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As it is cheaper to keep existing customers than to find new ones, this can have a significant effect on profitability. To encourage initiative. Organisations can gain significant advantage from encouraging and exploiting the present and potential abilities of the people within them. 3 The human resource cycle A relatively simple model that provides a framework for explaining the nature and significance of HRM is the human resource cycle (Devanna 1984). Human resource cycle Selection is important to ensure the organisation obtains people with the qualities and skills required.

Product orientation, a variant of production orientation 'Add more features to the product – demand will pick up'. Such firms do not research what customers actually want. Sales orientation Customers are naturally sales resistant so the product must be sold actively and aggressively and customers must be persuaded to buy them. Marketing orientation The key task of the organisation is to determine the needs, wants and values of a target market and to adapt the organisation to delivering the desired satisfactions more effectively and efficiently than its competitors.

The time frame of decisions made at strategic management level would typically have implications for 3-5 years. Tactical management (carried out by middle management) is concerned with establishing means to the corporate ends, mobilising resources and innovating (finding new ways to achieve business goals). Decisions made at this level would have medium term implications. Operational management (carried out by supervisors and operatives) is concerned with routine activities to carry out tactical plans.

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