BUSINESS MANAGEMENT

2.1 Introduction to human resource

management
Topic 2: Human resource management
 BUSINESS MANAGEMENT

Unit content
Assessment
Content
objective
Role of human resource management AO2
Internal and external factors that influence human
resource planning:
• Demographic change
• Change in labour mobility AO2
• Immigration
• Flexitime
• Gig economy
 BUSINESS MANAGEMENT

Unit content (continued)

Assessment
Content
objective
Reasons for resistance to change in the workplace AO2
Human resource strategies for reducing the impact of
AO3
change and resistance to change
Business Management Toolkit:
• STEEPLE analysis
• Force field analysis (HL only)
Introduction to human resources and the business
management concepts
 BUSINESS MANAGEMENT
What is human
resource
management?
• Brainstorm as many
words you associate
with human resource
management as
possible.
• Write each word
down onto an
individual sticky note.
 BUSINESS MANAGEMENT

Role of human resource management

 BUSINESS MANAGEMENT
Human resource
management
• Human resource
management (HRM)
is the management
function of deploying
and developing
people within an
organization to meet
its business
objectives.
 BUSINESS MANAGEMENT

A day in the
life of a
human
resources
department
 BUSINESS MANAGEMENT

The functions of HRM

Workforce Recruitment Training and Performance

planning and selection development management

Pay and Discipline and Employee

remuneration grievances welfare
 BUSINESS MANAGEMENT

Workforce planning
• Workforce (or human resource) Future
planning is the process of needs
anticipating and meeting an
organization’s current and future
staffing needs. Current
needs
• Many entrepreneurs argue that
people are a firm’s most
Workforce
valuable asset. Thus, workforce planning
planning is an essential part of
HRM.
 BUSINESS MANAGEMENT

The importance of workforce planning

• Failure to make the most of a firm’s human resources will result in an
organization facing a number of problems (the 5Rs).

Recruitment Resources Reservations Returns Reputation

Higher costs of Directed on Lower morale Lower levels of Poor corporate
recruitment, solving HR and higher productivity image if a firm
induction and problems levels of and profits. cannot retain
training. instead of uncertainty or motivate
achieving among existing staff.
organizational staff.
objectives.
 BUSINESS MANAGEMENT

Internal and external factors that influence

human resource planning:
• Demographic change
• Change in labour mobility
• Immigration
• Flexitime
• Gig economy
 Demographic
Impact on human
BUSINESS resource supply
MANAGEMENT
change

Demographic Countries with a high net birth rate will, in

Net birth rate the long-term, have a larger supply of
change human resources.
• Changes in the
If net migration is positive (i.e. more
characteristics Net migration rate immigrants than emigrants), the supply of
and trends in human resources will increase.
a
population will The later the retirement age, the greater
affect the Retirement age
the available pool of human resources.
supply of
human Women
resources in a This boosts the supply of human
entering/returning to
resources, particularly for part-time work.
country. workforce
Countries with an aging population will, in
Aging population the long-term, have a shrinking supply of
© Licensed to Cameron Momeni human resources.
 BUSINESS MANAGEMENT
Impact of aging
populations on
HRM
• An aging population means
there will be an
increasing shortage in
labour supply.
• Firms will need to be willing
to appoint and retain
older employees, even
keeping them past
retirement age.
• Women and part-time staff
will be more sought after to
provide workforce
© Licensed to Cameron Momeni
 Limitations on Limitations on
BUSINESS MANAGEMENT
geographical mobility occupational mobility
Change in labour
The attributes of the worker
mobility (e.g., education,
Ties to friends and family
• The mobility of labour qualifications, skills,
is the extent to which experience and training)
labour can: Mature workers who tend to
• move to different Relocation costs
be less willing to take risks
locations
Employees that are highly
Fear of the unknown
(geographical specialised
mobility).
• be flexible in Costs of living in a new Discrimination from
area employers on factors such
changing to as age, gender, religion or
different Language and cultural race
© Licensed to Cameron Momeni
jobs differences
 Examples of reasons why worker migration occurs
BUSINESS MANAGEMENT
Attractive pay and remuneration (e.g., medical
Pay and care, housing and relocation allowances)
Immigration remuneration packages and/or low tax rates offered in other
countries can drive migration.
• Globalization has Unemployment and low economic growth may
encouraged the Employment lead workers to seek jobs elsewhere. High-
migration of opportunities income countries may experience a shortage of
people for work labour with economic growth.
purposes.
Some industries have peak and off-peak
• Firms, especially Seasonal
seasons (e.g. agriculture and winter sports) so
factors
MNCs, will need off-season migration occurs when job-seeking.
to conduct
Political instability, lack of security and limited
workforce Domestic
business opportunities can drive workers to
planning with instability
migrate for better opportunities.
these reasons in
Higher
mind. Working overseas may provide better lifestyle
standard of
and career prospects for migrant workers.
living
 BUSINESS MANAGEMENT

Flexitime
• Flexitime is a system
whereby staff
determine their working
hours, subject to
them getting their
work completed by
set deadlines.
• Two common forms of
flexitime are:
• Teleworking
• Homeworking
 BUSINESS MANAGEMENT

Teleworking vs. homeworking

Teleworking is working away from

the office by using electronic forms
of communication. Homeworking is when employees
• e.g. salespeople of wineries who
work from their own homes instead
spend a significant amount of
their time commuting and of going into an office.
visiting
clients instead of working from the
winery at the vineyard.
 BUSINESS MANAGEMENT
The future of
homeworking
• Watch this video
and:
1. List the impacts
homeworking
have on firms in
the future.
2. What are the
HRM
implications
from the
impacts listed in
part 1?
 BUSINESS MANAGEMENT
Advantages and disadvantages of teleworking and
homeworking for employees
Advantages Disadvantages
• Job opportunities. • Huge reliance on use and reliability of
• Suitable for those who have family ICT software and hardware.
commitments. • Workers often exceed their contracted
• Flexible working hours. working hours.
• Little/no commuting thus reducing time, • Social isolation and boredom.
money and stress. • Often less job security and trade
• Autonomy in decision making. union representation.
• Possible income tax allowances. • Distractions at home.
• Increasingly affordable for people due
• Lack of authentic training and career
to lower costs of technology.
development opportunities.
 BUSINESS MANAGEMENT
Advantages and disadvantages of teleworking and
homeworking for employers
Advantages Disadvantages
• Reduced overheads from renting • Set up costs can be very high.
prime locations. • Recruitment processes must be tightly
• Flexible and extended working hours can controlled to ensure employees are
be offered to customers. self- motivated and take initiative.
• Can adjust for peak and off-peak trade. • Management, monitoring and control are
• Continuity of services from those hiring more difficult.
workers with dependents. • Technological breakdowns can cause
• Lower rates of absenteeism. major disruptions.
• Not always possible due to lack of working
• Flexibility to deal with working time
space at home or lack of security for
directives (laws).
sensitive data being held at home.
 BUSINESS MANAGEMENT
Gig economy
Gig economy services
• The gig economy refers
List as many gig economy services as
to labour markets
you can think of in 2 minutes.
where workers are
typically on short-term,
flexible and
temporary contracts.
• Gig workers and
independent
contractors provide
Read Box 7.1 on page 103 of the
services on-demand or
on-call.
textbook (Hoang, 5th edn) to see a list of
examples of gig economy services.
• These workers do not
have permanent
employment contracts.
 BUSINESS MANAGEMENT
Benefits and limitations of the gig economy
Benefits Limitations
• Flexibility for workers, businesses • Lack of regular income levels, job security
and consumers. and fringe benefits for workers.
• Lack of clear professional career path
• Workers have the flexibility of
or social support from the workplace.
working for a variety of
• Independent contractors are expected
employers to suit their needs.
to file their own tax returns which is a
• Lower costs for businesses. bureaucratic task.
• Contractors and freelance workers • Burnout is common when gig workers
work multiple jobs/contracts.
make extra income.
• Risk to a firm’s reputation if outsourced
• More control of work-life balance freelance contract provides poor
(in theory). quality services.
 BUSINESS MANAGEMENT

