Ethics in HR and Model of HR Function - Example

Academic Report on Ethics in HR and Model of HR Function Table of Contents Summary 3 2. Introduction 4 3. Evaluate and Justify of Selected Project4 New Ticketing and Packing Machine Project Scope and Benefits 5 New Computerised Quality Checking System Project Scope and Benefits 6 Analysis of the Projects Financial and Non Financial Factors 6 Analysis of the Projects Non Financial Factors 7 PESTEL Analysis 7 Selection of Project 8 4. Ethical Considerations of the Chosen Project 10 5. Human Resource Function Model 11 Enhancing the Leadership Credibility 12 Enhancing the Organisational Capability 12 Improve Communication Skills 12 Strategy Formation 12 Talent Management 12 6. Conclusion 13 7. Recommendation 13 8. References 15 9. Bibliography 18 10. Appendix 19 1. Summary In current scenario, taking investment decision is integral aspect for the business to sustain the operations of the business and earn competitive position in the market. This report analyses and highlights the two different alternative projects that LCJ Ltd is planning to undertake in order to improve and enhance the productivity of the business in the long run. Furthermore, the expected contribution of the two different projects has been drawn and justified based on the various investment appraisal methods including ARR, NPV and payback period. In this context, the report reveals that both the projects i.e. introduction of a new ticketing and packing machine as well as introduction of a new computerised quality checking system has its considerable advantages of improving the productivity of the business. On the other hand, the report highlighted the fact that project related to introduction of a new ticketing and packing machine is highly beneficial for the business as the calculated average return of the project 68.21% of initial investment. On the positive present value of expected cash inflow of £ 32910.59, which is comparatively higher than introduction of a new computerised quality checking system. Besides, the ethical consideration has been taken into due consideration while appraising the profitable aspect of the project. Conclusively, the report also provides recommendation in which efficiency of the project can be maintained throughout the phases of implementation of the project. 2. Introduction Project is regarded to the approach of enhancing the scope of the business activities within the determined time frame and allocated budget structure. Additionally, the management of the project is considered as one of the major management paradigms as it enables the organisation to effectively and efficiently achieve the ultimate goals and objectives in the constantly changing phase of the business environment. Moreover, the investment project in the context of the changing business environment is integral for the development as well as progress of the business in the global environment. In this context, it can be affirmed that in order to develop and make decision regarding the investment projects involves the benefits as well as existence of financial resources in the business (Baker & Powell, 2009). Besides, the cost benefits analysis related to project is effective tool that helps to recognise the effectiveness of the project and make choices over the optimal project for the business. LJC Ltd is one of the fruit and vegetable distributor of the market working over 80 years in dealing in packs of fruit and vegetables products business for the small retailers. Additionally, LJC Ltd is a small family business consisting of family members as the directors. Co-share, one of the business partners of the LJC Ltd considerably demanded to work with the business, which could likely enhance the volume of production. Besides, in order to do so LCJ Ltd needed to expand the business through investing in new machinery. In this regard, this study intendto evaluate the financial aspect of two different projects i.e. ‘Introduction of a new ticketing and packing machine’ and ‘Introduction of a new computerised quality checking system’. Based on the appraising profitability aspects of the two projects, recommendation will be made regarding the project that could be beneficial for the business. Moreover, ethical considerations will be drawn in relation to the chosen project and ‘model of the HR function’ and its possible implication to the business. 