Business and Management - Report Example

Business management Table of Contents Introduction 3 Strategic Human Resource Management (SHRM) 4 PEST analysis of UK 4 Current situation of Royal Mail 6 Application of SHRM for solving the problem 6 Reference 8 Introduction Prior to the arrival of internet, postal industry was one of the major solutions to the communication problems in United Kingdom. In such an industry Royal Mail Holdings plc was the market leader. The organisation is owned by a public limited company named Royal Mail Group Limited. The organisation reaches to almost everyone in the country. There are more than 181,000 employees in the organisation (Royal Mail, n.d.). General post office, a statutory corporation, was actually a department of UK government prior to the period of 1969. Later in 1990 it turned into a limited company but remained fully under control of UK government. Recently UK government tried to privatise the royal mail partially. According to Lord Peter Mandelson, the business secretary of the country, it is required to have a strategic partner for bringing a gale-force fresh air in the culture and management of the organisation (Tyler, February 3 2009). The main objective of privatising the organisation is to modernise it and improve its financial condition. UK government found that there is significant declination in royal mail’s popularity and demand as there is other advanced mode of communication like email has emerged. According to some analysts there is almost 7 billion euro pension deficit in Royal mail. UK government provide various attractive benefits to royal mail so it stays ahead in the competition. But according to experts the decision of making it modernise and atomise it by bringing a private sector company as the strategic partner might result to 40,000 to 50,000 job cut. As a consequence Communication Workers Union (CWU) asked the workers to go for a strike till the decision is reconsidered. The union claimed that over 12,000 postal employees would go for strike in different cities like London, Edinburgh, Plymouth and Bristol (Hope, July 15 2009). In UK postal industry this is worker’s strike is a historical problem which is actually badly affecting the future of UK postal industry. Proper understanding and implementation of strategic human resource management would be the ultimate solution for this type of situation. Strategic Human Resource Management (SHRM) Strategic human resource management is such a complex process that is continuously evolving and being discussed and studied by academic experts. There is no proper definition of Strategic human resource management as different people have different opinion regarding the topic. According to Wright and McMahan SHRM is “The pattern of planned human resource deployments and activities intended to enable the forms to achieve its goals.”(CIPD, May 2009). Strategic HRM is the proper combination of strategic management and human resource management. It helps the organization in the process of achieving its long term objectives. It is a comparatively new concept in the field of human resource management but there has been lot of development on this over the last two decades (Wei, n.d.). It is important to have a proper hierarchy for proper implementation of SHRM. A basic legal compliance has to be there which should be followed by efficient HR processes, then setting of effective HRM Programs and alignment of these with Strategic Goals of the Organization is necessary. All these should be structured into a pyramid. PEST analysis of UK PEST analysis refers to the analysis of Political scenario, Economical, Social and Technological environment of a particular country. Organisations can have clear understanding regarding the external environment of the organisation by the help of PEST analysis. Political scenario: In UK, government is monarchy type. There are several political parties in the country. Some of them are Democratic Unionist Party, Labour Party, Liberal Democrats etc. Apart from these parties there are various political pressure groups such as Campaign for Nuclear Disarmament, National Farmers Union, Confederation of British Industry etc. Prime Minister Gordon Brown is the head of the government and also the leader of Labour party. In UK prime minister appoints the cabinet. Economical state: UK is one of largest financial centre and trading power in the world. It is one of the few trillion dollar economies in Europe. Over the last few decades public ownership is greatly reduced in UK. UK is produce almost 60% of its food needs as the country is highly agriculture intensive. It has large reserves of natural gas, coal and oil. In 2008 UK’s GDP was almost 2.67 trillion where almost 4% was the contribution of energy sector. Recent global recession has badly affected country’s economy and it has been found that till February 2009 almost 1.97 million people lost their job and country’s GDP reduced to $1.8 trillion (BBC NEWS-a, 2009). Currently UK economy is trying hard to recover from global financial meltdown. Central bank rate which was 4.63% at the end of 2008, is now almost 1%. Social condition: As of July 2009 population of UK is approximately 61,113,205. Almost 90% of this population live in urban area. As far as various ethnic groups are concerned in the country almost 83.6% is English, 8.6% is Scottish and 1.8% is Indian. According to 2001 census UK’s 71.6% people are Christian and 2.7% are Muslim. Main language in UK is English. 