Analysis of the External Environment and Issues that Will Impact on HRM - Coursework Example

Analysis of the External Environment and Issues that will Impact on HRM Table of Contents Introduction 3 Brief Overview of the Company 4 Analysis of the External Environmental Elements for Foster’s in Australia 4 PESTLE Analysis Model 5 Critical Evaluation of the Environmental Impacts on HRM Practices 9 Conclusion 11 References 12 Introduction The present business environment of the global organizations is often observed to be influenced by various factors. In this regard, the impact of external environment is one of the major influencing factors for the modern business organizations to successfully accomplish their business goals. It significantly influences the overall management along with the operational functions of the organizations as well. In relation to the impact of external factor on management, the functions of Human Resource Management (HRM) frequently involve different challenges in order to maintain an effective balance amid the organizational workers with the employers. The functions involving HRM within the organizations are often impacted by the governmental regulations and obligations, economic condition, union activities and requirements along with the labor force of the particular community (Ivancevich 2007). The external influencing factors can be recognized as political, economic, social, technological, environmental and legal. The primary purpose of this report is to demonstrate the influence and impact of external factor on the HRM of Foster’s Group while performing its business operations in Australia. The main discussion of this report would be focused on describing PESTLE framework in order to analyze the external environment of Australia. Brief Overview of the Company Foster’s Group Ltd. (Foster’s) is regarded as one of the largest brewing subsidiaries of SABMiller, a British organization, which is well-known as a leading brewing company across the world. Foster’s is famous for its stranglehold on providing various alcoholic and non-alcoholic beverages along with facilitating its large expansion across the globe. Currently, Foster’s has been playing the role of a strong brand in the global brewing industry which is located in over 45 countries across the world. The company mainly focuses on brewing related practices which facilitate it to generate large sales revenue, mainly obtained by Carlton United Brewers (CUB), its Pacific and Australian beer related business segment (Foster’s Group Ltd. 2013). Analysis of the External Environmental Elements for Foster’s in Australia In relation to the present business environment in Australia, it is observed that the nation often been regarded as one the favorable business locations for the global marketers. The political suitability, continuous economic development along with convenient availability of abundant resources and capabilities are the fundamental factors which are able to draw the attention of the multinationals. However, in various cases, the global companies tend to face different issues in order to independently perform their business operations especially while performing HRM activities. With regard to the major issues in terms of practicing HRM in Australia, the major external environmental elements have been portrayed through analyzing PESTLE model as follows: PESTLE Analysis Model Political Factors Political factors can have a major bearing upon a business organization to efficiently coordinate its number of vital operations. Political disturbances and imbalances, along with strict governmental regulations can also impact the HRM functions of Foster’s by a considerable extent to efficiently manage its business operations in Australia (Oxford University Press 2007). In relation to identifying the major issue within the dimension of the political factor that can impact the HRM performances, it is apparent that Foster’s can face challenges concerning the country’s human resource policies relating to wage structure, compensation policies and working hours among others. Moreover, the changing governmental regulations can also create an impact upon the organization to efficiently perform its HRM policies and practices within Australia. However, the present democratic and political stability of Australia is significantly influencing the foreign marketers to efficiently operate their range of business activities. Consequently, effective and well-built HR regulations of the country apparently provide opportunities for the modern organizations to comply with their existing HRM functions within the nation (National Sothertons Group Pty Ltd 2010). Economic Factors The economic factors as a part of the PESTLE analysis refer to the various aspects related to economic stability of the host or operational country such as interest rates portfolio, taxation programs, exchange and inflation rates, economic growth according to Gross Domestic Product (GDP) rates and other economic constraints (Chernev & Kotler 2008). In accordance with the economic condition of Australia, it is recognized that the country has been achieving its continuous economic development through its range of governmental and non-governmental business industries. Moreover, the country is also witnessing continuous growth in terms of its employment rate which has been identified to be quite strong as it recorded a growth of 1.2% in between the period of February 2012 to February 2013 (Australian Bureau of Statistics 2013). The higher employment rate and increasing per-capita-income