3. Evaluate and Justify of Selected Project In the modern business scenario, in order to sustain the competitive scope, business need to undertake various investment decisions, which is often know as capital budgeting. Additionally, capital investment is also regarded as the approach of acquisition of capital such as machineries and plants that will increase the overall productivity of the business. Besides, the key aspect because of which the capital investment decision is integral for the business is that it requires considerable amount of funds for the business. Notably, such funds are acquired from equity, bank loans, owner’s funds and other sources. Thus, it quite important for the business to allot the funds in most appropriate manner to ensure the flow of expected return from the same. On the other hand, the selection of the project varies with business, as one may appraise the project based on the return while other selects on the basis of growth possibilities of the project in the long run. In the context of LCJ Ltd, the examination of the project will be made on the basis of the aspect that project will provide opportunity for the long term sustainability of the business in the market. In accordance to the provided case scenario, it can be affirmed that the capital investment decision in the context of LCJ Ltd plays a prior role for sustaining the long-term objectives of the business in packaging and distribution of fruit vegetables. Thus, in order to sustain the profitability and growth aspect the business need to acquire new machinery and equipments to enhance the production capabilities. In this relation business has estimated to invest their fund into one of the two different projects i.e. ‘New Ticketing and Packing Machine’ or ‘New Computerised Quality Checking System’ in order to enhance the financial as well as managerial efficiency of the business. The assessment of the scope as well as benefits that company is expected to acquire from both the projects has been discussed below. New Ticketing and Packing Machine Project Scope and Benefits In relation to the introduction of new ticketing and packing machine, this is regarded to be an integral project for the business that could enhance the productivity of the business. In the general prospective of the business, it can be affirmed that the project are been undertaken to enhance the value of the firm and increase the overall wealth of the shareholders (Alonso & Cunha, 2009). Besides, in relation to the key benefits of the underlining project is that it will assist the business to enhance the efficiency of the operation in undertaking the packaging activities through reducing the requirement of workforce by 12%. Additionally, the approach of reduction in the workforce of the business can substantially reduce the cost of operation. On the other hand, introduction of new machinery in the operation of the business will likely to enhance the production process of the business and production level of the business (Thori & et. al., 2013). It has been expected that if company introduces this machinery into the business operation then the production level will be enhanced by 18%, which assists the business to meet the expectation of the business partner i.e. Co-share’s. Moreover, another key advantage of this machinery is that it will enable the business to provide the required delivery of the products in the single day. New Computerised Quality Checking System Project Scope and Benefits On the other hand, in relation to introduction of new computerised quality checking system mechanism it can be affirmed that this mechanism will also allow the business to enhance its operational as well as production effectiveness. In relation to this project, it has been expected that this will likely to enable LCJ Ltd business to reduce the requirement of warehouse staffs in around 18%. According to Ramaa & et. al. (2012) warehousing management is integral function of the any business, as it functions as the linking node between the business and customers. In today’s competitive business environment, company need to put its considerable importance over improvement of warehousing operations to acquire significant position in the market (Sandberg & Abrahamsson, 2011). Besides, the Co-shares business requires high quality products and if the LCJ Ltd invests their fund in this project it will enable the business to improve the quality of the products and thereby meet the demand of Co-share. Nevertheless, this project will also enable the business in order to reduce the production level by 17% for greater efficiency Analysis of the Projects Financial and Non Financial Factors Prior to selection of any, project it been quite noteworthy for the business to evaluate the cost and benefits of the project for long run. In this context, both financial and non-financial factors have been analysed. Additionally, it can be affirmed that the project has been undertaken by the business in order to enrich the level of production and overall productivity of the business. Notably, on the due consideration of the fact that substantial amount of the fund allocated by the business in any particular project and if the same will, fails to provide significant benefit to the business it will create huge loss to the business (Atik, 2012). In theoretical prospect there are various method through which any particular project cost as well as benefits is been evaluated that includes payback period, average return, net present value among others (Obamuyi, 2013). The financial factors can be regarding the analysis of the ratio to determine the profit and costs. On the other hand, the non-financial factors are the cost