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Posted on May 7th, 2014, by

It’s very useful to analyze practices of firms of different national origin in the same country or comparing practices between different nations or regions.  Strategic human resources management is the idea that human resources management can be used to gain or enhance a competitive business advantage.  This analysis should include:

  • Environmental analysis with a focus on the organization, markets, capital, products, and the implications for HR in this context.
  • SWOT (strengths, weaknesses, opportunities, and threats) analysis. In the process of SWOT analysis, a detailed review of the programs, processes, technology, and capabilities of the HR function-a gap analysis is needed. (Wischnevsky, Damanpour and Méndez, 2011, p.64)

Strategic management approach includes analysis of the international and local business conditions and socio-political environment. HR professionals must be aware of and understand the implications of important global business and social trends. Part of the HR professional’s job includes environmental scanning, a process of aggressively seeking out new ideas and trends.

The elements of environmental analysis are:

  • Trends in organizational structure (flatter, more flexible organizations, mergers and acquisitions or partnerships between corporations);
  • Trends in government regulation in all of the countries that are important to the company and its competitors;
  • Demographic trends (decline of population in the EU and in the US, lack of skills at lower levels, aging population, increase of women in the work force and dual-career families)
  • Social and cultural trends (nationalized health care, public concern about executive compensation and work/family issues)
  • Competitor analysis, especially the human resources strengths and weaknesses of competitors
  • Changes in technology.

Besides external factors, HR specialists should assess also internal human resources in order to find any possible gaps in the human resource system. It should be also mentioned that there are of course more complexity for the international companies that operate on the global markets, because in this case environmental analysis requires a special detailed expertise. For instance, international employees bring special technical issues, human or personal issues and cost issues. Technical issues include support programs for compensation, tax considerations, health care plans that can cover employees across international borders, pension and social security, language training, movement of the family and household goods, issues of home ownership, immigration and work permits, payroll and banking services, safety and security. (Briscoe & Schuler, 2004, pp. 160-161)

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