Factors Influencing Management Choices in Human Resources Management - Case Study Example

Analysis of factors influencing management choices in HRM and assessment of strategic orientation РRОJЕСT RЕРОRT ОN STЕGGLЕS (BАIАDА РОULTRY) Student’s Name: Course Code: Tutor’s Name: Date of Submission Contents Contents 2 Introduction 3 Theoretical and Conceptual Foundation 4 Harvard analytical framework 4 Stake holder’s theory 5 Vertical and horizontal alignment in human resource management 6 Analysis of factors and assessment of extent of strategic orientation 7 External factors 7 Economic changes and conditions 8 Technological changes and advancements 8 Government regulations 9 Demographics of the workforce 10 Internal factors 10 Size of the organization 11 Organizational structure 11 Business strategy 12 Assessment of Extent of Strategic Orientation 13 Stakeholders 13 Vertical alignment 14 Horizontal alignment 15 Management and human resource practices 15 Conclusion 16 References 18 Introduction Baiada poultry pty Ltd. is a private company in Australia. It is one of the leading providers of poultry products such as poultry feed, breeding stock, day old chicken, fertile eggs and processed chicken products (Baiada, 2017). Since 1943 the company has provided poultry products in Griffith, hunter valley as well as Tamworth in New South Wales. Nowadays the company has operation sites all over Victoria, Queensland, south and Western Australia (Baiada, 2017). The company has been in the fore front to provide accessible and high quality services all over Australia. It has also contributed significantly to the government by enhancing the wellbeing and quality life of all people in Australia. In 2016, the company had a market share of about 20 per cent in Australia (Baiada, 2017). It has also been able to employ about 2,200 full time employees in its operating centers all over Australia management (Australian competition and consumer commission, 2008). The company uses contractors to employ their workers. This means that the company uses partner managed model in their human resource practices. As a privately owned company, Baiada works with agreements with Fair work Ombudsman to lay down policies with their contractors for better employment relations since 2015 (Baiada, 2017). This helps in reducing employee exploitation in the company and better human resource practices are achieved. As a researcher I engaged Baiada employees and the management to get information. The information in this report was collected from a number of employees in the company as well as the management. I have also gathered information from the company’s website as well as published documents regarding Baiada. Annual reports from the company as well as Australian competition and consumer commission have played a significant role in coming up with this report. There can be some limitations of the information in this report. This is because some information was not accessed due to the available restrictions. Some of the employee’s information may also be exaggerated or not true. Other written sources failed to provide clear information. The company’s strategic plan was also used to get information together with reports regarding the company. The report will analyze Baiada Company by first analyzing the different theories and concepts of strategic human resource management. These include the Harvard analytical framework together with stakeholders’ theory as well as vertical and horizontal alignment. Other concepts of human resource management will be analyzed to come up with an analysis of factors influencing management choices in HRM and assessment of strategic orientation in Baiada. Theoretical and Conceptual Foundation Harvard analytical framework Harvard analytical framework is an analytical map that helps managers on how to relate with their employees. It concentrates on the soft or human aspect of human resource management (Wei, 2006). According to Punia and sharma (2015), in making strategic human resources management decisions, the manager need to put into consideration a number of factors. These include the situational factors as well as the stakeholder’s interests. Situational factors include the business conditions and strategy as well as work force characteristics (Punia and sharma, 2015). Management philosophy of the organization as well as its labor markets and worker’s unions also makes part of situational factors. Additionally, law and social values together with task technology are also viewed as factors to be considered by managers in the Harvard analytical framework with regard to situational factors (Barney, & Clark, 2007). Stake holders’ interests range from the interests the organization’s shareholders, the management and the workers (Peters, 2004). The government as well as unions also has some interests in the organization that managers should consider within the Harvard model. Stake holder’s theory This is a theory in organizational management as well as ethics of a business. It takes into consideration the values and morals in the management of a business organization. Stakeholders are the parties in an organization that supports its existence (Nijssen & Paauwe, 2012). The theory puts it clear that human resource management choices have to involve the impacts of the many interests of the different stakeholders. These stakeholders can either be external or internal with regard to the organization. The external stakeholders in an organization include the media, government as well as the local