Economic, political, technological and demographic factors have a bearing on external environment. These forces have considerable influence on HRM.
External Environment
Economic, political,
technological and demographic factors have a bearing on external environment.
These forces have considerable influence on HRM.
Economic Factors
Economic forces include growth
rate and strategy, industrial production, national and per capita income, money
and capital markets, competitions, industrial labour and globalization.
A sustained growth and higher GDP
gives a lot of scope for HRM in the search of talents and innovations. Higher
the industrial production, the more it unleashes its impact in various sectors
giving a lot of scope for HRM activities. Where money and capital are vibrant
and is in the increasing tempo, it may lead to higher investment and activities
leading to greater demand for human resources. Globalization has opened new
vistas where competitive edge and highest quality of products and services are
needed. This imminent need gives a lot of scope for HRM activities.
Political Factors
Political environment covers the
impact of political institutions on HRM practices. Democratic political system
increases the expectations of workers for their well being. The total political
environment is composed of legislature, executive and judiciary.
An enlightened legislature passes
a plethora of legislations bearing on trade and finance, fixing
responsibilities and duties to management and employees. The executive is
always alert in implementing various schemes of government and law. The
judiciary is zealously guarding the rights of business and society. All these
aspects have made HRM to be active not only in choosing right people but also
in looking after the employees welfare and legal directions.
Technological Factors
Technology is a systematic
application of organized knowledge to practical tasks. Technological advances
affect the HR functions in more than one way. Firstly, technology makes the job
more intellectual and upgraded. Secondly workers are to know and put in
practice the upgraded technology, lest they are left out. Thirdly jobs and operations
become highly professionalized where the workers and employees of yester years
have to be weeded out or employed in substitute work. All these involve active
HRM operations.
Demographic Factors
Demographic variables include
sex, age, literacy, mobility etc. Workers are now called ‘knowledge workers’
and the organization ‘knowledge organization’. The problems, skills and ability
of women workers need separate treatment. This adds dimension to HRM thrust.
Tags : Human Resources Management - Personnel Environment
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