Business Issues and the Contexts
of Human Resources
5BIC
Prabhjot Ubhi
1.0 Table of Contents
INTRODUCTION ............................................................................................................................................ 6
1.0. EXPLAIN TYPES OF ORGANISATIONS AND THE ROLES OF MANAGEMENT IN
THEM. .............................................................................................................................................7
2.0 ANALYSE HOW HR IS DELIVERED AND DESCRIBE THE MAIN FUNCTIONAL AREAS OF
MANAGEMENT. ............................................................................................................................................. 9
3.0 EVALUATE BUSINESS PERFORMANCE AND THE CHANGE MANAGEMENT AGENDA.
........................................................................................................................................................ 11
4.0 REVIEW THE MARKET AND COMPETITIVE CONTEXTS OF ORGANISATIONS. ................................... 12
5.0 EVALUATE THE DEMOGRAPHIC, SOCIAL AND TECHNOLOGICAL TRENDS
AFFECTING ORGANISATIONS. ................................................................................................. 12
5.1.1 POLITICAL ENVIRONMENT ............................................................................................................... 12
5.1.2 ECONOMIC ENVIRONMENT............................................................................................................... 13
5.1.3 TECHNOLOGICAL ENVIRONMENT.................................................................................................... 13
5.1.4 SOCIAL ENVIRONMENT ..................................................................................................................... 13
5.1.5 ENVIRONMENT .................................................................................................................................. 13
5.1.6 LEGAL ENVIRONMENT ...................................................................................................................... 14
6.0 EXPLAIN THE NATURE OF GLOBALISATION AND INTERNATIONAL FACTORS
AFFECTING ORGANISATIONS. ................................................................................................. 14
7.0 DESCRIBE THE IMPACT OF GOVERNMENT AND EU POLICY AND REGULATIONS
ON ORGANISATIONS. ................................................................................................................. 15
7.1.1 LEGISLATIONS................................................................................................................................... 15
7.1.2 EMPLOYMENT LAW .......................................................................................................................... 15
7.1.3 CONSUMER PROTECTION LAW ........................................................................................................ 15
7.1.4 COMPETITION LAW........................................................................................................................... 15
8.0 IDENTIFY HR’S ROLE IN BUSINESS PLANNING. .............................................................. 16
9.0 ASSESS ENVIRONMENTAL PLANNING AND THE SOURCES OF BUSINESS DATA FOR
PLANNING PURPOSES ................................................................................................................ 17
10.0 EVALUATE HOW AGREED STRATEGIES, POLICIES AND PLANS ARE ACTIONED
WITHIN ORGANISATIONS. ........................................................................................................ 18
11.0 CONCLUSION ...................................................................................................................................... 19
REFERENCES .............................................................................................................................................. 20
2
Your Tutor Marked Assessment Feedback
5BIC Learning
Outcomes
1. Understand key
contemporary
business issues
affecting the HR
function within
private, public and
third sector
organisations.
Assessment
Criteria
1.1 Explain types
of organisations
and the roles of
management in
them.
Assessor criteria specific feedback.
This will receive a Pass, Refer grade.
PASS
You have produced a good outline into your
organisation and the different structures that can
be used. You have identified that your
organisation operates within the private sector and
that you have a functional structure.
You have referenced Handy and power culture and
you could have explained this in a little more detail.
You have included a structure chart to show how
the business is organised and you have discussed
the culture of the organisation and related this to
Handy.
1.2 Analyse how
HR is delivered
