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5CHR Business Issues and Context of Human Resources: Factors Affecting Organisation Assessment Answer

 5CHR - Business issues and the contexts of Human Resources - January 2019 

Aim

The aim of this assessment is to confirm your knowledge of business and the external issues impacting on your organisation’s operations and the role of HR in supporting business performance. You need to demonstrate your ability to;

  1. Understand the key contemporary business issues and main external factors affecting different organisations and the impact on HR.
  2. Understand how organisational and HR strategies and practices are shaped and developed.
  3. Know how to identify and respond to changes in the business environment.

Assessment brief

Assessment guidance 

You have been asked by the CEO to compile a report on ‘The developing role of HR within present day business’. Your report should include;

  • An analysis of internal forces which can shape the HR agenda. For example, you could include; structure/model of the HR function, HR strategies, strategic objectives and stakeholder expectations.

Assessment criterion: 2.1: Analyse the forces shaping the HR agenda.

Guidance

You could begin with a brief introduction of your business and HR context.

You must analyse how different models of the HR function impact on the HR agenda (in relation to your own organisation or one you are familiar with).

This discussion should be underpinned with theory or models such as:

  • Ulrich
  • Michigan
  • Warwick
  • Harvard
  • HR outsourcing
  • Hard / Soft model

Furthermore, you should explore two other internal forces which shape HR strategies. These could include;

  • Business objectives
  • Organisational culture
  •  Management structure
  •  Ownership
  • Stakeholder demands

Close 

  • Assessment and summary of a range of different external factors impacting on an organisation’s performance and explain how they affect the HR function. 

Assessment criterion: 1.1:  Assess a range of different factors which impact on an organisation’s business and its HR function.

Guidance

You must provide an assessment of at least three external factors that impact on an organisation’s business and on its HR function. You could include a PESTLE and/or a SWOT analysis to assist you with this activity.

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  • A table comparing two different environmental analytical tools e.g. SWOT, PESTLE, Porter’s 5 Force’s, etc.

Assessment criterion: 2.2: Compare different tools for analysing the business environment.

Guidance

You must compare two different analytical tools used for environmental analysis. You could carry out this comparison in a table.

Options that you could consider using include:

●      SWOT

●      PESTLE

●      Porter’s 5 Forces

●      Boston Matrix

●      Sigma

●      DMAIC

●      Lean canvas

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  • A summary of the key stages of strategy formulation and implementation. You should refer to the role of HR in each of the stages summarised.  You should also highlight HR’s role in; i) Business Ethics and ii) Accountability. You should reference all key models and literature used.

Assessment criterion: 2.3: Explain the key stages in strategy formulation and the implementation and the role of HR. 

Assessment criterion: 2.4: Examine HR’s contribution to business ethics and accountability.

2.3

You must explain the key stages in strategy formulation and implementation. You should underpin with relevant models & theories. Ensure that you discuss the role of HR in this.

2.4

You must consider HR’s contribution to business ethics and accountability. You could reference the CIPD code of conduct.

You could also consider Corporate Social Responsibility and corporate governance and HR’s role in these.

You could draw upon workplace examples.

 Close 

  • A table or chart illustrating a range of ways business performance is measured in the organisation for different purposes. You should also highlight, with examples, the role of HR in; i) Business Planning and ii) Change Management.

Assessment criterion: 3.1: Evaluate business performance and the role of HR in business planning and the change management agenda.

Guidance

You must produce a table or chart illustrating both financial and non-financial indicators of how business performance can be evaluated.

You must also include examples that illustrate the role HR plays in:

1) Business planning and

2) Change management.

You could reference Walton & Burgoyne, Lewin, Kotter and Bridges & Mitchell.

 Close 

  • An assessment of how different sources of business/internal and contextual/external data should be considered and used when planning. For example, internal information within the organisation including HR metrics, industry information e.g. trends in HR, competitive information, government information.

Assessment criterion: 3.2: Assess and utilise different sources of business and contextual data for planning purposes. 

Guidance

You must assess how business and contextual data/information can be used for planning purposes. This could include;

●      Industry information

●      Trends in HR

●      Employee turnover & retention

●      Absence data

●      Government information

You must assess both business/internal sources and contextual/external sources and comment on how these can be used in business planning.