community where the organization operates (Bos-Nehles, Van Riemsdijk & Looise, 2013). Consumer advocates and environmentalists are also considered as important external stakeholders who usually influence the formulation of the strategies (Barney & Clark, 2007). Internal stakeholders include the owners, investors and the organization’s employees. The theory also suggests that the strategy formulation process incorporates political management (Krishnan, & Singh, 2011). Strategic choices made by the human resource management become more effective due to incorporation of the stakeholders (Bos-Nehles, Van Riemsdijk, & Looise, 2013). According to the theory, human resource practices in every organization have to put into consideration all the interests of the different stakeholders for the business to gain profitability. Stakeholders will influence the different decisions in the organization hence making them an integral part of the business (Trullen, Stirpe, Bonache & Valverde, 2016). Vertical and horizontal alignment in human resource management Strategies taken by any business organization are driven by the organization’s goals and objectives. Alignment of these strategies vertically will make sure that they are directly related to the organizational goals which are further related to the mission, values and the vision of the organization (Boon, Paauwe, Boselie, & Den Hartog, 2009). The strategies are developed in such a way that they will show how the company will realize its goals and objectives. A number of strategies are usually laid down by business organizations in pursuit of attaining their goals as well as objectives. Vertical alignment ensures the business resources are effectively utilized in the process of achieving the set objectives (Wei, 2006). This alignment is basically characterized by the alignment between the business strategy and the human resource management strategy. In horizontal alignment, strategies do not compete; they work together with the aim of achieving organizational goals as well as objectives (Boon, Paauwe, Boselie, & Den Hartog, 2009). Different departments may have different strategies in the same business organization. Horizontal alignment will help these departments to work harmoniously and with the overall goals and objectives of the business in mind. Each part of the business must consider the overall picture of the business for success to be realized. Horizontal alignment is basically characterized by the human resource management strategies together with business strategy alignment (Wei, 2006). It is important for any business to employ horizontal as well vertical alignment for it to be successful. The major difference between the two fits is that horizontal alignment or fit is concerned with how the various human resource practices in an organization will be coordinated while vertical fit is concerned with the compatibility between the human resource practice packages together with the strategy used by a business organization. Both alignments help in increasing the business’s competitive advantage and success. This is because of the close relationship between harmonization of human resource practices and the business strategy itself (Wei, 2006). Analysis of factors and assessment of extent of strategic orientation Managers need to assess the various contingencies for them to make decisions which will make the organization realize its goals and objectives. They need to measure the conditions where organizational practices will occur (Wei, 2006). Decisions will be affected by various factors which will include both internal and external business environments which may affect the human resource practices in an organization. External factors These are factors that affect the human resource practices but the organization does not have the capability of controlling them (Wei, 2006). They affect the organization from outside. External factors are the same as external business environment. A good human resource strategy should take into consideration these external factors for the organizational goals to be realized. These include the following: Economic changes and conditions The current economy usually affects the selection, the ability of hiring as well as the structure of compensation in the organization. Human resource practices have gotten more significance due to the development of the global economy (Boselie, 2010). International competition together with globalization has become a major concern of human resource practices in many organizations. Major economic trends such as unemployment rate have the capability to affect the achievement of any organization. This makes it important for organizations to understand the economic conditions as well as possible changes in the economy for better achievement of organizational goals and objectives (Boon, Paauwe, Boselie & Den Hartog, 2009). Baiada Company as an example of the companies that operate under such economic conditions and changes should understand the economy in Australia. This will help the human resource management to operate in the economy and achieve the overall goals and objectives (Truss, Mankin & Kelliher, 2012). Selection, hiring and compensation of the company’s employees will be beneficial to the workers therefore increasing their output and the company’s competitive advantage will increase in the long run. Economic conditions will also help an organization in the achievement of economic goals. This is where the business or the company will have cost effective human resource