and describe the
main functional
areas of
management.
PASS:
You have identified the functional areas within the
business and you have described how they
interlink with HR functions.
You could have applied Ulrich to your organisation
which is good practice, and you could have
developed the theory here a little more.
1.3 Evaluate
business
performance and
the change
management
agenda.
PASS
You could have discussed Kaplan and Norton’s
balanced score card – however this could have
been further developed eg what is it and how can it
enhance business performance?
In terms of change management agenda you have
discussed Lewin and KPIs.
2. Understand the
main external
contextual factors
impacting on
organisations and
the HR function.
2.1 Review the
market and
competitive
contexts of
organisations.
PASS: You have used Porter’s 5 Forces mode to
describe competition and evaluated competitive
context.
3
2.2 Evaluate the
demographic,
social and
technological
trends affecting
organisations.
REFER:
You have produced a useful PESTLE analysis
identifying the factors that impact on your
business.
You have discussed effectiveness and efficiency
and how financial data can be used to measure
business performance.
You haven’t really described the key demographic,
social and technological trends which are affecting
your organisation. You could have linked this
more to your organisation and how it affects
changes in your recruitment policies, for example?
Can you amend this please?
2.3 Explain the
nature of
globalisation and
international
factors affecting
organisations.
PASS
You have described globalisation and perhaps you
could have supported this, using an academic
source.
You have related this to how it impacts on your
business.
You could have used GRO to look at sustainability.
2.4 Describe the
impact of
government and
EU policy and
regulations on
organisations.
5. Know how to
identify and
respond to shortterm changes in
the business and
external contexts.
5.1 Identify HR’s
role in business
planning.
PASS
You have discussed how the government policies
impact on your business. You have briefly
discussed two different impacts on the business.
REFER:
You have identified how your business helps with
business planning. You could have linked this
more to hard or soft HR approaches.
Can you go back and provide an explanation of
hard or soft HR and relate this to your business
4
organisation please?
Can you add in an evaluation of how HR
contributes to business planning within the
selected organisation eg. is it concerned with
developing initiatives and policy to meet long term
business goals (workforce development;
succession planning; talent and reward strategies)
or is it mainly concerned with operational activity of
implementing business strategy? (rolling out T & D
interventions; administration of new reward
strategy ; monitoring and reporting on absence and
retention levels). You have touched on this briefly
but this needs to be expanded please.
You could have also linked this to models such as
Walton or Burgoyne.
5.2 Assess
environmental
planning and the
sources of
business data for
planning
purposes
5.3 Evaluate how
agreed
strategies,
policies and plans
are actioned
within
organisations.
PASS:
You have discussed the different data sources you
can use to look for trends and patterns within the
organisation eg ONS and CIPD data reports.
REFER: You have discussed the role of HR, and
you have weakly evaluated (made a judgement) on
the different strategies and policies within the
organisation and how these are actioned.
You have identified some short term priorities,
ideally these should have a date on them to
identify whether these are short or long term.
However you also need to include some cost
considerations given to the proposed action eg.
x number of hours; industry average salary costs
and retention levels; general cost benefit analysis
rather than “inexpensive”.
You have added how you will communicate the
recommendations but could you be more specific
and include examples to support your argument
please?
5
Could you revisit this section please?
5BIC Assessor General Feedback
Dear Prabhjot
Thank for your assignment. You have made a good start to this, however there are some
amendments that are needed. Please see these listed above – please consult your tutor for
guidance before submitting this for a second attempt. Also, please include a copy of this
mark sheet when resubmitting your assessment.
Please also revisit the instructions for Harvard referencing as this is not wholly accurate.
Assessor Grade
1st Submission
Assessor Name
NJ Bowman
Assessor Name
Pass
Date
nd
2 Submission
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Date
If you are referred you have two weeks to resubmit your amendments.