You could use workplace examples in this section.

 Close 

Evidence to be produced/required

Evidence to be produced: A report equating to 4000 words in total.

Remember to relate academic concepts, theories and professional practice to the way organisations operate, in a critical and informed way, and with reference to key texts, articles and other publications and by using organisational examples for illustration.

All reference sources should be acknowledged using Harvard-style referencing, and a bibliography provided where appropriate (these should be excluded from the word count).

Answer

BUSINESS ISSUE AND CONTEXT OF HUMAN RESOURCE 

Introduction:

External forces impact the business environment and these influences the business operations in the process. It is the responsibility of an HR of any organization to provide the best learning environment, good approaches, to develop the learning skills for the growth of the personal and professional skills of the employees by introducing innovative learning approaches. The initiatives as taken by the HR, help the employees both in the open and informal environment in the organisation to encourage them to motivate towards their work and help to realise their true potential. ASDA is a British supermarket retailer; headquartered in Leeds, West Yorkshire. It was founded in 1949. It extended the businesses in south England in 1970-1980. In this assignment, the main external factors that affect the organisation and its HR have been analysed. The paper also helps in understanding the business strategies of the company as well.

2.1 Analyse the forces shaping the HR agenda.

The main aim of the hr. is regular changes in the attitude of the employees that they provide a better output which is valuable for the company. According to the business survey that internal forces change the shape of the agenda of HR. The first objective of the hr. is researching the new talent and to improve the skills of the employees for better performances. The first responsibility of hr. HR is to hire the employees and value their work and respect them (Altbach et al., 2009). Also, help them to solve their various problems or issues. HR must have a leadership approach to understand what the primary goals of the company are how to achieve that. It helps employees to know the knowledge of the company’s working culture. These improvements are necessary for the organisation and also help the employees to improve their performances. Here ASDA is a British supermarket retailer how these internal sources change the HR agenda that has been described briefly.

Ulrich model

By describing the definition of this model David Ulrich in his book HR champions, has identified four rules that help to HR of an organisation. These rules are an administrative expert, change agent, strategic partner and employee champion. 

HR business partner: the HR point of contact for these individuals is HR business partner and the most internal members of the company. HR communicates with the human resource department. The HR business partners provide the information to the internal customers the quality of their experiences. 

Change agent: when a company changes its structures, required to expand, evolve then their main objective is to change the agent that the human resource department maintains those organisational changes internally.

Administration expert: the administration role of the HR department to maintain different tasks. The administration expert observes the changes of legislation, rules and regulation and types of law that the company adapted (Bratton and Gold, 2017). 

Employee champion: any human resource department of the company is always aware of their employees that they are protected. The main objective of the employee advocate is to maintain the responsibility of the employees and their satisfaction and also creates a proper working environment.

The goal of the Ulrich model is to make proper and effective shifts from human resource, strategic management. This model aims to develop the policies and also provides support to the different business units. This model also helps the company ASDA to make good HR strategy. 

Michigan model

This model helps all transactional services in the businesses. It includes different activities such as recruitment, monitoring the absences, advice the employees how to deals with customers and deals with the different issues like discipline and many others. It is the approach best fit to the human resource. It needs the human resource strategy to help to make the overall strategy for the business (Bratton and Gold, 2017). It helps to limit the role of HR for reactive, organisational function and the importance of external and social factors of the organisation.

This model mainly focuses on the organisation, and it responds to the external environment. Focusing on the organisation, it has advantages that to observe the different aspects such as control management, formal structure etc. it leads the manager to assume that through systems of HR, the organisational strategy they have more power actually than they have. Also, it helps to the HR strategy to the company ASDA.

Internal forces shaping the HR strategy:

Business objectives

It is a plan of a company to making a profit in the businesses. It has observed the products and services which the company sell and anticipate the expenses of the company. The selection process of human resource department creates a productive workforce in an organisation. Improve the HR strategies affect the employees of the organisation and also it is helpful for the company (Buller and McEvoy, 2016). Making a proper working environment where the employees work comfortably. It will encourage the employees to motivate their works, and it is profitable for the organisation.