management programs to make its labor more productive (Baiada, 2017). Technological changes and advancements Technological advancements usually give firms better infrastructure as well as business growth. Due to the concept of globalization as well as technological innovation in the functions of the business, they form a positive picture for organizations (Wei, 2006). Human resource management has been affected by technological changes due to the interaction between human resources and the technology (Trullen, Stirpe, Bonache & Valverde, 2016). Human resource practices such as recruitment; training, educating, and observing as well as performance appraisal have been improved greatly by technological advancements. Technology also facilitates development and implementation in human resources in a faster way (Wei, 2006). The role of human resource management has also been affected by technological advancements due to the continued growth of multinational enterprises. Baiada Poultry Company has not been left behind. Human resource practices in the company have been affected by technological changes. It has continued to implement the fundamental, sustainable as well as permanent changes in its human resource management practices (Baiada, 2017). Contracting of employees has been facilitated by the new technological advancements. The company has also agreed to compensate all the underpaid workers in the organization (Baiada, 2017). Government regulations Human resource management in all organizations has been pressurized to operate within the law and as per the workforce compliance (Bos-Nehles, Van Riemsdijk & Looise, 2013). The existing regulations as well as changes will always affect human resources processes in organizations under the regulations. According to Trullen, Stirpe, Bonache & Valverde (2016), the human resource practices may be in form of hiring, training, and educating the workers and this must meet the rules and regulation of the region or the country where the business is located. Compensation and termination of workers must be in line with the prevailing regulations and legal necessities (Peters, 2004). Failure to comply with the law may lead to the company being fined or some legal actions to be taken against the organization. For sustainable strategic development in organization’s human resource management, government legislations and policies are very important. They have effect on every activity and function of the organization. Human resource management should therefore formulate policies and implement them as required by law of the specific country of operation. Since 2015 Baiada Company came up with policies to comply with the law regarding their workers at all of its sites (Baiada, 2017). The company also set a target of meeting social expectations of the Australian community. They had to provide safe, fair and equal working opportunities for their employees regardless of the location. The company also had to comply with common wealth workplace laws like the fair work regulations, fair work instruments as well as the fair work act 2009 (FW Act) (Baiada, 2017). Demographics of the workforce According to Boxall & Purcell, (2016), these demographics include factors such as age, ethnicity, gender, and marital status as well as the family status of the workers. Additionally salary levels and the workers’ occupation will also affect the human resource practices in a business organization (Punia and sharma, 2015). Baiada has been relying on contactors to hire their employees. In 2015, the company agreed to a compliance partnership which would correct the workers who had been under paid by the contractors previously (Baiada, 2017). Internal factors According to Punia and sharma (2015), these are the factors that affect human resource management practices due to the changes and events that take place in a business organization. The factors do not consider what is going on outside the business itself but in the business (Punia and sharma, 2015). They are the same as internal business environments. These factors include the following: Size of the organization Size of any business organization will affect the different human resource practices. The size will determine the type as well as intensity of human resource practices in the business organization (Garavan, Wilson, Cross and Carbery, 2008). It is evident that most small business organizations do not incorporate formal human resource practices (Punia and sharma, 2015). On the other hand, large organizations have human resource departments that deal with all matters relating to human resource. Human resource practices are therefore dependent on the size of the business organization as well as the different business strategies as well as structures in the organization (Garavan, Wilson, Cross and Carbery, 2008). Baiada as a large organization is affected by its size to an extent of hiring contactors who help them in hiring their employees (Australian government, 2015). This has even to workers exploitation in the past but the company has responded well by compensating them (Australian government, 2015). The size of the business will also affect management styles like in Baiada where participative style has been adopted (Australian government, 2015). Organizational structure This is a system that is used in defining the hierarchy within the organization itself (Wei, 2006). In the structure, each job is well defined together with its function and where to be answerable in the hierarchy. The structure will determine