This document discusses managing human capital and outlines several key points: 1. It defines human capital as the collective skills, knowledge, and expertise of employees that contributes to organizational productivity. Managing human capital involves treating employees as assets and investing in them. 2. Some challenges to managing human capital include globalization, workforce diversity, technological advances, and changing political/legal environments. HR strategies like task force, development, turnover, and paternalistic strategies can help address these challenges. 3. Best practices for managing human capital involve recruitment/selection, training, performance management, reward systems, and career development. The document discusses these practices and compares best practice and best fit approaches to human resource management.

1. Managing Human Capital
SUJAN MAHARJAN
ID No: B0154BABA0812
SCHOOL OF BUSINESS AND LAW
FEB 19 2013

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TABLE OF CONTENT
1. ABSTRACT 4
2. INTRODUCTION 5
BENEFIT
COLLINS REVIEW
3. CHALLENGES OF HCM 6
3.1. GLOBALIZATION 6
3.2. WORKFORCE DIVERSITY 6
3.3. TECHNOLOGY ADVANCEMENT 6
3.4. POLITICAL AND LEGAL ENVIRONMENT 7
OVERCOME THOSE CHALLENGES 7
4. HR STRATEGY 7
4.1. TASK FORCE STRATEGY 7
4.2. DEVELOPMENT STRATEGY 8
4.3. TURNOVER STRATEGY 8
4.4. PATENALISTIC STRATEGY 8
5. BEST PRACTICES 9
BEST PRACTICES MODEL 10
5.1. RECRUITMENT AND SELECTION 11
5.2. TRAINING AND DEVELOPMENT 12
5.3. USED OF PERFORMANCE 13
5.4. INVOLVEMENT OF DECISION MAKING 13
5.5. PERFORMANCE APPRAISAL 14
5.6. REWARD MANAGEMENT 14
5.7. JOB ROTATION 14
5.8. CAREER DEVELOPMENT 15
PROBLEM WITH BEST PRACTICES

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6. BEST FIT 15
BEST FIT MODEL 16
6.1. NORMATIVE 17
6.2. CRITICAL PRESPECTIVE 18
6.3. DESCRIPTIVE BEHAVIOURAL 18
6.4. DESCRIPTIVE FUNCTIONAL 18
7. DISCUSSION 19
7.1. CHANGE NATURE OF BUSINESS 19
7.2. DOWNSIZING 20
7.3. NEW WORK METHOD 20
7.4. NEW MANAGEMENT METHOD 20
7.5. TOTAL QUALITY MANAGEMENT 20
7.6. TECHNOLOGY 20
7.7. MERGER AND ACQUISITION 21
7.8. FINANCE RELATED ISSUE 21
7.9. BUY OUT 21
7.10. SATUATORY AND LEGAL COMPLIANCE 21
8. CONCLUSION 22
9. REFERENCE 23

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1. Abstract
Aside from cash or other valuable material needed in organization, employees are also
one of the asset that the company worth for it. So we can say that employees are the
human capital of the organization. Human capitals are those who can perform the task
with their skills, knowledge and ability to achieve the goal of the organization.
Human capital should be prepared for the future challenges to stay competitive in the
market. Human capital management (HCM) helps organization to develop their
resources plans. As we knew that everything is changing and only constant in life is
change, so organization also need to change the employee behaviour, style and the
expectation, which helps to motivate them to work. With the helps of these changes
employee can developed their career with the age, job requirement and other material.
This essay consider the concept of the human capital with their benefit, challenges,
models and the best practice and best fit concept in term of human resources
management. Using this model we can restructure the failure organization by
managing the human capital. It considers the detail process of human capital from the
recruitment process to their career development. By using all these information we
can suggest human resources manager to restructure the organization be managing
human capital and using the optimum utilization of resources, which result the cost
saving.
Proper planning and managing human capital within the organization is essential to
increase the capability, motivation, effectiveness and efficiency of employees. To
fulfil this organization need to do job analysis, job specification, recruitment and
selection, training, performance appraisal, rewards and incentives, career
developments that increase the quality of work life and organization development.

