The external business environment is broadly categorized as the micro and macro external environment, the paper focuses on the external macro environment therefore we will discuss about that in detail.
The external macro environment is made up of factors which are beyond the control of the organization. These include the PESTEL (political, economic, social, environmental and legal) factors. These factors are interlinked and cannot be distinct from each other easily. The effects these factors have on the businesses vary business to business and from time to time. The effect of changes in the macro environment over the business is indirect, that is it affects the business through some changes. However the change in business doesn’t affect the environment in return. (GHUMAN & ASWATHAPPA. 2010; WERNER & DESIMONE. 2006)
The human resource function is a part of micro or decision making environment. This is the business itself and it consists of various interdependent function which forms an organization. The functions other than HR function include, general management, operations, purchasing, marketing, financial, public relations, administration etc. The macro environment includes the general environment in which the business operates. Predicting an environmental change often is a difficult task due to the frequency and speed of changes that take place or due to lack of information related to that change which makes it difficult to predict. However the changes in the environment that affects the business occur constantly and they are difficult to predict. (BATES. 2005; KROON. 1995)
When we speak about environment and its relationship with human resource management it refers to the combination of factors that influence the working and execution of the HR department. Any function of the organization, as mentioned earlier, cannot work in isolation and are interdependent on a lot of factors ...Show more