the human resource practices in the organization (Nijssen & Paauwe, 2012). The structure of any organization shows how power is exercised in the organization and the different chains of command. This helps the organization in exercising good human resource practices due to the use the organization’s structure. Different businesses have different structures accompanied by different human resource practices. Baiada Company for example has its own structure ranging from Simon Camilleri, the managing director. Other departments in the company work under the supervision of the managing director including the human resource management which recruits, hires and fires workers both within the country as well as foreign workers (Baiada, 2017). The company has also been using external contractors who are used to hire employees for them. Business strategy Business organizations employ different strategies for them to increase their competitive advantage. Some strategies will link the management directly with the human resource practices (Katou & Budhwar, 2008). A business strategy plays a significant role in making the organization achieve its goals and objectives (Trullen, Stirpe, Bonache & Valverde, 2016). For successful businesses as well as the profitable ones, human resource management policies together with business strategies are developed at the same time and simultaneously for the enhancement of better organizational performance (Garavan, Wilson, Cross and Carbery, 2008). Baiada, being a privately owned company has tried its best to align its business strategy with the human resource management policies (Baiada, 2017). However their practice of getting foreign workers through contractors has affected the company human resource practices negatively. The company has gone forward to harmonize though an agreement with Fair work Ombudsman to lay down policies with their contractors for better employment relations and this will play an important role in increasing their workers satisfaction (Australian government, 2015). Other internal factors will include the employees themselves as well as their level of motivation in the working environment (Punia and sharma, 2015). After Baiada agreement with Fair work Ombudsman, the workers motivation has increased as they work to increase the profitability of the private company (Baiada, 2017). The core values, assumptions as well as beliefs of the people in the organization also comprise the internal factors (Punia and sharma, 2015). This forms the organizational culture and gives the employees a sense of expected behavior or shaping their attitudes. In Baiada, the workers are slowly adopting positive culture towards the company and this has a significant role to play in making the company more profitable (Baiada, 2017). The traditions of workers exploitation have been affecting the organizational culture but after the agreement with the Fair work Ombudsman human resource practices are better. Assessment of Extent of Strategic Orientation Stakeholders A business organization cannot operate in isolation. Other than the internal as well as external factors affecting human resource practices, the business such as Baiada, must integrate the various stakeholders for it to achieve success (Connell & Teo, 2010). The stakeholders have a role to play for the success of any business. Baiada cooperates with other companies in the process of doing their business. These include the Cordina and Red Lea both of HI chick which is a breeding company. These are very crucial stakeholders in the process of human resource management bearing in mind that Baiada owns only a third of the company (Baiada, 2017). Workers on the other hand must cooperate well for the company to realize their goals in the business. Being a privately owned company, the owners need to lay down good strategies for the company’s human resource practices to succeed. Mello (2015) says that Customers cannot be left behind. They are very significant stakeholders and human resource practices should aim at satisfying them. Baiada’s customers such as Aussie Farmers Direct had failed to buy from Baiada’s chicken until they agreed to make an agreement with Fair work Ombudsman (Baiada, 2017). This was to affect the company negatively until they obliged. This shows that good relationship among the stakeholders will always benefit the company (Punia and sharma, 2015). Other stakeholders such as the contractors that were used by Baiada in hiring workers should be incorporated in laying down human resources management policies. This will help the company in hiring the best employees and also pay them according to the laid policies. Other bodies such as Fair work Ombudsman should always be incorporated to make sure that the company reaches the required standards as far as human resource practices are concerned. Vertical alignment Being a private company, Baiada has tried to undergo their operations with the aim of achieving the company’s goals and objectives. Other than the growing farms that are usually contracted by Baiada, all the other strategies in the company are vertically integrated. The company’s operations such as breeder farms as well as broiler are vertically aligned to achieve the overall goals and objectives. Other operations in the company include processing plants, hatcheries, feed milling together with protein recovery. All these operations take place with the ultimate goals and objectives of the company in mind (Australian competition and consumer commission, 2008). Instructions from the