Organizational Commitment In The Global Environment

In the age of increased globalization (refer to appendix 1.a, pg 12), and as many corporations are becoming international in scope and scale, organizations are faced with making radical restructuring choices in order to remain competitive and flexible in today’s environment. The impact of globalization has altered the manner in which businesses function and conduct their operations, and it has influenced virtually every area of business practice.

Technological advancements such as high speed information transfer and videoconferencing have brought the world within reach while redefining the traditional views of a workplace by allowing employees to perform duties from home, while on an international assignment or on a holiday.

Technology has also enabled consumers from all over the globe to access products and services and in doing so, has stimulated the market into a state of hyper-competition (refer to appendix 1.b, pg 12), where producers from different international locations all participate in the same global market. This state of competition has forced firms to adapt more flexible structures, to reorganize their workforce, to seek out cost efficiencies in other countries and to utilize their workforce diversity to an advantage in an effort to stay globally competitive.

As Maznevski, Stager & Amann (2007, pg 2) have stated;

�geographic expansion offers the vast potential benefits of a much larger market area, spread risks, scope and scale, and location based cost advantages and exposure to a variety of new products and process ideas’.

The diversification of the product market has changed the nature of employment through operational restructuring, increased efficiency and flexibility, changes in structural and job design and the use of cross functional teams. Traditional hierarchies are disappearing, being replaced by more flexible structures that promote efficiency and communication, resulting in new types of employment relationships.

This paper will attempt to explore some of the changes and choices managers are faced with, the nature of those changes and their effect on the organizational commitment of employees working in a global environment.

Limitations of the Report

Due to the personal nature of the topic, the interpretation of the information researched and the views proposed have been influenced by the beliefs, values and experiences of the author of the paper. Therefore, not all views and/or perspectives have been expressed or contemplated by the author.

Sources of Data

The information contained in this report is based on secondary sources of information and contains research conducted by third parties. As such, care was taken in ensuring that only reliable sources of information were quoted.

The Report Organization

This report follows the standard xxxxxxxxxxxxx format and is broken down logically into sections.

The discussion section introduces the concept of globalization and explains what is meant by the term organizational commitment. The changing nature of employment and workplace diversity are explored in the context of organizational commitment, as well as the effects of global competition on the manner in which businesses conduct their operations, such as restructuring and downsizing, outsourcing as well as the increasing use of casual workers.

Finally, the conclusion section summarizes the information presented in the discussion section, followed by the appendices used throughout the report as well as a list of references.

DISCUSSION

Many of the organizational issues faced by management working in a global environment influence, and are influenced by, organizational commitment (refer to appendix 1.c, pg 12). Erickson (2007) defines organizational commitment as;

�a strong belief in, and acceptance of an organization’s goals and values, a willingness to exert considerable effort on behalf of the organization’s goals and values, and a strong desire to maintain membership in the organization’,

which is closely related to the level of job satisfaction (refer to appendix 1.d, pg 12) and job involvement (refer to appendix 1.e, pg 12) (Wood, Zefane, Fromholtz & Fitzgerald, 2008, pg 57). Due to the importance of employee commitment on organizational performance factors such as employee morale, motivation, performance and organizational success (Meyer, Allen & Topolnytsky, 1998), understanding the influence of globalization on commitment is of a vital importance to any firm operating within this environment of change and diversity.

The Changing Nature of Employment

According to Sappey, Burgess, Lyons & Buultjens (2006, pg 23), �when product markets become less standardized, the work itself and the working conditions are likely to follow’. This includes the time and hours of work, the skills required, types of projects and the number of people on a team.

The changes that are occurring due to globalization have resulted in organizations trying to stay competitive in the global market, through changing their organizational structures, which has resulted in different types of employment contracts. The uncertainty that organizations face make it difficult to promise life long employment, which used to be the basis on which organizational commitment was developed (Meyer et al, 1998). This gives rise to a concept of �commitment to one’s personal career’ (Meyer at al, 1998), which recognizes that today’s employees are more interested in career development then job security, and companies can cultivate organizational commitment by developing the skills, knowledge and abilities of their staff. However, this creates the problem of brain drain (refer to appendix 1.f, pg 12) for corporations as trained employees leave in search of other employment opportunities. However, by providing employees with training opportunities in the first place, organizations can increase the levels of normative and affective commitment in their workforce, which reduces turnover rates.

Another issue worth discussing is the increasing use of groups composed of core and subcontracted employees, working together on a specific task. These arrangements provide functional and numerical flexibility to the organization while maintaining stability and organization specific expertise