The Private Sector is made up of businesses which are owned by private individuals or families, by other organizations or by large numbers of individual and intentional shareholders, which can include employee stakeholders. Multinational companies can be defined as “as a business organization whose activities are located in more than two countries” (Smeller and Ballets 2001, pig 1 0197-10204) Although these are tooth usually large business there are a lot of differences between the two.
The business purpose of multinational companies is to generate revenue, to dominate the preferred market and sourcing the cheapest way to run the business. There may be several constraints placed on the business which may obstruct from fulfilling these purposes. Such constraints include, legal restraints, when working in various countries as one business the company will have to deal with different laws in order to function correctly, it may also have to deal with the politics of different countries and factor in any policies which may affect how he business can be run.
Language and culture will have an effect on how the business is able to fulfill its purpose, if a multinational company has employees who speak several languages it could be difficult for them to work successfully, “The latest report from the British Chambers of Commerce (BCC), titled “Exporting is Good for Britain But Knowledge Gaps and Language Skills Hold Back Exporters,” examined how multinational corporations that experienced miscommunication between employees and with clients did not meet sales goals.
The report found a direct link between language skills and reaching economic objectives among international businesses, with 70 percent of the 4,600 respondents saying they had no foreign language aptitude. ” (Global English, 2014) The large private sector also has a purpose of generating revenue but it also has to keep evolving as a company, companies do this by developing a mission and vision of the business purpose.
Unions and stakeholders both place constraints on the private sector in different ways, where unions use the force and power to gain changes and empower people within the sector, stakeholders use their powers to make changes which will benefit the company and sector as a whole. Unions may have played an important role in the private sector in the past, today membership is just as important, “Private sector membership levels increased by 61 thousand in 2013, to 2. Million, with members from ‘transport and storage’, ‘financial and insurance activities’ and ‘arts, entertainment and recreation’ industries contributing to the overall increase. (Lewis, 2014) Other constraints on the large private sector include a large high turnover of staff; this can vary from sector to sector, “Turnover levels can vary widely between occupations and industries. The highest levels are typically found in retailing, hotels, catering and sure, call centers and among other lower paid private sector services groups. ” CHIP. (2013) 2. 0 Assess how business type and purpose affects the HER Function (AC: 1. 2) The function of HER can change dependent on the business type and purpose.
HER within the Private Sector is usually delivered by “teams of HER specialists to carry out much of their people management work”(Taylor & Woodworms, 2012) For the private sector key HER objectives will include recruitment, managing absence, managing performance and keeping staff motivated to work efficiently. Absence management is important within the private sector as it can affect he organization in a big way, as described in the CHIP absence management summary for 2013, “the average absence level in private services organizations has shown more fluctuations.
It has increased compared with last year by an average of 1. 5 days per employee and is back to a similar level to that of 2011 (2013: 7. 2 days per employee; 2012:5. 7 days; 2011:7. 1 days; 2010:6. 1 days). ” (CHIP 201 3) However as the summery goes to say many private sector companies actively manage absence, “The vast majority of organizations are actively engaged in absence management, at least to some degree. The majority eve an absence management policy, record their annual employee absence rate and collect information on the causes of absence. (CHIP, 2013) Managing performance and keeping staff motivated in work are two areas which work well together within the role of HER with the private sector. Linking performance to pay has always worked successfully within the private sector compared to the public sector for example, “just one in three public sector workers think their salary should reflect their individual performance, compared to more than half of private sector workers. (CHIP, 2013) For multinational organizations HRS key objectives include bringing different policies for all areas or countries together. 3. 0 Explain how different organizational structures and management roles can impact on the HER Function (AC: 1. 3) There has been a change in how HER functions within organizational structures and the impact management roles can have. This can be traced back to changes in the labor markets. As the graph in Appendix 1 shows there has been great change in industry in the I-J.
There has been a rise of knowledge based services. Therefore this has impacted on the function of HER with business organization. “The human resource profession has evolved during the past 20 years and continues to change, from the collective demographics of HER professionals and the ways that practitioners enter the profession to the functions and roles served by HER and the value it brings to organizations” (Society for Human Resource Management, 2008).
There has been a move from transactional role of HER to the strategic role HER can play in the business organization, as described by the SHIRR survey report of 2008, “In fact, many of the transactional functions that traditionally formed the core of HER departments’ responsibilities are now often outsourced so that organizations can coos on business strategy through talent management and leadership development activities. ” (Society for Human Resource Management, 2008).
