Square International Company: Four External Influences Affecting Human Resource Management

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1. INTRODUCTION Square International Company is a cleaning and maintenance agency in the UK. This case explores four major external influences affecting human resource management (HRM) that it must consider in its plans to expand. Along with this, employee motivation despite the recent recession-induced layoffs are discussed below. 2. PESTLE ANALYSIS Successfully implementing necessary labor changes during a business expansion requires an understanding of the environment an organization operates in. The PESTLE (Political, Economic, Social, Technological, Legal, and Environmental) analysis is a powerful assessment tool for external factors that are out of Square International Company’s direct control. Best used with the SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis, it provides information about potential opportunities and threats around reconstructing HRM (CIPD, 2015). Here, four main contexts of an HRM setting are put under examination. 2.1. Political Government influence on trade comprises the political facet of the macro-environment (CIPD, 2015). For instance, HR managers of companies seeking to expand in multiple countries need to account for income taxation, which is regulated by the state, and adjust their pay policies accordingly (Hurn, 2014) (Dowling, cited in Hiltrop, 1999). Additionally, the differing degree of trade union authority in various nations also plays a large part in the negotiation not only of pay rates, but also other terms and

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