FEATURES OF THE COMPETITVE BUSINESS

ENVIRONMENT
Globalization
The Backlash Against globalization
Implications of globalization for HRM
Technology
Impact of new technology on HRM
E-Commerce
Demographic changes and increasing
cultural diversity
Implications for HRM
RESPONSES OF FIRMS TO THE NEW
COMPETITIVE REALITIES
• Smaller companies that employ fewer people.
• The shift from vertically integrated
hierarchies to networks of specialists.
• Technicians, ranging from computer repair
specialists to radiation therapists, replacing
manufacturing operatives as the worker elite.
• Pay tied less to person’s position or tenure in
an organization and more to the market value
of his or her skills.
• A change in the paradigm of doing business
from making a product to providing a service,
often by part-time or temporary employees.
• Outsourcing of activities that are not core
competencies of a firm (e, g, payroll).
• The redefinition of work itself: constant
learning, more higher-order thinking less,
nine-to-five mentality.
• NEW FORMS OF ORGANIZATION
• Virtual organization
• Virtual work place
Restructuring including Downsizing
Total quality management
Reengineering
Flexibility
COMPETITIVE STRATEGIES
Innovation strategy
Quality-enhancement strategy
Cost-reduction strategy
Speed strategy
EMPLOYEE BEHAVIORS AND HUMAN
RESOURCE STRATEGIES APPROPRIATE
TO EACH COMPETITIVE BUSINESS
STRATEGY
Innovation strategy
Quality-enhancement strategy
Cost-reduction strategy
Speed strategy
ENVIRONMENTAL CONTEXT
HRM ENVIROMENT
ENVIROMENTAL FACTORS
EXTERNAL ENVIROMENT
The external environment consists of those factors which affect an organization HR
resource from outside the organization. Each of those factors in isolation as well as in
combination with others can influence the HR function of any organization. The job of
HR manger is to identify these external factors and to balance the demands and
expectations of external factors with the internal requirements and achieve the
organizational goals efficiently and effectively.
The major external factors are explained with the help of the following
figure:

