strategic HR planning - Stonewall cas
1. Define and explain the significance of the term ‘derived demand’ as it applies to Strategic Human Resources Planning. (5 marks)
The indirect demand for something that has value based on other goods that can be derived or made from it: such as raw materials or other inputs to a process of production. Derived demand for a material is driven by changes in demand for the end product whose creation or production requires that material. [1]
Strategic Human Resource planning is the process of anticipating and providing for the movement of people with the skills and experience, into, within, and out of an organization to meet the long term strategic needs of the organization. [2]
Derived demand applies to strategic human resources planning particularly through labour. Human resources is one of the key resources that is deployed in a corporate for producing and providing the products and services that enable the corporate to generate revenue through responding to the needs of the market. That is to say, the demand for human resources is derived from the demand for the products and services.
2. Explain ‘derived demand’ as it applies specifically to Stonewall Industries. (5 marks)
Two major external environmental factors affect derived demand in the Stonewall case:
- The number of housing starts in a given year
- Interest rates
When the need for housing increases, it drives up the demands for the gypsum wallboard which is the major product of Stonewall. However, when the housing and construction industry experiences a downturn, the demand for gypsum wallboard and vinyl siding (another product of Stonewall) in the market will decrease accordingly.
Interest rate is another factor that has significant impact on demand side of the housing and construction raw materials. Once the interest rate raises, funds available for investment decrease, which means people will be more reluctant to invest in real estates. It would hence result in the shrinkage of housing
The indirect demand for something that has value based on other goods that can be derived or made from it: such as raw materials or other inputs to a process of production. Derived demand for a material is driven by changes in demand for the end product whose creation or production requires that material. [1]
Strategic Human Resource planning is the process of anticipating and providing for the movement of people with the skills and experience, into, within, and out of an organization to meet the long term strategic needs of the organization. [2]
Derived demand applies to strategic human resources planning particularly through labour. Human resources is one of the key resources that is deployed in a corporate for producing and providing the products and services that enable the corporate to generate revenue through responding to the needs of the market. That is to say, the demand for human resources is derived from the demand for the products and services.
2. Explain ‘derived demand’ as it applies specifically to Stonewall Industries. (5 marks)
Two major external environmental factors affect derived demand in the Stonewall case:
- The number of housing starts in a given year
- Interest rates
When the need for housing increases, it drives up the demands for the gypsum wallboard which is the major product of Stonewall. However, when the housing and construction industry experiences a downturn, the demand for gypsum wallboard and vinyl siding (another product of Stonewall) in the market will decrease accordingly.
Interest rate is another factor that has significant impact on demand side of the housing and construction raw materials. Once the interest rate raises, funds available for investment decrease, which means people will be more reluctant to invest in real estates. It would hence result in the shrinkage of housing