Organisational culture

It defines values, share the vision and behaviours of the employees that contribute to the environment of the organisation. It plays an important role in the success of the organisation. So the HR leaders and other HR members should maintain the proper organisational culture. HR leaders are always aware that the culture must focus on the company’s competitive efforts. For improvement of the culture, the HR leader has to work with the senior managers to point out what is good for organisation culture and how to improve it.  

1.1:  Assess a range of different factors which impact on an organisation’s business and its HR function.

PESTEL analysis of the retailer company ASDA

PESTEL analysis is a tool that is used to describe the framework of the macro environment to find out the threats and weaknesses. The PESTEL analysis describes the various factors of the organisation such as political, economic and social factor. Here the company ASDA has been described as the PESTEL analysis.  

Political factor

In a country, a political factor plays a key role. It also plays a vital role in an organisation. It creates an impact on the economy of the retail sector. It also has affected the British supermarket retailer ASDA. In the competitive business market, the British retailer ASDA has maintained some political factors like different social, political, legal activities. It has affected the business of ASDA and also in its HR department. Many rules have been imposed for this political situation of these countries. There are many rules imposed that the tax allowances up to 12,500euro if the earning up to 46,350 in a year. Increasing tax rates also affected the business of the organisation ASDA. Also, it has affected HR strategies. The productivity cost of the company also increased. So the HR department of ASDA does not recruit so many employees. The minimum wage law has been increased per hour for the 25 hours, 8.21euro for older and for 21-24 years it is 7.70euro (Expat Guide to the United Kingdom | Expatica, 2019). It has affected the business of ASDA. So the company faces trouble in making their payments to the employees. 

Economic Impact

There are many economic factors that have influenced the retail industry in the UK. ASDA also influenced by these factors. These economic factors are changes in taxation, interest rates, exchange rates of rupees etc. there will be a huge effect on ASDA's business and also on the strategies of HR. The different exchange rate, the tax rate of the different countries affects the business environment of ASDA and also affected HR's strategy to recruited new candidates. Also, the company does not pay enough amount of salary to their newly recruited employees. That is the main concern. There have been increased at 0.2% of GDP in the UK quarterly. The growing GDP affected the productivity level. It decreased by 0.9%, and it leads to the business growth negative at -1.4% (Ons.gov.uk, 2019). This also creates the market condition of the organization.  Also, the salary of the present employees not so much increased and also the company does not recruit new candidates.

Social Factor

There has been the impact of social culture on the image of organization ASDA in the UK. In the UK there are lots of people. Their demands, their necessity, their activities have affected the business of the organisation ASDA, and also the HR department is unable to make their strategies, and they have faced a lot of problems to recruited different types of candidates. But somehow the market condition of the ASDA may improve or gain some profits.  

2.2: Compare different tools for analysing the business environment

PropertiesSWOT Porter’s five forces 
FactorsBoth internal (Strengths and weaknesses) and external factors (Opportunities and Threats)External environmental factors
ConcernsAnalysing internal potential for putting strategic planning process for the company in placeCompetitive behaviours of the companies
ComponentsFour elements: Strength, Weakness, Opportunity and ThreatFive elements: Threat to new competitors, Bargaining power of suppliers, Bargaining power of customers, threat to existing rivalry, and threat to substitute of products
Analysis of the components 1. Strength
The analysis deals in evaluating the strength of the companies.
2. Weakness 
This evaluates the weakness of the company
3. Opportunity 
These are the favourable factors for getting an edge over the competitors
4. Threat 
These factors are external factors that hinders the competitive advantage of the organisations