including the employees and the other operational activities. The selection of the project thus depends on various factors as mentioned. Analysis of the Projects Non Financial Factors PESTEL Analysis Political Analysis In regard to the new project of LCJ Ltd, one of the political factors that the business need to ensure is regarding the effectiveness of the new machinery operation by considering environmental protection law with restricted level of emission. Besides, for effectively performing the trade in the international environment, different political environment of the countries in terms of their legislations, tax policies, and political conditions will also impact the operations of the business (Slamanig, 2013). Economic Analysis Correspondingly, the economic factor will also impact the performance of the business because this factor is beyond its control and is likely to impact the cost, price, demand, as well as the profitability aspects (Slamanig, 2013). Social Analysis On the other hand, the social factor play an important role and affects the performance and operation of business, which includes lifestyle, level of education, and living standard, which have significant impact over the consumption pattern of customers. Besides, in this concern increasing in the rate of labour unions is perceived to be major threat for the business (Slamanig, 2013). Technological Analysis Technology and its implication in the business were regarded to be highly advantageous for the business as well as customers. Thus, in this regard the new machinery that LCJ Ltd will introduce play important role in enhancing the operation of the business. In this respect, it is highly convenient for the customers to avail products, as it is easily available to them (Slamanig, 2013). Environmental Analysis The manufacturing unit need to focus over the environmental forces established in the nation and remain concern over the prime intention to safeguard the environment by producing eco-friendly products for a sustainable growth. Thus, in this concern awareness regarding the environmental operations in the process of production will enable business to become highly efficient (Slamanig, 2013). Legal Analysis In respect of maintaining, the functional aspects for the LCJ Ltd in the long run, business need to encompasses their operations in line with the parameter of various government policies and provisions (Slamanig, 2013). Selection of Project Both the affirmed proposed projects have been evaluated on the basis of payback period, average return and net present value methods. In the theoretical prospective, payback period method of appraising the investment measures the period that requires recovering the amount of initial investment of cash flows that has been underwent by the business (Brigham & Houston, 2006). ARR method measures average returns that has been acquired by the proposed project to the business (Hansen & et. al., 2007). On the other hand, NPV method evaluates the expected present value of the investment in relation to expected risk associated with the cash flows from the particular project (Brigham & Ehrhardt, 2013). In the context new ticketing and packing machine project, it has been expected that the cash inflows from the project for the four consecutive years will be £ 8000, 18000, 29500 and 40000 respectively. On the appraisal of the project based on payback period of the cash flow that has been acquired from the project it has been expected that LCJ Ltd will acquire the initial investment of £ 35,000 in 2.31 years (refer in appendix). On the other hand, new computerised quality checking system project from which the cash flow for the business will be £ 15,000, 22000, 24,000 and 29,000 respectively. Moreover, according to evaluation of this cash flow based on the payback period it can be affirmed that initial investment of £ 35,000 would be recovered within the timeframe of 1.91 years (refer in appendix). Correspondingly, considering the capital investment appraisal with based on payback method it can be revealed that investing in new computerised quality checking system project prove to be profitable for the business, as the period of realising of fund that initially invested is lower than other one i.e. 1.91 years. In relation to appraising the benefit, that company is likely to acquire from both the projects using the average rate of return it can be affirmed that the average return on the per year basis from the new ticketing and packing machine project is £ 23,875, which is 68.21% of the initial investment. On the other hand, new computerised quality checking system project will be £ 22,500 i.e. 64.29%. These points make it clear that new ticketing and packing machine project, which could enable the business to increase the level of the production by 18%, and will provide superior return to the company. However, considering the fact that new computerised quality checking system project will provide opportunity over the quality supplies to Co-shares business, key client of the business. Moreover, business