managing director are adopted by the other workers with the aim of achieving the vision of the company which is “To become the chicken grower of choice for the leading chicken brands in Asia-Pacific”. This means that vertical alignment aims at achieving the vision as well as the vision which is “To be the leading and sought after supplier of healthy chickens through sustainable best practice production and continual development of world class facilities, all of which exceed customer expectations” (Australian competition and consumer commission, 2008). Horizontal alignment Various departments as well as operations in Baiada, work together for the company to experience success in human resource management (Australian competition and consumer commission, 2008). However horizontal alignment was not very clear since it was not included in the company’s plan but the different strategies from different operations have made the organization better. Horizontal alignment had also made human resource management to fetch workers outside the country through contracts with other companies (Baiada, 2017). Even if this fetching has brought problems in the company due to workers exploitation, the agreement that was reached with the Fair work Ombudsman also represent good horizontal alignment (Australian competition and consumer commission, 2008). It has been clear that the company has been working together with other stakeholders for the company to achieve its goals and objectives. Management and human resource practices Top management of any business organization or company will affect the human resource management practices. The policies that govern the policies in human resource management are shaped in such a way that the top management of a business is giving instructions to the human resource management (Punia and sharma, 2015). This influence of the top management has affected the human resource management practices for long. There should be enough consultation between the top management of a business and the human resource management for the company to make better decisions and benefit the company in the long run (Trullen, Stirpe, Bonache & Valverde, 2016). Baiada for example has been contracting other firms to help the company in hiring as well as paying their workers (Baiada, 2017). This is an issue that has led to exploitation of many workers in the company something that can affect the forms productivity. On the other hand the top management should consult the human resource management for the company to set some policies which will benefit the company in the long run. Conclusion In conclusion Baiada poultry pty Ltd. is a private company in Australia. It is one of the leading providers of poultry products such as poultry feed, breeding stock, day old chicken, fertile eggs and processed chicken products. This paper has analyzed the Theoretical and Conceptual Foundation with Harvard analytical framework. The framework helps managers in relating with their employees for an organization to achieve its goals and objectives. The decisions made in any organization must consider the situational factors as well as stakeholders’ interests. The stake holders’ theory considers the values and morals in the management of a business organization. These stakeholders may be either internal or external. Vertical and horizontal alignment has also been well analyzed. In vertical alignment, all activities in the business must aim at achieving the overall goals and objectives of the business. Alignment of these strategies vertically will make sure that they are directly related to the organizational goals which are further related to the mission, values and the vision of the organization. The alignment is characterized by the alignment between the business strategy and the human resource management strategy. Horizontal alignment on the other hand looks at the different departments in an organization and how to harmonize their activities. In any organization like Baiada, Decisions will be affected by various factors which will include both internal and external business environments which may affect the human resource practices in an organization. External factors that may affect Baiada include economic changes and conditions, technological changes and advancements, government regulations together with demographics of the workforce. There are also internal factors which include size of the organization as well as the organizational structure. Business strategy in Baiada has also affected the company’s human resource practices internally. In the Assessment of Extent of Strategic Orientation, stakeholders such as customers and the owners will also affect the human resource practices of Baiada. A good example is the Baiada’s customers such as Aussie Farmers Direct had failed to buy from Baiada’s chicken until they agreed to make an agreement with Fair work Ombudsman. The company is vertically aligned. Operations in the company including processing plants, hatcheries, feed milling together with protein recovery are aimed at making the company successful. This is due to aligning the operations with the company’s vision and mission. It is also clear that the company has also incorporated horizontal alignment despite the lack of clear information regarding horizontal alignment. It had worked with contractors to employ other workers who were later exploited by the contractors. References Australian competition and consumer commission. (2008, December 17). 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