16.7 percent of total population fall in the age group of 0-14 years. Whereas 67.1 percent fall in 15-64 years age group. Almost all the people in the country are officially literate (99%). Technological sectors: Technologically the country is getting more and more advanced over the passage of time. This advancement is taking place at a very high rate as the privatisation is occurring at a great pace (Central Intelligence Agency, n.d.). Current situation of Royal Mail Major problem in Royal Mail began in the month of May when some of the managers tried to implement company’s cost cutting business plan. Management had fruitless talks during last five months with the CWU representatives. Royal Mail’s 2 billion pound modernisation plans include 10% cost cutting practices at several sorting offices and depots and 22% cost cut in London offices and depots. Moreover government wanted to make it partially privatise by bringing a ‘strategic partner’ in order to bring change in the management and culture of the organisation. But CWU was not at all agreed with these modernisation and changing plans. They claimed that these plan would result to 60,000 jobs lose in the organisation. As a result they called strike which include almost 1,20,000 Royal Mail employee. 30 million items are still pending to be delivered. 30,000 people have been employed as temporary workers in order to tackle the situation. The situation is expected to be more critical as the Christmas season is coming (Telegraph, 2009). Application of SHRM for solving the problem Proper adoption and implementation of strategic human resource management is the ultimate solution of this kind of problems. In case of Royal Mail it is clear that there is lack of proper co-ordination between the management and workers. Union’s strike is making the organisation cripple. The organisation is loosing its big clients like Amazon. Moreover CWU has recently claimed that it will call a national postal strike very soon. According to the principles of SHRM, there has to be proper change management plan prior to the introduction of any modernisation plan in the organisation. Same is applied in case of Royal Mail also. It is required to form a board which would analyse the present strategy of the organisation and find out why they are not working. Based on their findings they need to prepare proper future strategy. In case of Royal Mail also a board is needed to be formed. This board would be responsible for sorting out the present HR problem. Management need to properly communicate the requirement of modernisation in the company to the employees. They need to explain them that without advancement and modernisation the organisation will loose its competitive advantage in the long run and its competitors would win all the major postal deals. One of the main reasons of present strike is the fear of losing 60,000 jobs. As a result while management is deciding on its HR policies they need to consider various factors like possibilities of job cut, current economic condition, external competition etc. Organisation’s investment should focus on more job creation without hampering its all business interests. Reference CIPD, May 2009, What is strategic human resource management?, Strategic human resource management, [Online]. Available at: http://www.cipd.co.uk/subjects/corpstrtgy/general/strathrm.htm [Accessed on December 11, 2009] 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 06, 2009]. Hope, C. July 15 2009, Disruption to postal services as 12,000 Royal Mail workers strike, Telegraph, [Online]. Available at: http://www.telegraph.co.uk/news/uknews/5828010/Disruption-to-postal-services-as-12000-Royal-Mail-workers-strike.html [Accessed on December 11, 2009] Royal Mail, No Date, Royal Mail Holdings plc, Report and Accounts Year ended 30 March 2008, [Online]. Available at: ftp://ftp.royalmail.com/Downloads/public/ctf/rmg/2007-08Group_Accounts_19-05-08Final.pdf [Accessed on December 11, 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]. Tyler, R. February 3 2009, Britain: Royal Mail faces privatisation and jobs massacre, World Socialist Website, [online] Available at: http://www.wsws.org/articles/2009/feb2009/mail-f03.shtml [Accessed on December 11, 2009] Wei, L. Q. No Date, Strategic Human Resource Management: Determinants of Fit, Curtin University of Technology, [online] Available at: http://rphrm.curtin.edu.au/2006/issue2/strategic.html [Accessed on December 11, 2009] Read More