1.0 Introduction
The purpose of this report is to discuss a couple of strategic issues faced by human resource management practices in companies of today. At the end of this report, the advantages and challenges that each of these issue bring will be evaluated. Recommendations that organisations can put in place will be given to overcome the challenges brought on by each strategic issue. The strategic issues that I have chosen to discuss in this report are Mergers and Acquisition and Outsourcing.
1.1 Mergers and Acquisition
Mergers and Acquisition are different altogether but they serve the same purpose. A merger is when two companies merge to form a bigger company. As for acquisitions, this happens when a company buys another company and the company that was bought is then absorbed into the company that bought it. Mergers and acquisitions can be categorised in two ways; within the same industry or cross industry. Mergers and acquisition within the same industry means the two companies are from the same industry. As for cross industry, the two companies are from different industries but are then formed into a company that serves both these industries. (Noe, Hollenbeck, Gerhart and Wright, 2014)
1.2 Outsourcing
Outsourcing means that companies are enlisting the services of third-party providers, vendors or consultants to provide the services that the companies are unable to perform on their own due to lack of expertise. Outsourcing means that the people doing the job externally, not in-house. (Noe, Hollenbeck, Gerhart and Wright, 2014)
2.0 Advantages
2.1 Advantage of Mergers and Acquisition
There are numerous reasons why companies merge and acquire other companies. The biggest advantage of performing a merger or acquisition is t...
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... the cultures of the acquired companies (Kumar, 2014).
4.2 Recommendation: Outsourcing
A strategy that can be implemented by the HRM of a company is to have an agreement with the third-party service provider to be a part of the interview process of the person that will be doing the job that is outsourced and also to familiarize the person doing the job with the company (Kumar, 2014). The way Ezra Holdings does this is by having a buddy system where the external party works closely with an in-house employee that is trained to handle such situations and is also very familiar with the company’s culture (Kumar, 2014). This way the company will have an easy way to provide feedback and also the buddy will be able to train the external party if he or she does not meet expectation. Also the knowledge need to perform the job will be provided by the in-house employee.
Outsourcing simply means acquiring services from an external organization instead of using internal resources (Butler, 2000). By using outsourced resources, organizations can gain a competitive advantage by utilizing contingent staff to accomplish strategic goals without incurring the fixed overhead. By focusing on the leading edge and highly specialized skill sets, outsourcing providers can often offer higher quality services, or at a lower price than the client organization. Typical reasons for outsourcing go beyond simple contingent staffing. Outsourcing providers are able to maintain economies of scale with regard to specialization (...
Outsourcing is a complicated and a multifaceted subject that involves a “business[’s] purchase of parts or labor from another company rather than maintaining a sufficient enough number of its own employees to do the same work in the country where the company is already based” ("Outsourcing"). The first practice of outsourcing was in medieval times when “nation-states called in soldiers-for-hire to help their own military forces during ongoing conflicts” ("Outsourcing"). Many think of outsourcing as a one way trade of production facilities moving outside of a companies locale but in actuality it is a two way trade that also involves companies from other areas moving their factories to local areas where conditions are beneficial for the specific business. Outsourcing has evolved but the main idea has remained the same. The recent increase in outsourcing “was initiated by Wall Street pressures on corporations . . . . for increased profits . . . in the production of goods and services marketed in the U.S."(Roberts).
In many cases outsourcing has proven to be beneficial for businesses. It can help a business’s management by allowing executives to focus on the core structure of the firm rather than every specific element. Production, manufacturing, or additional servic...
Noe, Raymond A., et al. Human Resource Management: Gaining a Competitive Advantage. 7th ed. New York: McGraw-Hill/Irwin, 2010. Print.
No matter how big or small a business is, a business is able to outsource services that they could not do profitable on their own. Outsourcing is shifting all of the costs — accounting costs, including personnel, plus the risk of failure and the responsibility for action — to the third party. In return for assuming costs, the third party benefits by controlling the operation (Coughlan 167). This is the basic definition of outsourcing. Outsourcing has been around since the beginning of time.
Whether an organization consists of five or 25,000 employees, human resources management is vital to the success of the organization. HR is important to all managers because it provides managers with the resources – the employees – necessary to produce the work for the managers and the organization. Beyond this role, HR is capable of becoming a strong strategic partner when it comes to “establishing the overall direction and objectives of key areas of human resource management in order to ensure that they not only are consistent with but also support the achievement of business goals.” (Massey, 1994, p. 27)
Noe, Raymond A., John R. Hollenbeck, Barry Gerhart, and Patrick M. Wright. Human Resource Management: Gaining a Competitive Advantage. 7th ed. Boston: McGraw-Hill Irwin, 2010. Print.
