The Internal and External Environments of an Organization within the Context of HR Planning - Case Study Example

Running Header: The Internal and External Environments of an Organization within the Context of HR Planning and Job Design Student’s Name: Instructor’s Name: Course Code & Name: Date of Submission: Executive Summary This report explores the internal and external environments of the Wesfarmers Company within the context of HR planning and job design. This organization has various divisions that operate as separate business units. The company is also discussed in context of Herzberg’s, Weber’s and classical organization theories. The internal environment has ultimate effect on spear heading the HR planning and job design in the company (Peter, John & Patrick 2007, p. 90). External factors of the environment such as global economy and various changes in the society have been discussed and explored how the company has shifted to human resources for competitiveness and survival. The Wesfarmers Company has factored in relationship between Torres Strait Islander and Aboriginal people as the external environment concerning society changes (Wesfarmers 2009a, p. 3). This factor has been incorporated in the HR planning and job design. Table of Contents Executive Summary 2 Table of Contents 3 The Internal and External Environments of an Organization within the Context of HR Planning and Job Design 7 1.0 Introduction 7 2.0 Factors in the Internal Environment 8 The main functions in human resource management are planning, organizing, leading and controlling. However, these functions are influenced by internal factors. The Wesfarmers Company has embraced role culture and this is an internal factor that ultimately has effect on HR planning and job design. The company is run by directors led by chairman, managing director and financial director among other directors. The system is largely borrowed from Weber’s theory of bureaucracy where work seems to be controlled by few managers who are at the top of the structure. The major role of strategic human management resource planning is the interpretation of future plans and goals of the organization on basis of number and type of human resource. Wesfarmers (2009b, p. 3) reports that it has a profile of 11 directors including chairman. The members have major influence on the HR planning of the company since the board has one chief human resource officer, Mr. Ben Lawrence. In role culture, the pillars are strong well-designed departments. The job of department is controlled and coordinated by procedures governing role such as job descriptions and authority definitions. There are also procedures for communications such as circulation rules and document distribution and also dispute settlement rules also exist. In this culture the ultimate control and coordination is on the hand of senior managers. Power of position is the main power in this culture where only expert power is allowed if appropriate and personal power is not accepted. Here the procedures and rules are well established. The success of this culture relies on appropriateness in provision of responsibilities and roles (Fang 2000, p. 6). This culture works well in a stable environment. It also frustrates persons who are power inclined or need control over her or his own job and the way in which it is carried out. Under this internal environmental factor, the company is required to roll out effective plan such that it will have a vivid picture of their present workforce, its weaknesses, its strengths and potentials to see it through the next five years (Susan & Randall 1990, p. 226). According to Wesfarmers (2009b, p. 2), the norm of the organization job design has been oriented to offer decent and fair treatment to employees. The jobs in the company are designed for various areas of businesses in order to meet the company strategic plans. In Henri Fayol classical organization theory, one of the principles of management is division of work which increases output if task is grouped according to technical expertise and skill. The company endeavors to acquire the most skilled and talented employees in every business unit. Within varied businesses in the company, there are various skills required and every unit manages its own process of recruitment (Wesfarmers 2009b, p. 55). This has been the management style of the Wesfarmers in order to allow competitive advantage among its business units. Every division in Wesfarmers functions as an individual business and thus has a different culture. However, they have 4 core values that steer every businesses and form their culture entirely. Firstly, integrity is embraced in order to improve ethics within job. It also recognizes that openness is necessary so that individuals can accept their mistakes and learn from them. Units also embrace performance accountability in quest to enhance and protect their reputation. Lastly, they value boldness in order to make ready and bold decision and confront the status quo of sustainability and growth. In job designing the management can be most efficient if it develops procedures and rules to control the method in which the task is to be carried out. Susan and Randall (1990, p. 226) argue that management is more effective at developing ways for carrying out task and then organizing and planning. By breaking