Business Management unit 2

UNIT 2.1 – HRM (Very Likely Topic)

What is HRM?

Human Resource Management = managing people to achieve business objectives.

🎯 Role of HRM

• Workforce planning

• Recruitment & selection

• Training

• Motivation

• Appraisal

• Dismissal

• Maintaining employee relations

🔎 Internal vs External Factors Influencing HR Planning

Internal:

• Business size

• Financial situation

• Corporate culture

• Leadership style

External:

• Labour market conditions

• Technology

• Legislation

• Economic conditions

• Social changes

💡 Evaluation tip: Always connect to costs + productivity + morale.

💻 Remote Working

Advantages:

• Lower costs

• Higher flexibility

• Wider talent pool

Disadvantages:

• Harder communication

• Lower team cohesion

• Harder supervision

Examiners LOVE linking this to:

• Motivation theory

• Communication barriers

• Organizational structure

⚡ Resistance to Change (VERY EXAM LIKELY)

Reasons:

• Fear of job loss

• Loss of status

• Habit

• Poor communication

• Lack of trust

Kotter’s 8-Step Model (HL GOLD)

1. Create urgency

2. Build coalition

3. Form vision

4. Communicate vision

5. Remove obstacles

6. Short-term wins

7. Build on change

8. Anchor in culture

Evaluation: Expensive + time consuming but reduces resistance long-term.

📌 UNIT 2.2 – Organizational Structure (EXTREMELY COMMON)

Key Terminology

• Span of control

• Chain of command

• Delegation

• Centralization

• Decentralization

Types of Organizational Structures

🏢 Flat Structure

Pros:

• Faster communication

• Higher motivation

• Empowerment

Cons:

• Managers overloaded

• Harder control

Best for: Small/startups.

🏢 Tall Structure

Pros:

• Clear authority

• Better supervision

Cons:

• Slow communication

• Demotivating

By Function / Product / Region

Functional Structure

Best for: Specialization

Problem: Silos

Product Structure

Best for: Large diversified firms

Problem: Duplication of costs

Regional Structure

Best for: Multinationals

Problem: Harder global coordination

🔥 HL ONLY: Shamrock Organization

3 parts:

• Core employees

• Contract workers

• Outsourced/flexible workers

VERY relevant to gig economy.

📌 UNIT 2.3 – Leadership & Management

Managers vs Leaders

Managers:

• Plan

• Organize

• Control

Leaders:

• Inspire

• Motivate

• Create vision

Examiners LOVE this comparison.

Leadership Styles (ALWAYS TESTED)

Autocratic

Fast decisions

Low morale

Democratic

High motivation

Slower decisions

Laissez-faire

Creative teams

Risk of chaos

Paternalistic

Caring but controlling

Situational

Adapts to context (BEST for evaluation answers)

📌 UNIT 2.4 – Motivation (EXTREMELY HIGH PROBABILITY)

Taylor

Money motivates.

Works in repetitive production.

Maslow

5 levels:

1. Physiological

2. Safety

3. Social

4. Esteem

5. Self-actualization

Criticism: Not everyone follows order.

Herzberg

2 factors:

• Hygiene (salary, conditions)

• Motivators (achievement, recognition)

STRONG for evaluation answers.

HL Theories

McClelland

• Achievement

• Power

• Affiliation

Deci & Ryan

Intrinsic vs extrinsic motivation

Expectancy Theory

Motivation = Expectancy × Instrumentality × Valence

Examiners LOVE expectancy for 20 markers.

Labour Turnover (HL)

Formula:

(Number leaving / Average employees) × 100

Causes:

• Low pay

• Poor culture

• Bad leadership

Impacts:

• Costly

• Loss of skills

• New ideas

📌 UNIT 2.5 – Corporate Culture (HL GOLD)

Types:

• Power culture

• Role culture

• Task culture

• Person culture

Cultural clashes = common in mergers.

VERY evaluative topic.

📌 UNIT 2.6 – Communication

Formal:

Emails, reports, meetings

Informal:

Grapevine

Barriers:

• Language

• Noise

• Cultural differences

• Poor structure

Link to remote work + change.

📌 UNIT 2.7 – Industrial Relations (HL)

Sources of conflict:

• Pay

• Working conditions

• Redundancies

Employee actions:

• Strikes

• Work-to-rule

Employer actions:

• Lockout

• Legal action

Resolution:

• Arbitration

• Negotiation

• Mediation

Evaluation: Cost vs reputation damage.