Over to you

• Hoang textbook
• Question 7.1 332 million
Americans
• Page 98
• Question 7.2
McDonald’s
• Page 102
• Answer all parts
 BMT: STEEPLE analysis
Business Management Toolkit

1. Conduct a STEEPLE analysis of a

business in your country.
2. Identify opportunities and threats that
will impact human resource
management at your business.
3. Suggest human resource
management strategies that will:
a. Exploit opportunities.
b. Mitigate threats.
Theory of
knowledge

Why is it that despite

having a lower average
life expectancy, and the
existence of equal
opportunities laws, no
country allows men to
retire earlier than
women?
 BUSINESS MANAGEMENT

Reasons for resistance to change in the

workplace
 BUSINESS MANAGEMENT

Reasons for resistance to change

• According to Professor John Paul Kotter of Harvard Business
School, there are four main reasons why the workface will resist
change. They are:

Self-interest Low tolerance Misinformation Different

points-of-view
 BUSINESS MANAGEMENT

Human resource strategies for reducing

the impact of change and resistance to
change
 BUSINESS MANAGEMENT
Reducing
resistance to
change
• There are various
theories about how
to manage change
in the workplace.

According to the video,

what are the seven
ways to minimise
resistance to change?
 BM Toolkit:
Force field analysis of
ending homeworking (HL
only)
Business Management Toolkit

Companies such as Tesla and Google

have announced mandatory return to in-
person work at their offices. This has been
met with resistance from employees.
1. Construct a force field analysis of
implementing mandatory in-person work at
the office of a business of your choice.
2. Explain how FFA can be used to reduce
the impact of change and resistance of
change in your business.
 BUSINESS MANAGEMENT

Approaches to
learning

• Hoang textbook
• Activity 7.1 Research
skills
• Page 107

© Licensed to Cameron Momeni

 • Internal and external changes will always have an
Concepts in BM: impact on human resource planning and management.
• An exit interview is a tool often used by firms to find
change the true reasons why employees have chosen to
resign.
• Feedback from exit interviews helps to improve HRM
in businesses.
 BUSINESS MANAGEMENT

Over to you

• Hoang textbook
• Review Questions
• Page 107
 BUSINESS MANAGEMENT

2.2 Organization structure

Topic 2: Human resource management
 BUSINESS MANAGEMENT

Unit content
Assessment
Content
objective
The following terminology in relation to different types of organizational
structures:
• Delegation
• Span of control
• Levels of hierarchy
• Chain of command AO2
• Bureaucracy
• Centralization
• Decentralization
• Delayering
• Matrix structure
 BUSINESS MANAGEMENT

Unit content (continued)

Assessment
Content
objective
The following types of organization charts:
• Flat or horizontal
• Tall or vertical AO2 & AO4
• By product, by function or by region
Appropriateness of different organizational structures given a
AO3
change in external factors
Changes in organizational structures (e.g. project–based
AO3
organization, Charles Handy’s “Shamrock Organization”) (HL only)
Business Management Toolkit:
• Hofstede’s cultural dimensions (HL only)
Organizational structures and the business management concepts
 BUSINESS MANAGEMENT

The following terminology in relation to

different types of organizational structures:
• Delegation • Centralization
• Span of control • Decentralization
• Levels of hierarchy • Delayering
• Chain of command • Matrix structure
• Bureaucracy
 BUSINESS MANAGEMENT
Organizing human
resources
• Organizational structures
arrange employees in order to
show the following information at
a glance:
• Job titles
• Accountability
• Responsibility
• Businesses will adopt an Example of an organization chart for a
organizational structure in order hotel (expanded to show the
to function more efficiently. housekeeping department in detail).
 General
manager BUSINESS MANAGEMENT

Deputy
manager

Rooms Food & Sales & Human Finance

division beverage marketing resources manager
manager manager manager manager

Front office Housekeeping

manager manager
Example of an organization
chart for a hotel (expanded to
Team leaders
show the housekeeping
department in detail)

Housekeepers
 General
BUSINESS MANAGEMENT
manager

Delegation Deputy
manager
• Delegation is the
passing on of control Rooms
and authority to others division
manager
in a firm. Housekeeping
• This is essential as the managers delegate
quality control to the Housekeeping
business grows as housekeeping team
manager
managers are unable leaders
to effectively control all
aspects of the firm. Team leaders

Housekeepers
 BUSINESS MANAGEMENT

Span of control General

manager

• The span of control

Deputy
refers to the manager

number of people
Rooms Food & Sales & Human
who are directly division beverage marketing resources Finance
manager
manager manager manager manager
accountable to a
manager. Front office Housekeeping
manager manager
• Typically, the 1. How many people are accountable
to the Deputy Manager?
greater the seniority Team leaders 2. How many people are accountable
of the manager, to the Rooms Division Manager?
the greater their 3. Who has the widest span of control?
4. Who has the narrowest span of
span of control will Housekeepers
control?
be.
 BUSINESS MANAGEMENT
General
manager

Levels of hierarchy
Deputy
• Hierarchy in a business manager
refers to the organizational
structure based on a Rooms Food & Sales &
ranking system. division beverage marketing
manager manager manager
• The most skilled / senior
employees will appear at the Front office Housekeeping
top of the hierarchy. manager manager
• The least skilled / least
senior employees will
appear at the bottom of the Team leaders
hierarchy.