down work into simple elements; training of the workers is highly simplified, employees are easily replaced one for the other and supervision is made simpler. The Wesfarmers culture values have allowed it to have a job design that is focused to common objectives. Coles business unit has initiated enormous training for the last one year in order to improve, to develop delivery execution and improve knowledge of member team in fields that can have a positive effect on clients. The company respect the right of it employees to negotiate either collectively or individually, without or with the inclusion of third parties. This will serve as motivation to employees and also attracting new skills hence allow the company to deliver quality products and services for the next five years (Fang 2000, p. 5). As indicated in Herzberg’s theory, motivating agents such as recognition, self actualization and responsibility will be enhanced. 8 3.0 Factors in the External Environment 10 The rapid changes in global economy and others changes in the society are causing companies to move to the human resource for competitiveness and survival. PEST analysis has been utilized as a study tool that focuses on vital factors of external environment affecting the future and present of the firm (Hamid 2006, p. 4). It stands on technological, social-cultural, economical and political. The minister for Employment in Australia argued that the global financial crisis is slowing down the economy of globe leading to elevated unemployment rate (Ardus 2009, p. 1). In 2009, Wesfarmers made a net profit of $1,535 million and in 2008 it recorded a profit of $1,063 million. The activities of this company contributes largely to the economies of both New Zealand and Australia with over $6,535 million paid as wages and salaries and taxes, royalties and levies totaling $ 1,216 million (Wesfarmers 2009b, p. 14). The company HR planning has goals and future plans in form of number and types of human resource to make sure that company spends its salaries and wages money efficiently in order to cope with global economy. Wesfarmers management has established a job design aimed at maximizing output by hiring the right employees, training them appropriately and developed a proper rewarding system. This is also in line with HR principle which states that talent is the major driver to develop all values. This is to make sure that the company is able to operate effectively even during financial crisis. 10 The external factor concerning the relationship between Torres Strait Islander and Aboriginal people is a matter that can not escape to be considered in Wesfarmers Company’s HR planning and job design. The chairman of the company suggests that the two communities can be offered greater opportunities to contribute in the economic prosperity of the company and the entire country (Wesfarmers 2009a, p. 3). Human resource strategies of Wesfarmers have initiated a plan in an effort to reduce gap of life expectancy between Islander and Aboriginal communities in accordance with principle of equity. This is in an effort to win commitment from employees coming from both communities. The reconciliation plan is developed on 3 pillars of building opportunities, creating relationships and establishing respect. The company will be studying the present Islander and Aboriginals employees and determine how every of it diverse businesses will help to give sustainable opportunity results. Therefore, HR planning and job design in Wesfarmers Company will make sure that it tailors in this social factor for the next five years in order to attain its reconciliation goal. The recruitment and employee development will be affected by this social environment. The design of work group will be appropriate since work group membership have particular positive gains for individual. Cliff (2004, p. 5) suggest that the basic principle in designing work group is minimum critical specification of tasks to jobs. 11 4.0 Conclusion 12 References 13 The Internal and External Environments of an Organization within the Context of HR Planning and Job Design 1.0 Introduction According to Hamid (2006, p. 1), the HR planning is a vital part of how a company is going to attain its mission, by making sure that the appropriate persons, with the appropriate knowledge and skills are in the desired positions to perform on the mission of the organization. The HR planning challenges are mostly pinned on fast changing external and internal environment factors. The internal factors are those that emanates from the organization itself such as it culture, management style and work organization (Mohsen 2001, p. 4). The external factors are those that originate outside the organization and include those related to global economy and other changes in the society. According to Peter, John and Patrick, (2007, p. 273) the existing job design must be properly assessed while considering the present employees capabilities. Job design is viewed as the specification of method, contents and correlations of jobs to content organizational and technological together with personal requirements of holders of jobs (Walker 1998, p. 2). Company on focus is Wesfarmers and it started in 1914 as the Cooperative of western Farmers and it was basically engaged in providing merchandises and services to the Western rural community of Australia. In 1989, the firm extended to investments of energy industry by going into mining of coal after acquiring Western collieries. Additional extension of interest in coal happened in 2000 when it acquired the Curragh mine located at Bowen Basin Queensland. Also, in 1991 Wesfarmers merged its company of insurance with Federation Insurance to create Insurance of Wesfarmers Federation, one of the biggest Australian rural insurers. The company is one of the biggest employers in the country with approximately 200,000 employees (Wesfarmers 2009b, p. 52). 