Internal Environment

The internal environment also experts considerable pressure on human resource management. The internal environment comprises those factors that affect an organization’s human resources from inside the organization’s boundaries. The primary internal factors include the firm’s mission, company policies and corporate culture. These factors have a major impact in determining the interaction, between human resource management and other departments within the organization.

Mission and strategy:

The mission is the very reason and justification for the existence of a firm. Mission is usually expressed in terms of the benefits the firm provides to its customers. An organization’s mission statements tells what it is, why it exists and the unique contribution it can make. For example, observe the mission statement of ONGC. To simulate continue and accelerate efforts to develop and maximize the contribution of the energy sector to the economy of the country.

At various level people must carry out assigned tasks keeping the overall mission of the firm in mind. Now consider two companies: Company A wants to achieve leadership position through technological superiority new products and processes. On the other hand Company B does not believe in taking in big risks and prefers steady growth . Company A needs a creative environment where ideas are encouraged. Highly skilled employees need to be picked up to achieve technology led growth. Constant focus on training and development of workforce is needed. A compensation package designed to attract, motivate and retain the most productive employees is equally important. In Company B the strategies have to be different in line with its philosophy . Creative people may not like to work in Company B, because the mission statements puts little emphasis on risk taking.


Policies offer guidance for thinking. Policies tell people what they may or may not do. They direct the manner in which activities are to be achieved. Objectives show the destination and policies offer the route. In statements like we sell only for cash, customer is always right some aspects of a recurring problem are isolated and a broad guide is established for dealing with them quickly . Policies offer standing answers to recurring questions and specify the steps to be taken in making a decision. Most policies in large organizations relate to management of human resources only. Some of the important policies that influence the work of an HR manager are listed below:

1) To provide employees with a place of work that is as safe as possible.
2) To encourage all employees to achieve as much of their human potential as possible.
3) To provide compensation that will encourage a high level of performance in the form of increased quality and quantity of production.
4) To ensure that present organizational members are considered first for any vacant positions.

This last policy is often referred to as a promotion from within policy . This type of guideline aids managers when they are faced with promotion decisions. Since policies have a degree of flexibility however, the manager is not necessarily required to promote an employee currently with the firm. The supervisor may determine for example, that no one in the firm is qualified and chooses to look outside the firm for a replacement

Organizational culture:

Organizational culture is the product of all the organization’s features: its people, objectives, size, technology unions, policies, its successes and its failures. It is the sum total of shared values, beliefs and habits within an organization, in short the organization’s personality.

The challenge for HR professionals is to adjust positively to the culture of the organization. They have to choose paths that best reflect the culture of the firm and the attitudes of its people.

Source: HRM VSP

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