Many practitioners and academics have neglected HRM's environmental context, preferring to concentrate on technical detail. This is consistent with criticisms of traditional personnel management for its narrow focus on functional or ‘micro’ matters such as recruitment. In fairness, however, it must be recognized that personnel managers have always required a detailed knowledge of employment legislation, together with an understanding of industrial tribunals and trade union organization. Nevertheless, this represents a restricted selection from the wide range of environmental factors impacting on people management. The article, address a wider perspective and introduce a number of fundamental issues which are developed with the essence of HRM.. However, it is obvious that we are constrained by the availability of suitable people -a factor that is heavily dependent on environmental variables such as: the implications of world and national economic conditions for business growth the effect of inflation on the perceived value of wages; the traditions of local business culture; the particular nature of national employment markets.
These variables have a ‘macro’ effect on the utilization of human resources. Additionally, we consider other effects caused by the activities of external stakeholders, such as: competitors’ utilization and demand for human resources; multinational organizations and strategic alliances leading to restructuring or integration on a global basis; economic and legislative actions by governments; resistance or co-operation from trade unions; pressure on senior managers to cut costs and maximize shareholder value.
