Strategic Human Resource Management and Planning - Case Study Example

TOPIC NAME LECTURER INSTITUTION DATE Introduction Different external factors affect the operations of an organization and therefore, strategic planning is crucial in determination of future needs of an organization (HÄRTEL & FUJIMOTO, 2010). Strategic planning determines success of an organization in a given industry. Elements such as selection, training of employee and recruitment impact on the best human resources practice in a given environment. Härtel & Fujimoto (2010) argue that effective selection of employees will be based on criteria of competence so as to achieve organizational success. Recruitment will be based on the ability to give your best in a given organizational setting. Different organizations embrace different human resource practices. This is due to diversity in operations of organizations operating in different industries. This paper will use an appropriate model to analyze external environment and its impacts on an organization and discuss environmental elements and their impact on the human resource practices. Elements such as recruitment, and training of employees to improve their job performance within and outside the organization will be discussed. Our organization of choice will be AUSFUEL PTY LIMITED. This is an organization with a workforce of more than 20,000 and operates in many sectors such as transport, education and health. Organization profile AUSFUEL PTY LIMITED is a lubricant and a fuel distribution company. The company was established in 2004 and has outlet resell shops of up to 110 and employee force of 465. It handles services such as, supply and delivery of lubricant products, fuel storage, dispatch of fuel services, and pumping services. The company’s director is rook David and the Headquarter of the company is in Berrimah, which is in the Northern territory. The major suppliers of fuel to the company include BP REGIONAL AUSTRALASIA HOLDING PTY LIMITED. AUSFUEL GROUP is the holding company of AUSFUEL PTY limited. AUSFUEL is among the top ten fuel companies in Australia. It has a direct consumer outlet of 300 million liters of fuel and 450 million to retailers. The success factor in the company depends on all employees in the company. Strategic decisions depend on managers who define strategic direction for the company. The overall person to make final strategic decisions is Mr. Brooke David. Jackson & Schuler Model According to Schuler, Human Resource Management(HRM) is an aggregation of systems, processes, activities and procedures which managers undertake to facilitate business issues in an organization. To be specific, such activities will include behavioral and cognitive frameworks, health and safety policies and legislation. The model focuses on significance of strategic planning in aligning organizational change. Organizations need to change values, structures, corporate culture, strategy and mission. Effective changes in human resource practices and policies will encourage change of organizational behavior (DESSLER, 2012) & (HÄRTEL, 2007). There is a mismatch of skills and job design in most organizations. The organization needs effective job design tools and processes to effect productivity of employees. Strategic planning will need induction, performance management, benefits and reward scheme, development and training of employees (MATHIS & JACKSON, 2003). Impact of external environment on a range of HRM practices It is the role of strategic managers to anticipate and handle change in an organization. Organizational change is out of certainty (MONDY, NOE & GOWAN, 2005). Identification of change will aid in strategic planning of the company. Some of the internal factors in an organization will include human resource, organization culture, management, physical assets, cash profit and profit, and organizational structure. External factors will include economical factors, competition, legal, political, technological and environmental factors (SNOW, 1989). HRM practices include employee selection, development of skills within the organization; training modules for junior and senior staff. Recruitment of qualified staff requires competitive recruitment drives in the organization. Factors such as government legislation on employment procedures, taxation regimes, and financial acts will determine strategic plans by the company. External factors impact on the internal operations of an organization (DECENZO & ROBBINS, 1996). This is because the company serves the wide public. Whereas the internal environment is controllable, external environment is not controllable. Strategic managers will not manage or undo competition facing the company. Prevailing economic conditions and changes in legislation will impact greatly on the internal operations of an organization (GILMORE & WILLIAMS, 2009). AUSFUEL cannot control external actors but can respond to some of the external factors. Early response to the factors will enable company to penetrate the fuel and lubricant industry. The common challenge in the industry is the cartel problem. This poses effective barriers to entry due to high economies of scale for new entrants. There is a direct relationship between internal and external factors in the organization. Some external factors provide business opportunities while others threaten the competition of business in the industry. Factors such as globalization, increased competition, and technological advancement, growth in internet and industry dynamics place a great impact on organizational behaviors (MILKOVICH et. al. 1991). Some of the external factors included in the discussion include labor, political, demographic, economic and legislative factors in an organization. Political factors Political factors will impact job design, recruitment and workforce planning in organizations. Legal conditions and political stability influence strategic decisions in a company. A 40% increase in political influence will reduce strategic decisions up to the extent of 20%. This will impact financial decisions of the company. Volatile political climate will negatively affect distribution levels of fuels in the country; this is due to the uncertainties in relation to public transport systems. When government wants to finance its public expenditure, energy sector is the main target (PETER BOXALL, 2008). Increase in oil prices will discourage fuel consumption as the consumption power of consumer is reduced. Demographic factors They include organization attributes and specifically the context of organizational operations. Demographic factors such as gender, age, migration, population size, gender and levels of education will impact on organizational policies with regard to policies. The presence of minority groups of people in the country makes the organization to have a diversity of demographic factors. The population in the northern territory is genetically strong and this will enhance building of human resource capacity in the organization (BEIL-HILDEBRAND, 2010). AUSFUEL is very rich in indigenous population .About 30% of the population in the organization comes from Australia. Majority of population is young, with an average age of 31. AUSFUEL as Fuel Company is trying to align demographic factors such as indigenous territorians, community and workforce. HRM practices for young population will focus on diversity planning, selection, recruitment equal opportunity, and development and training programs. The aging population in the company needs to be replaced so as to eliminate gap in