HR Perspective: Virginia Blue Company - Case Study Example

Environmental Analysis: An HR perspective Name: Student Number: Tutor: Date: 1.0. Abstract This paper required evaluation of HRM integration in an organization’s business strategy, socio-political and economical environment. The paper hereby begin definition of key terms used which include Organisation’s people management, Practices, Economic environment, Socio-political and Strategy, before proceeding to evaluate use HRM integration in Virginia Blue Company. Using the secondary data from Virginia Blue Company, this paper analyzes HRM integration in an organization’s business strategy. Following the analysis undertaken, it is evident that the HRM plays the biggest role in the success of the organization. However, the paper was limited to use of secondary data of the organization 2.0. Introduction ‘Organisation’s people management,’ refers to the Human Resource Management, (HRM) in an organization. HRM is the process of managing employees by leveraging their abilities to ensure maximum gain through their superior performance. It involves the whole process of recruiting, training, appraising, motivating, developing and rewarding employees, (Arthur, 2008). ‘Practices’ here means the chore duties which accompany HRM in an organization. According to (Seal and Kleiner, 1999) ‘Strategy’ is the long-term plan for an organization which drives the organization to success. ‘Economic environment’ refers to the aggregate domestic economy of a nation; this includes the general outlook of the economy and market, (Wood, 2008). Performing individuals in consider the economic factors in the environments and look for means of getting the most out of it. ‘Socio-political’ environment is a combination of the social and political environments. ‘Social’ here has been used to refer to the way of life of people living in a particular society how they are organized, their behaviour and attitude, (Lawrence, 2009). These structures affect labour mobility, organizational and team work. ‘Political’ refers to those factors of a country which involve leadership, political structures, ideologies of the ruling parties and bureaucracy, (Spall, 2006). Strategic management is the process of continuously adjusting available resources, the working environment and the values of the management, (Greer, 1995). Strategic Human Resource Management is creation of a consistent culture, organizations practices and programs with appropriate policies for the success of the organization. Strategic Human Resource Management practices look at employee’s management issues and are focussed towards the direction of achieving the organizations objectives, (Bratton and Gold, 2003) 3.0. Strategic HRM Analysis Tools Strategic Human Resource Management (SHRM) analyzes competitiveness of a firm to come up with long term plans to meet its goals and objectives, (Bamberger and Meshoulam, 2000). To succeed, a company need to come up with Strategic HRM Analysis Tools. This will give it a good knowledge base for competitive opportunities present, strengths of the company, threats facing the company and weaknesses that limit the company progress, (Barney and Wright, 2008). We will take Virgin Blue Airways as a case study; it is performing well in the industry, (Highfield, 2005). Strategic HRM Analysis Tools include: 3.1. SWOT analysis Strategic management entails analysis of Strengths, Weaknesses, Opportunities and threats in organization; it is commonly known as SWOT analysis. This is aimed at determining a road map on how to go about deploying the most important assets in an organization to achieve its set goals and objectives, (Boxall and Purcell, 2011). At this point of the strategic human resource management, SWOT comes handy as a tool for scanning the business environment; internal and external environments so that the business can take precaution before the threats become dangerous, strengthening the weak areas, capitalizing on strengths and seizing the opportunities, (Bratton and Gold, 2003). Virgin Blue Airways has demonstrated the use of SWOT analysis by use of a distinct organizational culture which is is environment, employee and customer friendly, (Highfield, 2005). 3.2. PEST analysis PEST is analysis the macro environment of an organization which made up of Political, Economic, Socio-Cultural and Technological (PEST). 3.2.1. Political environment This is made up of the legislation, environmental policies, government taxation policy, local governments and political stability of a country, (Bratton and Gold, 2003). The CEO confesses in a speech when interview that the Australian environment played a big role in the success of Virginia Blues Airline company success. The CEO of Virginia Blues said that the employees make the organization’s culture. He appreciates the role of leadership in organizations culture development. Brett Godfrey the CEO thinks that the culture worked better in Australia (referring to the culture political and legal environments of Australia) and admits that the top team did a good job in creating a distinct culture, (Highfield, 2005). 3.2.2. Economic factors. Domestic economy plays a great role in performance of a company; national economy affects the customer and the company purchasing power. Other economical factors which affect the economy include currency exchange rate of a country, inflation and deflation and economic growth a country, (Barney, 2011). The success of Virginia Blues company can be attributed the economic well being of Australia. Aviation industry went through an economic recession period at the time the country was facing challenges like SARS and terrorism, Godfrey thinks that employee engagement is solely responsible for the their loyalty to the firm. He still has hopes that the firm will continue dominating the Australia aviation industry in the next decade, (Highfield, 2005). 3.2.3. Social factors. Demographic patterns of a country, attitude towards a product or a service and population growth rate are key factors the affect the development of a company. This is due to the fact that the people from the market of a product or service, (Boxall and Purcell, 2011). Godfrey the deputy CEO of Virginia Blue company admits that the customer is the key focus in everything they do in the organization. He goes ahead to convince all the employees to understand the need for customer focus. Godfrey says that the company places great concern on customer service that is considered paramount. All they emphasize to their people is people is to give priority to the customer who should get the best form the employees and the company in general, (Highfield, 2005). 