Industrial and Organizational Psychology From a Global Perspective

Abstract

As globalization has accelerated since the late 20th century, global business, workers, and researchers are more closely connected. Scientific research in industrial-organizational psychology also reflects the progress of globalization and the changes in global workers. One of the most significant changes is the growth of digital technology use (e.g., the Internet and artificial intelligence), digital equipment (e.g., computers and smartphones), and digital applications (e.g., emails and social media), which shapes the way worldwide employees work and how global businesses cooperate. Related to the development of technology, another significant change in the global business is the new forms of economy, such as knowledge economy, gig economy, digital platform-based economy, and shared economy, which changes traditional understanding of the nature of work. In addition to productivity-relevant changes, the more frequent cross-border mobility may also amplify the global uncertainty, such as the global pandemic since the outbreak of COVID-19. Globalization also comes with drastic changes in the nature of human capital and the strategic environment where more intense competition unfolds. Therefore, firms must constantly adapt their human resource (HR) systems to ensure human capital can be developed, bundled, and leveraged in a way that can sustain strategic decisions and competitive advantage. To understand the dynamic development of HR management, the research literature has identified two distinctive but complementary trends: convergence and divergence. The convergence trend predicts the emergence of universal HR systems due to gradually homogenous economic systems caused by the continuous progress of industrialization and technology. By contrast, the divergence trend anticipates the coexistence of multiple distinct HR systems resulting from insurmountable barriers of institutional contexts. Empirical evidence has shown that both trends exist in various HR domains, including recruitment, selection, training, and performance management. Further, globalization also cultivates some novel HR topics with an emphasis on how to manage human capital with high cross-cultural competence. While globalization brings opportunities, organizations and employees also face new challenges in cross-cultural settings, which requires both a deeper understanding of culture and the development of relevant skills to deal with these challenges. For organizations, it is important to realize their management practices may become ineffective in another cultural setting, and thus they need to be aware of the potential impacts of culture on organizational processes. Interfirm relationships may also feature an increased level of uncertainty and instability in intercultural settings. For individual employees, interpersonal dynamics at the workplace may become more complicated because of the increasing diversity in a globalized workplace. Cultural diversity, as a double-edged sword, may bring both opportunities and challenges (e.g., when differences cause conflicts and discrimination). To resolve the culture-related challenges of globalization, both the organizations and the employees need to appreciate cultural differences and equip themselves with the resources and capabilities to make the most of diversity.