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2. Introduction
Employees are the backbone of an organization without which organization cannot
survive in the competitive market. Because of the employee contribution toward there
work which help to achieve the goal and objective of the organization. Therefore
organization needs to motivate their employee to acquire some set of skills and
knowledge through their experience, exposure, training and so on that increase the
productivity of the organization.
Human capital is define as the collective stock of skills, attributes, knowledge,
expertise of employees which further plays and integral role in increasing the
productivity of the organization. Therefore human capital management refers to
managing the employees of an organization to contribute significantly in the
productivity of an organization need to treat the employees as an asset where
organization need to invest for the long term benefit.
According to the Bontis et al (1999), “ human capital represent the human factors in
the organization that combined intelligence, skills and expertise that give the
organization its distinct characters. The human elements of the organization are those
that are capable of learning, challenging, innovating and providing the creative trust
which probably motivated can ensure the long term survival of the organization”.
Benefit of human capital management
Help organization to build and shape the resources pool to prepare and achieve
strategic objective.
Allow the utilization of more effective and efficient use of resources
Provide realistic staffing projection for budget purposes.
Helps to maintain and improve a diversification human capital.
Helps an organization to prepare for restructuring, reducing or expanding its
human capital.
To write this essay I had consider the secondary sources like books, journals and
Google on Internet. Therefore this essay mainly focus on the seven dimension of
human capital management i.e. recruitment and selection, training and development,
used of performance, performance appraisal, reward, job rotation, and career
development. It also covers the best fit, best practice and other models and theory to
manage the human capital and discuss on that which method to accept to manage the
human capital for the betterment of the organization.

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In the review of collins I had consider the current challenges that organization are
facing to manage their workforce to compete in market. Organization are facing a lot
of challenges in term of human capital, globalization, technology and the legal and
political instability.
3. Challenges of HRM
Human capitals are the assets of an organization where the organization successes are
depend on them. The main challenge of HRM are facing in present business scenario
are globalization, work diversification, technology advances and changes in political
and legal. All these challenges make an HR manager to recruit, select, retain and
attract talented employees. Because of this external environment challenges HR
manager need to design and innovative mechanism of developing skills and
competencies of human resources to accept those challenges. The challenges that HR
manager are facing are as followed
3.1. Globalization
It is the process of denationalization of market by using the global economy. It refers
an extension beyond national borders of the market. Growing market of business
effect HRM in term of language, practices, competition, management styles, ethics,
attitude of employee. HR manager need to deal with these challenges more effectively
to compete in market. Due to the globalization international organization can get the
talented employees that helps in the organization growth.
3.2. Workforce diversity
There is no limit of workforce diversity that include age, ethnicity, gender, physical
abilities/qualities, race, education background, location and experience. HR manager
need to bring an innovative ideas, perspective and view to the work for the
development of organization by turning these diversity into strategic organization
assets. Diversity affects the multinational companies who operate their business on a
global scale and employ people from different countries. Therefore HR manager need
to act like „think global and act local approach‟.
3.3. Technological advances
Most challenging task of HR manager is to adopt the rapid changing technology,
which affect the nature of work. New technology has reduce the number of jobs and
created the scarcity of skill manpower. As the technological changes increase the
expenses of the organization. Only adopting the technology is not the solution we
need to hire an expertise to operate that technology also as well as provide training to
other staff about the uses and benefit of the technology so that there is no delay in the
work.

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3.4. Political and legal environment
With the change in the government, different rule and regulation also apply which
organization need to follow during the operation of business. HR manager need to
implement all those changes and adjust the work in organization by utilizing the
human capital effectively without facing any problem in the performance of
organization.
We can overcome those challenges by
1. By providing cross-culture training so that they understand other people
culture
2. Motivate and reward the employee so that they do not change their job.
3. Need to adopt the latest technology with the professional skill manpower to
provide training to other members
4. HR manager need to change the strategy that is flexible and adaptive to the
change in environment
5. Need to measure the performance of employee and proper career development
plans to reduce the employee turnover.
Therefore we can say that HR practices are becoming more challenging task for HR
manager because of retention, attraction of employees dealing with different culture
people. HR manager need to motivate the employee through the monetary and non-
monetary techniques like encouragement, training, job satisfaction etc.
4. HR Strategy
To manage the human capital HR manager need to follow the internal and external
environment to change in organization strategy. D.stace and D. Dunphy purposed four
HR strategy that fit for different organization situation.
Task focus HR strategy
Development strategy
Turnover HR strategy
Paternalistic HR strategy
4.1. Task focus HR strategy
In this strategy HR manager mainly focus on the bottom line of the organization by
emphasizing workforce planning, job redesign and work practice. It focuses on
tangible reward system by recruiting internal and external employee. This strategy is
used when market are facing major changes at that time HR manager need to focus on
the structure, skill, system and outsourcing of employees.

