External environment factors of hrm

A business strategy refers to the competitive efforts and business approaches that managers employ to please customers, compete successfully, and achieve organizational objectives. Some typical business strategies include innovation strategy, quality strategy, cost reduction strategy etc. Different strategy has different implications on HRM practices. Obviously, HR mission, objectives and policies have direct impact over HR practices.

External environment factors of hrm

Internal analysis helps us understand the organizational capability which influence the evolution of successful strategies. Many of the issues of strategic development are concerned with changing strategic capability better to fit a changing environment.

However, looking at strategic development from a different perspective i. Internal capabilities and process execution at times allow firms to gain competitive edge over competitors even with relatively lesser resources and lesser advantageous position. Strategic thinkers explaining the RBV suggest that the organizations are collections of tangible and intangible assets combined with capabilities to use those assets.

The factors of production used by firms in providing its customers with valuable goods and services are called assets.

External environment factors of hrm

These assets are of two types- tangible assets and intangible assets. Any physical means a firm uses to provide value to its customers form its tangible assets. Similarly, intangible assets are equally valuable for firms but their physical presence cannot be felt or seen.

For example, a brand name is a very important resource for any organization even though it is intangible. Few examples of Tangible and Intangible Assets: In order to take full advantage of its assets the organization needs to develop skills, as experience suggests that with similar assets two different firms may add value of different amount for themselves.

This difference can only be explained by the differences these organizations carry their capabilities in utilizing these assets.

For example, in a sector like management education, in a typical segment you will find institutions more or less with similar resources and infrastructure, however, the quality of their output in terms of new professionals for business may be starkly different for different institutions.

This is greatly reflected in the type of organizations that pick them up for employment and the kind of job responsibilities they are offered.

This difference in output can be explained on account of the skills which these institutions carry with themselves. This position has been found true in case of many Indian companies as well as the multinational corporations.

Competencies Most simply put, it refers to the ability to perform.

External & Internal Environmental Factors Influencing HR Activities | benjaminpohle.com

However, in order to have a better understanding of the concept, you need to understand first the resources, which are available to an organization and how they differentiate themselves as competencies or core competencies.

Strategic Importance of Resources: Few examples may be buildings, machinery or operational capacity. However, the specific condition and capability of each resource determines their usefulness.

Knowledge and skill of people together prove to be a great asset.

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Financial Resources of an organization may lie in capital, cash, debtors and creditors and providers of money. Intangible resources include the knowledge that has been captured in patents, brands, business systems and relationships with associates.

In knowledge economy intellectual capital is considered as a major asset of many organizations. Figure-I Shows a relationship between the resources, competencies and the competitive advantage: This becomes inevitable because of the competitors and sometimes the new entrants.Originally published in IRConcepts Newsletter in Summer A s organizations increasingly become subjected to the forces of globalization, pressure to increase competitiveness and with it the demands on people to serve their businesses with drive and commitment become even stronger.

At the forefront of strategic initiatives to improve organizational performance through people is the Human.

Internal and External Environment Factors that Influences Organizational Decision Making

Environment in Human Resource Management: Internal and External Environment! What is environment? In simple words, environment comprises all those forces which have their bearing on the functioning of various .

HRM Models The defining features of HRM is popularly known as models. These models provide analytical framework for studying HRM.

External environment factors of hrm

They provide characterization of HRM that establishes variables and relationship to be researched. Four most common models are: The Fombrun Model The Harvard Model The Guest Model and The Warwick Model All these models [ ]. The most carefully laid human resource plans can be affected by internal and external change anytime, so forecasting and flexibility are essential for effective planning and adapting as required.

Businesses are impacted by a number of factors, some internal and some external. While managers may not be able to control external forces, it is essential they identify and understand them. This paper examines the role of information technology (IT) directly on one central aspect of work in the twenty-first century, its impact on HRM itself.

We use the long-established ‘Harvard’ model of HRM, offering a more contextualised view of HRM, a more expansive view of stakeholders, and a wider and more long-term approach to outcomes.

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