2.0 Factors in the Internal Environment The main functions in human resource management are planning, organizing, leading and controlling. However, these functions are influenced by internal factors. The Wesfarmers Company has embraced role culture and this is an internal factor that ultimately has effect on HR planning and job design. The company is run by directors led by chairman, managing director and financial director among other directors. The system is largely borrowed from Weber’s theory of bureaucracy where work seems to be controlled by few managers who are at the top of the structure. The major role of strategic human management resource planning is the interpretation of future plans and goals of the organization on basis of number and type of human resource. Wesfarmers (2009b, p. 3) reports that it has a profile of 11 directors including chairman. The members have major influence on the HR planning of the company since the board has one chief human resource officer, Mr. Ben Lawrence. In role culture, the pillars are strong well-designed departments. The job of department is controlled and coordinated by procedures governing role such as job descriptions and authority definitions. There are also procedures for communications such as circulation rules and document distribution and also dispute settlement rules also exist. In this culture the ultimate control and coordination is on the hand of senior managers. Power of position is the main power in this culture where only expert power is allowed if appropriate and personal power is not accepted. Here the procedures and rules are well established. The success of this culture relies on appropriateness in provision of responsibilities and roles (Fang 2000, p. 6). This culture works well in a stable environment. It also frustrates persons who are power inclined or need control over her or his own job and the way in which it is carried out. Under this internal environmental factor, the company is required to roll out effective plan such that it will have a vivid picture of their present workforce, its weaknesses, its strengths and potentials to see it through the next five years (Susan & Randall 1990, p. 226). According to Wesfarmers (2009b, p. 2), the norm of the organization job design has been oriented to offer decent and fair treatment to employees. The jobs in the company are designed for various areas of businesses in order to meet the company strategic plans. In Henri Fayol classical organization theory, one of the principles of management is division of work which increases output if task is grouped according to technical expertise and skill. The company endeavors to acquire the most skilled and talented employees in every business unit. Within varied businesses in the company, there are various skills required and every unit manages its own process of recruitment (Wesfarmers 2009b, p. 55). This has been the management style of the Wesfarmers in order to allow competitive advantage among its business units. Every division in Wesfarmers functions as an individual business and thus has a different culture. However, they have 4 core values that steer every businesses and form their culture entirely. Firstly, integrity is embraced in order to improve ethics within job. It also recognizes that openness is necessary so that individuals can accept their mistakes and learn from them. Units also embrace performance accountability in quest to enhance and protect their reputation. Lastly, they value boldness in order to make ready and bold decision and confront the status quo of sustainability and growth. In job designing the management can be most efficient if it develops procedures and rules to control the method in which the task is to be carried out. Susan and Randall (1990, p. 226) argue that management is more effective at developing ways for carrying out task and then organizing and planning. By breaking down work into simple elements; training of the workers is highly simplified, employees are easily replaced one for the other and supervision is made simpler. The Wesfarmers culture values have allowed it to have a job design that is focused to common objectives. Coles business unit has initiated enormous training for the last one year in order to improve, to develop delivery execution and improve knowledge of member team in fields that can have a positive effect on clients. The company respect the right of it employees to negotiate either collectively or individually, without or with the inclusion of third parties. This will serve as motivation to employees and also attracting new skills hence allow the company to deliver quality products and services for the next five years (Fang 2000, p. 5). As indicated in Herzberg’s theory, motivating agents such as recognition, self actualization and responsibility will be enhanced. 