Question

Your Chief executive has asked you to prepare a report for the board identifying the key contemporary business issues and main external factors affecting the organisation and the impact on HR. The report should also include how HR strategies and practices are shaped and developed and how to identify and respond to changes in the business environment.

In presenting the report you are expected to have included :

-Comment on how the organisational and HR strategies and practices are shaped and developed in response to the external issues, factors and business context

Answer 1

There are two types of factors that affect organizations which are external and internal factors. The internal factors are controllable factors within the organization such as staff, process; organization culture, etc. external factors are uncontrollable factors. Major external factors are political, economic, social, technological, legal, environmental, competition, and globalization.

Major external forces that are shaping organizational and hr practices are labor market, supply, demand, employment law, social inequalities, competition, technology changes, etc.HR departments have to make changes in the organization along with these changing factors. Each external factor has a huge impact on the organization. Let’s consider the major external factors that affect organizational and hr strategies.

Political factors: organization is affected by the changes introduced by the government, trade unions, and other bodies that regulate sectors of business. The HR department has to ensure that organization is compliant with changing regulations.

Economic factors: the economic changes have a huge impact on an organization which includes inflation, exchange rates; employment levels, etc. Globalization has a huge impact on the economy of the country. Organization and HR management should be aware of the current market changes and prepared to cop up with it.

Social factors: social factors have an impact on the current workforce. Changing family structure, immigration workers are some of the major issues faced by the organization. The HR department should make plans to attract new candidates and retain the existing employees

Technological factors: rapidly changing technology affects the organization. New technology and machinery could increase organizational performance. But sometimes it downsizes the workforce.hr should evaluate the process to understand where the redundancies should be made.

Legal factors: every organization should comply with rules and regulations.HR departments should update company policies and procedures to remain legally compliant.

The HR department should anticipate external changes and plan appropriate management strategies. In order to support organizational objectives, HR strategies should be aligned with its business and stakeholders.hr should consider stakeholders' expectations. Organizational policies and practices need to be more agile and able to respond rapidly than its competitors in changing business environment.

HR practices should be flexible in terms and conditions of offers of employment.hr is also responsible for developing approaches for performance management. The success of organizational performance depends on how employees are managed.HR is associated with managing conflicts by building a culture that embraces change. Increasing competition affects the HR function. Organizations have to implement new strategies to improve quality and reduce the cost of production. All these external factors influence organization and HR practices and policies.