are also continuously developing which tend to create possible issues for the marketers due to the higher bargaining power of the workers. Therefore, the HRM functions of Foster’s can be affected by the increasing employment rate of the country. In this regard, it can be observed that the higher employment rate of the country significantly affects Foster’s to maintain its workforce within the organization. Therefore, the increasing economic condition can also impact on Foster’s to enhance the efficiency as well as effectiveness of the HRM practices while it is performing business operations in the Australian market (National Sothertons Group Pty Ltd. 2010). Social Factors The social factors often tend to create significant barriers for the organizations in terms of efficiently practicing HRM functions in any global nation. In relation to the social factors in Australia, it can be recognized that cultural variance and the perseverance of convenience among others are the critical determinants for consideration for a company. Moreover, the other social factors such as individual interests, values along with attitude and behavioral aspects can also severely impact the HRM functions of Foster’s in the Australian market. The country significantly involves a large number of immigrants from different parts of the world which enables to generate various types of cultural issues concerning language, religion along with other cultural factors. Moreover, the other social factors such as the demographic condition of the community, employee needs and the increasing number of part-time employees can also impact the HRM practices of Foster’s in Australia (Franklyn n.d.). With this concern, the HRM functions could face significant different social challenges in terms of managing employees by the incorporation of organizational policies and obligations. Technological Factors The aspect of technological development has been a constant and ever-present phenomenon in the brewing industry in order to increase the pace of producing quality based products in high volume. The technological factors comprise certain aspects in relation to the Research and Development (R&D) processes as well as automation activities and allied accessibility in the host or operational countries (Porter n.d.). In relation to the technological influence in the HRM functions, it can be observed that the business environment in Australia tends to be influenced by a greater use of technology. The present rapid development of technology in the business infrastructure has immensely changed the overall processes of the organization (Hossain & Quaddus 2011). However, it can also create barriers for the HRM at a significant level in terms of complying with new technological aspects within the organization. In this context, the development of technology in the business process significantly tends to require higher skilled employees which can be a major threat for Foster’s to successfully implement its HRM practices. Moreover, the integration of advanced technologies can also create the requirement for higher financial investments which can ultimately have a major impact on the overall business process of Foster’s in the respective market. The factor can also result in the necessity of adopting changes in relation to the HRM strategies in terms of recruiting and selecting workers for the organization (Verma n.d.). Therefore, it can be stated that the technological factors can also impact the overall HRM strategies as well as practices of Foster’s while conducting its business operations in Australia. Legal Factors The impact of legal factors can also be regarded as one of the major constraints for Foster’s to efficiently develop its HRM strategies in Australia. In relation to the legal considerations in the Australian business environment, it can frequently be observed that the country highly constitutes of well-built trade regulations for both global and national enterprises. Discrimination law, employment law, consumer law along with health and safety law are the major aspects of legal factors for the organizations in terms of entering and successfully functioning in the Australian business environment (Long 2009). Environmental Factors The environmental factors can be determined as one of the major aspects for the organizations in terms of making entry to a new market or country and it can also have an impact on the HRM processes of the organization as well. The business environment of Australia considerably incorporates environmental concerns with regard to various operations performed by the business organizations. In the context of identifying possible impact of environmental factors on HRM practices, it can be said that the organization can face issues concerning greenhouse gas emission. Moreover, the HRM strategies of Foster’s can also get affected in terms of adopting additional functions concerning environmental awareness programs for the employees. In this regard, the HRM functions of Foster’s could further face the challenges of providing additional training and development programs for the employees which can result in increasing the supplementary cost for the organization (Long 2009). Therefore, it can be viewed from the aforesaid external environmental elements that the HRM practices of Foster’s can be affected due to various constraints from the political, economic, social, technological, environmental as well as legal factors in Australia. Critical Evaluation of the Environmental Impacts on HRM Practices The HRM functions of an organization