1/6/2012

Session Outline
What is Business Environment? Approaches to study the relationship between Environment & HRM Stakeholders External Environment Challenges to HRM from the Environment

ENVIRONMENT & HUMAN RESOURCE MANAGEMENT

By Prabhashini Wijewantha

What is Business Environment?

Those factors and forces inside and outside the organization that affect the organizations performance.

Approaches to study the relationship between Environment & HRM

Understanding and analyzing the actors and forces in the Internal and External Environment of the organization from a HRM perspective. Exploring the challenges to the organization and the HRM function

Stakeholders
Any constituencies in the organizations environment that are affected by the organizations decisions and actions

Organizational Stakeholders

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External Environment
Demographic

Challenges to HRM from the Environment

Technology

Globalization

Managing Change

Cultural Political

Forces that Shape Opportunities and Pose Threats to a Company

Economic Natural
Developing Human Capital Market Responsiveness Cost Containment

Technological

Globalization
Trend toward opening up foreign markets to international trade and investment

Technology
Manual Labor to Knowledge Workers Implementation of Human Resource Information Systems

Change
Trend toward opening up foreign markets to international trade and investment.
Reactive change Change that occurs after external forces have already affected performance Proactive change Change initiated to take advantage of targeted opportunities

Managing Talent, or Human Capital

The knowledge, skills, and capabilities of individuals that have economic value to an organization. Valuable because capital: is based on company-specific skills. is gained through long-term experience. can be expanded through development.

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Responding to the Market

Total Quality Management (TQM) A set of principles and practices whose core ideas include understanding customer needs, doing things right the first time, and striving for continuous improvement. Six Sigma A process used to translate customer needs into a set of optimal tasks that are performed in concert with one another.

Responding to the Market

Reengineering and HRM
Fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in cost, quality, service, and speed. Requires that managers create an environment for change. Depends on effective leadership and communication processes. Requires that administrative systems be reviewed and modified.

Containing Cost
Downsizing The planned elimination of jobs (head count). Layoffs Outsourcing Contracting outside the organization to have work done that formerly was done by internal employees. Off-shoring The business practice of sending jobs to other countries.

Containing Cost
Employee Leasing The process of dismissing employees who are then hired by a leasing company (which handles all HRrelated activities) and contracting with that company to lease back the employees

Cultural Changes
Demographic Changes Diversity Changes Changing attitudes towards work Balancing work and family

Questions for Discussion