Technological Economic
Factors factors

Political legal HRM social &cultural

Factors cultural factors

Unions professionalism

External environment
All these factors are discussed in detail as follows:
1. Economic Factors. Economic factors include all those economic forces which
affect the HR function. Highly relevant economic factors are suppliers, customers.
Competitors, and globalization.
2. A brief description of these factors is as follow:
Suppliers . As regards the HR department, the suppliers are those who provide
human resource to the organization. The suppliers include the universities,
colleges, employment exchanges, training institutes, consultancy firm etc. the
quality of inputs of employed depends upon the suppliers.
Customers.
Competitors.
Globalization. Due to globalization, the HR mangers are required to play
challenging roles and create competitive advantage for their concern. Global firms
have to continually reorganize their operations and refocus their energies around their
crucial areas of competence. To day the business environment has become highly
volatile in nature. Changes of various kinds hit the from all angles. Successful
managers are those who anticipate and adjust to such changes quickly rather than
 being passively swept along or caught unprepared. If firm hire people who cannot
adjust to changes, then they are hiring the wrong persons. Agility is the name of the
game nowadays. If the firm have to survive. The HR managers have an important
role in creating a favorable to imitate and implement changes quickly. They have to
anticipate important and crucial changes in advance and initiate proactive steps
immediately.
2. political-legal factors.
The important legislations affecting HRM in India are:
-factories Act , 1948
- Trade unions Act , 1926
- The payment of wages Act, 1936
- The minimum wages Act, 1948
- Employees state insurance Act, 1948
- Workmen’ compensation Act, 1923
- The payment of Bonus Act, 1965
- The payment of gratuity Act, 1972
- The maternity benefit Act, 1961
- The apprentice Act , 1961
- Industrial employment (standing orders) Act, 1946. ect
3. social and cultural factors.
A few example of societal pressures are as follow:
Cultural factors affect the HR functions in the following ways:
-Cultural creates different types of people who become members of an organization.
- The attitudes of the workers toward work is the result of their cultural back ground .
- Time dimension, which influence HRM, has its roots in culture. In some cultures,
people are oriented towards the past, in others they tend to be more focused on the
present.
SOCAL AND CULTURAL ENVIROMENT
Culture is:
Derived mostly from the climatic conditions of the geographical region and economic
Conditions of the country.
A set of traditional beliefs & value which are transmitted & shared in a given society.
A total way of life and thinking patterns that are passed from generation to
generation.
Norms, customs, art, value etc.
>> Prescriptive
>> Socially Shared
>> Learned
>> Subjective
>> Cumulative
>> Dynamic
Religions and economic implications
Christianity
Islam
Hinduism
Buddhism
Confucianism
TECHNOLOGICAL ENVIRONMENT
Meaning of technology
Influence of technology
Box 1.2 :NEW ,EYES REPLANCE PASSWORD
:DRIVE YOUR CAR WITH REMOTE
INVESTMENT IN TECHNOLOGY
EXHIBIT 1.1 : THE ASIAN TECHNOLOGY LEADERS
Technology and economic development
Technology and international competition
Technology transfer
• Establishing the subsidiaries in developing countries
• Establishing joint ventures with the host country’s companies
• Acquiring the host country ‘s companies or by merging with the host country’s
firm
• Arranging technological transfer to the companies of developing countries
through techno logical alliances.
Scanning of technological environment
• The level of technology of the industry in the home country.
• The level of the technology of the industry in the proposed host country
• Compatibility of the home country’s technology with the host country.
• If the technology is not compatible, then select the appropriate technology for the
host country, if possible if not, select the host country’s technology that suits the
home country technology.
• Study the compatibility of the technology to the host country including the taste
and preference of the host country customers.
• Study the host country’s governmental policies regarding technology transfer.
• Study the models of the technology on the environment of the home country
including laws pertaining to environment pollution.
Appropriate technology
Information technology and globalization
Like internet, www sits, e-mail, cyberspace, information super highways. Computer
aided design (CAD), computer aided production (CAP) and on-line transactions.
• Reducing the size of inventories
• Reducing delivery time
• Reducing unproductive waiting time
• Reducing the incidents of stock-outs and lost sales
• Reducing to market changes at a faster rate
• Reducing Rush orders.
• Cutting down over production
• Reducing unnecessary movements of following and back-tracking
• Reducing paper work and wasteful process
• Reducing production level accurately
• Reducing/avoiding physical movement of employees, suppliers, and customers.
4. Technological factors.
In the present competitive world, technological development can dramatically
influence an organization’s environment.
Technological advancement affects the HR function in the following ways :
- New technologies, generally, compel people to learn a new set of skills altogether
or to upgrade their exiting skills and knowledge.
- -New technological advancement also lead to downsizing of workers.
- In many emerging industries, the positions that have been filled up with workers
possessing superior technical skills and knowledge, has title the power base from
management to technical workers. To manage the knowledge workers is a major
area of concern for the HR managers.
- Technological changes lead to collaborative team work where managers,
technicians, and analysts work together on projects. Team based incentive plant
make it necessary for all classes of employees to work in close co-ordination with
each other.
- 5. physical factors. The physical element of the external environment include
the geography, climate, and other physical characteristics of the area in which the
organization is located.
- Geographic shifts in the population alter the demand for the supply of workers in
local job markets.
- 6. Unions. Trade unions constitute one of the major power blocks in many
countries.
- 7. Professionalism. Job holders and seekers have become highly
professionalized and knowledgeable now-a-days.
A few of these problem are as follow:
- It is a difficult job to motivate such employees.
- Retaining such employees in the organizations is another difficult job.
- Another problem is referred to as ‘Techno-Structure’ by galbraith. Techno structure
is the composition of scientists and technicians of an organization.
INTERNAL ENVIRONMENT
1. Physical Element.
The physical element of the internal environment includes such factors as air quality,
temperature, noise, dust, radiation, and other conditions affecting employee health
and safety.
2. Technological element
The technological element of the internal environment relates closely to the physical
element. It consists of the layout of the workplace; the process by which the work is
performed; and the tools, equipment & machinery used to perform the work.
3. Social Element
The social element reflects the attitude and behaviors of managers and employees, in
dividedly and in groups. Because of their influential place in the organizational
hierarchy, top managers play an extremely role in determining the quality of the
social element.
4. Political element
These include attacking or blaming others, using (or withholding or distorting)
information, building images. Building support for ideas, praising others, creating
power coalitions, associating with the influential, and performing services or favors to
create obligations.
Power is an important aid in HRM. It can provide a means of gaining the type of
performance and behaviors desired of employees.
5. Economic Element
When the financial health of a firm is strong. There is a tendency to expend HRM
actives such as training and development , employee assistance programs, and
recreational activates.
ECONOMIC ENVIROMENT
• Capital flow rather than trade or product flow across the globe.
• Establishment of production facilities in various countries.
• Technological revolution de-linked the relation between the size of production
and level of employment.
• Primary products are de-linked from the industrial economies.

