IB Business Management – HL Topic 2 Comprehensive Notes

2.1 Human Resource Management & Change

HR planning & competitive advantage

• Right people, right roles, support & environment => productivity ↑, costs ↓.

• Staff seen as both asset (skills, innovation, reputation) & cost (wages, benefits, hiring, redundancy).

Core HR metrics

• Labour productivity (output/employee), turnover, retention, absenteeism.

Influences on HR plan

• Internal – strategy, finances, structure, labour relations, culture.

• External – economy, labour market, technology, law, social values, politics, industry trends, competition.

Workplace change trends

• Remote, hybrid, flexitime, compressed weeks.

• Gig & freelancing platforms.

• Greater work-life balance emphasis; wellness programs.

• Occupational shifts: some roles disappear (telephone operators), others boom (software dev).

• Working pattern innovations: job-sharing, career breaks/sabbaticals, downshifting.

• Work routine innovations: teleworking, part-time, temporary contracts, 4-day week (Iceland trial success).

Resistance to change – causes

• Fear of unknown, loss of control, routine disruption, lack of trust, poor communication, perceived losses, pace (too fast/slow).

Change-management steps (generic model)

  1. Identify & clearly communicate change vision + benefits.

  2. Plan & resource adequately.

  3. Strong visible leadership.

  4. Engage stakeholders early.

  5. Train & develop staff.

  6. Appoint change champions.

  7. Solicit feedback & adjust.

  8. Celebrate quick wins & milestones; break change into manageable phases.

2.2 Organisational Structure

Key concepts

• Hierarchy, bureaucracy, chain of command, span of control (narrow vs wide).

• Centralised vs decentralised decision power.

• Matrix: dual reporting to functional & project managers.

Main chart types

• Tall (many layers, narrow span) – specialisation, career paths; slow, costly, communication barriers.

• Flat (few layers, wide span) – empowerment, fast decisions; role ambiguity, burnout.

• By product/project (matrix) – cross-functional, resource synergy; role conflict, dual authority.

• By function – expertise, efficiency; silo risk.

• By region – localisation, cultural fit; duplication of roles.

Adaptation to external change

• Volatile markets → project-based.

• Tech advance → flatter, innovative.

• Global expansion → regional.

• Competitive pressure → decentralised responsive units.

• Fit also depends on culture, leadership, employee capability.

2.3 Leadership & Management

Management vs leadership

• Leaders: vision, inspire, long-term, people focus, creativity.

• Managers: execute, organise resources, short-term, process/efficiency, control.

Leadership styles

• Autocratic – central decision, strict obedience; useful in crises, tight deadlines, inexperienced teams; lowers creativity/morale.

• Paternalistic – ‘parental’ authority + welfare concern (Huawei); loyalty ↑ but dependency & innovation ↓.

• Democratic – consultative; encourages engagement & innovation; slower decisions, possible compromise.

• Laissez-faire – high autonomy; best with skilled self-starters; risk of inconsistency, poor coordination.

• Situational (Hersey-Blanchard) – adjust style to follower competence/commitment (telling, selling, participating, delegating).

2.4 Motivation & HR

Why motivation matters

  1. Productivity ↑ → profits ↑.

  2. Reliability (attendance, deadlines) ↑.

  3. Labour turnover ↓ → save recruitment/ training cost.

Taylor’s Scientific Management

• Analyse tasks, standardise, select & train, incentivise (piece-rate).

• Benefits: efficiency, clear roles, hierarchy.

• Drawbacks: monotony, low creativity, exploitation risk.

Maslow’s hierarchy

• \text{Physiological} \rightarrow \text{Safety} \rightarrow \text{Love/Belonging} \rightarrow \text{Esteem} \rightarrow \text{Self-actualisation}

• Business actions at each level (fair pay, security, team building, recognition, passion projects).

• Critiques: individual difference, cost, time.

Herzberg Two-Factor

• Hygiene factors remove dissatisfaction (pay, conditions, security).

• Motivators create satisfaction (achievement, responsibility, growth).

• Implication: improve hygiene first, then enrich jobs / recognise.

Other theories

• McClelland – needs for Achievement (nAch), Affiliation (nAff), Power (nPow); tailor roles.

• Deci & Ryan Self-Determination – autonomy, competence, relatedness support intrinsic motivation; caution over cultural bias.

• Adams Equity – fairness ratio input:output; under-, over-reward; fairness perceptions subjective.

• Vroom Expectancy – Motivation = Expectancy × Instrumentality × Valence; managers can train (↑E), keep promises (↑I), widen rewards (↑V).

Labour metrics

• Labour Turnover \frac{\text{No. leaving}}{\text{Total staff}} \times 100

• Labour Retention \frac{\text{No. remaining}}{\text{Total staff}} \times 100

• High turnover → recruitment cost ↑, knowledge loss; opportunity for fresh ideas.

Appraisal types

• Formative – ongoing feedback (probation/training).

• Summative – periodic judgement (annual, project end) → pay/promotion.

• 360-degree – multi-stakeholder anonymous input (performance, leadership).

• Self-appraisal – reflection on achievements, strengths, goals.