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4.2. Development HR strategy
Hr manager need to carry out the operation jointly with cooperate HR unit and the
business units. It emphasize on developing the individual career as well as the team of
organization. It focus on the internal employees by emphasizing corporate culture and
develop the organization with intrinsic rewards. HR manager follow this strategy at
the time of new product development in market to create the desire. HR manager need
to create cross culture organization synergy and a market leader culture by developing
internal individual career.
4.3. Turnover HR strategy
When the organization structure and methodologies are changed affecting the total
organization and career by downsizing the employees. At that time HR manager need
to build the team and create new strategy to overcome the situation by breaking old
culture. This strategy is adopted when organization cannot compete with the external
market and when business strategy of organization completely changed.
4.4. Paternalistic HR strategy
HR practices are a centralized personnel orientation, which emphasize on procedures,
precedent and uniformity. HR manager used this strategy when the production is
limited and organization has a monopoly on market.
The department and HR have to change in many ways so we need to attract talented
people who will be committed and involved in their work with the high level of
performance and deliver excellent value of money. With this strategy HR manager set
a new direction to the organization. Organization should involve their staff for the
changes and improvement of business. When we implement a new HR strategy we
need to involve our staff that are fully involved with organization. HR strategy should
be change with confidence to challenge the „fit for purpose‟ by working in partnership
with all our purpose and stakeholder to deliver our business obligation effectively.
Today‟s business world the most difficult task of an organization is to select the right
person for right place who can tackle the problem. Recruiters must know the
organization future plan so that they recruit the correct number of human capital
supply and demand. They should select human capital with their experience,
knowledge and ability required for the particular job, which is based on job
specification, job analysis and description.
Due to the rapid change in market, organization management realized that the
employees are considering as an asset and resources of organization. Therefore many

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organizations are focusing on planning and implementation of different strategies on
human capital for the success of business with a certain mission, vision and goals.
Human capital is one of the primary factors that help to improve the performance of
business (Armstrong and baron, 2002). Organization need to focuses on long term
about their employee and concern the macro economic factors regarding its structure,
quality, culture, and value with the organization future needs.
Best-fit approach is important for human resources management so that HR strategies
are suitable in different circumstances for the organization. It needs to focus on the
idea that different HR strategies have to focus on a given need of both the
organization and people (Armstrong, 2006). Due to this best fit is more prefer than
best practices in any organization. Best fit and best practice are described further.
In this competitive world many organization are dealing with changing environment
by various labour market, deregulation, globalization, information technology and
many factors. To be in the market organization should improve its performance by
solving these problems through reducing its operational cost creation of new product,
increasing quality, productivity and speed. To do these organizations need to manage
its human capital effectively to enhance the performance, synergy and motivation that
sustain the organization in competitive market. The organization performance and the
human capital are based on two approaches
1. Best practice (universal)
2. Best fit (contingency)
Both best fit and best practice explain the manner in which human resource policies
generally and rewards policies particularly can lead to better organization need to
work with both approach. The difference between best fit and best practice are
Best fit Best practice
Firms reward system should be aligned to
support the organization business
strategy.
One bundle of HR policies incluing the
reward system
Result in achievement of competitive
advantage
Lead to highly motivated and committed
employees who are key to an
organization competitive advantage.
Source: http://www.slideshare.net/msaadafridi/best-practice-model
5. Practices
Best practice approach specify that organization follow the exact set of HR
practices that are applied to increase the performance of organization which
deliver the best outcome which are value able for the stakeholders, employees and
the organization future. Best practice suggest that the greater use of the same
practices obviously pursued collectively and consistently gives an organization a
better result and create positive synergies between them. Organization needs to

