Busines Management - Report Example

Business management Table of Contents Introduction of Royal Mail and UK postal industry 3 Strategic Human Resource Management (SHRM) 4 PEST analysis of UK 4 Present state of Royal Mail 6 Application of SHRP for solving the prevailing condition 6 Reference 9 Introduction of Royal Mail and UK postal industry United Kingdom’s postal industry was primarily dominated by Royal Mail Holdings plc which is owned by Royal Mail Group Limited. It is a publicly limited company. General post office of UK was historically a government department, but by 1969 it turned to a statutory corporation and till 1990’s it was a limited company under the ownership of UK government. In June 2009, UK government passed a bill regarding its partial privatisation, but due to the present economical recession it was postponed. The decision of privatisation was taken to manage the poor financial position of Royal Mail (Sparrow, 2009). Although Royal Mail is a private company but it enjoys certain special benefits provided by the government to shield it from growing competition. Such protection played an important role in downfall of the company. The decision taken by the company regarding modernisation and automation can result to job cut of more than 60, 000 employees. In respond to this, Communication Workers Union (CWU) asked the workers to go for a strike till the matter is sought out. Such strikes are not in the UK postal industry, many strikes has taken place in past which are equally responsible for the poor condition of UK postal industry. If the management of Royal Mail want to settle the prevailing unrest, they have to understand implement Strategic Human Resource Management (SHRM). Strategic Human Resource Management (SHRM) Strategic Human Resource Management brings integration between corporate strategy and HR practices of the company. Such linkage assists the company to achieve its organisational goals in the best possible way (Devine, S. K. 1992). For any organisation its human resource is the biggest asset and it needs proper management so that it can act as strategic partner and the company can gets benefited in the long term (Lawler, et. al., 2006, p. 1-2). For application of SHRM, a proper hierarchy has to followed, like it must start with a basic legal compliance, then it should be followed by efficient HR processes, then setting of effective HRM Programs and alignment of these with the strategic goals of the organization. All these should follow a pyramidal structure (Office of Merit Systems Oversight and Effectiveness, n.d., p. 1). PEST analysis of UK PEST analysis helps the management to understand the prevailing market condition and to set the appropriate strategies. The four elements to PEST analysis are Political scenario, Economical state, Social condition and Technological sectors. Political scenario- politically the country is conservative and its legal system is based on early Roman traditional laws along with certain continental influence. In UK constitution is unwritten, hence they follows partly statutes and partly common law. They have active participation with many international organisations like CERN, NATO, OECD, UNESCO, WHO and many more. Economical state: it is a leading financial centre with trillions dollar of economy. From the last two decades government ownership has drastically declined. Though the service industry is showing a good performance, but industrial performance is constantly declining. The GDP declined to $1.8 trillion with a fall of 30 percent. The number of job cuts has gone drastically high and it has crossed 1.97 million by February 2009 (BBC NEWS-a, 2009). Interest rate is at 1 percent but soon it might go to zero level. To boost the economy government has provided stimulus of trillions of dollars. They have a labour force of 31.23 million (2008), out of which 4 percent is engaged in agriculture, 24.2 percent in industry and the rests 74.5 percent are employed in service sector. Starling has fallen sharply against dollar (around 30 percent) just in 6 month. Social condition: UK’s population is approximately 61,113,205 (July 2009), with the age group of 0-14 years comprises of 16.7 percent, 15-64 years of 67.1 percent and above 65 years 16.2 percent. So with passage of time the strength of labour force will decline as the population growth is just 0.279 percent (2009). Technological sectors: with the privatisation of government sectors, rate of technological up-gradation has increased to lead fast modernisation in different sectors like postal, communication, transportation (Central Intelligence Agency, n.d.). Present state of Royal Mail After the company has undertaken a modernisation plan of 2-billion pound, the condition of unrest has stated. At present 50 percent of the sorting work is being done in an automated form, where as in France it is 63 percent and in Germany 89 percent. So the company need modernisation to enhance its competency. On the same side modernisation will result in high job losses. But after the strike called by CWU, 120,000 employees have gone on strike. Around 30 million items are still pending and the rest are getting derived too slow. To overcome the entire situation, company has employed 30,000 temporary workers for clearing the pending posts. As per the union still 100 million posts are pending and with passage of time it might go high due to Christmas season (Telegraph, 2009). Application of SHRP for solving the prevailing condition The problem which Royal mail is facing is not just a Human Resource problem. It has its root in the company’s present strategy, so to handle the condition all the departments have to work hand and hand. At present the company is in a bad state and