6. Mission
Mission is the very purpose and justification for the existence of a firm an
organization mission statement tells-what it is.
7. Policies
Objectives show the destination but the route towards that destination is shown by
policies.

Some of the important policies that influence the work of an HR

manager are listed as follow:
-To provide safe working conditions for employees.
- To encourage the employees to achieve as much of their potential as possible.
-To provide such compensation to employees that encourages high level of
performance.
- To provide promotional avenues to employee.
8. organizational culture
Organizational culture is the sum total of shared values, beliefs and habits within an
organization. It depicts the personality of the organization. The HR managers have to
adjust positively to the culture of the organization.
9. Organizational conflicts
There is often conflate between organizational culture and employee’s attitudes.
According to S.K. chakra borty, conflict arises because of the
following qualities:
- personal goal .vs. organizational goal.
- Personal ethics vs. organizational ethics.
- Rights vs. duties.
- Obedience vs. self respect
- Discipline vs. autonomy
 - Self confidence vs. arrogance
- Actualization vs. aggrandizement
- Authority vs. responsibility
- Leadership vs. follower ship
- Delegation vs. abdication
- Participation vs. anarchy
- Feedback vs. abuse
- Cleverness vs. wisdom
- Grooming vs. pampering
- Doing vs. becoming
- Material benefit vs. spiritual loss
- Change vs. stability.
- Greed vs. renunciation.
- Short term vs. long term.
- Short term vs. long term
10 organizational structures

11. HR systems

ISSUE FOCUS ON
____________________________ _______________________________________

*Recruitment Internal source/external sources/both

* selection Merit/experience/promotion from within
* Training and development Regular/need based
* Participation management Top down /Bottom up
* Incentives Individual merit/ group output
* Job security Life long employment/need based jobs
* Employee welfare As per legal provision/ be a model employee

THE NEW BUSINESS ENVIRONMENT

THESE THEMES INCLUDE:
- Productivity
- Knowledge management
- Quality
- Responsiveness
- Globalization
- Outsourcing
- High value addition
- Information technology
- Excellence culture
- Benchmarking
- Virtual organization
 - Social and environmental responsibility

STRUCTURAL ADJUSTMENT PRESSURES

The response of a few major parties to the new structure adjustment are as
follows:
1. Government
2. Employers easing.
The challenges before employers throughout the world, as has been observed by
ILD are as follows:
“The change in the system of government and economic management, with emphasis
On pluralism and economic liberalization, has thrust employers & their organization into
The centre stage of economic development debate & action. The role of the private sector
As an engine of development has gained credibility. Recognition of this is one thing but
for the government to divest themselves of some of the tools of power will take time. The
struggle for true partnership in development will not be easy.”
3. Trade unions ILD, 1992
4. workers
In the present scenario, workforce diversity is increasing.
Changes that challenge managers of human resources
These five area shown below.
CURRENT ISSUES IN HRM
Employer /employee rights
This is clearly an important and growing areas of debate and concern to some degree ,it
Reflects the shift in employer/employee negotiations from the bargaining table to the
courtroom, as organizations and individuals attempt to define rights, obligations, and
Responsibilities.
Among the many specific issues covered in this broad area are
*Job as an entitlement • Plant closing notification
* Employment at will • Right to know
* Privacy (testing) • Comparable worth
* Whistle-blowing • Right to manager
* Mandated benefits • AIDS
* Smoking

Work and family Relations

There is a new and important perception that the individual at work is not “detached “
From family concern and responsibilities. Due, in part, to the rapid increate of women in
the workplace, as well as a growing interest in and concern with the family, there is
increasing demand for recognition and support of family employee concerns.
Among the issues in this area are
 • Day care • Parental leave
• Child care leave • Cafeteria plans
• Alternative work plant • Mandated benefits
• Elder care

-
Education /Training /Retraining
As organization trim personnel and gear up for the tough competition within the global
economy, the skills and competence of the available pool of employees are becoming a
pivotal issue. Among the key issue in this area are
* Literacy * Dropout prevention
* Employee education /training * Retraining
* Management development * Industry obsolescence
* Plant closings

Changing Demographics
Among the issue in this area are
• Shrinking pool of entry –level • social security
workers • “Planting “and motivation
• Retirement health benefit funding • Pension fund liabilities
• Increasing number of “nonpermanent/
Contract “employees

Productivity/competitiveness
Among the issues in this area are
• Productivity improvement
• Worker participation
• Foreign competition
• Mergers
• Quality programs and measurement
• Incentive/performance pay
• Globalization
• Downsizing