The main objective of this chapter has been to introduce you to the diagnostic model to help diagnose HR problems and prescribe, implement, and evaluate solutions. This chapter also briefly reviews some concepts from the behavioral sciences to show you how they apply to HRM decisions. It further examines two other aspects of the environment of the HRM function: the physical location of the organization in a labor market and the work sector in which it is located. This book has been written on the assumption that HRM programs are more likely to be effective if the manager or specialist follows a diagnostic approach.

1. A sound HRM program can contribute to organizational end results such as socially responsible and ethical behavior and high-quality, competitive products and services.
2. The diagnostic approach suggests that before you choose an HRM program you should examine the nature of the employees, the external and internal environmental influences on the organization, and organizational factors. These factors act as moderating variables in HRM decisions, and HRM activities are influenced by them.
3. Various factors in the external environment—such as government regulations, unionization of employees, and competitive pressure—also exert strong influences on the HRM function.
4. Understanding the characteristics and composition of the labor force is important when designing an HRM program.
5. HRM has become a strategic area and is now recognized as important in creating and implementing the overall strategies of a firm. Specific strategic challenges facing both HRM and the firm include global competition, productivity and quality, workforce diversity, and the caliber of the workforce.
6. The work sector in which the organization is operating—public, private, or third—determines the complexity, strategic importance, and power of HRM as a function and the activities operating managers must implement.
7. Organizational factors—including goals, organization culture, the nature of the task, the makeup of the work group, and the leader's style and experience—must be taken into account to maximize the effectiveness of HRM.
8. An attitude is a characteristic and usually long-lasting way of thinking, feeling, and behaving. A preference is a type of attitude that evaluates an object, idea, or person in a positive or negative way.