the condition is getting worst day by day due to the ongoing strike. Company has lost its reputation as it failed to deliver the mails and parcels on time. As per the news agencies, Royal Mail has lost a £25m deal with one of its big clients Amazon. This is not the only loss for Royal Mail; many other clients are moving always and making the contracts with other rivals of Royal mails. But the rivals of Royal Mail already declared that it won’t be possible for them to handle the growing pressure (Telegraph-a, 2009). Thus the full system is setting disturbed by the ongoing strike. To solve the problem, company should adopt SHRM in its HR department. As per the SHRM, before introducing any change in the organisation a proper change management planning has to be done. At first the management has to set a board who will conduct all the required work. The members of the board should understand prevailing strategy of the company and then analyse whether the change will be beneficial or not (Georgia State University, 2005). Similarly management of Royal Mail should make a board that will be responsible for managing the present HR problem. At first they should make the employees understand the fact that if the company does not take up modernisation plan, they will lose their competency in market. So to retain in market, the company has to upgrade itself. The main root cause of ongoing strike is job loss for 60,000 employees. It is a fact that in such a bad economical state it will be difficult for the employees to find a need job, so it is management’s responsibility to hand excess of manpower after new technology is implemented. At present the company has £2 billion to be invested for technology up gradation; hence a part of this should be invested in arranging advanced training programs for the employees. Such training will assist the employees to upgrade their skills and to develop themselves as per the company’s new working environment. The employees who will be retrenched should be given special training so that they can be absorbed in some other department or they can be shifted to some other company as per government’s reference. Management of the company is highly responsible for such disturbing condition because on one side they are planning to retrench 60,000 employees and on the other side they are paying high salaries to the top level managers (Market Direct, 2009). Before taking any major decision, both management and union should discuss the matter with an open mind. The union should understand the fact that if they continue the strike, customers of Royal Mail will shift to some other postal service provider and will not be back again. Such shrinking customer base will hamper the company’s business as well as the future of the company’s employees. Keeping this fact into mind a more realistic decision has to be taken by both the parties. As per the decision, the change management plan should be developed keeping the whole process transparent. Management should give a fair opportunity to the employees to actively participate and to provide their suggestions. As soon as the matter of strike gets solved out, management should incorporate certain changes in their HR policies so that in future such conditions should not come up. After the prevailing economical slowdown gets over, management has to incorporate SHRM in full form. This will help the management to set the HR policies as per the corporate strategies and the HR department will actively participate in the strategy making process. The management should understand that no company can run its business successfully until they have a proper HRM strategy. Reference Sparrow, A. May 5, 2009. Brown will back down over Royal Mail privatisation, predicts Labour rebel. [Online]. Available at: http://www.guardian.co.uk/politics/2009/may/05/brown-royal-mail [Accessed on November 04, 2009]. BBC NEWS-a, August 07, 2009. Timeline: Credit crunch to downturn. [Online]. Available at: http://news.bbc.co.uk/2/hi/7521250.stm [Accessed on November 05, 2009]. Devine, S. K. 1992. Strategic Human Resource Planning: A Union Perspective. Human Resource Planning. Vol. 15. Lawler, E. E. 2006. Achieving strategic excellence: an assessment of human resource organizations. Stanford University Press. Central Intelligence Agency. No date. The World Fact Book. [Online]. Available at: https://www.cia.gov/library/publications/the-world-factbook/geos/uk.html [Accessed on November 05, 2009]. Office of Merit Systems Oversight and Effectiveness. September 1999. Strategic Human Resources Management: Aligning with the Mission. U.S. Office of Personnel Management. [pdf]. Available at: http://www.opm.gov/studies/alignnet.pdf [Accessed on November 06, 2009]. Telegraph. November 01, 2009. Royal Mail strikes: High Court threat to postal crisis breakthrough hopes. [Online]. Available at: http://www.telegraph.co.uk/news/uknews/royal-mail/6479221/Royal-Mail-strikes-High-Court-threat-to-postal-crisis-breakthrough-hopes.html [Accessed on November 06, 2009]. Telegraph-a. October 15, 2009. Postal strike: Royal Mail rivals say they cant cope. [Online]. Available at: http://www.telegraph.co.uk/news/uknews/royal-mail/6336332/Postal-strike-Royal-Mail-rivals-say-they-cant-cope.html [Accessed on November 06, 2009]. Marketing Direct. November 02, 2009. POSTAL STRIKE: Royal Mail boss Adam Croziers £1m salary revealed. [Online]. Available at: http://www.marketingdirectmag.co.uk/News/MostRead/949874/POSTAL-STRIKE-LATEST-Royal-Mail-boss-Adam-Croziers-1m+-salary-revealed/ [Accessed on November 06, 2009]. Georgia State University. 2005. Change Management. [Online]. Available at: http://www2.gsu.edu/~wwwpmo/change_management.html#CM_Process [Accessed on November 06, 2009]. Read More