Financial Constraints Facing Global Industries - Case Study Example

Financial constrains facing Global Industries Name University Course Tutor Date Financial constrains facing Global Industries Abstract Human resources development (HRD) is a vital department in any organization. There are several roles played by the department in order to achieve organizational goals and employee development. This short report will analyze the issues facing HRD department at Global industries and the possible solutions that can be applied without abolishing the HRD. For example, the report will analyze the importance of an employee headcount, role of HRD in Global Industries, and the contributions contributed by HRD towards organizational achievements. In addition, the report will explain the importance of training by pointing out the arguments for and against outsourcing training and development activities. It is necessary to note that understanding the economic trends of the business world can help an organization prepare for any financial holdbacks especially if the company has never faced a loss in a long time. In the end, the report collected by Global Industries shall contain useful data for registering recommendations. Table of Contents 2 Abstract 2 Introduction 4 Role of HRD in a company 4 Importance of training, learning, education and development 5 Arguments for training 6 Recommendation 7 Conclusion 7 Bibliography 8-9 Introduction Whenever a company faces financial holdbacks, the executive team is always worked up. At such times, business analysts within the organization must come up with a quick recovery plan to meet organizational objectives. In the case, of Global Industries, the president and CFO Representatives of Global Industries need to come up with a quick solution of protecting the company’s name. After analyzing budget estimates of all departments and doing necessary cut down on expenditures, they feel that the HRD department should be abolished. Andrew the company’s CFO feels like Karen’s Department (HRD) has employees who are less beneficial to the company at that time when a company is facing a financial crisis. In addition, both, the president and CFO feel that the department’s headcount should be reduced, or better of abolished if Karen cannot come up with better solutions to save her employees. Considering the analysis, HRD department at Global Industries is at risk. It is vital to note that abolishing the department may solve current financial issues. However, statistics prove that the company will face tremendous problems in the future without the department. Role of HRD in a company It is necessary to understand the role played by the HRD in any organization, before making any conclusions. Human Resource Development is an aspect that analyzes the continuous training, learning and development of various employees aiming at attaining organizational goals. In the business world, competition is rampant and natural (Luthans, 2012, p.4). However, in order to out compete other organizations, proper training and development of employees will help them improve in their jobs and make them more effective (Avey, Luthans, & Youssef 2010, p.431). Therefore, the major role of HRD is enhancing employee performance with the aim of increasing organizational productivity. Importance of training, learning, education and development Human Resource Development addresses four critical elements, which include training, education, learning and development of employees and other stakeholders of the organization. This helps to increase the knowledge of all employees with the aim of meeting future organizational demands. With the nature of advancement in technology, organizations should be prepared to equip their employees with latest skills. Therefore, including training in an organization’s budget is essential for future benefits (Peterson et al 2011, p. 430). Training helps in accumulating of human capital, which is an added advantage in the effective development (Simsons & Richardson 2012, p. 6). Therefore, abolishing training in Global Industries implies that they organization may fail to have efficient and current skills to handle new challenging situations. This means that will have insufficient and inefficient trained personnel to address current challenging situations that may be new to them. In the end, a gap in consumer satisfaction will be created, which gives their competitors credit in having more consumers and increased sales (Lee & Bruvold 2010, p. 13). When training is in the process, learning occurs. The employees not only learn for personal benefit, but also for organizational development. Learning helps the employees develop several skills like, communication, customer service relations, human relation, quality initiatives, ethics, and diversity among others (Van Zolingen & Wortel 2011, p. 10). Therefore, understanding the need for collective learning while training increases the opportunity of the organization to come up with useful ideas in addressing issues like financial constraints. The idea behind education and development critically