HR Skills and Competencies

in the
Global Business Environment

A Brief Survey of HR Skills and Competencies in the Global Business

Environment

Objectives of this Paper:-

The major objectives of this paper are:

i) To identify the need and significance of HR skills and competencies,

ii) To make a brief review of such competencies, and
iii) How to activate and cultivate the cross cultural and other HR skills in the fast changing
globalised business environment.

Need of new HR Skills & Competencies:-

With rapid globalization of business and ever-increasing technology,/ specifically information

technology, since the last two decades, more and more companies operate internationally. As a result,
executives in each business function need to develop a new set of competencies, i.e., knowledge,
skills, and experiences to help their organizations succeed in the highly demanding and volatile
environment of the modern global economy. And for this purpose, extremely effective HR
Management is essential in small to large size firms to develop the required skills matching their
expanding global operations.

Cultural Borders and Complex Roles of HR:-

Whether or not one functions in a global organization, he is operating in a global environment. For
success in the present business scenario, one needs to succeed rising cultural borders as the
economic boundaries are disappearing. An HR manager of a large US company working in China
caught one employee stealing. She fired him as per company’s rules and policies, and turned him
over to the local authorities. However, later she (HR Manager), was shocked to learn that the erring
employee had been summarily executed. She discovered too late that the cultural context in which
the policy was framed was widely different from the cultural context in which she carried it out.

Global culture, therefore, plays a vital role in the professional capability of global HR managers
requiring new cross-cultural competencies. In the border-less economy, culture and cultural
competency matter much. “As economic borders come down, the cultural barriers go up, presenting
new challenges and opportunities”, expressed Doug Ivestor, former CEO, Coca Cola. Moreover, not
only does the US compete with Singapore, Taiwan or Malaysia for customers and jobs, but even
businesses in Boston also compete with companies from Australia, Sweden and Japan.

Globalization requires HR professionals to work not only across geographic boundaries but national,
cultural, ethnic religions, organizational, time, distance, legal, financial, historic, economic and
political factors, too. Hence the role of a HR manager is more complex. Core competencies and
organizational capabilities are the key factors influencing long-term success in the global markets.
Tremendous technological advances, fast changing employee expectations and their diversity and the
skills shortages in different countries also force the HR people to look into their own skills.

Further, the HR goals are also changing. Continuous demands are being placed on HR staff to
develop Leaders, retain quality personnel, reduce or manage attrition rate and increase productivity
in the wake of integrating global and local goals.

Situations and Forms of Global HR Roles:-

Globalization of HR activities can take several forms and the HR managers can be involved in any
of the following situations:

 The operation of parent company firms overseas

 The operation of foreign firms in the home country
 The employment of foreign citizens
 The operations of government agencies and non-profit organizations

Moreover the HR specialists may be dealing with the managers and executives as under:

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i) Home-based managers, but with a central focus on global markets and players
ii) Multicultural team members who work on a series of international projects
iii) Globally mobile managers, who undertake frequent but short visits to various places
overseas, being loyal to the parent culture
iv) Expatriates with parent organizational culture, spending lengthy assignments, and
representing the parent organization in a limited number of host countries
v) Transitional managers who move across-borders on behalf of the organizations, relatively
detached from any single headquarter

In addition, an HR manager may be employed in a role combining these situations and people. Each
situation creates challenges for them. One of the fundamental challenges is to identify and train
people who although raised and experienced in one culture, can effectively interact with, and
manage people in one or more different cultures. A further challenge is to develop policies, norms
and practices in each business environment in which the employer operates. And HR managers also
need to integrate and coordinate activities taking place in diverse environments with people of
diverse backgrounds.

The reality today is that, most companies experience one or more aspects of global HRM, and their
successes or failures are directly related to how they handle such challenges.

Some Clusters of Global HR Competencies:-

Obviously in the globalised context, being global is less about where you do business, and more
about how you do it. HR managers have to articulate the how of global business. Terence Brake has
identified three competency clusters for the global leaders. These are:
 Business acumen
 Relationship management, and
 Personal effectiveness

Business Acumen is defined as the ability to gain and leverage professional K & S to achieve
optimal results for the stakeholders of the company. This cluster includes the following
competencies:

 Depth of the field

 Entrepreneurial spirit
 Professional expertise
 Organizational resourcefulness, and
 Stakeholder orientation

Relationship Management is the ability to build and influence cooperative and collaborative
relationships in a complex and diverse global network in order to mobilize and integrate energy
towards meetings business strategies. The relevant competencies are as under:

 Change leadership
 Community building
 Conflict management and negotiation
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  Influencing and inspiring others; and
 Cross-cultural interaction

Personal Effectiveness is the skill of attaining increasing levels of maturity in order to perform at
peak levels under difficult or vulnerable conditions of working in a chaotic global enterprise. The
essential competencies of this cluster are:

 Accountability
 Learning and curiosity
 Maturity
 Improvisation
 Thinking agility

A recent survey of top HR professionals, “The Global HR Leaders’ Agenda” reveals that the top five
core competencies of this profession are related to mindset. These are:

i) Change Management: the ability to deal with uncertainty and change

ii) Maturity: the stability of guaranteed performance under stress
iii) Openness: being open to new ideas and practices
iv) Flexibility and Adaptability: being able to quickly adapt to the changing
circumstances
v) Contextual thinking: an ability to see the bigger picture and develop cognitive
competencies

According to the survey, HR knowledge and learning are the key competencies in the US, while in
Europe; the focus is on the primacy of language skills, international experiences and ability in cross-
cultural negotiations. In Asia, key competencies include knowledge of the business and ability to
maintain core values across cultural contexts.

