Chapter 3
Overview:
-HRM strategy is determined primarily by organizational strategy.
-BUT environmental factors shape HRM strategy, so HR managers and planners must
continually monitor the environment.
-Typically, they scan by reading publications, retaining memberships in professional
associations, attending conferences, or using professional scanners.
-A number of methods, such as trend and impact analyses, scenario planning and the Delphi
technique, are used to identify future trends.
-Monitored environmental factors include economic climate, the labour market, the political
and regulatory climate, demographics and social norms.
-Stakeholders such as shareholders, unions, customers, employees and executives contribute
strongly to the formulation and implementation of strategy.
Environmental scanning:
-Environmental Scanning: systematic monitoring of the major factors influencing the
organization
-Goal is to identify trends within the external environment that might affect formulation and
implementation of both organizational and HR strategies.
What is external environment?
-External environment: anything outside organizational boundaries that might influence an
organization.
-The external environment is not part of the organization but is tightly integrated with it.
-Sources for analyzing the external environment can include publications, professional
associations, conferences/seminars, professional consultants.
-Note: Canadian HR managers can benefit strategically by reading US publications and
attending US conferences. Many HR trends are seen 1-2 years earlier in the U.S. from when
they become present in Canada.
Analyzing the external environment: sources and methods – stages
-Scanning: an attempt to identify early signals of changes and trends in the environment. This
information is ambiguous, incomplete and unconnected.
-Monitoring: a systematic approach to following some key indicators that may affect the
organization, such as absenteeism rate in the working population due to a certain type of
illness.
-Forecasting: after monitoring a trend, an attempt is made to project the possible impact on
the organization.
-Assessing: an attempt to describe the impact of the monitored trend
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