Business Environment Essay

550 Words3 Pages
Personnel managers cannot perform their job in vacuum as a number of environmental factors affect HRM. Environment furnishes the macro context and the organisation is the micro unit. Of primary importance here are the external influences of economic conditions, labour markets, laws and regulations and labour unions. Each of these external factors separately or in combination can influence the HRM function of any organization. Changes in the external environment have a profound impact on the personnel. These changes include technological obsolescence, culture and social changes, and policies of the government. The external environment consists of factors that affect an organization’s human resources from outside it. Let us examine these factors in detail: · Technological Innovation- Rapid technological changes and innovations are taking place all over the world. As a result of these, technical personnel are increasingly required. Hence ,procurement of technically skilled employees is necessary to match the changing job requirements. · Economic Factors- Economic conditions influence financial “health” of the organization. Under favourable economic condition, expansion of existing programes and creation of new programme are very likely. With less favourable or deteriorating condition, contraction or cancellation of some programme may be necessary. · Employees’ Organizations- Employees organizations have mustered strength to match the growth of industrialisation. Labour unions seek to bargain with management over the terms and conditions of employment for their members. · Labour Markets- In labour markets, organizations seek employees (demand and labour), and individuals offer their services to organizations (supply and labour). Labour supply and demand have implications on all activities, but particularly for compensation

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