Refer
Date 12/07/15
Fail
Date
Please submit this document again with the amendments added and highlighted in
another colour.
For office use only
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Please start your Tutor Marked Assessment Under this box.
5BIC Assessment
Introduction
6
In this report to CEO the key contemporary business issues affecting the HR function will be
highlighted in Nestle, UK. It will start from the brief introduction of the company, then its
external environment issues which the industry and the company has to face. With that the
legislations which impact the business process would be discussed. How the company has
managed the issue of globalization and there are some recommendations in the end of the report
which are to be discussed and implemented for achievement of goals.
1.0. Explain types of organisations and the roles of management in them.
7
Nestle is one of the largest food and beverage companies in the world, and is best known for the
variety, quality, nutrition values contained buy the products. It is considered to be the largest
food company in the world, in terms of its revenues. Nestle has approximately 8,000 brands
leading to a large number and range of products through a large number of markets. Nestle has
approximately 447 manufacturing plants that are operating in almost 194 countries and there are
around 333,000 employees working under Nestle (Nestle.com, 2015).
It started its operations in UK in 1860’s. Its roots have been embedded in three giant
organizations i.e. Nestle, Rowntree of York and Anglo-Swiss Milk Company. The Angelo-Swiss
and Nestle merged in 1905 and later in 1988 took over the third one. It is a privately held limited
company. They are among the largest players in UK region. Currently they have employed more
than 800 people which ae working in almost 23 sites. Nestle is considered to be one of the
biggest exporter of food, as it exports its products to almost 70 countries across the globe.
The major theme of the company is “Good food good life” which is also communicated to the
customers at the end of every television commercial, and the same has also been printed on the
packaging of the products (Nestle, 2015). This is a promise that they will continue to serve
people every day with good and quality food that will enhance their standard of living. They are
dedicated and committed to enhance lives of people by proposing and offering healthy food that
is of good taste and quality leading on to refreshing beverages that can make your day even
better. They believe in thinking out of the box, and are initiating a broad range of environmental
and social enterprises that will help them making a difference.
Nestle believes in becoming an stimulating development partner that will delivers imaginative,
quality food and beverage resolutions that will enable operatives to originate and provide
pleasure to its consumers (Nestle, 2015). The mission statement throws light on their desire to
work more closely as partners to know more about their customer’s needs, and can enhance and
improve their products at regular basis only to satisfy their customers.
They have their headquarters in Gatwick, UK. Their sales office is in London and they have their
centers at different locations which include Dublin, York, Garden Cit, Staverton, Sudbury,
Wisbech, Aintree, Liverpool, Askeaton, and Redhill.
8
Nestle UK has maintained a very healthy culture where everyone is getting the benefits. It is a
perfect platform for an employee to excel in their relative field by utilizing your skills and
abilities at their best. They rotate their people between different departments and areas which
enhance their knowledge and gives them a chance of leaning (Anon, 2015). Handy had described
four types of cultures, and in Nestle power is equally divided amongst the employees. The top
management take help from them and power is not restricted only in a few hands. Nestle also
make teams and follow task culture but they allow the employee to grow and send him to have
an experience of different departments. Nestle do care about its employees but they stay in
certain limits, they do not overdo it. Even though work is initially designated according to his
specialization but for employee growth he is being rotated among different departments.
2.0 Analyse how HR is delivered and describe the main functional areas of management.
9
Source: (Nestle.com, 2015)
The managers of Nestlé are very committed and always concerned about adding value to the
organization and also the lives of people. The leaders of Nestle believe in on going achievement
and success and they work really hard to reach the top. They constantly try to improve their