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take advantages by adopting best practice that helps an organization performance.
Best practice cover different perspective model of HRM such as high
commitment, high performance, involvement in work system and mutual gains
models (shield, 2007).
According to Johnson, 2000 “ best practice is a high performance work practice
which are described as HR methods and system that have universal, addictive, and
positive effects on organization performance”. Best practice is nothing more than
desperate group of methodologies, processes, rules, concept and theories that have
previously generate success in certain areas.
Best practice model
Hrm policies hrm outcomes organization outcomes
Organization job design strategies high job performance
Recruitment integration problem solving
Selection commitment changes
Socialization flexibility innovation
Appraisal adaptability cost effectiveness
Training and development low turnover
Reward system grievances
communication
HR strategies
Best practise cover different element to maintain the organization structure and helps
to increase the performance of the organization. They are:
Recruitment and selection
Training and development

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Extensive use of performance
Involvement of decision making
Performance appraisal
Reward
Job rotation
Career development
5.1. Recruitment and selection
As every organization have an responsibility to recruit the best employee to the
changing business environment. The recruitment and selection of employee are
fundamental to the effective function of an organization and these activities are
important to HRM in practices. Most people recruit the best people and then place
them into specific position. Organization used two major source of recruitment,
from outside and within inside. Organization that recruit from within a job
positing program and consider first before recruiting from outside. Recruitment
and selection is done by the need of the organization and select according to the
job specification.
Fig: steps-in-recruitment-and-selection
source:http://www.apkibook.com/2012/03/steps-in-recruitment-and-selection.html

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Before recruitment and selection organization need to identify job analysis: what has
to be done, number and types od position and responsibility. Then we need to
summarise the responsibilities i.e. job description and specification. After that HR
mnager need to identify the knowledge, skills and ability person who can perform the
task that are identified in job desciption. Organization needs to follow these steps for
selecting best employee.
o Interviews
o Biographical interview
o Competency interview
o Situational interview
o Test
Psychometric test
Aptitude test
Personality test
o Reference
o Examination
o Job offer
o Contract with employees
5.2. Training and development
Training is a learning process that involves the acquistion of skills, concept, rules or
attitude to enhance employee performance (Stephanie, 2005). It is an effort initiated
by an organization to their employee for the better performance. Training aims to
improve the employees skill and behaviour.
Similarly, development is important in current business environment because of
increasing importance of product and service quality, new technology, skill and
labour shortage and employee commitment. Some of the steps involves in training
and development (casico, 1998) are:
1. Determining training needs
2. Organization analysis
3. Demographic

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4. Knowledge, skills and attitude analysis
5. Personal analysis
Organization can trained their employee by using on the job training (OJT) i.e.
training are given hand on by experience instructor. By providing training
organization can increase the production, reduce employee turnover, ability to use
new technology and change in employee attitude.
5.3. Used of performance
Performance is the procedure to set an objective, appraisal and reward. Performances
in HR consider the ability, motivation and opportunities for an employee.
Performance of an employee focus on direction, intensity and persistence of work to
generate productive outcomes. Managing performance is about individual, groups and
organization achieving something that is desirable as a consequence of their action,
which lead to improvement and is invariable associated with effectiveness and
efficiency (sarah Gilmore and steve williams, 2009).
Guest (1989) theory of HRM, with its four HR policy goal of strategic integration,
commitment, flexibility, and quality describe how HR policy implementation can lead
to certain organization outcomes including job performance and other outcomes that
can effect organization performance. HRM focus on certain areas that help to
implement these policies to get the outcome for long term including organization
performance. The performance of employee is depend on how they behave and there
choice influence the performance of organization (Purcell et al 2003). These models
describe how HR practices implement the strategies that affect the three keys variable
in the performance of the organization.
5.4. Involvement in decision-making
Organization needs to involve their employee when making a decision for the
organization. It helps to creates and impact on decision and affect in the employees
job. It is not compulsory tools or practices but it helps to encourage the employees
and contribute to continuous improvement on the success of their work n
organization. As the participation of employee in decision-making is still a matter of
debate because some believe that worker union should participate and some believe
that the limited number of employee should involve in decision-making. We can
involve an employee participation in various ways like: total quality management
(TQM), by empowered teams and joint committees and council through which they
can share their views and ideas in making decision. The benefits of employee
involvement in decision-making are enhancing morale, more productivity, healthier
co-workers relationship and creative thinking.