3.0 Factors in the External Environment The rapid changes in global economy and others changes in the society are causing companies to move to the human resource for competitiveness and survival. PEST analysis has been utilized as a study tool that focuses on vital factors of external environment affecting the future and present of the firm (Hamid 2006, p. 4). It stands on technological, social-cultural, economical and political. The minister for Employment in Australia argued that the global financial crisis is slowing down the economy of globe leading to elevated unemployment rate (Ardus 2009, p. 1). In 2009, Wesfarmers made a net profit of $1,535 million and in 2008 it recorded a profit of $1,063 million. The activities of this company contributes largely to the economies of both New Zealand and Australia with over $6,535 million paid as wages and salaries and taxes, royalties and levies totaling $ 1,216 million (Wesfarmers 2009b, p. 14). The company HR planning has goals and future plans in form of number and types of human resource to make sure that company spends its salaries and wages money efficiently in order to cope with global economy. Wesfarmers management has established a job design aimed at maximizing output by hiring the right employees, training them appropriately and developed a proper rewarding system. This is also in line with HR principle which states that talent is the major driver to develop all values. This is to make sure that the company is able to operate effectively even during financial crisis. The external factor concerning the relationship between Torres Strait Islander and Aboriginal people is a matter that can not escape to be considered in Wesfarmers Company’s HR planning and job design. The chairman of the company suggests that the two communities can be offered greater opportunities to contribute in the economic prosperity of the company and the entire country (Wesfarmers 2009a, p. 3). Human resource strategies of Wesfarmers have initiated a plan in an effort to reduce gap of life expectancy between Islander and Aboriginal communities in accordance with principle of equity. This is in an effort to win commitment from employees coming from both communities. The reconciliation plan is developed on 3 pillars of building opportunities, creating relationships and establishing respect. The company will be studying the present Islander and Aboriginals employees and determine how every of it diverse businesses will help to give sustainable opportunity results. Therefore, HR planning and job design in Wesfarmers Company will make sure that it tailors in this social factor for the next five years in order to attain its reconciliation goal. The recruitment and employee development will be affected by this social environment. The design of work group will be appropriate since work group membership have particular positive gains for individual. Cliff (2004, p. 5) suggest that the basic principle in designing work group is minimum critical specification of tasks to jobs. 4.0 Conclusion The Wesfarmers Company has adopted role culture and this is the internal environment that affects the HR planning and job design in the company. In company’s culture, it is run by few directors at the top of structure making it a bureaucratic system. The board has one chief human officer and therefore the overall management has influence on the HR planning and job design to be adopted by the company. There are various skills required in various business units and every unit manages its own process of recruitment. The rewarding system and respect of employees’ right will serve as a motivation factor to allow the company to operate effectively for the next five years. The company HR planning has goals and future plans in form of number and types of human resource to make sure that company spends its salaries and wages money efficiently in order to cope with unfavorable global economic environment. The company has been affected by the society changes concerning the relationship between Torres Strait Islander and Aboriginal people since they also make the part of company workforce (Wesfarmers 2009a, p. 3). It has also initiated efforts to cater in the relationship between two communities in its HR planning and job design. HR theories concepts and principles are vital in HR planning and job design. References Ardus 2009, ‘HR and recruitment news’, Multiply your Recruitment options, vol. 1 no. 21. pp. 1- 2. Cliff, F 2004, ‘Designing jobs to meet the needs of both employer and employee’, Job Design, vol. 1 no. 1, pp. 1-15. Fang, L 2000, ‘Human resource strategy to improve organizational performance: A route for British firms?’, Future of Work Programme, vol. 1, no. 9, pp. 2-33. Hamid, R 2006, PEST Analysis in Strategic Human Resources Planning, pp. 1-11. Mohsen, B 2001, ‘International civil service commission’, A Framework for Human Resources Management, pp. 1-20. Peter, B, John, P & Patrick, W 2007, Human Resource Management, Oxford, New York. Susan, E & Randall, S 1990, ‘Challenges for industrial/organizational psychologists’, Human Resource Planning, vol. 45, no. 2, pp. 223-239. Wesfarmers 2009a, Wesfarmers Reconciliation Action Plan for FY2009/10, pp. 1-8. Wesfarmers 2009b, Sustainability Report, pp. 2-77. . Read More