Housekeepers
 General
BUSINESS MANAGEMENT
manager

Chain of command Deputy

manager
• The chain of command refers
to the formal line of
Rooms Food & Sales &
authority through which division beverage marketing
orders are passed down in manager manager manager
an organization.
• For example, if the general Front office Housekeeping
manager manager
manager wanted to
communicate to all
housekeepers, the formal Team leaders
chain of command would flow
as seen in this diagram.
Housekeepers
 BUSINESS MANAGEMENT
Bureaucracy
• Bureaucracy is the execution of
tasks that are governed by official
administrative and formal rules of
a firm.
• Bureaucracy can be a source of
inefficiency and frustration due to:
• Requirements to fill out
unnecessary paperwork.
• Long official chains of
command.
• Too many committees set up to
investigate issues.
• Managers with duplicate roles
and responsibilities.
 BUSINESS MANAGEMENT

Centralization
• Centralized
structures have a
very small number
of people at the
top who control the
decision-making.
 BUSINESS MANAGEMENT

Advantages and disadvantages of centralization

Advantages Disadvantages
• Rapid decision-making • Added pressure/stress for
• Better control senior staff
• Better sense of direction • Inflexibility
• Efficiency • Possible delays in decision
making
• Demotivating
 BUSINESS MANAGEMENT

Decentralization
• Decentralized
structures have
decision-making
authority and
responsibility shared
with a greater
number of people.
 BUSINESS MANAGEMENT

Advantages and disadvantages of decentralization

Advantages Disadvantages
• Input from the workforce • Costly
• Speedier decision-making • Inefficiencies
• Improved morale • Greater chances of mistakes
• Improved accountability • Loss of control
• Teamwork • Communication issues
 BUSINESS MANAGEMENT

Delayering
• Delayering is the
process of removing
one or more levels
in the hierarchy.
• This is designed to:
• Widen the span of
control at
each level.
• Shorten the chain
of command
 General BUSINESS MANAGEMENT
manager

Deputy
manager

Rooms Food & Sales & Human Finance

division beverage marketing resources manager
manager manager manager manager

Team leaders Example of an organization chart for a

hotel being delayered from six to five
levels.

Housekeepers
© Licensed to Cameron Momeni
 BUSINESS MANAGEMENT

Advantages and disadvantages of delayering

Advantages Disadvantages
• Reduces costs • Creates anxiety and a sense of
• Improves the speed of insecurity
communication • Overloads staff
• Encourages delegation and • Decision-making can take
empowerment longer
 BUSINESS MANAGEMENT

Over to you

• Hoang textbook
• Question 8.1 Ferrari
• Page 118
• Question 8.2 Restructuring at
Southmead College
• Page 119
• Answer all parts
 BUSINESS MANAGEMENT

Matrix structures
• Matrix structures organizes
employees from different
departments to temporarily work
together on a particular project.
• It is a temporary opportunity to
work with colleagues from other
departments on projects.
• Each member in the matrix
organization is held accountable
to two managers – their:
• Department/line manager
• Project manager from the Example of a matrix structure of department members
matrix. of a hotel working together to start up a new hotel.
 BUSINESS MANAGEMENT

Advantages and disadvantages of matrix structures

Advantages Disadvantages
• Improved communications • Added workloads
• Maximises skills set of the • Difficult to coordinate
workforce • Time consuming
• Cost-effective
 BUSINESS MANAGEMENT

The following types of organization

charts:
• Flat or horizontal
• Tall or vertical
• By product, by function or by region
 BUSINESS MANAGEMENT

Organizational charts
• Organizational charts are diagrammatic representations of firms’
formal structures.

Five important features shown by Common types of organization

organization charts charts

1. Functional department • Flat/horizontal

2. Chain of command • Tall/vertical
3. Span of control • By product
4. Channels of communication • By function
5. Levels of hierarchy • By region
 BUSINESS MANAGEMENT

Flat organizational structures

• Flat organizations have fewer levels in the hierarchy.
• Managers tend to have a wider span of control.
 BUSINESS MANAGEMENT
Tall
organizational
structures
• Tall organizations
have many
levels in the
hierarchy.
• Managers tend to
have a
narrower
span of control.
 BUSINESS MANAGEMENT

Advantages of flat versus tall structures

Flat structures Tall

structures
• Increased opportunities for career • Quicker and more effective
development due to importance communication.
of delegation. • Easier to control and
• Improved communication due to manage.
fewer layers. • Increased efficiency and
• Cheaper to operate. productivity due to specialization of
• Reduces power distance between labour.
senior and junior staff. • Greater opportunities for
promotion.
 BUSINESS MANAGEMENT
Organizations by product,
function and region
• Most large businesses are organized in such a way so
it is clear to see each business function, the products President
produced and where the division is located.

Vice Vice Vice

By function President President President
(Production) (Marketing) (Finance)

Vietnam Singapore
By region Plant Plant
Manager Manager

By product Consumer Industrial Consumer Industrial

products products products products
 BUSINESS MANAGEMENT

Over to you

• Hoang textbook
• Question 8.3 Organization charts (1)
• Page 121
• Question 8.4 Organization charts (2)
• Page 124
• Question 8.5 Departments or
faculties
• Page 124
• Answer all parts
 BUSINESS MANAGEMENT

Theory of
knowledge

To what extent do
organization charts limit
our knowledge about an
organization?
 BUSINESS MANAGEMENT

Appropriateness of different organizational

structures given a change in external
factors
 BUSINESS MANAGEMENT
Organization Common reasons for restructuring a
restructuring firm
• Organization
restructuring is the
• To incorporate new job roles and
reorganizing of human eliminate redundant roles
resources of a firm • To reduce costs/debt
into a new • To concentrate on key business
organizational activities
structure.
• To incorporate new technology
• This occurs when there
• To ensure the skills and expertise of
is a need for change
in order to remain employees are used effectively
competitive in a • To sell a part of the firm’s business
changing business activities
environment. • To merge with another company
 BUSINESS MANAGEMENT

Changes in organizational structures

(HL only)
• Project-based organization
• Charles Handy’s ‘Shamrock Organization’
 Director
Motion pictureBUSINESS
project MANAGEMENT
Project-based Cast
1. Using a movie of your
organizations choice, list the key people Art
• These firms organize and departments involved
their human resources in the production of a Camera
around particular projects movie.*
HIGHER LEVEL ONLY

or development plans. Electric

2. Organize the departments
• Examples of industries

Producer
into a project-based Grips
that use this type of organization chart.
organization chart
Hair & make-up
include:
*You will find it helpful to
• Construction
search www.imdb.com to find Sound
• Software
out this information.
engineering Catering
• Entertainment
• Aerospace Example of an organization chart for Stunts
• Oil exploration producing a movie.
Special effects
 BUSINESS MANAGEMENT
Advantages and disadvantages of project-based
organizations

Advantages Disadvantages
HIGHER LEVEL ONLY

• Flexibility • Discontinuity
• Productivity • Isolation
• Efficiency • Inefficiencies
• Motivational • Conflicting interest and priorities

censed to Ca
 BUSINESS MANAGEMENT
Handy’s Shamrock
Organization
• Charles Handy, an organizational
behaviour and management
HIGHER LEVEL ONLY

expert, proposed that firms need to

be able to adapt quickly to the
dynamic changes that occur from
the external environment.
• He proposed that human
resources should be organized
into:
• Core staff
• Peripheral workers
• Outsourced workers

censed to Ca
 BUSINESS MANAGEMENT
Features of Peripheral
Handy’s workers
Shamrock • These are part-time, temporary
and portfolio workers who are
Organization employed when needed.
• This allows for flexibility in
HIGHER LEVEL ONLY

order to adapt to changes

Core from the external
staff environment. Outsourced
• These are full time workers
workers who handle • These are individuals or
the daily operations businesses paid to complete
of the business. particular and specialized
• They are crucial tasks.
to the firm’s • They are hired
operations, for their
survival and expertise so
growth. the firm can
focus on their
core activities.
 BUSINESS MANAGEMENT