1. The threat of new competitors
There is a need for more information about the local business, and overall it is difficult for a new entrant to compete with the market leaders.
2. bargaining power of suppliers
The scarcity of the raw materials could be occurring with the increae in the bargaining power of the suppliers. This could increase the competition for the resources and raw materials.  This could increase in the costs and could reflect on the decrease in the profits of the company (Manteghi and Zohrabi, 2011).
3. bargaining power of customers
Customer is an important part of any business. So, the companies have to provide the best services for attracting the customer with maximum satisfaction. 
4. threat of existing rivalry
There are so many competitors in the market. So the companies need to compete with the competitors. Thus, the companies need to maintain this strategy to capture the market.  So in order to attract the customer, the companies should need to provide the goods and services to the customer at a low cost in order to remain competitive in the process.
5.Threat of substitute
There are so many competitors in the market. These companies give a big threat to the companies (Manteghi  and Zohrabi, 2011). Thus, in order to capture the market, the companies should adopt new strategies to grab the market and also make a profit for the company. Other companies give products and services at low cost. 
SignificanceThe analysis would be helping in  evaluating the internal structures of the companies such that they could formulate effective strategies for proper governance of the businessesThe analysis would be enabling the companies to analyse the competitor’s strategies and thereby helping to formulate effective strategies for the businesses

Table 1: Comparison of two analytical tools:

Source: (Manteghi and Zohrabi, 2011)

2.3. Explain the key stages in strategy formulation and the implementation and the role of HR:

Steps in strategy formulation:

Strategy formulation is the process to get the perfect action strategy to achieve the goals for the ASDA Company as well as visions also. There are six stages in this formulation process; these are: 

  1. Setting organisation's objectives: The main thing in any kind of formulation of strategy is to set objective goals for a long time to achieve them fully and during determining these goals factors that can have an impact on the process should be analysed carefully before setting the goals.
  2. Evaluation the Organizational Environment: It is the step in which economic and industrial environment must be examined to get the better result of the market which mainly done by the analysis of the competitive position of the ASDA.
  3. Setting quantitative targets: It is also an essential step as the ASDA must set this quantitative target practically by the use of analysis in order to achieve those targets (Karami, 2016).
  4. Aiming in context with the divisional plans: With the help of detail analysis of trends of macroeconomic, the dedication and contribution of each department is justified in order to set the goals.
  5. Performance analysis: In this step, the difference is analysed between the planning of performance and execution of that in order to get an evaluated result to determine the present condition and future plans.
  6. Choice of strategy: This is the last step, and in this, the final actionable plan is selected after a detailed analysis of all the information and according to the goals in order to get success for the company ASDA.

HR mainly takes an active part in the division of the resources and also gives away about the coordination, and decision-related structures and HR also control the labour management and cost to give an advantage in the competition (Noe et al., 2017). 

Implementation:

There are 5 steps in implementation plan those are:

  1. Evaluation and communication of the strategic plan: In this step, first the plan is checked that is it according to the goals or not then the budget is verified that is the budget supports the program or not in order to implement the plan and then each and every employee should have knowledge about this plan. 
  2. Development of an implemented structure: In this step, a relation have to be developed among the various departments, work plans with executions are planned, main managerial works is determined, responsibilities and main operative tasks are determined, and then all the tasks are allotted to the right sections (Chang, 2016). Staffing solutions must be solved in order to give competition.
  3. Development of implementation support policies and programs: In this step, the progress is evaluated and monitored to get knowledge about the result, then reward and recognition structure should develop to encourage the employees according to result, then all the information are gathered, and feedback is generated about the result, at last, all these progress is should convey to all the employees of ASDA.
  4. Budgeting and allocation of resources: In this step, the resource is distributed to all the departments along with the plan and requirement and monitoring should be done on the uses of these resources by the departments.
  5. Discharge and functions and activities: Continuous employing of employees according to requirement with the training must be done along with the proper measure (Karami, 2016). Then their performance is evaluated, and the required steps must be taken to minimise the plan and execution of the plan difference in ASDA.

HR mainly develops the structure of resource distribution and also handles critical situations in order to make the growth of the company faster and also interact with the public as well as stakeholders.

Model:

One of the famous models is Mintzberg’s Model, according to Henry Mintzberg the plan formulation and implementation should be done after careful inspection of company like ASDA’s goal, vision and mission and objectives and then only they should perform the SWOT analysis method which is performed under control of the respective HR to determine proper perfect plan (Whittington, 2016). He also stated that if some company failed to perform these steps, then implementation of the plan precedes the formulation of the plan in reality which is terms as new strategies by him. According to the model ASDA needs to follow the proper implementation plan and every stage to get the successful result.

