Welcome back. This is a first video in lesson three. In lesson two we looked at organizational and managerial strategies for managing employees. We looked at high versus low road strategies, at an organizational level and we looked at six different managerial styles ranging from coercive to coaching. Now the objective of this lesson is look at different influences on both organizational, as well as, managerial strategies. So in this video were going to focus on external influence on HR strategy. In the second video were going to turn our attention inside the organization and look at the importance of organizational strategy. And in the last video we going to look at important of ideas. So first, external influences on HR Strategies. To do this we will look at four different categories. First is competition and consumers, which includes both private, as well as, public sector consumers. Second labor Markets and Demographics. Third, community and legal pressure, and last, technology. So first competition and consumers. Now there's an old saying in, an old phrase in labor economics that labor is a drive demand. Labor demand, that is the strength of employees need for employees is derived from employers competitive positions in their markets for goods, services, whatever their market is. So, the labor demand for airline pilots, for example, stems from the role in satisfying customer's demand for flights. As roots, as the types of aircrafts, as passengers needs change, the demands for different types of pilots changes accordingly and the need to deploy them in certain ways changes as well. So the need for pilots is derived from the marketplace, the goods and services that the airline is trying to provide. So whatever affects demand for a product or service could influence HR. For example, consumer taste, and again I'm thinking consumer here broadly, it's not just private sector consumers, but tax payer and public sector consumers as well, right. So, does quality become more important, this can affect an HR strategy. Does being open late become more important, this can affect an organization's HR strategy. You also need to look at the influence of local and global competition. Does global competition put a particular price pressure on an organization, which then affects its HR strategy? Macro economic conditions such as the unemployment rate, whether an economy is in a recession or not can affect an organization's HR strategy. Can affect the appropriate choices that a manager might make in terms of his or her personal style. And then, lastly, I put this in brackets, because it's not really flowing from the demand for a product of service, but thinking about cost pressures and market place pressures. If investors are looking for certain return from an organization, that can affect HR strategy as well. But remember, this goes back to our last lesson, when our comparison of Sam's club and Costco. Remember that HR strategies are not completely determined by these factors. You can probably think of different restaurants, grocery stores, or businesses in your own area that are in the same competitive space, but choose to manage their employees differently. Okay next, look at factors surrounding the labor market and demographics. So first, in terms of the labor market, you need to assess what's the availability and competition for needed skills. So, you need to pay attention to labor supply and labor demand. Simple, captured by this simple graph that you might have seen in a basic economics course. Does your HR strategy give you the ability to recruit and retain the workers you need in this competitive marketplace? Changing demographics can also affect and influence an organization's HR strategy and a manager's choice of individual styles. So, for example, do employee's have evolving scheduling needs where they need to increasingly take care of children or elderly parents, that can affect an HR strategy. Do different generations have expectations for job stability or not? Do they have expectations for autonomy, for flexibility, for certain types of pay. Do they like performance pay or not? Are some workers, some generations, looking for benefits, other generations looking for retirement benefits, this is can affect HR strategy. And all of this is to say a good manager and a good organization needs to manage diversity effectively. Third, there is legal and social pressure. Laws and Regulations also shape HR strategies. Does the law require you to provide certain benefits? Do you have to provide advance notice of scheduling? Do you have to consult with the works counsel or bargain with the union? Beyond the law, there are also social pressures. Customers or politicians might have ethical expectations of you, such that you treat labor in an environment in a certain way and HR strategies also have to fit with a local culture. So cultural norms can be another influence on HR strategy. Lastly, technology. Is there a skills gap? Do employees have the skills needed to work with technology in your organization, this could influence your HR strategy. Technology might also change expectations around connectivity, and autonomy, and independence. And so, how does that fit with your HR strategy? On the risk side, there's privacy concerns for employees that are shaped by technology, and in turn, shape HR strategy and managerial choices. On the organizational side, technology raises certain risks. Employees might lose laptops with sensitive data. They might post things on social media. How is that handled by your HR set of policies and practices. And lastly, technology can give different capabilities to HR systems. Does this will give you the ability as an organization to outsource certain functions for example and how does that fit with your HR strategy. So in conclusion, we have looked at four different categories of external influences on HR and managerial strategies. We've looked at competition and consumers. Labor markets and demographics, legal and social pressure, as well as technology. In the next video, we're going to turn our attention inside the organization and look at the importance of organizational strategy on HR strategy and managerial strategy.