HRM & Corporate Strategy: Analyzing Influencing Factors - MOD003486

This essay explores the intricate relationship between Human Resource Management (HRM) policies and corporate strategy, highlighting how effective HR practices can drive organizational success. It discusses the concept of Strategic Human Resource Management (SHRM) and its role in aligning HR activities with strategic goals. The essay provides examples, such as Sainsbury's innovative HR practices, to illustrate how companies can leverage human capital for competitive advantage. It also examines the influence of internal and external environmental factors, including competition, compensation, and legislation, on HR activities. Specifically, it references UK legislation from 2013 that aimed to protect employee interests, emphasizing the importance of compliance in HR practices. The essay concludes that a well-structured HRM policy, coupled with effective communication and employee engagement, is crucial for achieving organizational objectives and maintaining a competitive edge in the market.

HRM

Contents
Introduction...........................................................................................................................................2
HR policies leading to achieving the corporate strategy........................................................................2
Conclusion.............................................................................................................................................7
References.............................................................................................................................................9

Introduction
Human resource management functions to identify the appropriate talent among the
employees that can be most suitable for achieving success. It involves hiring, retaining, and
recruiting the people as per the requirements of the organisation in order to execute the
strategy and achieve the business goals. The essay brings out the discussion on HR policies
that are affected by both internal and external factors. HR functioning plays an important role
in fulfilling the structure`s compliance. The essay discusses a strong relationship between HR
policies and the strategic goals or the corporate level strategy. The essay has the relevant
examples of how HR policies can become as competitive advantage to an organisation. Apart
from this, secondly, it is undoubted that the organisation is affected by internal and external
environmental policies such as competition and compensation. Legislation is an important
part that has to be considered by the organisation while selecting and forming strategies for
the employees. The essay also has the relevant examples of UK that how 2013, it imposed
several regulations to protect the interest of the employees (Barnes, 2018).
HR policies leading to achieving the corporate strategy
Human resource policy is the set of rules and regulations that business places to hire, assess,
reward, and train the workforce. When these policies are properly established in the work
procedure then they can swerve to remove the misunderstanding between the employees and
employers regarding their rights and responsibilities at the business place. To make the
organisation more effective in accomplishing the goals, HR department has to form such
policies and processes that can deliver the strategic effect (Benjamin, 2018a). In order to
comply the policies structure with the corporate strategy, the concept of strategic Human
resource management was raised. SHRM aims to promote high performing workplaces that
can ultimately lead to achievement of corporate strategy. SHRM links the business activities
with the strategic goals and objectives that can lead to improvement of business performance

and develop such business culture, which will foster flexibility and innovation. This involves
the planning of new HR activities and deploying the resources that can achieve the goals.
Activities such as selection, recruitment, training and rewarding that has to be executed
properly while keeping in mind the company`s objectives because human capital is an asset
to an organisation (Beamond, Farndale, and Härtel, 2016). No organisation can only work
with the equipments and machines. Companies focus on identifying, analysing, and finally
balancing two jacks of forces, which are external opportunities and threats lying in the hands
of organisation with the identified internal strengths and weaknesses. Aligning the HR system
with the strategic goal can enable the organisation to achieve the targets. For example-
Sainsbury might not be a largest grocery chain. Moreover, it is important to know that
company has its lead and ability to innovate the existing human practises to achieve the
corporate goals (Naranjo-Valencia, Naranjo-Herrera, Serna-Gómez, and Calderón-
Hernández, 2018). The company y`s main strategy is to focus on the success that has made it
a leader in the grocery supermarket where it opened its first worker academy just a few year
ago. Apart from this, the company not only focus on innovation but it also has established
training academies, which will focus on preparing its staff for the best standards to achieve.
The HR department of the company has also initiated the self-service style of shopping
(Benjamin, 2018b). The inherent engagement of employees in the operations make it a top
running business ladder. Communication plays an important role in building the successful
business model. This company has a strong reputation especially in regards to employee
relations such as being appreciated for their work and honoured that how employees treat
even in the supply chain. It is important to consider that efficient human capital can be a
competitive advantage to the organisation or even this can create to enhance competitive
advantage( Martin, 2014). For example- to stay in the competition, the company may choose
to offer low price in the market. To ensure low pricing system, the company strives to

manage its operating expenses as low as possible to make large profits either by pooling the
independent contractors or brining the human capital from offshore. Whereas in an attempt to
minimise the HR expenses and employ other methods of reducing the expenses to make
significant profits but these days many Fortune firms have been blamed for the use of
offshore vendors and leveraging this strategy to make large profits (HumanResourcesMBA
Staff, 2015). Various perspectives can yield lucrative ideas that will ultimately lead to
differentiate the products and services. The innovation can come from equity partners, full
employees and advisory members and these people are rich source of innovation as their
decision has a weigh in the organisation operations. 3M promote an equal opportunity for the
employees that do not discriminate the employees on the basis of sex, colour, age, religion,
disability or the national origin. HRM policy and procedure can help the organisation to
deliver the strategic effect and achieve the organisational goals. Both employee and
management should understand the importance that cooperative (not adversarial) is crucial to
the organisation`s success. The relationship can be through communication such as managers
are obliged to convey the targets, goals, and objectives to its team and workforce, which can
ultimately make them, feel as partners in the business operation and they play a key role in
the success of organisation (Olson, Slater, Hult,. and Olson, 2018). At a corporate level,
business leaders are responsible to create value through the business. This corporate strategy
is concerned with the selection of business through which the company can compete,
develop, and coordinate the portfolio of products. The corporate level strategies cover four
strategies formed by senior management (Chowhan, 2016). This strategy leads to
diversification, Consolidation, and geographic expansion. Diversification strategy is a
corporate strategy that leads to increase the profitability by increased sales volume from
products. Diversification lead to venture out into new business, new market, and new product
that increase profits. This strategy seeks to form a growth strategy that involves an increase in