can make its arbitrary choice through selection of new computerised quality checking system project. On the other hand, considering the aspect of profitability of the business through introduction of both the alternative method using NPV it can be stated that the result reflected different scenarios in relation to such projects. In relation to the assessment of the result, it has been highlighted that new ticketing and packing machine project is quite superior to new computerised quality checking system project. Relatively, the value as per the calculation of the NPV reflected that new ticketing and packing machine project would be around £ 32910.59, which is significantly superior over the computerised quality checking system project value i.e. £ 31443.87. Moreover, on the basis of the comparison based on the cost benefit analysis of both the projects it has been comprehensible that project of new ticketing and packing machine introduction is quite beneficial for the business in the long run over other project. Besides, it can also be affirmed that implementation of the project will immensely increase the overall productivity of the business. Moreover, the machinery facilitates the business to label the products in relation to the recent norms of food legislation. Thus, inventing introduction of new ticketing and packing machine project is highly beneficial for the business for long-term competitive advantage. 4. Ethical Considerations of the Chosen Project In context of selection of any particular project considering the aspect of the ethical codes and conducts are integral aspect prior to its selection. Besides, considering the aspect of possible ethical issues, which could be, raised during the time of impartation will assist the business to eradicate the negative impact of such project. Moreover, considering the aspect of the ethical consideration in the project selection has taken into the prior concern in order to maintain reliability and validity of the different activities that need to be performed in the project (Raghunandan & et. al., 2012). In relation to selection of best alternative in respect of cost and benefit, due consideration has been made over evaluation with the assistance of various investment appraisal methods including ARR, NPV and payback periods of the projects. Besides, it has been affirmed that above mention aspect of analysis of the investment decision will provide true picture of the project in relation to the prospect of profitability in the long run. Moreover, the appraisal in relation to both the projects has been maintained through avoiding personal interaction and degree of biasness in taking any needful conclusion regarding selection of project. In relation, Negulescu & Doval (2012) highlighted the selection of any particular project need to take into concern factors including honesty, equity, health protection and safety as well as welfare of the workforce (Alm, 2007). Apparently, justification has been in regard to selection of the project through keeping the aspect into the prior consideration that the selected project will help to enhance and improve the overall business productive of the LCJ Ltd. Besides, in relation to the current business operation it has been revealed that the scenario that company is highly focusing upon is the quality aspects in the warehouse management in order to efficiently meet the clients demand. Thus, in relation to determination this particular project will be selected in the business with relevant data regarding the expected cash inflows from the both the projects in order to derive the possible long-term opportunity to the LCJ Ltd from the selected project (Frost & et. al., 2012). Moreover, the NPV method that is concerned over determining the expected value of the inflow of the project in relation to the future valuation is a widely used mechanism to validate the selection of the project profitability. Likewise, the aspect of ARR that represent the average inflow of the project per year has been utilised to maintain the ethnicity in the selection of the project (Sookram & Kistow, 2012). Nevertheless, the aspect of the calculation justified that investing in ticketing and packing machine project is highly beneficial for the business to increase its overall productivity as well as concern over the legal provision that has been currently implemented in the economy. 