Due to the rapid improvements on communications technology, economic freedom and the continuous promotion of trade liberalization2 (World Trade Organization 2008), modern business trend has gradually shifted from multinationalism to globalization.
It is also crucial for businesses today to actively participate in the trading of goods and services in the world market. In reality, globalization is not only focused on the continuous global movements of goods and services from one country to another but also the global traffic of human resources3 (Steger 2003, p. 37). With regards to the large supply of available work force in the labour market, a lot of medium- and large-scale businesses have been taking advantage of the opportunity to hire competitive employees at a minimum wage.
To enable the readers to fully understand the impact of globalization and multinational companies on labour market, the definition and main purpose of globalization will first be provided. In response to globalization, the impact and some of the common HR strategies used by multinational companies in response to globalization will be identified and thoroughly discussed. Eventually, ways on how globalization and the HR strategies used by most multinational companies trigger either positive or negative impact over the labour market will be identified.
To enable us to maximize the positive impact of globalization on labour market, recommended solutions on how we can effectively counteract the negative impact of globalization and ways in which most multinational companies are currently treating employees will be provided.
Globalization is “a process of interaction and integration among people, companies, and governments of different countries which is driven by international trade and investment through the use of information technology”4 (The Levin Institute 2008). Basically, globalization allows business people to maximize their available financial