External influences impact the business environment, which in turn has an impact on business operations. The responsibility of any organization’s HR department is to provide the best learning environment, promising techniques to growing learning skills, and creative learning approaches to grow employees’ personal and professional skills.
According to HR, the efforts assist workers in the open and informal environment of the business in being engaged towards their job and realizing their full potential.
This unit teaches students how to identify and evaluate business and external contextual variables that affect companies and how to analyze the impact of these factors on the HR function.
HR’s involvement in strategy creation and implementation is also examined in this session. The curriculum is intended to enable students to take a critical view of these situations and to offer practical organizational and HR solutions to solve them.
External forces impacting businesses and Human Resources
There are a number of variables that influences day-to-day operations. Human resource management is one example of this. Studying this subject is necessary since new regulations or rules may be approved and must go into effect immediately. HR should be prepared for these changes so that they do not suffer the consequences.
SWOT analysis, PESTLE analysis, and Porter’s Five Forces analysis tools all aid in planning company functions. Furthermore, these techniques aid in the evaluation of external factors that impact enterprises and activities. They are critical for businesses to get insight into how to execute projects properly.
PESTLE Analysis Entails
- Legal considerations
- Social considerations
- Economic considerations
- Technological aspects
- Environmental variables
Porter’s analysis focuses on:
- Purchasing Power
- Supplier Influence
- Rivalry between competitors
- Substitution Threat
- The Threat of New Entrants
A SWOT Focuses on:
- Threats
- Strengths
- Weaknesses
- Opportunities
Current forces influencing the HR agenda
HR should anticipate some changes, which necessitates appropriate methods to support an organization’s strategy and functions; HR plans and activities should be in sync with stakeholders and the business’s plans. HR must also address the demands of stakeholders such as workers, shareholders, and business managers, among others.
The high level of competition has influenced how the HR department structures itself and handles its goals. Large public and private sectors, for example, are primarily focused on income production, and therefore have a significant HR function that follows the same methods as the Ulrich Model (1998)
Traditional company models may not guarantee organizational continuity in a rapidly changing business environment. Globalization, climate change, technological change, competition, demographic change, and social inequity require organizations to go beyond profit maximization and the bottom line of their loss accounts.
How skillfully workers are managed will determine organizational success, i.e., cultural and structural transformation. It’s also worth noting that change can lead to conflict, which is why HR is so vital in creating a change-friendly culture.
This lesson will assist students in gaining knowledge and understanding of many techniques that they can use to bring about change effectively. They will also be aware of the procedures and activities they must participate in to ensure that HR services run smoothly.
Analyze the business environment using various techniques
Business analysis models are valuable tools and approaches to understand your organization’s environment better and think more strategically about your company. There are a variety of generic techniques to choose from, but some are more important than others. Among them are:
- Opportunities, Threats, Strengths and Weaknesses (SWOT)
- Political, economic, social, legal, technological, and environmental variables are considered in a PESTLE analysis.
- The framework of Porter’s Five Forces
Porter’s Five Forces frameworks determine where power is concentrated. When the number of clients exceeds the supply, the supplier can set the price (Bargaining power of supplier). On the other hand, PESTLE is concerned about the impact of many external factors on its competitive position.
However, unlike SWOT analysis, which considers both internal and external aspects, the two analytical methods solely analyze external factors.
This information is critical for learners since these tools will allow the company to develop numerous difficulties that they must address.
Strategy formulation and implementation
This course will teach students that strategic management is more than just a set of guidelines to follow. Human resource management serves as a link between a company’s human resources and its goals, functions, and objectives, with the goal of:
- Improving adaptability, creation, and competitive strategy.
- Create a culture that is appropriate for the organization’s needs.
- Improving business performance
The process through which an organization determines its position, defines a goal, and devises measures to achieve it is known as strategy formulation. This necessitates the establishment of defined goals and objectives, as well as the provision for some flexibility.
Corporate strategy: This is the level at which specific objectives are determined. Is it a case of an increase, stability, or decrease?
Business level strategy: This is the level where you focus on how you’ll compete. Such as whether it be through a close relationship with customers, product or service leadership, or the lowest total cost of ownership? What is the basis for the distinction?
Strategy at the market level: This strategy level focuses more on the business’s future growth. At this point, it is determined whether or not to follow:
- Diversification plan
- Market penetration strategy
- Market development strategy
- Product or service development approach
Accountability and business ethics
To lessen the risk of ethical conflicts emerging and dealing with them, HR managers may assist in ensuring that organizations function with proper regard for fairness, integrity, and justice.
Business planning
HR may play a dual role in change management by developing and leading changes and functioning as a facilitator for changes initiated by other leaders and departments. What happens, though, when the HR department becomes the focal point of change?
Human resource professionals may find it more challenging to handle transformations like transitioning to a shared services model, integrating with another HR function following a merger, or offering new services to new clients than other types of organizational changes.
Learners should market their skills in this method because it will also contribute to the organization’s success.
You may use several examples of planning tools to analyze a company’s performance in a changing environment and provide the best plans for ensuring its long-term success. These are some examples of these tools:
- A tool for benchmarking
- The Lewin Model
- A model of the value chain
These tools aids in performance by putting best operations into practice. Comparing an organization’s product to that of rivals also aids in learning and improving best-practice techniques.
The sources of company data that are utilized in HR planning
When it comes to using HR data, it is not easy from a legal and ethical standpoint. Still, it’s also valuable, and it’s arguably the most valuable asset an HR staff has. Why? Employees are delighted when information is used to enhance choices and procedures are streamlined, adding value to the business.
This unit will equip the learner with the knowledge that indicates data sources in the business and link mined data to analyze its performance and apply it to enhance that firm after completing this unit.
Learning outcomes
This unit’s main objective is to:
- Assist students in comprehending the external influences that affect HR agendas.
- Assist students in comprehending various analysis methods, including SWOT, Porter’s Five Forces, and PESTLE.
- Assist learners in comprehending the function of human resources and the procedures involved in putting company strategies into action.
- Assist the learner in accepting and implementing changes in the workplace.
Conclusion
As we’ve seen, human resources play a critical role in almost every aspect of an organization’s strategy. Specifically, HR provides critical methodologies, explicit knowledge, and potential solutions that suit the demands of the business and stakeholders.
The learners will have the knowledge and skills to properly operate the business and handle changes within the firm after finishing this course.
Finally, we suggest using PETLE’S method to examine external elements that influence how businesses are run.
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