Thus ‘cultural sensitivity’ emerges as a key dimension of their skill requirements. Most of the issues
in globalization are cultural. One has to value diversity and diverse cultures and at the same time
stick to one’s own company’s core values.

While ‘culture’ is a proven key to global success, executives from the US, Canada and Australia
ranked last in this 30-nation survey of business leaders as to whether multicultural experiences
matter. The message: companies from these countries are in danger of losing their competitive
advantage by disregarding the very thing that makes organizations successful in the global market.
Among globally successful companies, ‘culture’ is not an obstacle, but leverage for competitive
edge.

Further according to Global Literacy’s research, successful leaders possess four distinct
competencies in the new environment:

a) Personal literacy: understanding and valuing oneself

b) Social literacy: engaging and challenging others
c) Business literacy: focusing and mobilizing one’s organization, and
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 d) Cultural literacy: valuing and leveraging cultural differences

How each of these literacies get expressed depends on the culture one lives, works and conducts
business in. Though being universal competencies, yet these may be practiced differently by the HR
people in high-tech or services in Boston or in Bangalore.

Cross Cultural Competencies in Action:

Global leaders evidence transcultural competence in the following ways:

 Take interest in different cultures and business practices

 Make non-judgmental initial interaction
 Exhibit conceptual understanding of differences
 Make model of product/service diversity related to culture
 Show model of organizational behavior diversity to culture

Cross-cultural competence can be activated as under:

 Start by making global skill of core competence

 Globalize and localize leadership competencies and management tasks
 Link performance management to global business goals
 Attract talents through company’s “international message”
 Recruit for a global perspective
 Build and develop cross cultural sills, and
 Reward for soft skills

Cross-culturally competent executives create impact and meaning by facilitating world-wide

conversations to articulate the enhanced objectives of their organizations. Denmark based pharmacy
giant Novo Nordisk sends ‘cultural coaches’ around the world to help their people to personalize,
interpret and operationalise their core values. Moreover strengthening diverse multicultural teams is
also vital to working in a networked environment. Adhering to their principles while respecting
different cultural norms, leaders use conflicts to build creativity, understanding and motivation. If
they are smart enough to form strong cultural relationships in the organizations, the performance
rises surely.

How can the HR manager begin?

o Start by ‘Building Business Credibility’ :

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 Be able to articulate the why, what, where and how of the globalization. Make a SWOT
analysis for your business in the global market. Allocate more time for strategic thinking.
Understand the customer base and how it is changing globally, regionally, and locally. Be
highly sensitive to what different stake holders, particularly the customers, perceive as value
and focus all efforts on collaborating with others to deliver those value propositions.

o Study the ‘Execution capabilities

Of your company and how they facilitate such business objectives as speed, quality, low cost,
consistency, innovation and responsiveness. Identify performance opportunities and threats
throughout the enterprise.

o Be ‘Proactive’ and demonstrate ‘Leadership’

Explore setting up partnership with businesses and functions- particularly IT, to produce the
maximum value for the company in the minimum possible time. Look for performance
breakthroughs, partnerships outside the business with suppliers, customers and joint venture
partnerships.

o Review the ‘Time’ spent on non-value adding activities

Outsource what you can as quickly as possible and focus on adding economic value.

o Be ‘Visible & Tangible’

Measure the performance and communicate the results.

Conclusion

Globally literate HR leaders focus on organizational results. They create global standards of
excellence, link people’s contribution to visible and tangible outcomes and build a winning
business culture of performance in the process. They develop a new set of attitudes,
behaviors and competencies in the current unique century of rapid changes. They also help,
people at all levels of the organization to be more personally aware, socially skilled,
technically sound, economically enlightened, culturally wise and globally gainful.

The global business arena is changing very fast and becoming a battle ground for talents. As
economies shift from being industrial to knowledge-based, many senior managers begin to
recognize that surpluses are generated from the brains, minds and hearts of the people.
Though these people are being stimulated and connected by new powerful technologies, but
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 technology alone can not create and sustain their performance. As in other human
performance revolutions throughout history, the people-technology interface will drive
progress. HR, in global context, will take a giant step forward, and position itself at this
critical interface and therefore for many HR professionals these changes will require a radical
shift in mindsets and skills towards multi-disciplinary, high-tech and multi-cultural expertise.

References:

 Robert Rosen and Patricia Digh, Global Literacies : Lessons on Business Leadership &
National Cultures (Simon & Schuster, 2000)
 Pat Joynt and Bob Morton, ‘Crossing the Seven Cs’ : The Global HR Manager, ed.
( Jaico, 2005)
 Brake Torence; The Global Leader: Critical factors for creating the world-class
organization ( Irwin Professional, 1997)
 www.nehra.com ; The Global HR leadership Agenda