Part of this change is a move from the backroom to the boardroom; this includes moving responsibility from HER to line managers, “The human resources function n has a crucial role to play in coaching and working with line managers to help them to better understand the range of tools at their disposal to help develop and retain talent. This can range from linking specific performance measures (which include behavioral) with larger goals to clearly defining job roles. 0 Slowed, 2009) It is essential that HER and Line managers work together to manage people issues effectively and consistently. HER key functions depend on the organization structure, but as the CHIP report of 2007 suggests many HER professionals see recruitment retaining key staff as a key objective, closely followed by employee development. The report also suggests “The great majority of respondents (81 % of the 787) report that their HER function has changed its structure in the last five years, with just over half of these (53%) having done so in the last year. (Clad, 2007). 4. Explain the role of the HER function in formulating organizational strategy (AC: 3. 2) An organizational strategy is defined by Chandler (1962) as “determination of the fundamental long-term organizational goals and objectives, and the adoption of ways of action and the allocation of resources crucial to achieve these goals. ” (Chandler, 1962) The role of the HER function in formulating organizational strategy is an important one. The HER Function needs to create a strategy to support the organizational strategy.
The changing role of HER into a more strategic role within organizations shows that HER plays an important role n formulating organizational strategy, “Understanding how HER is approached in the context of the organization in which it operates is crucial to understanding how HER contributes to business strategies and the value that it is poised to bring to the organization. ” (SHIRR, 2008) A CHIP report into the changing HER function discusses, “HER managers were reported by senior managers as having a major role in about two-thirds of the reorganizations surveyed.
HER was second only to finance in having a leading role, albeit still limited. ” (Tamaki, Reilly and Stroller, 2006) This therefore shows how crucial the HER function is to organizational tragedy, whether it is when an organization is undergoing changes or setting out its goals for the future. If the HER function can be integrated into the organizational strategy there will be more opportunity for the strategy to be successful, as Beer et al (1984) discussed in their model, the authors suggested the need for a close relationship between the business strategy and the internal HER structure. 5. Explain how organizational strategy is translated in HER strategy and policy (AC:3. 3) As Davis and Sculls suggest in Strategic Human Resource Management, as there s “increasing integration of HARM into organizational strategy, both policy and practice need to become more proactive in order to enhance the organization’s ability to fulfill its mission and strategic agenda”(Davis and Sculls, 2008). HER strategies will be involved when there external factors which affect the overall organizational strategy, such as changes in the labor market, globalization and the change of organizational strategy.
It can be noted that for these reasons managers and decision makers do not follow a formal approach when formulating their organizational strategy. Integer identified the decision recess needed by an organization when making decisions. The approach places less emphasis on political and social factors but on a more structured way of thinking when discovering a problem to finding an eventual thinking. “Integer (1987) says that formal approach to strategy making results in deliberation on the part of decision-makers, which results in thinking before action.
On the other hand, the incremental approach allows the strategy to emerge in response to an evolving situation. ” (Buddha and Aware) This shows how using or having an organizational strategy allows for the use of HER strategy. HER is now focused on being a strategic planner for the organization and therefore they will need to respond to evolving situations on a daily basis. 6. 0 PESTLE Analysis (AC 2. 1, 2. 2, 2. 3, 2. 4) This activity will analyses current external factors which impact Adversaries, such factors include, political, economic, social and technological.
Please see appendix 2 for PESTLE NOTES. 7. 0 How does PESTLE or SOOT affect the organization’s HER Function (AC: 2. 5) This activity will analyses current external factors which impact Adversaries. As the main function of our organization is HER a large portion of the forces affecting he organization as whole also affect the HER function. There are many external factors which affect the organization, beginning with the political or legal impacts on the business. There are many political areas which affect the organization, locally, regional, national and European levels.
Nationally there is the affect of taxation policies and legislation this could have an affect both a personal level in terms of wages and an organization level such as changes to corporation tax. The organization also received funding from government organizations to provide further training and qualifications for employees. Employment law has a major affect on the organization and changes not only affect the organization but our clients also. We try to be an environmental friendly organization, we have the bike to work scheme, carpool scheme and try to be as paper free as possible.
The economy has a great impact on the organization. A great example of this is the economic recession, if employment levels fall this will mean our clients have less employees and therefore less money to pay for our service, also during a recession unemployment levels rise which could allow us to cherry pick the best employees. As the organization is an SAME money supply affects how we promote ourselves to clients. Inflation has a big impact on the organization, increased costs and lessens profit and revenue the business needs to grow.
Social changes which impact the business include a shift in values and cultures. As a company we provide a service which other companies or organizations see as outsourcing – as an organization we are trying to change the perception. Demographic changes have an effect on the business; HER is predominately a female area, this could have an effect the availability of suitably trained HER staff. Technology has major impacts on the organization. We provide bespoke service in terms of technology, if our competitors are able to provide the same service we could lose clients.
The speed and efficiency of technology is important, if the technology failed it would impact on our clients and therefore our reputation. 8. 0 Analysis of techniques/tools you used (AC: 2. 5, 3. 1 ) This analysis looked at the PESTLE technique when assessing factors which can impact organizations. This is a particularly useful tool when looking at Adversaries. We can see from the analysis that the international market could eve a major affect on the organization going forward it will also help to further sustain the company economically.