The Strategic Importance of Understanding The External and Organizational Environments

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The Strategic Importance of Understanding The
External and Organizational Environments
HR professionals need to scan the environment
everydaywhether by Internet, newspapers, or
magazines. Everything has the potential to impact
everything we do. Charles Tharp HR Consultant
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Chapter 2 Objectives

• Understand actions required of HR managers in
  relation to external and internal factors
• Describe various HR aspects of the flat world
  (the dynamics of a changing world)
• Discuss the use of contingent workers
• Describe key HR aspects of MAs
• Understand the relationship of country cultures
  to HRM
• Discuss the implications of the virtual workforce

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Chapter 2 Objectives

• Describe the relationship between HRM and
  business/competitive strategy
• Describe the relationship between HRM and culture
• Discuss key aspects of training a supervisor for
  foreign service
• Describe the HR aspects of a social audit

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HR duties

• External Environment
• Stay informed about econ political conditions
• Investigate foreign labor market qualifications
  and conditions
• Educate organization about new issues to be
  addressed in globalization
• Provide resources and cross-cultural skill
  training
• Internal Environment
• With the line managers, determine behaviors
  needed to implement the firms strategy
• Align HR policies and practices with the vision,
  mission values
• Develop HR practices that send a clear and
  consistent message about the companys desired
  culture
• Learn to use and advocate advanced HRIM
  technologies to gain a CA

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Flat World Implications(refer to handout)

• Ricardos Theory of Comparative Advantage in
  Macroeconomics
• Outsourcing (e.g., remote exe. asst)
• Downsizing
• New markets
• Homesourcing (e.g., Salt Lake City)
• Insourcing (e.g., UPS)
• Technology (e.g., reference checks, resumes
  scanning, candidate search)

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Employees Working as Contingent Workers in the
U.S. Workforce
Note Contingent workers can include independent
contractors, temporary employees, freelancers,
and consultants.
EX 2.2
What is the implication to HRM?
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Industry Life Cycles

• Nascent
• Firms compete to establish a distinctive
  reputation and to create customer loyalty.
• Rapid Growth
• Companies that survive the industrys creation
  usually enjoy a period of rapid growth.
• Mature
• The rate of growth eventually slows and the
  industry moves into a mature stage.
• Decline and Renewal
• Industrys products/services become obsolete.

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Key HR Activities in the Stages of the
Merger/Acquisition Process

• Stage 1Precombination
• Participate in assessment of target firm
• Assist in thorough due diligence assessment
• Participate in planning
• Assist in developing HR practices for rapid
  learning and knowledge transfer

• Stage 2 Combination
• Recruit and select integration managers
• Transition team design and staffing
• Assist in deciding who goes
• Facilitate establishment of new culture

• Stage 3Solidification and Assessment
• Establish criteria and procedures for assessing
  staff
• Monitor and strengthen new culture
• Develop and implement plans for adjustment and
  learning

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Labor Markets
Slow Growth
Skills Shortage
U.S. Labor Market
Immigrants
Competition for Employees
What are the trends and HRM implications?
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Growth Rate of the U.S. Labor Force
WHY THE DECLINE?
Note Values for 2010s are projections.
EX 2.4
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Fastest-Growing Occupations
EMPLOYMENT (IN THOUSANDS) OCCUPATION
2000 2010 CHANGE () Computer software
engineers, applications 380 760 100
Computer support specialists 506 996 97
Computer software engineers, systems software
317 601 90 Network and computer systems
administrators 229 416 82 Network systems
and data communications analysts 119 211 77
Desktop publishers 38 63 67 Database
administrators 106 176 66 Personal and home
care aides 414 672 62 Computer systems
analysts 431 689 60 Medical assistants 329
516 57
Good Reason to get an IT minor!!!!
EX 2.5
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Hourly Compensation Costs for Production
Workersin Selected Countries (2002)
EX 2.7
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A Sampling of Test Scores for Eighth
GradersAround the World
MATH SCIENCE 604 Singapore 569 Chinese
Taipei 585 Chinese Taipei 568 Singapore 582
Hong Kong SAR 550 Japan 579 Japan 540
Australia 534 Slovak Republic 538 England 531
Canada 535 Slovak Republic 526 Russian
Federation 533 Canada 525 Australia 530 Hong
Kong SAR 502 United States 529 Russian
Federation 496 England 515 United States 466
Israel 468 Israel
EX 2.8
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Country Cultures

• Read Mercedes-Benz in Alabama, pg 57
• Discuss the Taken for a Ride case

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Dimensions of Country Cultures

• Future Orientation
• Gender Differentiation (Masc. vs. Feminine)
• Uncertainty Avoidance
• Power Distance
• Individualism (vs. collectivism)
• Institutional Collectivism
• In-Group Collectivism
• Assertiveness
• Performance Orientation
• Humane Orientation

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Dimensions for Comparing National Cultures
EX 2.9
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Consequences of Country Cultures

• The need for HR practices to be congruent with
  the country culture to enable global success
• Use of incentives
• Attitudes towards work
• Empowerment
• Evaluation

Describe the differences in HR policies that you
might have to have in various cultures
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Company Culture

• Company culture
• Pattern of shared assumptions (e.g., values,
  beliefs, ceremonies, heroes and norms)
• Relationship to Vision, Mission, Objectives and
  Strategy
• The creation of a culture
• Strong vs. weak culture

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Business Strategies
TotalQuality
LowCost
Competitive Strategies
Innovation
Customer Service
Describe your HR policies for the various
competitive strategies
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Sabres Virtual Teams, pg 70

• Discuss the HR actions needed to implement the
  strategy (i.e, to achieve the objectives)

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Expatriate Training

• Describe the key aspects that should be in a
  companys expatriate training

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Levi Strauss Case Study

• Managers at Levi Strauss believe they manage an
  ethical company. What are some possible points
  of disagreement?
• Do you think the company was living up to its
  vision when it laid off so many workers and
  contracted work to suppliers in 50 countries
  outside the United States?
• Review the social audit criteria