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5.5. Performance appraisal
After the job placement, HR manager need to review the performance of the
employees that had assigned to them. The performance appraisal is based on the
employee job and responsibilities rather than the personality and characters. By doing
the performance appraisal it helps an HR manager to identify the job enhancement
and promote professional growth. To evaluate the performance we should use the
open line communication to build the relationship with all the employees. HR
manager need to appraise the employee on the basis of the employee‟s willingness to
work for the achievement of the future goal.
Performance appraisal is done to recognize the achievement, to evaluate the job
progress by which we can know whether to trained the employee for the further
development of their skills, ability, knowledge and the strength. Organization should
do performance appraisal on annual basis with the review of employee, supervisor HR
manager and the chairman of the organization.
5.6. Reward management
Reward is essential factors within the human capital management, which motivate an
employee in their performance. Reward may be financial or non-financial or intrinsic
reward that influence on the recruitment and retention of employee. The political and
economical forces affect current trends of reward system. Therefore UK reward
system is based on the performance of the employee rather than the time served with
the firms. According to Armstrong 2001, “ rewards strategy involves the thinking
ahead to set a strategic course that aligns the reward practices with its business goal,
its culture, and the environment in which it operate. To get the reward there need to
balance between three perspectives i.e. employer, the employee and the cost
perspective”.
5.7. Job rotation
Job rotation is the movement of the employee job from one position to another. It
involved the particular work, duties; function, which is assigned to an individual
employee or the group. In job rotation may last for three months to two years as per
the requirement and the nature of the work, duties and responsibilities of the job.
According to Prof. A.M. Sarna,” job rotation involves periodic assignment of an
employee to completely different sets of jobs activity. One way to tackle work routine
is to use job rotation when activity is no longer challenging the employee rotated to
another job at the same level that has similar skill requirement”
The advantage of job rotation helps to understand the other activities in another
department to gain knowledge that increase the performance, reduced boredom and
monotony as well as promote inter-departmental cooperation. There is some

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disadvantages like it cost more in training as well as create disruption with other
employees.
5.8. Career development
Career development is important in recent time to retain skilled, competent and result
oriented people for the organization. To retain the employees management should
assist individual plan their career with realistic information about career opportunity
that exit within a particular organization. Due to the technology and competition
organization need to select the right staff as well as need to retain them in
organization to reduce the turnover of employee which lead a great loss to
organization in term of cost, quality and productivity. Dougles T.Hall said that career
development refers to both attitude and behaviour that are directly related to work
performance of an employee. Each employee developed their career with making
more money, responsibility and acquiring more status and power.
Best practice is all about the recruiting the people to their career development.
Different organization follows different means to their employee because there is no
one specific rule for the development of an employee. After the above discussion, we
came to know that there is no any particular way to treat the employee for the increase
in the performance of employee for the benefit of organization.
Problems with best practices are:
According to capelli and crocker-hefter(1996), committed that “the notice of a single
set of best practice has been overstated”. There are examples in virtually every
industry of firms that have very distinctive management system. It is belived that the
best practice has an inconsistency between the belief and the resources which focus
on intangible assets including HR manager that allow the organization to do better
than their competitors. The practices that work in one organization will not
necessarily wok in another organization because it may not fit its strategy, culture,
management style and technology or working practices.
6. Best fit
Organization want to have best employee, who can tackle the problem at a right time
with their knowledge, skills and ability. But this is the most challenging for an HR
manager to select the right person for right department. Before selecting the
employees, organization must know the future plan of an organization so that they can
select the employee with their knowledge, ability and skills required for an
organization. Best fit approach the performance of the firm is maximized when the
human capital are constant and delegated to the organization business strategy.