The Freelance Revolution

• Scan the QR code to read this
article from Forbes magazine
HIGHER LEVEL ONLY

about “The Freelance

Revolution”.
• From the article, list all the
benefits of HRM changing their
organizational structure to
include more peripheral and
outsourced workers (i.e.,
freelancers).
BUSNIESS MANAGEMENT

BM ToolKit
Hofstede’s cultural
dimensions & organizational
structures (HL)

• Discuss how the

knowledge of Hofstede's
cultural dimensions can
influence organizational
structures.
 Factors that influence the design of organizational structures
BUSINESS MANAGEMEN T
Size of the business Larger firms tend to require more formal structures
and vice versa.
Highly skilled workers can adopt flat/flexible or
Employee project-based structures whereas low-skilled workers
competencies require a more formal structure.
Managers who trust their staff are more likely to
Management attitudes implement flatter structures to enable delegation and
vice versa.
Creative and innovative cultures that are accustomed
Organizational culture to change might opt for more flexible project-based
structures.

Concepts in BM: • There is no ‘best’ or optimal strategy when it

change, creativity comes to structuring an organization.
and innovation • The ‘best’ or optimal strategy depends on
several key factors.
 BUSINESS MANAGEMENT

Over to you

• Hoang textbook
• Review Questions
• Page 128
 BUSINESS MANAGEMENT

2.3 Leadership and management

Topic 2: Human resource management
 BUSINESS MANAGEMENT

Unit content
Assessment
Content
objective
Scientific and intuitive thinking/management (HL only) AO2
Management and leadership AO2
The following leadership styles:
• Autocratic
• Paternalistic
• Democratic AO3
• Laissez-faire
• Situational

Business Management Toolkit:

• Force field analysis (HL only)
• Hofstede’s cultural dimensions (HL only)
Leadership and management and the business management concepts
 BUSINESS MANAGEMENT

Scientific and intuitive thinking/management

(HL only)
 BUSINESS MANAGEMENT
Lost!
You are visiting a city you have
never been to before. After a long
day of exploration, you want to go
back to your hotel. However, you
HIGHER LEVEL ONLY

realize you are lost, and your

phone battery has no power left.
You know your hotel is within
walking distance.
1. How will you find your way back
to your hotel?
2. If you do not speak the local
language, how will this influence
your attempt to return to the
hotel?
 BUSINESS MANAGEMENT
Scientific thinking
and management
• Scientific thinking and
management are based
HIGHER LEVEL ONLY

on objectivity, facts and

empirical evidence.
• Decisions are made on
quantifiable data and
proof rather than on
subjective opinions.
 BUSINESS MANAGEMENT
Intuitive
thinking and
management
• Intuitive
HIGHER LEVEL ONLY

thinking and
management
are based
on
personal
beliefs,
perceptions
and instincts
(gut feelings).
 BUSINESS MANAGEMENT
Scientific or intuitive
decision-making
• Most decisions are based on
a combination of both
HIGHER LEVEL ONLY

scientific and intuitive

aspects.
• The choice of decision-
making depends on
numerous factors such
as:
• Extent of work
experience.
• The scale of the
decision.
• The urgency of the
BUSINESS MANAGEMENT

BM ToolKit
Force field analysis in
scientific and intuitive
decision-making (HL only)

• Explain how force field

analysis uses scientific
and intuitive decision-
making.
 BUSINESS MANAGEMENT

Management and leadership

 BUSINESS MANAGEMENT
Leadership or
management?
1. What does a
leader do?
2. What does a
manager do?
3. What are the characteristics
(traits) of a leader?
4. What are the characteristics
(traits) of a manager?

Write your answers down on

sticky notes. Use one sticky note
for each question and be
prepared to share your
 BUSINESS MANAGEMENT

Leadership
vs.
management
 BUSINESS MANAGEMENT

Management
• Management is the practice Planning
of achieving an organization’s
objectives by using and
controlling the available
human and non-human Controlling Organizing
resources of the business in The key
an effective way. functions of
• A manager is someone with management
decision-making authority
within a firm, and has
responsibility for problem-
solving in order to achieve Coordinating Commanding
specific organizational goals.
 BUSINESS MANAGEMENT

Leadership
• Leadership is the practice
of influencing, invigorating
and inspiring others to
achieve organizational
goals.
• A leader is someone who
influences and inspires
others to get things done.
• They foster:
• Motivation
• Respect
• Trust
• Loyalty
 Leadership Management
BUSINESS MANAGEMENT
• 9am to 5pm
Time and • 24 hours a day
• Short term
Devotion • Long term perspective
perspectives

• Broader role • More defined role

Roles and • What and why • How and when
responsibilities
Differences questions questions

between • Followed through

Influence on • Command by authority
leadership & others
vision and action • Focus on outcomes
• Focus on
management emotions
• Follow rules and
Risk-taking • Challenge status quo policies
• Keep order and
control
• Abide by procedures
• Create culture of hope
• Suitable in times of and cultures
Vision • Suitable in stable
change
environment
 BUSINESS MANAGEMENT
Skills and roles of leaders versus managers
Leadership Management
Do the right thing Do things right
Knowing what’s right Doing what’s right
Motivating and inspiring others Directing and controlling others
Inspire others to follow a shared vision Follow orders from executives
Create a change Conform to the norms
Innovators Problem solvers
Action Position
Strategic decision making Tactical decision making
Trusted and respected by others Listened to by others
Achievement of objectives through Achievement of objectives through
willingness of followers compliance of others
Natural Instincts Learned skills
 BUSINESS MANAGEMENT

Approaches to
learning
• Hoang textbook
• Activity 9.1 Research
and thinking skills
• Page 134
 BUSINESS MANAGEMENT

The following leadership styles:

• Autocratic
• Paternalistic
• Democratic
• Laissez-faire
• Situational
 BUSINESS MANAGEMENT

Spectrum of leadership styles

• Leadership is the process of influencing and inspiring others to
achieve organizational goals.
• There is a wide spectrum of leadership styles.

