Question

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Objective To provide you with analysis to identify emerging practices and trends that may impact on human resource management in the organisation. Why is it important to undertake additional environmental analysis when developing the HR strategic plan? opportunity to undertake additional environmental an Activity Identify an organisation with which you are familiar. This may be your own organisation or another that you and the group are familiar with. Conduct a short PESTLE analysis, identifying at least five relevant factors in each of the PESTLE categories

Answer 1

Various companies consider Human Resources as an administrative function, so they do not want to spend more resources in this department. In my views, Human Resources Department (HRD) is the most underrated function in the company. HRD works with the most critical asset of the company – the human asset. Every company has a diverse workforce, so the HRD has to deal with varying personalities of employees. Investing in HRD must be taken as an investment for the betterment and wellbeing of employees in the company.

We all understand the criticality of business strategy for the overall effectiveness of the company. On similar lines, the HR strategy is quite critical for effectively managing the human asset of the company and hence a comprehensive environmental analysis as well as internal analysis must be done. Internal analysis will help in identifying the areas of improvement in the HR strategy. Environmental analysis will help the company to find out the various factors, which can have effect on the overall workforce efficiency in the company.

To develop a comprehensive HR strategy, companies must conduct the following:

• Conduct a SWOT analysis of the company to understand its strengths and weaknesses
• Conduct a 5 Forces analysis and PESTLE analysis to have an overview of the market conditions and opportunities
• A demographic study can be conducted to understand the potential customer disposition and their preferences
• A benchmark study can be conducted to understand the best practices being followed in the industry
• Based on the above findings, the company can develop its HR strategy so as to capitalize on the potential of its human asset.

PESTEL Analysis of Fitbit:

• Political Factors:
  • High corporate taxes levied by the government
  • Manufacturing laws of the region must be adhered to
  • Trade regulations to be adhered to for global business
  • Corruption and bureaucracy of the region will have substantial effect on business
  • Company may have to abide by the favored trade partners of Government
• Economic Factors:
  • Rising labor costs will have impact on the manufacturing costs of the product
  • Type of economic system of the region
  • Exchange rate of various nations, where the company does business
  • Fall in the financial performance of the company
  • Unemployment rate of the region
• Social Factors:
  • Purchasing power of customers
  • Class structure, power distance and hierarchy of the region
  • Availability of various options of similar products
  • Attitude of the consumers
  • Cultural disposition of consumers
• Technological Factors:
  • Design and antenna problems of the product may decrease its long-term viability
  • Too much information being shared publicly, leveraging on Fitbit’s technology, has decreased its demand
  • Technological advancement of competitors like Apple, Xiaomi
  • Rate of technological diffusion in the region
  • Overall investment of company in R&D and technological evolution
• Environmental Factors:
  • Recycling issues
  • Climate change of the region
  • Waste management
  • Regional laws pertaining to environmental pollution
  • Support for renewable energy in the region
• Legal Factors:
  • Privacy concerns laid by US FTC
  • Employment law governing the region
  • Data protection laws
  • Consumer protection policy
  • Anti-trust laws which must be followed