2.4 HR’s contribution to business ethics and accountability 

In the corporate world, it is necessary to make the corporate world free from any kind of scandal but in recent time’s corporate scandal increase in day by day. So the companies need to develop a reliable organizational method which can be useful on this kind of scandal for the welfare of stakeholders as well as the people of the society the HR plays a crucial role in this organizational method by taking crucial decisions ethics are the core of the industrialism and corporate society need to develop a substantial ethical standard to implicate business decisions to create trust and culture in term of time (Cohen, 2017). CIPD believes that corporate work should be done for the welfare of the society when this sector is in good hands the people are pleased with it which next the business more productive and more profitable and communities related to it became flourished. But the problem is work cannot be dome always as a positive representation because of the presence of corporate scandals, inadequate behaviour of the workers and also harassment of them. This can be partially or effectively solve by the HR as Hr is the position which content expert people of the organisation and who has all-time access to the stuff and can do work for their welfare.  

HR’s Role in Corporate Social Responsibilities and corporate governs

HR of ASDA has a crucial role in order to achieve the CSR objectives of the ASDA Company. Involvement of the employees of ASDA is a critical factor for this success where HR has the qualities and scope to increase the employee’s ability of the work and commitment which is also a strategy of CSR. Employees mainly chose the organisation like ASDA which can enforce the CSR errors for the welfare of the employee. CSR can also be helpful as the HR weapon which, results in a method for human resource practitioners to be guided. With that method, thereby in this way, ASDA’s social responsibility is maintained by HR (De Stefano et al., 2018). 

CIPD has the following obligations which the HR needs to follow within the business practices:

i. Professional Competence and Behaviour

  • The HR should maintain the professional knowledge and competence by the application of continuing professional development for promoting an insightful service in the company (Manteghi and Zohrabi, 2011)
  • He/she should be seeking proper support from the management if the company requires involving into new activities
  • He/she should accept the responsibilities for their decisions and actions

ii. Ethical Standards and Integrity

  • The HR should maintain, develop and establish the business relationships on the basis of the trust, confidence and respect (Manteghi and Zohrabi, 2011)
  • He/she should exhibit the personal and professional integrity within the business environment
  • He/she should be safeguarding the personal and confidential information as a result of the business relationships by not sharing the same with the third parties
  • He/she should be promoting equality of diversity, opportunity and support of the dignity and human rights of the employees

iii. Representative of the Profession

  • The HR should always act to support the values and reputation of the company, Asda 
  • He/she should exhibit personal leadership in order to maintain the highest standards of ethical conduct at the workplace (Manteghi and Zohrabi, 2011)

iv. Stewardship

  • The HR should be demonstrating reasonable and fair standards while dealing the employees
  • He/she should be taking appropriate actions against the employees not following the ethics at the workplace
  • He/she should promote appropriate development and people practices for enabling the employees to improve their customer satisfaction skills (Manteghi and Zohrabi, 2011)

The HR can fully integrate into their operations which results as developing CSR’s decision and initiative. Thus, HR should play a pivotal role to Enhance recruitment and retention methodology and labour’s crash methodology in ASDA.

3.1: Evaluate business performance and the role of HR in business planning and the change management agenda.

Financial indicators 

Financial Indicators Evaluation 
Working capital Cash is immensely used as working capital in ASDA. It can more overly be calculated by the knowledge of the exact difference between existing liabilities of the business from the company's existing assets. Cash in hand, short time investment, receivable accounts, accrued expenses as well as payable accounts and loans are the total parts of the main or key equation of KPI.
Current ratioWhile KPI is considered and discussed the difference between liability and assets the KPI as current ratio mainly is the value which can be derived by the decision of assets with liabilities which can give an overview of ASDA’s problems and its solutions (CIPD, 2019). In order to grow its business, it is necessary to fulfil the financial obligations continuously within time, and a credit rating should be maintained at a low level. 
Operating cash flowTo understand about the deliveries and expenses of operating it is necessary to analyse or monitor the operating cash flow of ASDA (Van Looy and Shafagatova, 2016). This type of KPI is mainly in use by comparing the neat capital and with the investments which are on the way to be used in the advancement of the ASDS business.