Autocratic Paternalistic Democratic Laissez-

faire

Situational
 BUSINESS MANAGEMENT

Autocratic
• This type of leader:
• makes all the
decisions

independently.
• does not
delegate.
• instructs
others. Suitable for: Drawbacks of this leadership style:
• Unskilled • No feedback from employees
employees • Opinions and suggestions are ignored
• Crisis • Poor working relationships leading to high
situations levels of absenteeism and turnover.
 BUSINESS MANAGEMENT

Theory of
knowledge

Is it possible for
employees to thrive
under autocratic
leadership? Do
autocrats necessarily
suppress creativity?
 BUSINESS MANAGEMENT

Paternalistic
• This type of leader
treats their
employees as if they
were family members
by guiding them
through a
consultation process

Negative attributes
Positive attributes • Controlling
• Nurturing
• Helicopter style
• Develops workers
leadership (hovering)
 BUSINESS MANAGEMENT

Democratic
• This type of leader:
• involves employees
in decision
making.
• consults staff and
considers
their views.
• develops better
morale. Suitable for: Drawbacks of this leadership style:
• Situations where • Decision making is delayed.
the leader is • Timely / costly for a large workforce.
not always • Not suitable during crisis.
present.
 BUSINESS MANAGEMENT

Laissez-faire
• This type of leader
will:
• have minimal direct
input.
• allow staff to make
decisions.
• rely on high levels
of staff
motivation. Drawbacks of this leadership style:
Suitable for: •
• Environments Time consuming decision making.
• Delayed execution.
requiring • Relies heavily on teamwork.
creativity. • Potentially encourages slack.
 BUSINESS MANAGEMENT

Over to you

• Hoang textbook
• Question 9.1 Vinayak Textiles
• Page 136
• Answer all parts
 BUSINESS MANAGEMENT

Situational
• This style of leadership is
to adapt to
circumstances by using
the right person and the
right leadership style.
• Factors affecting
situational leadership
styles:
• Culture
• Leader
• Organization
• Task
• Subordinates
 BUSINESS MANAGEMENT

Over to you
• Hoang textbook
• Question 9.2 Situational leadership (1)
• Page 137
• Question 9.3 Situational leadership (2)
• Page 138
• Question 9.4 School leadership and
management
• Page 138
• Answer all parts
 BUSINESS MANAGEMENT

Approaches to
learning
• Hoang textbook
• Activity 3.1 Thinking and
communication skills
• Page 40
• Activity 3.2 Thinking
skills
• Page 41
• Activity 3.3 Research
skills
• Page 41
 BUSINESS MANAGEMENT

Theory of
knowledge

To what extent do
leaders and managers
always know what is
‘best’?
BM BToUoSlIkNitE: SS
MANAGEMENT
Hofstede’s cultural
dimensions in leadership and
management (HL)

• How might knowledge of

Hofstede’s cultural
dimensions help to
improve the effectiveness
of management and
leadership in business
organizations?
 BUSINESS MANAGEMENT

• Ethical considerations of leadership and

Concepts in BM: management are based on people’s personal
Ethics values and moral judgements.
• This in turn determines the extent to which a firm
conducts business activities in an ethical manner.
 BUSINESS MANAGEMENT

Approaches to
learning
• Hoang textbook
• Activity 9.2 Thinking
skills
• Page 139
• Activity 9.3 Research
and thinking skills
• Page 139
 BUSINESS MANAGEMENT

Over to you

• Hoang textbook
• Review Questions
• Page 140
 BUSINESS MANAGEMENT

2.4 Motivation and demotivation

(SL and HL)
Topic 2: Human resource management
 BUSINESS MANAGEMENT
Unit content
Assessment
Content
objective
The following motivation theories:
• Taylor
AO3
• Maslow
• Herzberg (motivation-hygiene theory)
The following types of financial rewards:
• Salary
• Wages (time and piece rates)
• Commission
AO2
• Performance-related pay (PRP)
• Profit-related pay
• Employee share ownership schemes
• Fringe payments
 BUSINESS MANAGEMENT
Unit content
Assessment
Content
objective
The following types of non-financial rewards:
• Job enrichment
• Job rotation
• Job enlargement AO2
• Empowerment
• Purpose/the opportunity to make a difference
• Teamwork

The following types of training:

• Induction
• On the job AO2
• Off the job
Business Management Toolkit:
• Descriptive statistics
Motivation, demotivation and the business management concepts
 BUSINESS MANAGEMENT
Motivation in the
workplace
• Motivation refers to
the desire, effort and
passion to achieve
something.
• In business, it is the
willingness to
complete a task or job
with enthusiasm.
 BUSINESS MANAGEMENT

The following motivation theories:

• Taylor
• Maslow
• Herzberg (motivation-hygiene theory)
 BUSINESS MANAGEMENT
Taylor
Taylor’s theory in brief
• Taylor’s theory
assumed that 1. Train and develop each employee.
employees are 2. Provide detailed instructions and
primarily motivated by supervision of each
worker.
money.
3. Divide work equally between
• Productivity could be managers
improved by setting and workers:
4. Managers plan the work using
output and efficiency
division
targets related to pay. of labour.
5. Workers perform the work in a
standardized
fashion.
 BUSINESS MANAGEMENT
Criticisms of
Taylor’s theory
• Ignores non-financial
factors.
• Does not recognize that
people can be
independent thinkers.
• Difficult to measure the
output of
professionals
that focus on mental
output, rather than
physical output.
• Can lead to repetitive
and monotonous
 BUSINESS MANAGEMENT
Maslow
• Maslow believed that the
Self-actualisation
psychological (emotional and
mental) needs of Esteem
employees was what
motivated people, not just Love
money. and
• He developed a hierarchy of belonging
needs where people must Safety
be motivated by lower
order needs before they can
progress to higher order Physiological
needs.
 BUSINESS MANAGEMENT

Maslow’s
theory
explained
 BUSINESS MANAGEMENT

Examples of needs in Maslow’s hierarchy

Self-actualisation Intrinsic drive within people to become

the best they can be

Esteem Job titles, decision-making power,

praise

Love and belonging Interaction, teamwork, trade union

membership

Safety Job security, sick pay, maternity leave,

pensions

Physiological Food, water, shelter, warmth, air

 BUSINESS MANAGEMENT

Criticisms of
Maslow’s theory
• Identification of
workers’ needs
is difficult.
• Not everyone has the
same five needs.
• Self-actualization
needs are rarely
permanently achieved.
 BUSINESS MANAGEMENT
Herzberg
• Herzberg’s research resulted in two categories of factors affecting
the level of motivation in the workplace. They are:

Hygiene factors Motivators

• These are factors that can lead

• These are aspects of work that to the psychological growth of
do not motivate but must be met workers and hence increase
to prevent dissatisfaction. satisfaction and performance at
work.
 BUSINESS MANAGEMENT

Two-
factor
theory
explained
 BUSINESS MANAGEMENT

Examples of hygiene factors and motivators

Hygiene factors Motivators
Working conditions Promotion opportunities
Organizational rules Recognition
Relations with others Responsibility
Job security Achievement
Pay Job enrichment
Paid leave Job enlargement
Health insurance Job empowerment
 BUSINESS MANAGEMENT

Herzberg’s
theory in
brief
 BUSINESS MANAGEMENT

Criticisms of
Herzberg’s theory
• Hygiene factors can be
taken for granted.
• Does not apply to low
skilled jobs (the study
was limited to
engineers and
accountants).
• Employees may not
want the extra
responsibility and stress
from having enriched /
more demanding jobs.
 BUSINESS MANAGEMENT

