In brief there are two external and internal environments which play major role in shaping any company or organization’s human resources management decision making. Every HR manger has to consider them while making decision. They are as follows
External forces include political legal, economic, technological and cultural factors.
1. Political legal; three institutions such as legislature, executive and judiciary constitute the political environment.
a) Legislature (parliament at the center level), (Assembly at the state level) is the law making body.
b) Executive is the law implementing body.
c) Judiciary has the role of watchdog. It makes sure that both legislature and executive work within the confines of the constitution and in public interest.
2. Economic; economic growth, industrial production, agriculture, population, national and per capita income, money and capital markets, suppliers, competitors, customers and industrial labor are the components of the economic environment.
3. Technological; with the introduction of new technology the following things take place;
a) Jobs become more intellectual or upgraded
b) New technology dislocates workers
c) Technology has impacts on workers
d) The job holder should be highly professionalized and knowledgeable
4. Cultural factors; The culture factors influence the HR function in the following segments; knowledge, belief, art, moral, laws, customs and other capabilities and habits of an individual.
Internal forces are; strategy, task, leadership, unions, organizational culture and conflict and professional bodies.
1. Strategy, task and leadership;
3. Organizational culture and conflict;
4. Professional bodies;