Recruitment & selection

• Process: define role → source candidates (internal vs external) → advertise → screen via application/CV/cover → shortlist → select (interviews, tests, portfolios, refs).

• Internal pros: culture fit, cheap, motivation; cons: create gap, limited talent.

• External methods: referrals, online boards, newspapers, trade press, agencies, headhunters, job centres, fairs.

Rewards

Financial (intrinsic link to theory):

• Piecework (Taylor), commission (Maslow esteem), bonuses, profit share (Herzberg motivator), PRP (controversial hygiene), fringe benefits, wages/salaries (Maslow safety).

Non-financial: empowerment, teamwork, job enrichment / rotation / enlargement (Herzberg motivators, Maslow esteem/belonging; Mayo).

Training

• Reasons: productivity, motivation, quality, flexibility.

• Types:

• Induction – onboarding culture & basics.

• On-the-job – learn while doing (cheap, context-relevant; risk errors).

• Off-the-job – external courses (fresh ideas; costly, time away).

2.5 Organisational (Corporate) Culture

Definition & indicators

• Culture = shared values, beliefs, attitudes & practices.

• Strong culture → visible artefacts, rituals, open-plan layout, story-telling, ‘team-member’ language, aligned behaviours & high commitment.

• Weak culture → “them vs us”, mission cynicism, high turnover.

Handy’s ‘Gods of Management’

• Power (Zeus) – central figure, few rules (Alan Sugar/Amstrad).

• Role (Apollo) – hierarchy, job descriptions, bureaucracy (NHS).

• Task (Athena) – project teams, skill-based power, adaptable (PepsiCo).

• Person (Dionysus) – autonomy for experts, loose affiliation (law firms).

Cultural clash & gap

• Gap = difference between actual & desired culture.

• Triggers: organic growth (more hierarchy), mergers/takeovers (dominant prevails/hybrid), overseas expansion (national differences), leadership change.

• Negative outcomes: communication breakdown, demotivation, resistance, silo sub-groups, less innovation.

2.6 Communication

Formal vs informal

• Formal follows official structure, usually recordable.

• Informal happens outside channels (grapevine).

Methods – strengths & weaknesses

• Face-to-face – rich cues; geographic/time constraints.

• Written – permanent record; lacks tone, may be misread.

• Phone – real-time; no body language.

• Video conferencing – visual + remote; tech glitches.

• Instant messaging – fast; no non-verbals, risk of misunderstanding.

Common barriers

• Language & jargon, noise/distractions, lack of feedback, cultural & hierarchical barriers, vagueness, emotion/time pressure, tech issues, personal bias.

• Mitigation: open culture, training, transparency.

2.7 Industrial Relations

• Conflict can arise from differences in goals, values, personalities or communication styles at any level of the firm.

• Typical triggers

• Inadequate leadership & communication → poor support, clashing styles.

• Power struggles & competition for scarce resources/promotions.

• Personality clashes & culture‐based prejudices.

• Workplace inequities (favouritism, discrimination).

• Stress, role ambiguity & unclear job descriptions.

• Value / goal incompatibility & intolerance to compromise.

• Consequences of unresolved conflict

• Lower productivity, falling morale, political infighting, collaboration barriers.

• BUT—if managed well it can surface problems & stimulate improvement (exam tip).

Employee approaches

• Trade union = voluntary association negotiating collectively for members on pay, hours, holidays, conditions, training & facilities; may lobby government.

• UK union density ≈ ⅓ workers; membership falling (legislation, de-industrialisation, part-time/ gig growth).

• Union categories: craft, industrial, general, white-collar.

• Illustrative unions: CWU (UK comms/post), IG Metal (DE metal), UGT (ES general).

Collective bargaining

• Structured negotiations; aim is a legally binding collective agreement for a fixed period.

• If talks stall, mediation/arbitration tools available.

Other industrial action

• Work-to-rule – employees follow contract to the letter; reduces goodwill, productivity; hard to discipline.

• Strike – concerted refusal to work (paid only if law/contract allows); extreme step to force settlement; usually preceded by a ballot.

• Example: unlimited strikes by French ski-lift workers (2023) to secure pension reform & pay.

Employer approaches

• Negotiation team (senior leaders/HR) or external consultants.

• Pressure tactics

• Threat of redundancies; threat of closure.

• Contract changes / use of fixed-term renewals.

• Lockouts – employer bars entry & suspends pay (e.g. American Crystal Sugar 2012).

• Reputational and investor risk of prolonged conflict identified (exam tip).

Conflict-resolution processes

• Conciliation (mediator aids compromise) & arbitration (mediator decides).

• Binding vs non-binding; pendulum (winner-takes-all) variants. Example: ACAS in HIAL air-traffic pay dispute (2019).

• Employee participation – teamwork, suggestion schemes, quality circles (Pixar).

• Industrial democracy – formal decision power (worker-owned co-ops, John Lewis Partnership).

• No-strike agreements – unions pledge industrial peace (e.g. French ATC before Paris 2024 Olympic “truce”).

• Single-union agreements – firm bargains with one union (Starbucks–SWU 2023, $20/hr, 32-hr week, credit-card tipping).