HRM Environment

Now that you have basic understanding of the major functions and processes in HRM and who performs them, we will take a look at the HRM environment. This includes the internal environment of the organization itself and the external environment of the industry, society and world in which the organization operates.

The internal environment of an organization is comprised of the organization’s business functions, such as marketing, operations, finance, etc. However, HRM does not operate solely within the context of an organization, but is also influenced by external factors. These factors of the external environment include, but are not limited to, customers, shareholders, society, competition, the labor market, the economy and technology.

Globalization

Globalization is major factor in the external environment that has become more prominent in recent years. With advancements in travel and technology, the business world is becoming more global in nature than ever before, leading to increasing diversity in the workplace. People in other countries can become employees who work virtually without setting foot in a corporate office. Likewise, companies in other countries can compete with businesses around the world, as physical presence is not necessary for the completion of tasks. Integration of world economies and societies require HR managers to think and act globally.