Many practitioners and academics have neglected HRM's environmental
context, preferring to concentrate on technical detail. This is consistent
with criticisms of traditional personnel management for its narrow focus
on functional or 'micro' matters such as recruitment. In fairness, however,
it must be recognised that personnel managers have always required a detailed
knowledge of employment legislation, together with an understanding of
industrial tribunals and trade union organization. Nevertheless, this represents
a restricted selection from the wide range of environmental factors impacting
on people management.
Often exponents of HRM have been no better than traditional personnel
managers in this respect. Kochan and Dyer (1995: 343) argue that despite
the obsession with strategy, HRM theories have a fundamental weakness:
'a myopic viewpoint which fails to look beyond the boundary of the firm'.
Without the ability or the interest to locate their activities in a wider
environmental setting, human resource practitioners can lose contact with
the 'bleeding edge' of organizational survival. To counter short-sightedness
and parochialism, HR managers must widen their perspectives beyond their
own organizations (Beardwell and Holden, 1994: 613). In contrast to colleagues
in marketing, production and finance, people managers seem less prepared
to function in a competitive world.
This chapter addresses this wider perspective and introduces a number
of fundamental issues which are developed further in later chapters, for
example:
* What is the connection between education and skill levels
and national success?
* To what extent is the nature of people management determined
by prevailing political ideology and national culture?
* Is HRM simply a managerial reaction to the spread of market
economies throughout the world?
* Is there a contradiction between HRM's long-term emphasis
and the short-term priorities of the stock market?
We observed in the previous chapter that the essence of HRM lies in
the competitive advantage to be gained from making the most of an organization's
human resources. However, it is obvious that we are constrained by the
availability of suitable people - a factor which is heavily dependent on
environmental variables. As we shall see, they include:
- the implications of world and national economic conditions
for business growth;
- the effect of inflation on the perceived value of wages;
- the traditions of local business culture;
- the particular nature of national employment markets.
In effect, therefore, these variables have a 'macro' effect on the utilization
of human resources. Additionally, in this chapter we consider other effects
caused by the activities of external stakeholders, such as:
- competitors' utilization and demand for human resources;
- multinational organizations and strategic alliances leading
to restructuring or integration on a global basis;
- economic and legislative actions by governments;
- resistance or cooperation from trade unions;
- pressure on senior managers to cut costs and maximise
shareholder value.
We begin the chapter with an examination of situational factors at the
international and national levels.
Excerpt from chapter 2 -
Human Resource Management in a Business Context, (1st edition) Thomson
Learning. Copyright A. J. Price - this excerpt may be copied for
personal use only and must be credited to the author if quoted in any text.
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