5. Human Resource Function Model In relation to the implementation of the project, it has been highly important for the business to develop strong human resources through integrating the approach of project in relation to all stakeholders of the organisation. Besides, stakeholders are the group of people having significant interest in the business. On the other hand, through concentrating over the function of human resource management in relation to the selected project will provide high emphasis over boosting the productiveness of the business (Becker & Huselid, 2006). In this regard, to the selected project business need to develop the strategic framework with the human resource of the organisation in order to maintain the long-term sustainability. Moreover, through integrating the aspect of the human resource in the project the business could focus over the quality, values and requirement for the future to be effective (Mahapatro, 2010). On the other hand, in relation to LCJ Ltd the major requirements of the business are to work affectingly with Co-Share. In this regard, business should focus over the deployment of best possible HR function model in order to successfully implement the machine in the warehouse operation (Ofori, 2012). In this regard, through the approach of HR functioning the business will focus over following elements. Enhancing the Leadership Credibility In respect of successfully implementing the project into the business warehouse and increasing the overall productivity, LJC Ltd HR professional need to enhance the leadership capabilities to augment the level of motivation of employees to adopt the changes (Petty, 2009). Enhancing the Organisational Capability Correspondingly, with due consideration of the fact new machinery will enhance the overall productivity of the business, LJC Ltd significantly need to change its working culture as well as behaviours for better prospects (Sani, 2012). Improve Communication Skills Besides, it has been equally important for employees to work in coordinative manner and enhance the productivity of the business. Besides, this could be achieved through successful relationship building, excellent interpersonal and communication within the workforce (Lee & Yu, 2013). Strategy Formation On the other hand, impartation of the HR strategies aligning with the objectives has been estimated with the new project in order to be integral aspect to enhance the productivity level (Longman & Mullins, 2004). Talent Management Notably, with the event of introduction of the new machinery, LCJ Ltd also needs to retain and recruit talent workforce to work efficiently with the same and ensure expected production level (Cannon, 2011). 6. Conclusion The aim of the report is to access the efficiency of the two different projects i.e. ‘New Ticketing and Packing Machine’ and ‘New Computerised Quality Checking System’ projects. From the above discussion it has been affirmed that both the projects has its own benefits, as the project of introduction of the new ticketing and packaging machine will allow business to label the products of the business in respect of the newly formed food legislation and enhance the overall productivity of the business by 18%. On the other hand, new computerised quality checking system project will allow the business to produce high quality products and enhance productivity by 17%. Besides, on the basis of comparing the cost and benefit analysis of both the project it has been ascertained that project related to introduction of new ticketing and packing machinery into the operation of business is comparatively highly efficient for the business as the expected net present value and average rate of returns in the project is higher. Moreover, in regard to implementation of the project it has been important for the LCJ Ltd to improve its HR functioning through proper leadership, talent management, and strategic formation and changing the organisational structure of the business. 7. Recommendation In regard to the selection of the project effective decisions regarding the analysis of the expected return from the project is highly integral to sustain the efficiency of the project in the current business industries. Besides, in this regard, it can be recommended for the business that the problem related to the weak controlling can be minimised through protecting different aspects including enhancing the skill and staffing and deploying people in different activities of the project based in the level of competency. On the other hand, risk related to the project can be minimised through developing the contingency plan and manage the efficiency of the project in a sensible and achievable level. Moreover, the approach of measuring the efficiency of the project through Internal Rate of Return could also be recommended as the tool to determine the profitability of the projects. Nevertheless, the approach of employing the skilled personal of management, conflict resolution, communication, as well as proper leadership practice in the project will likely to improve the efficiency of the project. 