Firms and workers operate, directly or indirectly, in a global economic environment that generates significant opportunities. Those opportunities are accompanied by risks, which can arise from the susceptibility to crises of interconnected economies.
Economic turmoil can clearly threaten the growth and survival prospects of firms, and recessionary pressures can force organisations to adapt and engage in major organisational change. Many firms initially embark on a programme of cost control, scaling back innovation and research and development efforts, or mothballing plans for growth and expansion. Such a context of cuts and uncertainty can also negatively affect employee motivation, effort and confidence, especially when job security is under threat. Recent evidence suggests that a growing level of job stress is attributed to the changing patterns in employment and working conditions (e.g. work overtime, intensive workloads, increased insecurity, reduced wage and benefits, poor promotion prospects) generated by a volatile economic environment.
It can also, however, encourage the generation of new ideas and path-breaking operational, technological and managerial innovations. Crises can lead to a more fundamental re-valuation of organisations’ resilience capabilities, internal and external resources, market position, strategic alliances and labour market strategies. It may also act as a catalyst to improve organisational systems and processes, such as staffing, talent management, employee involvement and career development, fairness in rewards, or as an engine for innovation, new market explorations, and both inter- and intra-organisational collaborations.
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But this is more complex when we consider the management of a global workforce across different national settings, where different political, economic, legal, cultural and education environments must be taken into account. This requires HR professionals to think both strategically and globally in order to maintain competitive advantage in challenging global markets, and to improve resilience to future economic shocks.
George Saridakis is professor of Small Business and Entrepreneurship at Kingston University Business School and honorary professor at the University of the West Indies