Over to you

• Hoang textbook
• Question 10.1 The world’s
richest billionaires
• Page 147
• Question 10.2 Richer
Sounds
• Page 149
• Answer all parts
 BUSINESS MANAGEMENT

The following types of financial

rewards:
• Salary • Profit-related pay
• Wages (time and piece rates) • Employee share ownership
• Commission schemes
• • Fringe payments
Performance-related pay
(PRP)
 BUSINESS MANAGEMENT

Financial rewards
• Financial rewards are
methods that
businesses can use
to motivate workers
by using some form
of monetary payment.
• Financial rewards can
be time or output
based.
 BUSINESS MANAGEMENT

Salary
• Salaries are financial Benefits Drawbacks
rewards set at a fixed
annual rate but paid Useful for when output or It is not easy to distinguish
productivity is difficult to the efforts or outputs of
on a regular basis
measure and/or where different workers. Therefore,
(e.g., fortnightly or linking pay with speed may it is difficult to reward those
monthly) lead to lower standards who are more efficient and
• Salaried workers often (e.g., teachers and doctors) productive.
work longer than
There is little, if any,
their contracted Better for a firm’s cash flow incentive to work hard since
hours but will not due to monthly payments. people are paid the same
be paid for the amount for their time.
extra work.
 BUSINESS MANAGEMENT

Wages Benefits Drawbacks

• Wages are the reward for
labour services, usually Hourly rates are used to
Using an hourly wage
expressed as an hourly reward workers for their
rate is an easily
rate (time) or as a time not effort, which may
understood payment
measurable quantity of encourage poor
system.
output (piece rate). productivity.
• Most unskilled workers are Quality of products may
paid in hourly wages. deteriorate thus close
Piece rate incentivizes supervision is necessary.
• Those who earn wages
workers to work harder. Workers may be
are likely to be paid
overtime for any demotivated if there is a
extra hours worked. machinery failure.
 BUSINESS MANAGEMENT

Commission Benefits Drawbacks

• Commission pays workers
Speed and aggressive selling
a percentage of sales or
output contributed. techniques do not correlate with
high quality.
• e.g., An estate agent may
get paid 1% of the value of Overcomes the Puts added pressure on workers.
each property that is sold. disadvantages of Tasks can be repetitive or
The 1% is known as the output-based monotonous.
commission systems such as Lack of security for employees as
• Typically, commission wages. they do not know what their
earners are also paid a salary will be.
basic salary, to help meet
There may be a need to hire
their physiological needs if
very little is sold. more quality controllers.
 BUSINESS MANAGEMENT
Performance-
related pay (PRP) Benefits Drawbacks
• PRP rewards those employees
It creates incentives for Targets may be
(as individuals, teams or whole staff to work better. unrealistic
workforces) who meet certain
goals. Stress can be caused by
Workers will work better
the pressure of meeting
• These goals may be related to with clear targets.
targets.
sales targets, competence or
Fair as hard work is Non-financial motivators
successfully completing a
rewarded. are ignored.
contract.
• This can be paid as a: PRP is not appropriate for
Creates a system of
• Performance bonus some professions where
performance
quality is seen as more
• Loyalty bonus management
important than quantity.
• Pay rise
• Gratuity
 BUSINESS MANAGEMENT

Profit-related pay Benefits Drawbacks

• Some businesses try to
motivate their Strengthens employee The share of the profits
loyalty and encourages made is usually too small to
workforce by linking team working. provide an incentive to work
pay to the level of
profits in the firm Individual efforts are not
Boosts labour efficiency and
recognized by this reward
i.e. the higher the profit limits labour conflict.
scheme
made, the greater the
pay received by It is more beneficial to
employees. Breaks down a ‘them and senior management as
us’ culture since everyone employees lower down in
• It is usually paid as an is working together to the hierarchy feel that they
annual bonus. achieve high profits have no influence over
profits
 BUSINESS MANAGEMENT
Employee share
ownership Benefits Drawbacks
schemes Staff will have a direct Impractical to implement
• This payment scheme interest in the well-being for employees other than
rewards workers, of the organization by those in senior
managers and directors being a shareholder. management.
by giving them shares Majority of employees do
in the company. not qualify for share
Lower rates of ownership.
absenteeism and staff Typically the dividends
turnover. distributed are not
sufficient enough to act
as incentives.
 BUSINESS MANAGEMENT
Fringe payments
• Fringe payments are benefits to an
employee in addition to their wages or
salary. Benefits Drawbacks
• These will vary from employee to
employee depending on their position. Helps to meet an
employee’s safety
• Examples include: Can be hugely
needs.
• Subsidized meals
expensive, especially
They can also make for senior executives
• Private health insurance employees feel more who benefit from the
• Housing allowance valued as the most generous
• Pension fund contributions employer is looking perks.
• Staff discounts after the well-being
of the employee
• Company car
 BUSINESS MANAGEMENT

Over to you

• Hoang textbook
• Question 10.6 Calculating
financial rewards
• Page 165
• Question 10.7 Perez
International Consultants
• Page 168
• Answer all parts
 BUSINESS MANAGEMENT

Approaches to
learning
• Hoang textbook
• Activity 10.3 Research
and thinking
• Page 164
 BUSINESS MANAGEMENT

The following types of non-financial

rewards:
• Job enrichment
• Job rotation
• Job enlargement
• Empowerment
• Purpose/the opportunity to make a difference
• Teamwork
 BUSINESS MANAGEMENT
Non-financial
rewards
• Non-financial rewards
are non-monetary
factors that motivate
people by offering
psychological and
intangible benefits
(i.e. factors not
directly linked to
money).
 BUSINESS MANAGEMENT

Job enrichment
• This involves giving Benefits Drawbacks

workers more complex Workers may feel forced

Gives employees a
and challenging tasks into the extra work and may
challenge.
to exploit their not respond to incentives.
potential. There may disputes about
Encourages employees to
• It attempts to give the payment for extra
be more productive.
responsibilities.
employees
greater Employees feel rewarded. Job enrichment has been
responsibility by found to be most beneficial
Extra tasks could lead to in administration and
vertically future promotion. technical roles.
extending their
role in the
organization chart.
 BUSINESS MANAGEMENT
Non-financial rewards at a restaurant
Organization chart for Duties of each level in hierarchy
a small restaurant
• Menu creation
• Planning staff roster
Head chef
• Interviewing potential chefs
• Supervise food hygiene & kitchen sanitation

• Ordering ingredients
Assistant
chef • Supervise station chefs
• Quality control

Station chef Station chef • Food preparation

1 - starters 2 - breads
and mains and desserts • Cooking for their station
 BUSINESS MANAGEMENT
Example of job enrichment for assistant chef
Organization chart for Duties of each level in hierarchy
a small restaurant with job enrichment
• Menu creation
• Planning staff roster
Head •
• Shortlist Interviewing
interviews potential
of potential chefs
chef chefs
• Confirm food hygiene & kitchen
• Supervise food hygiene & kitchen
sanitation
sanitation
is to standard
• Ordering ingredients
• Supervise station chefs
• Quality control
Assistant • Preliminary interviews of potential chefs
chef • Supervise food hygiene & kitchen sanitation
 BUSINESS MANAGEMENT

Job rotation
• Job rotation is a type of Benefits Drawbacks
job enlargement that Gains in productivity by
involves workers better motivation may be
Reduces boredom from
performing different lost due to a fall in output as
overspecialization. the employees settle into
tasks at the same level
of complexity in a their new roles.
systematic way.
Makes it easier to cover for
Greater training costs.
absent colleagues.