Lengnick-Hall M.L.; Lengnick-Hall, C.A.; Andrade, L.S.; Drake, B. 2009. “Strategic human resource management: The evolution of the field.” Human Resource Management Review, 19, pp. 64-85.
Mergers and acquisitions immediately impact organizations with changes in ownership, in ideology, and eventually, in practice. There are multiple reasons, motives, economic forces and institutional factors that can, taken together or in isolation, influence corporate decisions to engage in mergers or acquisitions. The financial risks of merging with or acquiring an organization in another country and how those risks can be mitigated are important issues for corporations to conduct research on. This paper will examine the sensible and dubious reasons for mergers and acquisitions and the benefits and costs of the cash and stock transactions.
Outsourcing is a technique for companies to reassign specific responsibilities to external entities. There are several motivations for outsourcing including organizational, improvement, cost, and revenue advantages (Ghodeswar & Vaidyanathan, 2008).
...urcing services, the company operation will be became a mess. This is because one organization can’t run a lot of task or project at one time. Therefore an organization need outsourcing in the way to help their organization run smoothly.
Torrington, D. Hall, L. & Taylor, S. (2005) Human Resource Management. Harlow: Financial Times Prentice Hall
A disciplined approach to management eying leading employees, improving the management team and building the business strategy. Instead of treating each problem as a one off. They design systems and structures that make it easier to handle in the future. (Techrepublic, 2015) 2.2. Risk of exposing confidential data: When an organization outsources HR, Payroll and Recruitment services, it involves a risk if exposing confidential company information to a third-party Synchronizing the deliverables: Some of the common problem areas include stretched delivery time frames, sub-standard quality output and inappropriate categorization of responsibilities. At times it is easier to regulate these factors inside an organization rather than with an outsourced partner Hidden costs: Although outsourcing most of the times is cost-effective at times the hidden costs involved in signing a contract while signing a contract across international boundaries may pose a serious threat Lack of customer focus: An outsourced vendor may be catering to the expertise-needs of multiple company at a time. In such situations vendors may lack complete focus on your organization 's tasks. 2.3. 1.Know the
When entrepreneurs plan their business future they will consider how they can increase their business size or profit in a short period. Entrepreneurs may consider growing their business or company by using a merger or an acquisition. These methods can be a speed up tool and a short cut to enlarge their business. (Burns, 2011) Also they can reduce competition, make it easier for entrepreneurs to think about the market and product development and risk reduction. Furthermore, some lesser – known companies can improve their firm’s image and market power by using merger and acquisition with larger firms. However, there may be risks associated with merger and acquisition related to lack of finance and time. (Burns, 2011) This essay will discuss more deeply the advantages and disadvantages of using mergers and acquisitions, showing how it can affect firms and market with the case study.
In the 1980’s, the birth of a new concept called ‘Human Resource Management’ was born. This trend comes after an intense period of Taylorisation, Fordism and now, McDonaldisation. HRM came to counter balance these trends and to consider the concept of the Man as a Man and not as a machine. For the last several decades, the interests of companies in "strategic management" have increased in a noteworthy way. This interest in strategic management has resulted in various organizational functions becoming more concerned with their role in the strategic management process. The Human Resource Management (HRM) field has sought to become integrated into the strategic management process through the development of a new discipline referred to as Strategic Resource Management (SHRM). In current literature, the difference between SHRM and HRM is often unclear because of the interconnections linking SHRM to HRM. However, the concepts are slightly different. Thus, we can ask, what is strategic human resource management? What are the main theories and how do they work? What do they take into account and how are they integrated? What are the links between SHRM and organization strategy? In order to answer to these questions, we will precisely define strategic human resource management, followed by a look at the different approaches built by theorists, and finally, we will see the limits between the models and their applications depending on the company’s environment. Discussion Strategic Human Resource Management: definition Strategic human resource management involves the military word ‘strategy’ which is defined by Child in 1972 as "a set of fundamental or critical choices about the ends and means of a business". To be simpler, a strategy is "a statement of what the organization wants to become, where it wants to go and, broadly, how it means to get there." Strategy involves three major key factors: competitive advantages (Porter, 1985; Barney, 1991), distinctive capabilities (Kay, 1999) and the strategic fit (Hofer & Schendel 1986). Strategies must be developed with a relevant purpose to sustain the organizational goals and aims. SHRM is one of the components of the organizational strategies used to sustain the business long-term. SHRM defined as: “all those activities affecting the behaviour of individuals in their efforts to formulate and implement the strategic needs of the business. (Schuler, 1992)” or as “the pattern of planned human resource deployments and activities intended to enable the firm to achieve its goals.