Table: financial indicator

Source: (Van Looy and Shafagatova, 2016)

 Non-Financial Factors

Non-financial indicatorsEvaluation 
Brand PreferenceIt is mainly used to get knowledge about ASDA company’s present position and also the position of its products and its services along with the competitor’s services. According to many marketers, aware people always go for product brands before price so the company’s brand image or branding should be in top in order to be in peak position. 
customer experienceIt has a direct and effortful effect on retention of customer and churns to achieve much more customer ASDA should improve as much as possible customer interaction with the employees to give a better experience to the customers (Arena et al., 2015).
Innovation It is the ASDA's ability to launch a new service for new products in existing markets or new markets successfully. Both the number of new products and the quality of it and the advertisement of it should play a key role in launching a new product.  

Table: non-financial indicator

Source: Created by author 

HR’s role in business planning and change management 

 HR of ASDA plays a crucial role in change management as when the company applies new technology in order to maximise its production rate, some of the employees may deny accepting the new technology. For undertaking the change within the business environment Lewin’s change management model could be applied by the HR. the elements of the model can be described below as:

Lewin’s change management model

Lewin’s change management model

Figure 1: (Cummings et al. 2016)

Unfreeze

This step requires the HR to prepare Asda to accept the change necessary to meet with business objectives of the company. For this, the HR needs to challenge the attitudes, beliefs, behaviours and attitudes of the employees.

Change

This is the important step which requires the HR to resolve the uncertainty by formulating effective strategies for the making the changes required at the workplace to be implemented. This requires the HR to manage the communication and time which are the two key constraints for making the change.

Refreeze

This step requires the HR to manage the outcome of the change such that the same are being embraced by the employees. This requires the HR to train and employees and make aware about the benefits of the change after the same is implemented within the business environment.  

In this case, HR's role becomes crucial. HR should come and take an active part in that event by taking some significant steps like little increase in the salary of the employees in order to give encouragement to accept the new technology. On the other hand, HR takes an active part in the business planning of ASDA and should have an idea about the business plan taken by the authority in order to give a fierce competition to the competitors. By understanding it, HR must find the balance between the cost and the expected profit in order to give balance or approval to the new idea (Analoui, 2017). On the other hand, HR should also have an active idea to forecast the demand of the existing market and HR should be proactive in nature to deal with some other kind of problems and their solutions related to business planning and execution. 

3.2 Assess and utilise different sources of business and contextual data for planning purposes   

  • Industry information – information about industry like the plans or programs of the competitor companies of ASDA or about their strategies will help significantly to the ASDA in order to select and improved their business planning in order to beat their competitors and to get maximum profit and a big customer circle, so to determine the forward planning of ASDA is much needed to get the various kinds of information about the industry.
  • Trends in HR – New or modern trend in human resource and management sectors have the improvised effect on the business planning of ASDA (Noe et al., 2017). If the industrial market receives the new trend about this managements then the other companies will use it in order to use their resource is in a better way, so it’s essential for ASDA to get knowledge about new trends in order to use their resources in maximizing way and according to that much preferable business plan can be set
  • Employment turnover and retention- In order to plan for the business ASDA should take some significant rates to minimize the turnover of employees and maximize the retention by expanding the salary range and giving the reward benefits and many other to the employees so that the employee number become on top and it will be beneficial for their further planning. 
  • Absence data- Any kind of absence or missing data of the ASDA company must create immense problem to the planning as data is the, much important thing on the planning are dependent so ASDA should take significant steps to recover absence data or solve this kind of situation if they appear in order to make a foolproof planning.
  • Government information- Government information also plays a crucial role in business planning of ASDA as for example if the government ban a material and company plans and executes to produce a product by using that kind of material then there is an absolute chance to receive a considerable loss. So for the planning of business ASDA should be updated with every small and significant information about the government movements.  

Conclusion:

From the above analysis, it can be said that proper evaluation of the external and internal analysis is needed to be done for understanding the business environment. In this assignment, the detailed analysis of Porter's five forces and SWOT analysis of the company has been done. Besides, also various stages of the strategy formulation and implementation are also discussed. Role of the HR in maintaining business ethics and planning has also been considered for a better understanding of the HRM.

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