INTERNAL+EXTERNAL

1. Environment of HRM
• Environment of HRM includes all those
factors which have bearing on the
functioning of HR department.
• These forces can be divided in two
categories, i.e. External Forces and
Internal Forces.
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2. Utility of Analyzing the Environment
• To become proactive and not remain reactive to the
environment.
• Reactive strategy are useful in stable and
competition less environment.
• Today’s environment is characterized by intense
competition and change where proactive steps are
vital to survive.
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4. Environmental Forces
External Forces Internal Forces
• Political-Legal • Unions
• Technological • Strategy, Task &
Leadership
• Cultural
• Organizational
• Economic culture & conflict
• Professional Bodies
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5. Political-Legal Forces
• Plethora of Labour laws related to
employment, working conditions, pay &
wages, and laws related to industrial
disputes.
• Which political party is ruling. Different
parties can have a different outlook.
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6. Economic forces
• Economic growth, industrial production, agriculture,
population, national and per capita income, money
and capital markets, suppliers,competitors,customer
& industrial Labour are the components of economic
environment.
• Economic forces relevant to HR:
 Suppliers
 Competitors
 Customers
 Economic growth
 Industrial Labour 6

7. Technological
• Jobs tend to be more intellect.
• Obligation of HRM to train workers acc. to new
technology and to rehabilitate those who can not
be trained.
• Workers acquaint with new technology are more
demanding.
• Technology has impact on human relations.
• Job holders have become highly professional and
knowledgeable.
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8. Cultural Forces
• Culture refers to complete whole which
includes knowledge, belief, art, morals, laws,
customs, and other capabilities & habits
acquired by an individual as a member of
society.
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9. Strategy, task & leadership
• Alignment between the strategy, structure,
people, and management is important for
organization’s success.
• Nature of task/ job also affects HR in terms of
hiring, compensation, training etc.
• Leader also impact any of function area of
organizations.
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10. Unions
• Unions are considered a part of internal as
well as external force in an organization due
to its affiliation from outside political parties.
• Unions have influence on all HR activities right
from hiring to separation.
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