Environment of HRM

Environment of HRM includes all those factors which have bearing on the functioning of HR department. These forces can be divided in two categories, i.e. External Forces and Internal Forces.
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Utility of Analyzing the Environment

To become proactive and not remain reactive to the environment. Reactive strategy are useful in stable competition less environment. and

Todays environment is characterized by intense competition and change where proactive steps are vital to survive.
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Cultural

Technology

Unions

Economic

HRM

Strategy, leadership Task

Political & legal Professional bodies

Org. Culture

Environmental Forces
External Forces

Political-Legal Technological Cultural Economic

Internal Forces Unions Strategy, Task & Leadership Organizational culture & conflict Professional Bodies
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Political-Legal Forces
Plethora of Labour laws related to employment, working conditions, pay & wages, and laws related to industrial disputes. Which political party is ruling. Different parties can have a different outlook.
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Economic forces
Economic growth, industrial production, agriculture, population, national and per capita income, money and capital markets, suppliers,competitors,customer & industrial Labour are the components of economic environment.

Economic forces relevant to HR:

Suppliers Competitors Customers Economic growth Industrial Labour

Technological
Jobs tend to be more intellect. Obligation of HRM to train workers acc. to new technology and to rehabilitate those who can not be trained. Workers acquaint with new technology are more demanding. Technology has impact on human relations. Job holders have become highly professional and knowledgeable.
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Cultural Forces
Culture refers to complete whole which includes knowledge, belief, art, morals, laws, customs, and other capabilities & habits acquired by an individual as a member of society.

Strategy, task & leadership

Alignment between the strategy, structure, people, and management is important for organizations success.

Nature of task/ job also affects HR in terms of hiring, compensation, training etc.
Leader also impact any of function area of organizations.
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Unions
Unions are considered a part of internal as well as external force in an organization due to its affiliation from outside political parties. Unions have influence on all HR activities right from hiring to separation.

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