processes and satisfy their customers at its best. They have decentralized structure, they tend to
response to the requirements of customers with the help of prescribed strategies and policies
(Anon, 2015). They have established flat and flexible structure, with less levels of management.
The roles and duties are already defined and communicated to the employees so everyone would
know what are they supposed to do. As Nestle takes help from its employees while taking
decisions that mean they have Democratic Leadership Style.
Tyson and Fell’s model can be applied to nestle UK. Nestle believes in hiring people that have
professional skills and attitude and due to which they can maintain a good relation with the
company. They have centralized systems and have created certain centres for incorporating the
10
policies of human resource (Anon, 2015). Those centres include Talent Management and
International HR, T&D, R&D. Reward and employee relations, Recruitment services. From
these they identify the true potential of the person, train him ad make him an asset for the
company.
3.0 Evaluate business performance and the change management agenda.
The performance indicators of Nestlé provide a way to measure the shared values and
sustainability. This would provide a summary that will communicate the performance of the
company. In the start of the year the target and performance standards are written and then at the
year-end they are match with the achieved ones (Nestle.com, 2015).
Nestle use the following three methods to identify its performance.
•
Measure the financial performance and compare with desired and previous year
•
Determine whether its client have increased in this year or not
•
The response of the customers.
For each of the above three different performance indicators are made. Also compare your
business with the other competitors, this will give an idea about their strengths and weaknesses
and you can take benefit from those.
In the start of the year the target and performance standards are written and then at the year end
the ones which are achieved are removed from the list and the ones which are remaining are
modified and new strategies are made for them and they are to be achieved in the next year.
Change can be better managed in organizations by first understanding that what change is
required and then implemented the desired change policy or procedure to induce it into the
organization. This can be referred to Lewis change model which is a three step process. And the
first step is planning to change, to identify why we need change. This steps needs to tell the
employees why to change and alter some beliefs too which will help company achieve its goals
(Mindtools.com, 2015).
11
After this the actual change would take place where, it is a timely process as changes do not
happen overnight. After this the last stage where people have embraced the new ways and now
using it in their business process and company is going towards success.
4.0 Review the market and competitive contexts of organisations.
Nestle UK is doing very well and holds strong market position. It has continued to grow from the
start and as its business has now expanded too much, it is still capturing more market share. They
have an aim to grow at least with the growth rate of 10 to 20 basis points in a year. The leading
brands of the company which includes Kit Kat, Nescafe, have been playing vital role in
enhancing the sales of the company.
Porter’s five forces model can be used to analyse the macro external environment of business as
it talks about five forces which a competitive business has to face in its environment and so des
the Nestle. The threat of new entrants in the market is high, as there are less barriers and the
country also appreciate foreign investment. The competition is quite high among the market and
all are struggling to get more market share but Nestle UK has maintained its position quite well.
The bargaining power of customers was medium, they provided the products wanted by the
customers but at their own prices, which were not high. The supplier bargaining power is
medium, as there are many suppliers, so you can easily switch. But Nestle believes in
maintaining long term relations with its suppliers and customers. And as market is highly
saturated so threat of substitute was quite high. If one product is unavailable customers can easily
but the other one.
5.0 Evaluate the demographic, social and technological trends affecting organisations.
5.1.1 Political environment
As Nestle is dealing in food and nutrition, so they have to maintain themselves with the changing
regulations about the standards of food set by the government. Though UK government is not