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Best fit (or contingency) approach of HRM are closely linked between strategic
management and HRM, which is vertical integration between an organization
business strategy and HRM policies and practices. Best-fit approach is the
relationship to strategic management through contingency and configuration
approach. Best-fit approach assumes a classical, rational planning model of strategic
management. Best-fit approach links the business strategy and its human capital
strategy for providing both fit and flexibility with each other‟s.
HR manager must fit with other aspect of the organization, which is effective. There
is no any certain best fit that organization follow to achieve the goal and objectives. It
is determined by the position of the organization in the market that, which practice to
adopt as changes in the environment. Best fit approach focus the HR strategies that
should be contingent on the contect, circumstance of the organization and its types.
Best fit is viewed as a virtical integration between the organization business and HR
strategies.
Best fit model
Best fit model is more realistic than best practice. It follow the method if it is
successful then follow that method to achieve the goal until it fail due to the internal
and external environment. There is some limitation of best fit model are
It is factual and static and doesn‟t have account of processes of change
It is necessary to avoid falling into the trap of contingent determination. There
should be the alternative for making strategies.
It reliance on the classical rational planning approach to strategy making
It reliance on determinism and the resulting lack of sophistication in its
description of generic competitive strategies.
The firm control the completed with its own HRM
Best fit model ignore employee interest in the process to increase economic
performance.

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Best fit model
Structural changes cultural changes
Job/role profiling individual attitude
Behaviour
Competence-base HR policies and practices
Different types of best-fit model that fit in HRM are:
Normative model
Critical perspective
Descriptive behavioural
Descriptive functional
6.1. Normative Models
Strategic
integration
Environment triggers
Strategic objectives
HR strategies
External integration

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This model is base on the concept of the hard HRM and soft HRM. Hard HRM is the
traditional approach toward managing the human capital. It link between the
workforce management and organization strategy. It focus on the HR planning, job
analysis, recruitment, benefit and compensation, performance appraisal. Hard HRM
view the human capital as passive resources that the organisation used and dispose
after its used.
Soft HRM is the modern approach to HRM. It is the synonymous of Michigan model
of HRM. This model consider human capital as the “assets” of the organisation rather
than “resources” and lays stress on organisation development, conflict management,
leadership development, organisation culture and relationship building as a means of
increasing trust and ensuring performance through collaboration. This model
considers that what is good for the organisation is also good for the employees.
(briphthubpm.com)
6.2. Critical perspective
This model is the reaction against the normative model. This perspectiveespouses a
gap between rhetoric as organisation claims to follow soft HRM policies when they
actually enforce hard HRM.(storey and sisson etal 1993). Vaughan (1994) observes
that whilst organisation mission statements espouse that employees are their most
important assets, organisation reality is characterized by impersonal economic
rationalism. Most organisation claim that employees are the asset of organisation for
their benefit and welfare but in reality organisation follow the hard HRM approach
and organisation always focus on the individual employees.
6.3. Descriptive Behavioural
This model is based on the contingency theory where employee behaviour are
measured between strategy and organisation performance. Its main purpose is to
control the employee attitude and behaviour with the various HR strategies to increase
the performance of the organisation. This model focus on the behaviour of employee
rather that their skills, knowledge and ability.
6.4. Descriptive -functional
Functional model is the process of input- process and output, which involve the
internal and external environment. The performances of an employee consider as
input, the transformation as the work conduct within the organisation process and the
result or service are output. This model is interrelating with separate elements that
work together towards a common goal by communicating with each other‟s.

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7. Discussion
After the study of the best practice and best fit approach, HR manager need to know
how to used those in a particular situation as the market is changing day by day. To be
in the market organization not only select the high qualified employee but also need to
motivate them so that they perform well and organization can retain them for long
time. There are some of the suggestion that I would like to suggest the director about
how they can restructure the failing organization. They are:
Change nature of business
Downsizing
New work method
New management method
Total quality management
Technology
Merger and Acquisition
Finance related issues
Buy outs
Statutory and legal compliance
7.1.Change nature of business
As we know that there is nothing constant except the change that happening in
the market. Therefore organization needs to change with the market otherwise
they need to face risk and cannot survive in the competitive market.
Organization change the nature of the business by diversifying into new areas,
increasing their capacity and conversely shed off their division that do not add
too much value. For example, to start a new product in market organization
needs to change in the nature of their doing business by hiring new expert,
using new strategies to compete and choosing different product line.