apparently focus on managing and developing human capital along with ensuring to render effective support for the workers to attain the individual as well as the overall goals of the organization. It comprises a range of essential activities that ensure to aid the organizations to effectively deal with different challenging phases which can hinder their overall performances. In relation to the aforementioned external factors, it can be recognized that the HRM strategies or practices of Foster’s can face different challenges in terms of practicing its range of HRM activities. The following discussion has depicted certain HRM activities which can be affected by the external environmental factors in the Australian market (Hasnat 2010). According to the political and legal factors in the Australian market, the HRM activities of Foster’s can be highly affected due to various employment policies of the government. With this concern, it is observed that the activities such as recruitment, employee wage along with training and development programs can be affected due to the political and legal influences of the country. Moreover, the legislature, existing judiciary policies along with governmental resolutions can also generate adequate difficulties for Foster’s in terms of practicing HRM in Australia (Hasnat 2010). Contextually, in terms of the economic environmental aspects, the HRM activities of Foster’s can also get hindered in terms of recruiting or providing training development programs for the staffs. In this regard, the suppliers of HRM including different consulting firms as well as other training providers may also create certain difficulties in the Australian market (Hasnat 2010). In relation to the social factors, the growing diversity in Australia could be a major concerning factor for Foster’s. In this regard, the notion of growing diversity in Australia significantly implies the demands and the changing behavioral aspects of each sub-group which could further affect the overall HRM activities of Foster’s in the respective business market. Moreover, the demographic influences concerning age groups, gender variances, income levels along with attitude and behavioral characteristics of each individual or group further can impact on the HRM strategies of Foster’s in the Australian brewing market (Hasnat 2010). In the similar context, the technological and environmental factors could also create different constraints while the organization is performing its HRM practices in the Australian market. In this regard, the technological factors are the major influencing tools for the organization which further has an impact on the transformation plan of HRM within the organization (Hasnat 2010). Conclusion The notion of HRM practices is primarily recognized by the organizational existing business strategies, which essentially facilitates a company to efficiently perform different HRM activities. However, the external environmental factors constitute a major role in the organization to shape a well-built HRM strategy. In relation to the aforesaid discussion of different external factors, it has been observed that the HRM functions of Foster’s can be affected especially in terms of recruiting and providing training and development programs for the employees in the Australian brewing market. The external environment of Australian business market is significantly found to be more effective for the multinationals. However, in relation to different aspects the business environment of the country could generate various challenges for Foster’s in terms of effectively practicing its HRM functions. Owing to the increasing growth of the global brewing industry, the Australian brewing market can be considered as the major opportunity for Foster’s to achieve competitive position. Nevertheless, the HRM functions of the organization should highly focus on the political and legal considerations, social and environmental influences along with economic factors while performing different HRM activities in the Australian brewing market. References Australian Bureau of Statistics 2013, 6202.0 - Labour Force Australia Feb 2013, Summary, viewed 1 April 2013, Chernev, A. & Kotler, P. 2008, Strategic Marketing Management, 3rd Edition. Elsevier, United States. Foster’s Group Ltd. 2013, Overview, About, viewed 1 April 2013, Franklyn, C. (n.d.). The Development of Human Resource Management from a Historical Perspective and Its Implications for the Human Resource Manager, Federal University of Technology, viewed 1 April 2013, Hasnat, A. 2010, Environmental Factors Influence on HR Management, Scribd Inc., viewed 1 April 2013, Hossain, M. A. & Quaddus, M. 2011, Impact of External Environmental Factors on RFID Adoption in Australian Livestock Industry: An Exploratory Study. Pacific Asia Conference on Information System, viewed 1 April 2013, Ivancevich, J M 2007, Human Resource Management, 10th Edition, Tata McGraw-Hill Publishing, India. Long, Y. 2009, The Impact of Information Technology on the Hr Function Transformation, University of Twente, viewed 1 April 2013, National Sothertons Group Pty Ltd 2010, Doing Business in Australia, General Information, viewed 1 April 2013, Oxford University Press 2007, PESTEL Analysis of the Macro-Environment, Foundations of Economics, viewed 1 April 2013, Porter, M. E. (n.d.). Industry Structure & Competitive Strategy: Keys to Profitability. Structural Determinants of Competition, viewed 1 April 2013, Verma, A. (n.d.). Macro Factors Affecting Business Environment, SlideShare Inc., viewed 1 April 2013, Read More