very unstable, but at times with the change of governments the company has to face certain
issues due to which the industries also suffer (Gov.uk, 2015).
12
5.1.2 Economic environment
Whenever the interest rates increases or inflation rates changes, they effect the business of the
companies. Even at times of recession or economic crisis the company had to face reduction in
sales and other loses (OECD, 2015)
5.1.3 Technological environment
Because of the technological advancements company needs to always upgrade its processes,
which initially can be cost to the company but later it would be very beneficial. As everyone in
the market place is using that technology, if nestle would not opt that then it might lose its
position (Gov.uk, 2015). Nestle is using many state of the art water filtration plants for producing
quality mineral water along with the refined minerals and nutrients to add in its products through
better refinement procedures and mechanisms.
5.1.4 Social environment
Nestle has a wide range of customers, whose needs and lifestyles changes with time. So in order
to meet their needs constantly is a big issue. But nestle tries its best in order to sustain its
position. It is very important for the company to keep bringing modification in products in order
to satisfy the needs of customers. People’s trend is shifting towards the mineral water as they are
getting more and more conscious about their health in these days. Such a psyche of target or
potential market is quite beneficial for the Nestle as the chances of the consumption of mineral
water can be enhanced. Another social trend of starter is affecting the strategy of Nestle as the
company is getting more focused on its juice ranges to satisfy such social dine-in need of its
consumers.
5.1.5 Environment
The whole focus of society nowadays is on the environmental protection, so Nestle is trying to
play its part by using material for packaging that can be recycled. And it is always ready to play
its part for the benefit of the society (Hse.gov.uk, 2015).
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5.1.6 Legal & Demographic environment
Nestle always fulfil the conditions kept by the legislations which keep on changing. The working
conditions and other things all are set with respect to the legislations. And in future also the
changing legislations could be a challenge for Nestle (Gov.uk, 2015). As far as demographic
factors are concerned, upper middle class consumers are often considered as the customers of
Nestle water and juices as only such customers can afford such necessity and luxury in their life
on routine basis. Women are found the most exposed to Nestle products as they are the primary
buyers of the pure products of Nestle.
6.0 Explain the nature of globalisation and international factors affecting organisations.
Globalization is a step ahead from the tradition boundaries, and is referred to as a process of
integration in which you share your culture, beliefs and products with the others. Through this
the international trade has increased henceforth and people are now more interested in actually
getting cheaper products from other countries. After the concept of globalization evolved there
has been growth in the volume of the foreign direct investment. This had benefited the
developing countries that have been able to maintain themselves in a better manner (Beck, 2000).
Nestle has been outsourcing professionals from many parts of the world, this has enhanced its
performance in a good manner. They have a belief that that if they will expand their business
internationally, then they would have a lot of opportunities and a wide range of work force too.
So with respect to this strategy it has expanded its operations in many countries across the globe.
Nestle has been using the internet and web based technology in order to direct the transportation
of its goods all around the world.
UK is very supportive and appreciate investments from other countries. They also supports the
exporters and facilitate as much as they can. In order to export or sent items abroad, the company
needed to have a license from Export Control Organization, but before that you have to check
that whether your good lies in the permitted goods list (Cheong et al., 2002). If yes then you
would get a license and can export goods. The goods of Nestle are all in the permitted list, so
Nestle does not has to face any restriction from the government.
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7.0 Describe the impact of government and EU policy and regulations on organisations.
7.1.1 Legislations
UK legislation and EU controls the way businesses carry out their operations. There are three
dimensions of legislations that can be imposed on the businesses. Those are