8. References Atik, A., 2012. A Strategic Investment Decision: “Internationalization of SMEs”: A Multiple Appraisal Approach and Illustration with a Case Study. Scientific Research, Vol. 4, pp. 146-156. Alm, K., 2007. Challenges to Investment Ethics in the Norwegian Petroleum Fund: A Newspaper Debate. Philosophica, Vol. 80, pp. 21-43. Afonso, P. & Cunha, J., 2009. Determinants of the Use of Capital Investment Appraisal Methods: Evidence from the Field. University of Minho, pp. 1-15. Baker, H. K. & Powell, G., 2009. Understanding Financial Management: A Practical Guide. John Wiley & Sons. Becker, B. E. & Huselid, M. A., 2006. Strategic Human Resources Management: Where Do We Go From Here? Journal of Management, Vol. 32 No. 6, pp. 898-925. Brigham, E. & Ehrhardt, M., 2013. Financial Management: Theory & Practice. Cengage Learning Publications. Brigham, E. & Houston, J., 2006. Fundamentals of Financial Management. Cengage Learning Publications. Cannon, J. A. & McGee, R., 2011. Talent Management and Succession Planning. Chartered Institute of Personnel and Development. Frost, G., & et. al., 2012. Exploring Sustainability Considerations in Capital Budgeting Decisions. Discipline of Accounting, Business School, pp. 1-16. Hansen, D., & et. al., 2007. Cost Management: Accounting and Control. Cengage Learning Publications. Lee, E. & Yu, K. S., 2013. How are Global HR Competency Models Evolving for the Future? Cornell University, pp. 1-7. Longman, A. & Mullins, J., 2004. Project Management: Key Tool For Implementing Strategy. Journal of Business Strategy, Vol. 25, No. 5, pp. 54-60. Mahapatro, B., 2010. Human Resource Management. New Age International Limited. Negulescu, O. & Doval, E., 2012. Ethics Issues in the Management of the Projects. Review of General Management, Vol. 15, Iss. 1, pp. 33-41. Ofori, D. F., & et. al., 2012. Perceptions of the Human Resource Management Function among Professionals: A Ghanaian Study. International Journal of Business and Management, Vol. 7, No. 5, pp. 159-178. Obamuyi, T. M., 2013. Factors Influencing Investment Decisions In Capital Market: A Study Of Individual Investors In Nigeria. Organizations and Markets in Emerging Economies, 2013, Vol. 4, No. 1, pp. 141-161. Petty, A., 2009. Leadership & The Project Manager. Developing the Skills that Fuel High Performance. [Online] Available at: http://artpetty.com/wp-content/uploads/2009/05/ldrshipandprojmgrfinal.pdf [Accessed April 27, 2015]. Ramaa, A., & et. al., 2012. Impact of Warehouse Management System in a Supply Chain. International Journal of Computer Applications, Vol. 54, No.1, pp. 14-20. Raghunandan, M., & et. al., 2012. Examining the Behavioural Aspects of Budgeting with particular emphasis on Public Sector/Service Budgets. International Journal of Business and Social Science, Vol. 3, No. 14, pp. 110-117. Sookram, R. & Kistow, B., 2012. Capital Budgeting and Sustainable Enterprises: Ethical Implications. The Journal of Values-Based Leadership, Vol. 5, No. 1, pp. 1-7. Sani, A. D., 2012. Strategic Human Resource Management and Organizational Performance in the Nigerian Insurance Industry: The Impact of Organizational Climate. Business Intelligence Journal, Vol. 5, No. 1, pp. 8-20. Slamanig, M., 2013. Pest Analysis Hungary. GRIN Verlag. Sandberg, E. & Abrahamsson, M., 2011. Logistics Capabilities for Sustainable Competitive Advantage. International Journal of Logistics, Vol. 14, No. 1, pp. 61-75. Thori, P., & et. al., 2013. An Approach of Composite Materials in Industrial Machinery: Advantages, Disadvantages and Applications. International Journal of Research in Engineering and Technology, Vol. 2, No. 12, pp. 350-355. 9. Bibliography Drury, C., 2007. Management and Cost Accounting. Cengage Learning EMEA. Institute of Chartered Secretaries and Administrators, 2009. Capital Investment Appraisal. Capital Budgeting. [Online] Available at: https://www.icsa.org.uk/assets/files/pdfs/BusinessPractice_and_IQS_docs/studytexts/cfm2/r_CFM_6thEd_StudyText_Chapter12.pdf [Accessed April 27, 2015]. Meyer, M., 2013. The National HR Competency Model (Part III): Ten Competencies to Elevate HR from the HR room to the Boardroom. SA Board for People Practices, pp. 1-4. Peterson, P. P. & Fabozzi, F. J., 2004. Capital Budgeting: Theory and Practice. John Wiley & Sons Publications. Price, A., 2011. Human Resource Management. Cengage Learning. Rickard, C., & et. al., 2012. Going Global: Managing the HR Function across Countries and Cultures. Gower Publishing, Ltd. Shapiro, 2008. Capital Budgeting and Investment Analysis. Pearson Education India Publications. 10. Appendix Project: New Ticketing and Packing Machine Payback Period Payback Year Net Cash Flow £ Cumulative Cash Flows £ 0 -35000 -35000 1 8000 -27000 2 18000 -9000 3 29500 20500 4 40000 60500 Payback period is 3 years + (9000/29500) = 2.31 years ARR = £ (8000 + 18000 + 29500 +40000)/4 = £23,875 = £ (23875/35000)*100% = 68.21% NPV NPV Year Net Cash Flow £ Discount Factor 12% Discounted Cash Flows £ 0 -35000 1 -35000 1 8000 0.89285714 7142.86 2 18000 0.79719388 20997.52 3 29500 0.71178025 20974.5 4 40000 0.63551808 25420.72 NPV £ 32910.59 Project: New Computerised Quality Checking System Payback Period Payback Year Net Cash Flow £ Cumulative cash flows £ 0 -35000 -35000 1 15000 -20000 2 22000 2000 3 24000 26000 4 29000 55000 Payback period is 2 years + (20000/22000) = 1.91 years ARR = £ (15000 + 22000 + 24000 + 29000)/4 = £ 22,500 = £ (22500/35000)*100% = 64.29% NPV NPV Year Net Cash Flow £ Discount Factor 12% Discounted Cash Flows £ 0 -35000 1 -35000 1 15000 0.89285714 13392.86 2 22000 0.79719388 17538.27 3 24000 0.71178025 17082.73 4 29000 0.63551808 18430.02 NPV £ 31443.87 Read More