performance objectives, which is beyond past performance records. For example- every
company wants to get larger market share and ear more and more profit. Starbucks will find
ways to penetrate in market like diversification. These strategies are used to expand the
organisation`s operation by subtracting and adding markets, services and stages in the
production of existing business. This allow the company to enter the lines of the business,
which are different from the current business operations. Whereas, Starbucks is largest
coffeehouse organisation in the world (HumanResourcesMBA Staff, 2015). The company not
only sell the coffee beans that sell drinks, sandwiches, snacks, and salads. Consolidated
strategy leads to combine the accounting information of the parent company and its
subsidiaries that combines two or more organisations with a number of different options such
as acquisitions and mergers. Geographical expansion strategy is a business strategy that leads
to growth by increasing the number of stores through which customers can buy the
organisation`s services. In fast global economy, well planned and prioritised geographical
strategies are required so that a business can be sustained. If the business is properly
managed, it can lead to reduce the costs and get the access to some new market and poo
talent. For example- Expansion of food company (McDonald’s) that have expanded the
business in other more countries such as India, Pakistan and Asian countries (Brewster,
2017).
Several external and internal environment factors can influence the HR activities of the
organisation. Successful HR strategy complements the business goals. Internal and external
factors consist of competition, compensation, legislation, and employee relations.
Competition among the companies that can affect the ability to recruit the qualified workers.
Big MNCs search for the appropriate candidates that are qualified enough to work as leaders
so that they can spend money on advertising recruitment. In such scenario, human resource
sector will have the need to focus on developing the recruitment strategies that can attend job

fairs to invite the applicants. To achieve the same level of business success, HR department
should maximise the recruitment and retention efficiencies to reduce the employee issues.
Internal policies affect the HR activities such as company is very well committed to ensure
that employees could receive proper training and development. HR department should
monitor the appropriate number of employees that are about to get retirement and company
has to ensure that the company has potential replacements and other staff members have
trained to avoid a sudden. Business can also use models that will ultimately help them
(Buller, and McEvoy, 2016). Compensation is another internal policy that suggests that
labour supply drives the compensation amount that a business should offer to attract the
employees. For example- when there is a large amount of talent available in the market, the
amount of compensations remains low as compared to other multiple companies who wants
to recruit the employees. Legislation in UK has affected all the HR activities because Federal
and state legislation dictate how often a business should retain its personnel records and
employee data (Guerci, Longoni, and Luzzini, 2016). For example- Americans with the
Disabilities act, Health insurance portability and accountability Act, and genetic information
and Non-discrimination act. These acts oblige the organisation to provide a safe environment
for the employee`s health. External environment affects the business operation as the
PESTEL conditions affect the human resource policies. The intensity of interruption done by
the government can alter the company operation. Political factors involves initiatives, grants,
and government funding (Jamali, El Dirani, and Harwood, 2015). Apart from this, political
instability, relation with other governments, and taxation that affect human resource practises.
These acts protects the confidentiality of an employee`s medical information to make sure
that organisation has to work within the confinement of law. Moreover, in 2013 in UK, five
legislative changes have been carried out that affected the HR policies. It is understood that
business need to submit the real time PAYE information to the HRM revenue and customs

(Beer, Boselie, and Brewster, 2015). The legislation requires to introduce the real-time
information as a part of PAYE. It is important to submit the PAYE returns to Human
management revenue and custom either before the due date so that the payment finally
reaches to employees. In the same year, it was discovered that the company allows to raise
the statutory payments for the maternity pay, sickness pay, and paternity pay. The amount
that was paid earlier rose for both maternity and paternity sicknesses. A certain amount of
salary or pay earnings is decided when paying the maternity pay (Beamond, Farndale, and
Härtel, 2016). It is important for the company to announce the cap based on compensating
individuals that could be awarded under the claims of unfair dismiss. This compensation is
almost equal to a year`s salary rather than limiting it to a small amount. This cap ensures that
appropriate procedures that are placed to prevent the unfair treatment and the discrimination.
Other more legislative changes state that make more employees redundant and there should a
forty-five days consultation period. Before this legislation came into action, the consultation
period remains ninety days. Apart from this, it is important for the human resource
department to update the proposed legislation of the parental leave (Corporate Compliance
Insights, 2018). The legislation has decided to increase the time from thirteen to eighteen
weeks. Moreover, it is essential for the human resource to get an updated handbook and other
associated documents so that employees get aware of changes in the legislation. Other more
acts includes anti-discrimination, wage and hour, leave provisions, and medical and
disability, these acts were imposed to protect the interest of the employees. Employers can
not refuse to hire the employee, terminate the employee, or discriminate him on the basis of
colour, sex, religion, and nationality. Fair labour standards Act rely on the amount of
minimum wages suggested by federal and government HR professionals (Jamali, El Dirani,
and Harwood, 2015).

Conclusion
From the above discussion, it can be concluded that Human resource of the company forms
HR policies and procedures that has to face and see many changes in the formation or the
process to comply with the legislation procedures and make sure that these employees are
aware of changes. Some HR departments that have failed to implement some changes may
find their organisation in trouble and these organisations face lawsuits because of not
fulfilling the legislation rules.

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