An employer will benefit Some employees see this

from a more widely trained as merely adding to their
workforce. workload.
 BUSINESS MANAGEMENT

Example of job rotation for station chefs

Organization chart for a small
Job rotation for station chefs
restaurant
• The station chefs take turns
Assistant working at each station so both
chef chefs get to broaden their range
of cooking skills and abilities.

Station Station
chef 1 chef 2
 BUSINESS MANAGEMENT

Job enlargement
• Job enlargement is Benefits Drawbacks
broadening the number May reduce productivity as
of tasks that an the employee may be less
employee performs. efficient at completing the
• The job essentially whole task.
remains unchanged. Employees may view this
Prevents boredom with
as a way to get them to do
• It attempts to give repetitive tasks.
more work for the same
employees a greater pay.
responsibility by Workloads may become
horizontally extending unmanageable for
their role within the employees.
organization chart.
 BUSINESS MANAGEMENT

Example of job enlargement for station chefs

Organization chart for a small Job enlargement for station
restaurant chefs
• The station chefs are given the
Assistant opportunity to cook all menu
chef items instead of specializing in
their area of expertise.

Station Station
chef 1 chef 2
 BUSINESS MANAGEMENT

Empowerment
• Empowerment is about
developing the
potential of
workers or teams to
achieve the best they
can.
• It involves granting
workers the authority to
be in charge of their
own jobs and execute Ways to cultivate empowerment
their own ideas to • Delegation
solve business • Worker participation
problems. • Continuous professional development
 BUSINESS MANAGEMENT
Purpose/the
opportunity to
make a difference
• Purpose is the
opportunity to make a
positive difference.
• Some employees are
motivated by
intrinsic,
altruistic motives. For
•example:
Doctors and nurses
Ways to cultivate purpose
• Social workers
• Clear communication and understanding of an
• Charity workers
organization’s objectives.
• Teachers • Building ongoing relationships with beneficiaries
© Licensed to Cameron Momeni of
 BUSINESS MANAGEMENT
Empowerment and
purpose to
motivate teams
Watch this video and:
1. State the four
strategies suggested
to keep employees
motivated.
2. Which strategy is an
example of
empowerment?
3. Which strategy is an
example of purpose?
 BUSINESS MANAGEMENT
Teamwork
• Teamwork occurs when
employees work with
fellow colleagues.
• Examples include
organizing employees
into:
• Department teams
• Matrix organizational
structures
• Quality circles
• Cellular
manufacturing
 BUSINESS MANAGEMENT

Approaches to
learning

• Hoang textbook
• Activity 10.4 Social and
communication skills
• Page 171
 BUSINESS MANAGEMENT

The following types of training:

• Induction
• On the job
• Off the job
 BUSINESS MANAGEMENT
Training
• Training is the
process of providing
opportunities for
workers to acquire
employment-related
skills and knowledge.
 BUSINESS MANAGEMENT
Induction training
• This is training that is Benefits Drawbacks
aimed at introducing Establishes clear Time consuming to plan,
new employees to expectations and working delivery and oversee an
the organization. habits from the start induction program
• The purpose is to help Help new recruits understand Disruptive to trainers’ own
new recruits settle in corporate culture of the firm work
quickly so the they
Information overload is
feel self-assured Settling in quickly means
common and
and supported in new recruits can contribute to
counterproductive for new
the firm more promptly
their new jobs. staff
Morale boost from new staff Induction programmes can
feeling welcomed and be too long and tiresome for
confident in being competent new employees eager to
in their new jobs start working
 BUSINESS MANAGEMENT
On the job
training Benefits Drawbacks
• This is training that is Trainees may pick up poor
Relatively cheap
carried out whilst at work practices
the workplace.
Internal trainers may lack up-
• Examples of on-the-job Relevant to the firm’s needs
to-date skills and experiences
training include
induction training and Fewer disruptions to daily Disruptive to trainers’ own
mentoring operations work

Establishes stronger Often piecemeal and

relationships at work incomplete

Productivity initially low as

Convenient location
trainees learn new skills
 BUSINESS MANAGEMENT
Off the job
training Benefits Drawbacks
• This is training that is Potential loss of output as
carried out off-site Access to expert trainers workers are away from
workplace
(e.g. at a tertiary
college or hotel Expensive to pay for trainers,
A wider range of training training venue and potential
conference room). hotel and travel expenses for
can be provided (e.g. first
aid). employees
Not all skills and knowledge
No distractions or disruptions
learned is relevant and/or
from colleagues or customers
transferred to the workplace
Finding time for staff to
Business networking can disseminate knowledge from
take place training courses can be
difficult
 BUSINESS MANAGEMENT

Over to you

• Hoang textbook
• Question 10.8 Northern
Ireland’s hotel industry
• Page 176
• Answer all parts
 BUSINESS MANAGEMENT

Theory of
knowledge

Is it possible to quantify
motivation in the
workplace in order to
acquire knowledge of
what motivates
employees?
 BUSINESS MANAGEMENT
BM Toolkit:
Descriptive statistics and
Reward Gateway is a provider of Reward Gateway
fringe benefits to firms looking to
increase employee engagement
(i.e. motivation).
• Explain how an employer would use
descriptive statistics prepared by
Reward Gateway to understand how
to motivate their employees.
• You may find it helpful to visit
www.rewardgateway.com for further
information.
 Type of motivation Definition Example
This is motivation to engage in
BUSINESS MANAGEMEN T
work for its own sake. The Employees stay late at work as they enjoy
Intrinsic activity is enjoyable as it is fun being at work. They are eager to learn and
or challenging. develop new skills in their jobs.

An employee stays late at work. They have

Extrinsic - This is motivation to engage in agreed to work overtime as they will be
reward work in anticipation of paid for additional hours worked beyond
rewards. their contracted working hours.
An employee stays late at work. They work
Extrinsic - This is motivation to engage in unpaid overtime to correct a mistake in
punishment work in order to avoid order to avoid their line manager giving
punishments. them a poor performance review.

• Sustaining motivation is hugely challenging.