employment in organization (BRINER, 2008). Freezing employment of young population will raise job efficiency gaps in the organization. Economic factors Economic factors such as credit availability, unemployment, business cycles, inflation and interest rates. Availability of credit facilities in an organization will determine employee loyalty to the organization. Unemployment levels will determine recruitment and development of workforce in organizations. Business cycles determine level of business activities in an organization (ROTHWELL, 2012). During boom, the level of economic activities in an organization are many. The organization will embark on continuous training so as to enhance efficiency of employees. Economic factors will determine strategic decisions and directions for organizations. Economic factors such as interest rates will have a spiral effect on consumer behavior. When the rates of interest are so high, the purchasing power of consumers is low. This means that consumers will prioritize basic essential commodities. This will cut expenditure budget on fuels. High levels of unemployment will depress the level of consumption of non-essential services and goods. For instance, AUSFUEL has a wide consumer base in Darwin. New projects such as INPEX will increase demand for fuels. Strategic, AUSFUEL will enhance operational size in the next 2 years. The capital city of Northern territory of Australia is in Darwin. This is where most students will come to study and thus provide affordable labor to the company. The labor market refers to the extent to which the available skills will embrace change in an organization. The stock of labor skills has direct relationship with economic factors and therefore, strategic planning will require adequate training so as to effect strategic plans for the organization. Supply of labor is scarce and globalization has necessitated the need for recruitment of creative minds. Screening of employees will enhance geographical search for competent workers. HRM aspects are in fact affected by presence or absence of legal factors (BAHUGUNA & KUMARI, 2010). The manner in which employees conduct organizational business will depend on existing legal frameworks. Legal factors determine remuneration benefits and rewards. The agency problem is there to determine nature of current employment environment. Employees initiate contracts on behalf of employees. Need for creative minds require continuous training of key employees, redefinition of job and creation of new job opportunities in the organization. When an organization is responsive to external factors, it is essential to adapt HRM practices. Innovation and reforming of employee’s culture will improve workers loyalty to organization. Clear strategic frameworks will define specific roles and responsibilities of employees in a company. Social Factors Social factor represent society and attitude of people towards the organization. Cultural diversity in the Northern Territory is as a result of students from different countries settling in the area. AUSFUEL promotes social culture with people from diverse backgrounds. The organization has a strict security and safety procedures for the employees. Technology According to Lengnick-Hall & Lengnick-Hall (1990), globalization is as a result of continuous application of technology to change human life. New technological renovations change human life. Technological advancement will assist AUSFUEL to keep a competitive edge in the fuel industry. The latest technology involves NMI system. Infrastructure Infrastructure provides accessibility necessary for delivery and distribution of lubricants and fuel for the company(SCHULER & JACKSON, 1999). It refers to roads, land for construction and buildings. There is a poor roads network in Northern Territory and this makes transport expensive. The poor terrain makes the cost of commodities expensive. Land cost is relatively cheap but infrastructure costs are too high. Market Factors/opportunities The fuel and lubricant industry faces stiff competition. Fuels are driving forces of the economy. Effective strategic planning will enhance market dominance for the AUSFUEL Company. Every day competitors in the feel and lubricant industry come up with new marketing strategies. Technological innovation will boast market relevance for this company. According to Mr. Brooke David, business expansion is part of strategic planning. This is, in most cases, influenced by prevailing market conditions. To illustrate this business expansion, Archer capital sells its independent oil distribution agents to AUSFUEL, leading to the expansion of company revenue to the tune of $650 million. This is approximately more than 6 times of its current earnings. Other factors such as technology, change of climate and legal factors in equal measure impact operations of the company (Boxall & Purcell, 2008). Changes in taxation regimes will affect strategic planning of a company. Legislation such as workplace safety and health will affect industrial relations of the company. Governments are pushing for legislation to protect consumers and environment. Company competitors pose business expansion threat to the company. The competitors offer the same product in the market and this leads to reduction of the market share of the company. The company needs swift decisions to enhance market dominance. The main competitors of the AUSFUEL Company are SHELL PETROLEUM and CALTEX LIMITED. Conclusion The operations of an organization are affected by external operations performed by the organization. Strategic planning comes in at this point to determine the future trends and success of an organization. Some of the elements that impact positively on human resource management include section, training and recruitment of employees. The model used has centralized AUSFUEL PTY LIMITED as an organization of choice while analyzing the external elements to an organization. Some external factors provide business opportunities while others threaten the competition of business in the industry. Factors such as globalization, increased competition, and technological advancement, growth in internet and industry dynamics place a great impact on organisational behaviors. Some of the external factors which will be in our discussion include labor, political, demographic, economic and legislative factors in an organization. The AUSFUEL Company is a top ten company in fuel and lubricant industry. Success in the company operations depend on overall workers in the company. The core role of strategic managers is to give strategic directions for the company. The industry faces stiff competition and this needs a competitive edge so as to enhance company market share. References BAHUGUNA, P., & KUMARI, P. (2010). Strategic Human Resource Management & amp; amp; Organizational Performance. BEIL-HILDEBRAND, M. B. (2010). Re-Theorizing Human Resource Management and Human Resource Management in Context. BOXALL, P. F., & PURCELL, J. (2008). Strategy and human resource management. Basingstoke [England], Palgrave Macmillan. BRINER, R. (2008). Evidence-based Human Resource Management. 184-211. CORINE BOON, & DEANNE N. DEN HARTOG. (n.d.). Human Resource Management, Person–Environment Fit and Trust. DECENZO, D. A., & ROBBINS, S. P. (1996). Human resource management. New York, Wiley. DESSLER, G. (2012). Management and people: HRMG100. Fenches Forest, N.S.W., Pearson Education Australia. GILMORE, S., & WILLIAMS, S. (2009). Human resource management. 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