Chapter 3

3.02 External Environment and HRM

 Economic environmental elements; economic environmental is
of great concern to HRM everywhere
a) Capital; ensuring proper utilization of resources involves the
proper use of capital.
b) Labor; availability of quality labor at reasonable remuneration is
essential.
c) Price level; the input side of an enterprise is clearly affected by
price level changes.
d) Fiscal and tax policy of government; fiscal policy has
considerable impact on employment generation.
e) Customer; customer are king they have to be satisfied.
f) Technological environmental elements; technological have had a
profound effect upon the working population.
 Technological Environment Elements
 Categories of technological changes;
a) Enhances ability
b) Improved ability
c) Increased ability
d) Mechanism and automation of certain mental process
e) Extension of human ability
f) Increased understanding of diseases
 Social and cultural environmental elements;
HR managers are to be responsive to the societal needs and
cultural values of the people. Most important are following:
a) Belief that no culture
b) Opportunities of people
c) Faith in business
d) Belief in competition
 e) Respect for the individual
f) The political and legal environmental factor
g) The political environmental
h) The legal environmental
 The Political and Legal Environmental Factors
a) The political environment
b) The legal Environment
 Globalization
Globalization is creating a situation where human resource
management must begin to search for mobile and skill employee.
3.03 Internal Environment and HRM
a) Changes and works force composition ; the work force
composition has changed
b) Changing skill requirement ; necessities HRM to provide extensive
training
c) Corporate rightsizing ; size of the work force be kept equal
d) Re engineering ;
e) Decentralized work side
f) Proper management practice
g) Union attitude