• A firm needs to be able to adapt to rapidly
Concepts in BM: changing business environments in order to
change and keep employees engaged and productive.
sustainability • There is no one-size-fits-all motivational strategy as
individuals are motivated by different intrinsic and extrinsic
factors.
 BUSINESS MANAGEMENT

Over to you

• Hoang textbook
• Review Questions
• Questions 1 to 6 and 15 to 20.
• Page 52
 BUSINESS MANAGEMENT

2.4 Motivation and demotivation

(HL only)
Topic 2: Human resource management
 BUSINESS MANAGEMENT
Unit content
Content Assessment objective
The following motivation theories (HL only):
• McClelland’s acquired needs theory
AO3
• Deci and Ryan's self-determination theory
• Equity and expectancy theory
Labour turnover (HL only) AO2 and AO4
The following types of appraisal (HL only):
• Formative
• Summative AO2
• 360-degree feedback
• Self-appraisal
Methods of recruitment (HL only) AO2
Internal and external recruitment (HL only) AO3
Business Management Toolkit:
• Gantt charts in recruitment and selection (HL only)
 BUSINESS MANAGEMENT

The following motivation theories (HL

only):
• McClelland’s acquired needs theory
• Deci and Ryan's self-determination theory
• Equity and expectancy theory
 BUSINESS MANAGEMENT
McClelland
• McClelland’s acquired needs theory suggests that there are three types
of needs that must be satisfied to boost motivation and productivity.

Need for Achievement Need for Power Need for Affiliation

(n-Ach) (n-Pow) (n-Aff)
• N-Ach people are moderate • N-Pow people tend to be • N-Aff people seek to have a
risk takers as they feel a strong-willed as they like to good social and working
sense of achievement if a influence the behaviour of relationship with
task is not too hard or too others. colleagues.
difficult. • People who seek • They are motivated by
• They are more interested in institutional power (instead working in teams or
personal success rather of personal power) bring customer relations instead
than extrinsic rewards. the best out in their teams of working alone.
to achieve organizational
© Licensed to Cameron Momeni
objectives.
 BUSINESS MANAGEMENT

McClelland’s
theory
explained
 BUSINESS MANAGEMENT

Deci and Ryan

• Self-determination theory Autonomy
by Deci and Ryan
suggests that the drive to
flourish relies on three
core requirements:
• Autonomy
Competence Relatedness
• Competence
• Relatedness

Employee
motivation
 BUSINESS MANAGEMENT

Deci and
Ryan’s
theory
explained
 BUSINESS MANAGEMENT

Equity theory by
•
Adams Inputs Outputs
Adams suggests what motivates
employees is whether they feel
outputs are equal or relative to their
inputs.
• i.e. is the workplace and/or
remuneration equitable? What What
employees employees
• Therefore, workers will only be put into get out of
motivated if their remunerations and their jobs their jobs
recognitions are:
• Commensurate with their efforts
AND
• Fair in relation to other employees
performing similar jobs.
 BUSINESS MANAGEMENT

Equity
theory
explained
 BUSINESS MANAGEMENT

Equity theory in brief

Demotivated employees Motivated employees

Inputs Outputs Inputs Outputs

Time
Time Enjoyment

Remuneration Effort Remuneration

Effort

Recognition Ability Recognition

Ability
 BUSINESS MANAGEMENT
Expectancy theory by Vroom
• Expectancy theory put forward by Vroom suggests that people only put in the
effort to do a task if they expect they will achieve the required result.
• Vroom suggests when faced with options, people choose the one with the
greatest motivation consisting of three parts:

Motivation = Expectancy x Instrumentality x Valence

The belief
The value of
that effort will The
the reward to
lead to performance
the
acceptable reward.
employee.
performance.
 BUSINESS MANAGEMENT

Expectancy
theory
explained
 BUSINESS MANAGEMENT

Approaches to
learning
• Hoang textbook
• Activity 10.1 Thinking
skills
• Page 150
• Activity 10.2
Communication and
Thinking skills
• Page 153
 BUSINESS MANAGEMENT

Over to you

• Hoang textbook
• Question 10.3 Andy Hay
Management School
• Page 154
• Answer all parts
 BUSINESS MANAGEMENT

Labour turnover (HL only)

 BUSINESS MANAGEMENT

Calculating labour turnover

Number of staff leaving
Labour turnover = x 100
Total number of staff

• Labour turnover measures the percentage of the workforce that

leaves the organization in a given time period (usually one year).
• A low labour turnover percentage is desirable as it suggests:
• Workforce planning has been effective
• Employees are content and motivated to work
 BUSINESS MANAGEMENT

The following types of appraisal (HL only):

• Formative
• Summative
• 360-degree feedback
• Self-appraisal
 BUSINESS MANAGEMENT
Performance
management
using appraisals Formative Summative
• An appraisal is the
formal assessment of
an employee’s Methods
performance in fulfilling of
a job based on the appraisal
tasks and
responsibilities set out
in the job description. 360-degree Self-appraisal
feedback
 BUSINESS MANAGEMENT

Methods of appraisal
• This is a planned and ongoing process in which appraisal
Formative evidence is used by employees to inform them about what to do to
appraisal improve their work practices.

• This is a written description of an employee’s performance

Summative at work, summarising personal performance and
appraisal achievements during the year.

• This involves collecting evidence about the employee’s job

360-degree performance from peers, subordinates, managers or others
feedback with direct contact with the employee.

• This involves employees appraising themselves based

Self-appraisal on predetermined criteria.
 BUSINESS MANAGEMENT
Advantages and disadvantages of appraisals

Advantages Disadvantages
• Leads to professional development with • Time consuming and costly
goal setting • Follow-up on feedback requires funding and
• Allows for objective praise of staff monitoring
• Provides constructive feedback • Can be subjective due to perceptions and
• Useful for managers getting valuable work relationships interfering with process
feedback from employees
• Staff may get offended by feedback process,
especially in areas of weakness
• Training and development needs can be
• Appraisers may lack skills, experience
planned from aggregate findings of
appraisals and confidence in carrying out appraisals
effectively.
• Allows for objective analysis of how much to
• Employees can experience unnecessary
reward employees in terms of pay.
anxiety if appraisals are linked to pay.
 BUSINESS MANAGEMENT

Methods of recruitment (HL only)

 BUSINESS MANAGEMENT
The recruitment and selection process
1. Vacancies
become 6. Check 7. Offer job to
available references best candidate

2. Advertise the 5. Perform 8. Issue and sign

vacant post aptitude testing employment
(if contract
required)

3. Check 4. Conduct 9. Carry out new

applications and employee
create a shortlist interviews induction
 BUSINESS MANAGEMENT
Recruitment Where job vacancies are advertised:
process
Newspapers
• When a job becomes
available and the firm Specialist trade publications
has decided on the
Company websites and social media platforms
details of the vacant
position, the job Online recruitment websites
needs to be
Employment agencies
advertised.
Job centres

University career fairs

 BUSINESS MANAGEMENT
Selection
process
• Applications
usually
comprise of:
• Application
form
• Curriculum
vitae
• Cover letter
• Interviews are conducted of a shortlist
of suitable candidates.
• Testing may be required in the form of:
• Psychometric tests
• Aptitude tests
• Intelligence tests
• Trade tests
 BUSINESS MANAGEMENT

Internal and external recruitment (HL only)

 BUSINESS MANAGEMENT
Internal
recruitment
• This involves hiring
people who already
work for the business
to fill a vacant post.
• