Examining Business Issues: The Role of HR in Strategy and Ethics

This report provides a comprehensive analysis of business issues and the role of Human Resources (HR) in addressing them. It covers key factors shaping the HR agenda, comparing tools like SWOT, PESTEL, and Porter's Five Forces for business environment analysis. The report also discusses factors affecting business organizations and HR functions, stages in strategy formulation and implementation, and HR's role in business ethics and accountability. Furthermore, it evaluates business performance and assesses different sources of business and contextual data for planning purposes, highlighting the importance of HR in strategic decision-making and organizational success. The document is available on Desklib, a platform offering study tools and resources for students.

Business Issues
and
the Contexts of Human
Resources

Table of Contents
INTRODUCTION...........................................................................................................................1
2.1 Analysis of key factors shaping HR agenda.........................................................................1
2.2 Comparison of various tools for business environment analysis..........................................2
1.1 Factors affecting business organization and HR functions...................................................5
2.3 ,2.4 Stages in strategy formulation and implementation and role of HR in business ethics
and accountability.......................................................................................................................6
3.1 Evaluation of business performance.....................................................................................7
3.2 Assessment of different sources of business and contextual data in planning purposes......9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Human Resource management is associated with managing employees of the
organization and organizing their work accordingly. HR manager have responsibility of staffing
people and analysing business performance. There are several issues that affects proper
functioning of company such as lack of skilled workers, inability to adopt new technology,
financial crisis and many more. HR is responsible to design business plan so that objectives and
goals can be fulfilled accordingly and necessary changes can be made (Baesens and et.al., 2016).
In the report various tools for analysing business performance will be covered such as SWOT
analysis, PESTEL analysis and Porter's Five Forces. Factors that affects business organisations
and HR functioning are not constant rather it varies from time and market standards and trends.
Role of HR in business planning and change management will also be discovered. Study will be
focused on analysis of business issues and the role of HR in context to it. Factors affecting
business and HR functions will also be studied.
2.1 Analysis of key factors shaping HR agenda
HR model is designed that constitutes strategies of HR and its objectives and targets. It
also comprises processes and standards of it. HR strategy demonstrates organisation's strategic
role and steps to be adopted for betterment process. It is also beneficial in identification of gaps
in the structure and skills required for the company. Functioning of any organisation can be made
running smoothly by formulating HR model. It is also helpful in various processes such as
decision making and problem solving that is hindering growth and success of the company.
Projects are assigned using this model (Buckley, 2016). It provides clear vision of areas which
required development to hold competitive position in the marketplace. All the employees are
allotted their duties.
HR Strategy: It helps in identification of requirements of human resources that might be
needed for the organisation for achieving its objectives and goals. It acts as a bridge between
strategic plan and Human resource management. For development of plan of action, it is required
to consider following elements: Culture: It involves cultural factors, values, and beliefs of the company. Organisation: Type of job, description of job, etc. constitutes organisation part.
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 People: In any venture, people are the most essential and important segment which are
the building blocks and success factor. Skills possessed by the employees, their
capabilities and abilities to manage and organize things constitutes this section .
 Human Resource Systems: It is responsible for recruiting workers as per the requirement
of the organisation (Buller, 2016). It also includes communication of the goals and
mission to the employees and providing training if they lack in specific area or due to
introduction of new technology.
To implement HR strategy successfully, it is required to follow certain things given below:
 Organise initiatives: resources that could generate profits, factors generating risks etc.
should be planned.
 Performance and Budget: Incentives based on performance should be linked up with
strategy, cost analysis of the firm should be done to identify overall cost for a particular
project.
 Structure: Organisational structure helps in creating strategies.
 Engagement of Staff: They should be allotted with respective duties. They should be
encouraged to participate actively in the procedures of improvements.
Ethics in human resources: Business ethics involves equal employment opportunities for
everyone without being biased. It helps in avoiding work issues that may incur cost for the
organisation (Crane and Matten, 2016). Market reputation greatly influence by ethical
considerations. When company possess good brand image in the marketplace they have abilities
to attract several customers.
2.2 Comparison of various tools for business environment analysis
SWOT Analysis: It is a simple tool used for analysis of strengths and weaknesses of any
organization. It is also helpful in identifying threats and opportunities (Rothaermel, 2015). These
factors helps in utilizing strengths to achieve future business opportunities. Weakness and threats
can be used to discover areas which requires improvement.
Strengths
1. Benefits and advantages that an
organization have.
2. Unique and distinct characteristics
possess by the business that makes it
Weakness
1. Business Segments which requires
improvement.
2. Factors that should be avoided for
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from others (Bull and et.al., 2016).
3. Identification of Unique Selling
Proposition of the firm.
organization's growth.
3. Elements affecting sales of the
company.
Opportunities
1. Discovery of business opportunities.
2. Analysing market trends which are
required to be adopted.
3. Use of the latest technology at
workplace.
4. Introduction of change in policies of
government.
Threats
1. Obstacles and issues possible to face.
2. Analysis of market competitors.
3. Development of technology could be
serious issue for the organization.
4. Cash flow difficulty.
5. Impact of weaknesses on business.
Table 1: SWOT Analysis
PESTEL Analysis: It is a tool that is used to analyse external factors that affect business
environment. Its result is used in identification of threats and weak points of the company.
PESTEL analysis for a business organisation is given below: Political:It involves factors which may impact economy of a particular industry or
country. Let's take an example to understand the following factor: Imposition of new
laws of tax have direct impact on organisation's structures which are generating revenues
and incomes. There are several factors such as :tax policy, tariffs for trade etc.
(Hollensen, 2015). Economic: Economic performance is directly affected by these factor. They have long
termed effects which can be recovered easily. For example, if inflation rate of any
economy rises it has direct impact on the products cost of the company. There re several
factors that constitutes economic factors such as interests rates, economic growth
patterns, foreign exchange rates and many more. Social: It includes social environment and values such as cultural factors, demographics,
population, beliefs and values, etc. For example, UK has high number of buyers during
holiday for any product.
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 Technological: Advancement in technology impacts business operations. Many times are
unable to incorporate the latest trends due to deficiency of skilled employees which
affects overall performance and profitability of it (Bryman and Bell, 2015). Legal: There are certain laws and regulations that affects working of corporation. It
involves safety laws and standards, labour laws, employment laws etc. Environmental: Factors related to environment also impacts business organisation. For
example, tourism and hotel industries are affected by environmental issues. It is the
responsibility of the authorities to control and monitor activities. It may include climatic
changes, weather, global warming, etc.
Porter's Five Forces: It is used to analyse business power in the marketplace. It is helpful in
identifying current strengths and competitive areas in which planing to take initiative in the
future (Schniederjans, 2015). It constitutes five factors discussed below to determine competitive
power of the company. Supplier Power: Availability of supplier for particular materials is analysed. The
distinctive feature and cost of the product is taken into consideration from various
providers so that comparison can be made to discover the best possible option benefiting
business. Buyer power: It involves number of people who would potentially buy your product and
what price is offered by other ventures for the similar commodity. Competitive Rivalry: It involves number of competitors in the market that may affect
your business growth. If number of rivalries are offering product at similar price than
there is potential to lower down business power (E. Dobbs, 2014). On the other hand, if
something productive and innovative is offered by you than there are chances of holding
strong position in the market. Substitution Threat: It involves capabilities of competitors to attract customers by
offering similar product. When substitution is powerful, then it has potential to affect
your business.
 Threat of New Entry: Business get also affected by the entry of new enterpriser in the
market. If the price of products is lower than offered by you then chances are there that it
may affect functioning of firm. When uniqueness in the commodity is offered by the
corporation, then it has potential to survive for longer duration.
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1.1 Factors affecting business organisation and HR functions.
Any strategy is successful if it is able to achieve all the objectives and goals set by the
company. Factors that affects business organisations and HR functioning are not constant rather
it varies from time and market standards and trends. There are internal as well as external factors
that directly affects business enterprise. These factors are discussed below: Competition: It a major factor affecting business operations and abilities to employ new
skilled workers (Holgersson, 2016). When a company is well established in the market it
doest not require promotional strategies and advertisements for conducting recruitment
process. Applicants just visits websites and apply for the job opportunity. Small
corporations does not have the same popularity as established organisations, therefore
they require active recruitment and promotion techniques to hire skilled employees for
the company. There it is the responsibility of HR to develop and design plans for
conducting recruitment process to acquired employees who have necessary skills that
could be beneficial for them in the competitive marketplace. Compensation: In order to attract employees in the market where unemployment is
prevailing and number of skilled workers are more than the available job options,
compensation is provided to recruit new workers in the organisation. HR have job role of
evaluating compensation structures by analysing industries, locations and salary surveys
in order to make sure that they offer competitive salary to gain attention of the skilled
employees (Idemudia, 2017). Financial stability is also considered into process. HR
should manage internal composition of compensation. For example, Employees which
are highly qualified and have experience of years should be paid more as compared to
newly appointed trainee for the similar job. Legislation: HR functions are directly affected by Legislation. Federal and State
Legislation states to the business that for how much time, records of the employees
should be stored. HR managers should adhere to such rules and also train other staff
members to follow them. The Genetic Information Nondiscrimination Act, the Health
Insurance Portability and Accountability Act etc. ensures that medical details of the
workers remains confidential within organisation.
 Employee relations: HR activities are affected by policies of the company. HR manager
should look upon employees that are required to be replaced by others due improper
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knowledge or not fitting into organisation's working culture (Knapp, VandeCreek and
Fingerhut, 2017). Political factors also influences functioning of firm.
2.3 ,2.4 Stages in strategy formulation and implementation and role of HR in business ethics and
accountability
Strategy formulation is a procedure that involves number of steps in order to achieve
business goals and objectives. Entire process can be divided into six steps. These are discussed
below: Identifying objectives of organisation: In developing strategies for the organisation, the
very first stage is identification of goals and targets of it (Bhasin, 2016). They should be
designed in a such a way that they last for longer duration. Strategies are formulated
because it helps any venture to follow the procedure to acquire set mission. It is also
important to analyse factors that might affect goals of the company. After formulation,
strategic decisions can be made to implement strategy. Organisation Environment Evaluation:Next stage in the process is to assess operational
environment of the company (Ladyshewsky, 2016). It includes economic and industrial
environment. It helps in identification of competitive position of the firm. Review
includes both qualitative and quantitative. It is helpful in evaluating factors which are
important in the success of any organisation. Thus, strengths and weak points can be
compared with others. After analysing these factors, competitors actions can be tracked
on to identify possible threats and opportunities. Setting up Quantitative Targets: Target values are set for the organisation in this stage. It
contributes in meeting organisational objectives. Purpose of doing this is to evaluate
contribution made by several operating departments. Divisional plans: this stage involves identification of contribution made by every sub
department and by considering all the above stated factors strategic planning is carried
out for every unit. Performance Analysis: It is carried out with the purpose of discovering gap between
actual and expected performance (Moorhead, 2016). Organisation's past, present and
future conditions should be critically evaluated. It identifies gaps between reality and
long term goals. Prediction is made about future following currents trends.
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 Choice of strategy: In this stage, the best possible option is selected among the available
set of actions on the basis of organisational goals, potential and opportunities.
Role of HR in business ethics and accountability Fair Treatment: It is the responsibility of HR to ensure fair treatment with employees.
They should not be discriminated on any grounds and treated equally (Neubauer and
Lank,2016). Trainings should be provided to the employees at all the levels to encourage
them to grasp organisational changes. Pay Equity: It is one the most important consideration at workplace. People who are at
same level should be paid equally. HR is responsible in assessing wages of the company,
its market position and competitive strength.
 Diversity: it involves equal employment chances should be provided to diverse
population irrespective of age, race, nationality, religion, fender. HR practices includes
providing training sessions, mentoring and guiding diversified manpower of the venture.
3.1 Evaluation of business performance
Business performance of any organization can be evaluated by comparing outcomes with
the targets set by it. Financial indicators can be utilized in the procedure. Review Business plan: Key factors that are used in evaluation process are sales and
earnings. Predicted sale is compared with actual results (Pettigrew and Starkey, 2016).
First basic stage is assessing performance involves review of business plan which
consists cost analysis, mission statements, executive summary, etc. SWOT Analysis can
be used along with financial analysis to identify critical factors that have potential to
affect company. SWOT Analysis: It is utilized in developing business strategies by utilizing strengths and
improving weakness. Opportunities should be acquired and threats should be identified to
respond in situations when company face downtime. Financial analysis: By analysing business goals and targets financial plan should be
framed that would include funds and costs required by the company and also profits and
cash flow is required to be evaluated. Factors that are needed to be considered in the
process are turnover, current sales, revenue and cash flow.