explains the power of advancement. Education gives people knowledge to develop. However, if done in the wrong way , then it will be less effective in an organization . For example, when undertaking headcount reports of employees, it helps in analyzing the employee performance and their contribution to the organization (Hill, Kuchinke & Zinser, 2013 p. 6). This will be the best alternative to determine how wages can be cut depending on an individual’s contribution to an organization. Some common employees may be less qualified than their manager however; statistics may prove that their contribution is better off without the manager. Therefore, theoretical knowledge is less beneficial if it cannot be applied practically (Dorgham 2009.). Arguments for training When considering the situation in Global Industries, it is logical to consider training as a luxury. However, it is necessary to look at the bigger picture. If the company abolishes the HRD department they will, be attracting more loses. The organization will not have up to date professionals in respective departments. Training has benefits to the organization as follows; Thory suggest that training prepares the employees and employers for unknown possibilities that may occur in future (2013, p.18). Training one person in an organization can cause tremendous changes in case of sudden, abnormalities. For example, Global Industries is facing financial hatch, and executives are scared of the future outcome. However, they should not neglect the importance of a single trained professional who can alter the company’s fate by suggesting current issues that may help the company. In addition, training, gives the employees opportunities of building relationships with other companies (Alagaraja 2013, p. 80). This helps them in identifying their weakness and improving on them to maintain quality products and meet consumer demands (Walumbwa et al 2011, p. 10). Therefore, such advantages should not be neglected when suggesting ideas that can help solve a company’s financial problems. Recommendation This report is specific and nullifies the idea of abolishing HRD department. Training is not a luxury, but rather a necessity. Therefore, instead of reducing budgets on training, the company should cut other activities like vocational trips and increase working hours for the employees. However, employees should be consulted to avoid labour unrest. When the financial situation has relaxed, then they can re introduce the system but in a moderate way. In the end, both the organization and employees will benefit. Conclusion Different market trends affect the consumption level of consumers. Therefore, it is beneficial to analyze such situations to avoid financial constrain. In addition, the organization should have regular analysis of headcount reports that will help in noting the financial budgets as compared to sales. In the end, the company will be in a better position to reduce and balance some departmental expenses before being hit by a financial problem. Reference List Alagaraja, M 2013, ‘Mobilizing organizational alignment through strategic human resource development’ Human Resource Development International, vol. 16, no. 1, pp. 74-93. Avey, J B, Luthans, F, & Youssef, C M 2010, ‘The additive value of positive psychological capital in predicting work attitudes and behaviors’, Journal of Management, vol.36, pp. 430–452. Dorgham, M A 2009, ‘The ageing workforce and hrm –challenges, chances, perspectives’, International Journal of Human Resources Development and Management, vol. 9, no. 2/3, Hill,R B, Kuchinke, K, P & Zinser, R 2013, ‘Guest editorial : (re)connecting workforce education and human resource developmenet’,Journal of Human Resource Development Review vol. 12, no.1, pp. 3-10, viewed 20 March 2013, Lee, C H & Bruvold, N 2010, ‘Creating value for employees: investment in employee development’ Routledge, vol. 14, no. 6, pp. 981-1000. Luthans, F 2012, ‘Psychological capital: Implications for HRD, retrospective analysis, and future directions’ Wiley Periodicals, Inc., vol. 23, no. 1, pp. 1-8. doi: 10.1002/hrdq.21119 Peterson, S J, Luthans, F, Avolio, B J, Walumbwa, F O, & Zheng, Z 2011, ‘Psychological capital and employee performance: A latent growth modeling approach’, Wiley Periodicals, Inc., vol. 64, no. 2, pp. 427–450. Simsons, N & Richardson, J 2012, ‘New roles. new responsibilities: examining training needs of repository staff’ Journal of Librarianship and Scholarly Communications, vol. 1, no.2, pp. 1-17, viewed 20 March 2013, Thory, K 2013, ‘Teaching managers to regulate their emotions better: insights from emotional intelligence training and work-based application’, Human Resource Development International, vol. 16, no. 1, pp. 4-21. Van Zolingen, S J & Wortel, L 2011, ‘Workplace learning: a new model applied in a case study in the netherlands’, Inderscience Publishers, Volume 12, Number 1-2/2012, pp. 9-30. Walumbwa, F O, Luthans, F, Avey, J. B & Oke, A 2011, ‘Authentically leading groups: The mediating role of collective psychological capital and trust’, John Wiley & Sons, Ltd, vol.32, no.1 pp. 4–24. Read More