Corporate Governance and Human Resource Management - Example

Corporate governance and Human resource management Introduction Management is an important function carried out in organisations and business systems. The main purpose of management is to ensure that the particular systems can effectively achieve their goals and objectives (Bateman and Scott 12). For this to happen, it is important that the owners and executives managers of these entities employ people that understand that dynamics of strategic management and changes in the particular industries. All organizations, in the management of their human capital have created the human resource department, which is essential in the success of these organisations. The human resource department is essential in the development of systems and strategies that can make organisations effective in the process of achieving their goals and objectives (Dickmann and Paul 59). Human resource management is responsible for recruitment, staffing and creation of strategies that make companies and organisations able to function effectively Additionally, corporate governance is also an important aspect of the management of corporations in order that they achieve their set objectives. It involves creation of strategies and approaches that are essential in the achievement of the corporations set goals and objectives (Mondy and Robert 15). This paper examines the concepts of human resource management and corporate governance as undertaken in different business organisations, focusing on the distinctive features in the two processes. 2. Human resource management Human resource management refers to the management function that is specially designed in order to maximize the performance of employees towards achievement of their strategic goals and objectives. The human resource function primarily concerns how human capital is managed in organisations and companies; in this case, it focuses on the systems and policies that needed to enhance company efficiency and effectiveness. The human resource department in an organisation is often responsible for various activities that include recruitment of employees, development and training, performance appraisal, as well as rewarding (Bratton and Jeffrey 71). Additionally, human resource functions are also concerned with various industrial relations. Here, it deals with the balancing of various organisational practices and regulations that arises from the process of collective bargaining as well as the governmental laws In emerging companies, specially trained professionals often perform the duties of human resource management. On the other hand, the same functions in large companies are often dedicated on the discipline functions in the organisation. In this case, the company staff specializes in the different tasks in human resource, as well as the functional leadership that entails involvement in the strategic decisions across the business front. To train the professionals in the human resource field, most institutions that offer higher learning have developed programs that are dedicated to the particular duties and responsibilities of the practice. 3. Human resource functions in business practices Human resource management functions at the business macro-level area concerned with the process of overseeing culture and organizational leadership. Additionally, it ensures that the business complies with the employment as well as the labor laws that are often different in terms of geography. It also oversees the security, safety, as well as healthy needs of the employees. In instances where company employees are legally authorized and desire to have collective bargaining agreements, human resource functions becomes the most reliable and essential primary liaison with the representatives of employees such as the labor unions. In this case, the human resource management function, though the representatives of employees begins to engage lobbying practices with governmental organisations and agencies. In business organisations, human resources is responsible for four main functions, these are; training and development, staffing, motivation as well as staff maintenance (Bateman and Scott 57). All these four functions are essential towards creating efficiency and effectiveness in organisational functions. An effective coordination of these functions is important towards creating competitive advantages for the business organisations. 4. Corporate Governance The concept of corporate governance widely concerns the different mechanisms relations and processes through which corporations are effectively directed and controlled in order to achieve the set goals and objectives (Kieff 9). Governance structures are important in the creation, identification as well as distribution of duties, rights and responsibilities to the various participants and stakeholders in the corporation. The stakeholders in this perspective include the managers, creditor, auditors, board of directors among others, who hold an interest in the success of the corporation (Davies 49). Additionally, the process of corporate governance in these business organisations deals with the process of making and implementing various decisions in the affairs of the corporation. Corporate governance entails all the processes by which goals and objectives in the corporations are established, often with respect to the social, regulatory as well as the market environment. The process of governance in corporations comprises of activities involved in the monitoring of different action and behavior of employees and stakeholders, policies and the decisions made by corporations and their respective agents. In most cases, the practices in corporate governance are often affected by the attempts done in aligning the interest of the stakeholders. It is important to understand that the different stakeholders to the corporation often have many divergent ideas and views, which are all aimed at increasing the effectiveness and efficiency of the organisations (Kidd 67). In this case, the leadership of the corporations has to ensure that they put all these contributions into consideration in the process of corporate governance. In the recent past, there has been a renewed interest towards governance practices of modern corporations. Of great