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 Financial Ratios: These can be taken out from financial statements for comparing
performance at various time intervals (Razavian, Turetken and Vanderfeesten, 2016). It
could also be utilized for comparison with others. Employee satisfaction: It is necessary to evaluate satisfaction level among employees by
analysing elements like working hours, organisational culture, trainings, etc. Benchmarking: Information and details that is collected from several businesses within
similar sector is utilized for benchmarking. Factors such as cost overheads, working
hours, etc. are used for measurement of performance. Customer satisfaction: A business is successful if products and services provided by
them are satisfying customers because they are ultimate users of it. A database should be
maintained that contains complaints and feedback of consumers. Questionnaire can be
asked to be filled up by them where they can rate services and provide suggestions for
improvements.
Role of HR in business planning and change management
Human resources have job role of managing employees and functions of the company. As
the business grows and expands, skilled manpower is required to accompany change (Rumens,
2016). HR manger are assigned with the job role of recruiting candidates that are suitable for the
profile and could be beneficial in the growth and success of firm. Role of HR in business
planning is discussed below: Selection and staffing: After setting up gaols and objectives of the companies it is
required to have appropriate people for fulfilment of those needs. Finding right individual
for the job role is very important to execute business plan. Organisational Development: Register planning introduces change at workplace of
which employees are not aware of but HR manager have knowledge of it. They can talk
about the issues which can impact working of system. Training and development: According to research, only 20% of the employees have
capabilities and skills which are required for the development process in upcoming years
which concludes that training is essential to be provided to the staff members of the
company for development of the organisation (Sackman, Rohan and Reskin, 2016). HR
manager would identify potential of every individual and accordingly trainings would be
provided to them.
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 Being Proactive: Enthusiasm of HR impacts other employees as well. When employees
find their manager excited about future opportunities of the company and planning to
bring new skills and talent, it also helps in encouraging them to work more effectively
and give their best possible inputs to meet business objectives (Salunke, 2013).
3.2 Assessment of different sources of business and contextual data in planning purposes
Basically there are two ways available to collect information about the business that is
internal and external sources (Ward, 2016). Business information can be collected form several
sources such as conducting survey, books, internal records which can be utilized in business
planning and introducing improvements as well. Internal information sources includes
employees of the company and shareholders. External sources includes books and printed
materials like magazines, journals, newspaper etc. Today internet has solved all the issues of
gathering data. Online media is one of the easiest and best way which is a quick and faster
method. It is one of the most powerful tool. For using internet information, search skills are
needed to be developed to collect efficient and proper data.
HR metrics: It is used to measure effectiveness of HR initiatives which comprises
turnover, labour costs, expenses and training. It is required to show organisational money spent
on each human resource for training and development purposes (Wyplosz, 2016). It is the job of
HR manager to make available information to be acted upon to the business leaders so that
necessary decisions can be made related to marketing strategies, introduction of new product into
marketplace and investment criteria.
HR trends: Human resource are trying to balance situations of work pressure and stress,
challenging markets and unstable economy. In the past few years, automation has impacted
every field in the marketplace. For this, skills are required to operate and use such equipments.
HR teams makes constant efforts in recruiting skilled employees in the company. Competitive
information is also analysed by HR so that necessary improvement can be introduced to
maximize profits for the firm. Everyday challenges are faced by every company with the new
prevailing trends by the adoption of new technology and innovation in workings (Yeoh and
Popovič, 2016). Government also introduces various regulations on the businesses which are
also required to be managed by HR only to ensure that do not have negative impact on the
corporation and goals and targets can be met.
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CONCLUSION
From the above report it can be concluded that every organization faces business issues
which are required to be dealt appropriately to hold competitive market position. Human
Resource Management have responsibility to organize and manage administrative functions and
performance. Strategic planning can be used to formulate steps to be followed while achieving
business objectives. HR Manager have the job role of providing training and development
sessions to employees to acquire the latest trends. Enthusiasm of HR impacts other employees as
well. They are also involved in the development process of a firm. Business performance can be
evaluated by various means such as by performing SWOT Analysis, Financial analysis, through
customer and employee satisfaction and many more.
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