3.2.4. Technological factors. Technology in use affect the customer service and prices, a good technology will have the effect of a reduced cost in the price of the organizations product or service. Technology in use in Virginia Blues Company shows some good impact in the pricing of the flight charges in the organization. This has attracted a good customer share in the market, (Highfield, 2005). 4.0. Porter’s five forces It analyses competitiveness of an organization by evaluating competitiveness and strengths of an organization using the five variables that that can be used to measure strength in the market. The five forces are: Power of supplier, buyer power, competitiveness, presence of a close substitute and threats of new industries, (Boxall and Purcell, 2011). 4.1. Power of supplier This examines the ability of the supplier to control the prices of the service or product in the market. This is controlled by prices of inputs, uniqueness of the product, supplier’s strength and cost incurred in changing suppliers, (Boxall and Purcell, 2011). Virginia Blues Company has unique services which is a cheap but basic and had enabled it to control the prices in the market place of the domestic aviation industry in Australia, (Highfield, 2005). 4.2. Buyer power. This looks at the control strengths of the buyers when it comes to the changing or the prices in the market through; buyers’ population, effect of one buyer in the organization and the rigidity of the buyer to switch between suppliers, (Barney and Wright, 2008). This only affects the organization that depends on one or few customers but is not relevant Virginia Blues Company. In fact it is the one controlling prices in the market. This however still places them at the cutting age to continue improving their service lest the competitor come up with a better one. 4.3. Competitiveness The success of any business today depends on its ability to compete favourably in the business environment. Market is the key factor which the businesses are competing for (Wilson and McKiernan , 2011).. Many firms offering similar products are the genesis of the competition, (Boxall and Purcell, 2011). Virginia Blues Company is not an exception either; it is facing tight competition from other domestic airliners but has an upper hand in the competition platform, (Highfield, 2005). 4.4. Presence of substitutes. Upon price increase, customers are likely to opt for the substitute in the market as a means of responding. This will reduce the supplier’s power and ability to capture the market, (Boxall and Purcell, 2011). Virginia Blue Company is a king in the crowd but has to be cautious on altering prices of the services due to presence of potential competitors who can easily overtake it, (Highfield, 2005). 4.5. Threat of new entry. Potential profit opportunities attract new investors. Increased businesses supplying the same products are likely to cause a reduction of profit in a company. This can only be protected by the government, (Gerhar and Milkovich, 2011). Virginia has an upper hand in the market and new investors are not likely to overtake it soon because of its economies of scale, otherwise a rise in a new industry that can supplement aviation pause a threat, (Highfield, 2005). 5.0. Four corner’s analysis This is a tool which helps in analysing competitors; this will help develop the vision of the organization future abilities, assumptions and strategy which form the four corners of the analysis. Four corners analysis is helpful in predicting potential responses from the competitors in an attempt to counter a move. 6.0. Analysis of value chain Decision making in an organization should be guided by the most important parson in the organization who is the customer, (Boxall and Purcell, 2011). It should be directed towards creating value for customer. This can be done by conducting an analysis of value chain. This is a list of guiding principles on how the organization is creating value for their customer. That is, the organization can be divided into individual sectors which add some value to the customer product at the stage of production or processing, (Virgin Blue, 2003). Every added value should increase an inch at the cutting edge in the competition hence a competitive edge gap is increased. Highfield and Godfrey’s agreed that the structure of Virginia Blue is divided into two; operations and commercials. Operational is made up of airport, engineering and Aeroplanes. While commercial, has branding, sales and revenue. The two are directly below the deputy CEO’s office. Human Resource, Information Technology, customer service and corporate affairs are under the CEO’s office, (Highfield, 2005). 3.0. Competitive strategy for Virginia Blue Company Virginia Blues have largely employed PEST analysis in its strategy, this has been done through brooding of a culture that encourage employees to stay committed and loyal to the organization. This worked and the culture is unique and good though very rigid. Its rigidity is however not harmful to the performance of the organization. It is in fact a milestone to the organization since it will stay in the organization as long as the organization is benefiting from it. The culture affects eternity in terms of performance. It used technology to reduce the cost of transportation and hence a reduced ticket fee for the air flight attracting masses and becoming a choice of many. 4.0. Challenges faced by HR in Virginia Blue Company The Virginia flight company has a culture that is rigid and therefore everybody joining the system should try to fix himself into the culture. The culture cannot be altered according to the management of the organization. It is the individuals joining the organization that should change their culture to fit into the system. This has resulted in increased cost of recruiting of new employees into the system. The recruitment cannot be done in a simple way but a distinct procedure is followed to make sure that the best people are recruited into the organization and who will easily be integrated into the system, (Highfield, 2005). 7.0. Conclusion Management and HRM come up with a business strategy which is a guiding tool in the HRM and management practices. This should be done properly so that the company access to the top and competent staff who will work towards achieving the organization goals with undivided devotion. The success of an organization largely depends on its teams and culture; employees mean eternity in the organizational performance. If leadership is not strong, instability may be the final results in an organization. A strong team will remain focused on improving the organizational product. In the twenty-first century therefore, a company should strive for competitive advantage through its people. 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