Employment law

Law of Consumer protection

Competition law
7.1.2 Employment law
It is necessary for organizations to provide your employee with safe working conditions and
ensure their safety and health. And for this they need to follow the following

Health and Safety at Work Act 1974

Sex Discrimination Act 1975

Race Relations Act 1976

Employment Protection Act 1978
7.1.3 Consumer Protection Law
These ensure that employees are being treated fairly or not. These include:

Sale and Supply of Goods Act

Trade Description Act

Consumer Credit Act
7.1.4 Competition law
This law ensures that competition in the market place is fair. They include:

Competition Commission. (Legislation.gov.uk, 2015)
15
These legislations may impact your business, as due to them you have to change your working
conditions and also your business process & practices. The business has to ensure there is no
discrimination, or employees are given their genuine rights and also that they are not using any
illegal ways to sustain in the market. Business has to mould its recruitment strategies according
to it as the employment law has banned child labour so no such employee can be hired.
Furthermore, competition policy has restricted the company from aggressive marketing in which
competitors are often reflected as poor quality oriented or something worst. Laws regarding
consumers have impacted the company’s attitude towards customers where they have to take
care of them at professional level by considering all their rights.
8.0 Identify HR’s role in business planning.
HR in Nestle is very well organized and they have divided their tasks into certain centres which
are given tasks accordingly. The centres have been named as Recruitment Services, Talent
Management and International HR, Learning and Development, Information and Administration,
Reward and Employee Relations.
The HR plays its role quite efficiently and starts planning at strategic level and ensure that their
planning has been implemented or not. This HR planning is also linked with strategy of the
organization which demands a timely arrangement of human capital by conducting recruitment
procedures on time. They are truly committed and demand the same from their employees. The
Recruitment team is very efficient and have set standards which the other countries follow. They
not only focus on the job but also to identify beforehand the potential needed and try to fill gaps.
They continuously try to capture the best talent. They also act as internal consultants, where they
oversee the duties of the vacancy, then design the process of selection and then offer the job.
They continuously try to introduce new methods through which they can make things better and
easier.
Moving on to its Talent Management and International HR team, they focus on the development
of the employees, they polish their skills and try to make you future leaders. This HR centre
focus entirely on the employees and their talents. So even for the development of the employee’s
career they may even send him to other locations across the globe.
16
The Learning and development Team will find out ways to improve the processes and if
employees need any training they are responsible for it. How to cut costs and what new
innovations should be brought, and the whole process of supply chain is covered in it.
The Reward and Employee Relations team is responsible for the matters of employee relations,
their wages and compensation packages. Their main focus is on maximizing the returns. They
believe that rewards motivate the employees so in order to make them perform more effectively
then they should be given reasonable incentives and packages (Barkers, 2015).
HR basically is embedded in strategic decision making but it also ensures that planning is then
implemented too.
9.0 Assess environmental planning and the sources of business data for planning purposes
Nowadays organizations are focussing in making products that are tasty and healthy, but with
these they also make sure these do not cause any harm to the environment and add a value to the
organization. So Nestle has adopted a life cycle assessment approach to check their
environmental performance and planning.
Source: (Nestle.com, 2015)
The HR department in Nestle is responsible for examining the skills needed to fill the possible
vacancies that would be vacant in the near future. The R&D department informs the HR about
17
the trends going on in the market and what changes should be done (Barkers, 2015). Other than
their own department they check the national data sources which tell them the possible future
needs and then HR plans accordingly. They could possibly look for the standard pay rates going
on in the market to determine their own salary packages. Also the published weekly/monthly
business journals can be an important source that helps in planning. The organizations also refer
to the Office of National Statistics, Organisation for Economic Co-operation and Development,
UK Commission for Employment and Skills and Health & Safety Executive for information and
extract the ones that are relevant to them.
10.0 Evaluate how agreed strategies, policies and plans are actioned within organisations.
At the start of the year Nestle makes the plans for the whole year, it check the previous year’s
performance and see where the company stands and how much it has improved in the whole
year. Has its customers increased or what changes the company incur during the past year. By
keeping those in mind, it devise new goals for the year. If the previous year goals are pending so
they are also included in this year’s goals and new strategies are being made to achieve them.
After the goals have been decided upon, next step is the strategy and action plan. How to achieve
those goals and which route should be used. The managers brief the employees about their goals
and ask their opinions and in this way the strategy and plans are derived.
These are then divided into different departments, what HR department has to do what R&D has
to do, all the departments are given their goals for the time period. The workforce will be
decided and what skills would be required to carry out these goals. Whether there is a need of
training or not. Also Nestlé’s organizational competence is checked. Making sure that the plans
that are made are in favour of all the stake holders. Then after analysing all these all the
departments start with their work and it is the task of the managers to make sure that the
performance of company is going good.
After six months there is a meeting held amongst the department and also a major one where the
managers of every department brief about the performance to the top management. The problems
they are facing are also discussed so that they should find a way to resolve it. In this way the
company make sure that the a\pathway towards the goals is right or not. The measures which can
18
check the performance is the increase in revenue, increase in total annual sales and increase in
number of customers.
11.0 Conclusion
From where it started and where it’s now, Nestle has definitely crossed a milestone and have
reached heights of success. Not only in one country but throughout the world. It is due to their
quality and best practices. Instead of being threatened by their competitors they have become a
threat for them by their innovation and logical analysing. They believe in creating shared values
they would be able to excel and also create long term relations with their suppliers as well as
customers. Nestle has been managing the globalization issues quite well and their HR practices
are also quite good as compared to the others. But still they have to capture more market share
that means they still have the potential to grow.
19
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