interest has been the issue of accountability in terms of financial management and other important resources. The increased interest has been necessitated by the high profile collapses and fall of various large corporations, which happened between 2001 and 2002. Most of the collapses of these corporations was attributed to lack of proper financial management and planning as well as the economic meltdown that happened in 2008 5. Corporate governance and human resource management From the foregone discussion, it is evident that the main purpose of corporate governance is to regulate the process of ownership and control of business organizations (Wallace and John 45). For this reason, the function establishes the particular legal terms as well as conditions needed in the allocation of the property rights to the different organization’s stakeholders, thus restructuring their relationships (Senarclens 37). Additionally, the process influences their incentives and other benefits they get from the work they do thus creating platforms through which they can work together to achieve the set goals and objectives and company competitive advantages. Cooperation in the process of organisational management is essential due to the particular role it plays towards enhancing the process of distribution of responsibility in the production, improvement if processes as well as other important innovations (Gottschalk 16). It is important in securing the commitment of corporation’s stakeholders to the particular goals and objectives of the corporation. In this process, it make available the full benefits as well as incentives for their knowledge, skills and the experience that the dedicate towards the effectiveness of the organisation. Ideally, this is a function that is often undertaken by the human resource function in the business. Following this development, it is important to point out that corporate governance impacts on the effectiveness of the human resource functions and practices. Corporate governance in business organisations structures the relationships of stakeholders, while prioritizing their interests, which corporate managers are expected to serve. While focusing on the results of corporate governance and the relations of stakeholders, as well as the policies and outcomes of the human resource functions, it is imperative that a distinction be drawn between the internal, as well as the external stakeholders for the organization and the degree to which they are involved in the productive activities of the organization. It is important that all the employees and other stakeholders play a leading role in the activities of the organisation to ensure that it achieves competitive advantages and market position. Additionally, it has to be in a position to make profits and repay the services of the employees and all other important players in the general governance and management as well as production of goods and services. The stakeholders of an organisation can be categorized into two important groups; these are the internal and external stakeholders. Internal stakeholders are those that interact directly with the work practices in the organisation (Fratianni 35), they include the employees, managers and other staff. On the other hand, the external stakeholders are those that benefit from the goods and services produced by the business. They play an important role in the production and marketing of the goods and services (Buckingham 62). Human resource management ensures that organization’s functions are effectively coordinated in order to achieve the set goals and objectives (Mathis and John 31). It establishes the framework upon which company activities are supposed to be followed, the expected outcomes and motivation strategies expected to be used in enhancing the performance of workers (Monks and Nell 45). On the other hand, corporate governance is important in creating proper working relationships between the internal and external stakeholders in the business. This relationship is important towards ensuring that organisations can have a variety in ideas needed to ensure that organisations succeed in their practices. 6. Conclusion It is important to note that human resource functions and corporate functions are essential in ensuring that organizations are effective and efficient in their services delivery. Those that advocate for adoption of human resource practices often argue that the strategy is important in the recognition of the rising returns from the works of employees and other stakeholders (Dess 28). Organizations that intend to be effective in the work practices are expected to integrate different strategies and approaches that can lead to effective utilization of the knowledge, skills and experience of its stakeholders. For this reason, the fusion of human resource strategies and corporate governance are essential in ensuring that organisations can effectively use their internal functions and external strategies towards enhancing their effectiveness (Solomon and Aris 27). Works cited Bateman, Thomas and Scott Snell. Management. 3rd ed. New York, NY: McGraw-Hill Irwin, 2013. Print. Bratton, John, and Jeffrey Gold. Human Resource Management Theory and Practice. 2nd ed. Mahwah, N.J.: Lawrence Erlbaum, 2000. Print. Buckingham, Jane. Managing Responsibly Alternative Approaches to Corporate Management and Governance. Farnham, Surrey, England: Gower, 2012. Print. Davies, Adrian. Best Practice in Corporate Governance Building Reputation and Sustainable Success. Aldershot, Hants, England: Gower, 2006. Print. Dess, Gregory. Strategic Management: Text and Cases. 6th ed. New York: McGraw-Hill/Irwin, 2012. Print. Dickmann, Michael, and Paul Sparrow. International Human Resource Management a European Perspective. 2nd ed. Hoboken: Taylor & Francis, 2008. Print. Fratianni, Michele. Corporate, Public and Global Governance the G8 Contribution. Aldershot, England: Ashgate, 2007. Print. Gottschalk, Petter. Corporate Social Responsibility, Governance and Corporate Reputation. New Jersey: World Scientific, 2011. Print. Kieff, Scott. Perspectives on Corporate Governance. Cambridge [U.K.: Cambridge UP, 2010. Print. Kidd, John B. Advances in Human Resource Management in Asia. London: Palgrave Publ., 2001. Print. 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