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7.2.Downsizing
The reason to restructure the organization is because of downsizing the
workforce. The changing market forced to adopt the new strategies, product
mix, and staff redundant to cut the internal cost and achieve process
efficiency. Downsizing makes an organization to make new job description,
make new team, change organization structure and need to make good
communication with remaining employee to perform the task well.
Downsizing induced restructuring which leads to a flatter organization
structure and boarder job description and duties. Downsizing occurs when
organization cannot compete in the market.
7.3.New work method
After the restructuring the organization need to adopt newer method of work,
outsourcing, system, policies and structure. The new staff and old need to
work together to make a drastic change in performance so overcome the
problem. The newer work method may required placing emphasis on the result
rather than the method flexible reporting, relationship and a strong
communication policy.
7.4.New management method
The reason of restructuring an organization is because of centralized operation
and top down approach where all the power are taken by the top-level
management. Therefore organization need to follow the behaviour approach
where employees are consider as assets and focus on employee
and decentralized the power to conduct the work smoothly. For that
organization needs to adopt job flexibility, enlargement and enrichment for the
new structure organization. The new management start with new paradigms,
so organization has to use best practices to remain competitive in market.
7.5.Total quality management
Organization needs to compete in market with their quality of product and
services by using six sigma and total quality management (TQM). Six-sigma
focus on the quality and output by identifying the problem and removing them
by minimizing variability in manufacturing and business processes. In TQM
organization participate in improving the process, services, product and the
culture in which they need to perform. Organization needs to focus on the
quality and the services rather than maintaining a separate quality control
department to accept or reject the quality specification.
7.6. Technology

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Innovation of new technology influences the business that required
restructuring to compete in market. As technology is changing day by day so
change in technology helps in business process that involve redesigning the
business by maximizing potential value added and minimizing administration
cost.
7.7. Merger and Acquisition
When single organization cannot compete in the market, the better option in
market is to get merger and acquisition with another organization. After the
merger and acquisition organization need to restructure them by forming
matrix team, special task force and a new subsidiary.
7.8.Finance related issue
When business cannot handle financial problem organization need to
restructure them by selling the part of organization assets, downsizing,
changing structure etc. when small companies grow then venture capitalist
might demand high for setting a new business structure, company may
restructure to improve its efficiency and increase profit to attract more
investor. Company may try to restructure to avoid the high cost of a formal
bankruptcy.
7.9.Buy out
If any of the option doesn‟t work then company will be sell our and the change
in the ownership will change the structure of the organization. Restructuring
allow new owner to provide power to implement new control, new
management system in micro level.
7.10. Statutory and legal compliance
Restructuring may be done due to the legal and statutory requirement. As the
government charge more tax, increase in inflation force the organization to
restructure.

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8. Conclusion
As the statement cited by Beardwell about the current challenges that HR manager are
facing in current situation are the major problem for HR manager. Therefore they HR
manager and the management team need to work together to face the challenge. The
change should be done because of public demand and political instability. Even
though organization need to continue to attract talented people who perform well and
committed involved in their work with high level of performance that result in the
greater value of money. When the organization is restructure, they need to set a new
objective and direction to overcome and compete with the competitors. HR manager
need to adopt best-fit or best practices according to the changing situation to improve
the system with the skill, ability and experiences employee to provide the better
public services. We need to treats an employee as an assets by involving and
motivation them for more production and get more benefit. The senior employee and
other member are involves in decision making to evaluate their value and contribution
in an organization.

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9. References
1. Armstrong, M. (1991) : “ Personnel and the Bottom Line ” : London : Kogan Page.
2. Beardwell, Ian. and Holder, Len. (1997): “ HRM - A Contemporary Perspective ”
(2nd
ED.) : Pitman Publishing.
3. Beer, M. and Spector, B. (1995) : “ Corporate wide transformation in HRM ” , in
R. E. Walton and P. R. Lawrence (eds.), “ HRM : Trends and Challenges ”.
Boston : Harvard Business Review.
4. Guest, D. (1991) : Personnel Management : The end of orthodoxy? : “ British
Journal of Industrial Relations ”, 29 (2): 149-76.
5. Sisson, Keith. (1996): “ Personnel Management A comprehensive guide to theory
and practice in Britain ” : Blackwell Publishers.
6. Gilson, Stuart C. “How To Make Restructuring Work for Your Company.”
http://hbswk.hbs.edu/item/2476.html. Retrieved August 02, 2011.
7. William, B.W. and Keith Davis. 1993. Human Resource and Personnel
Management. New York: MC Grow - Hill.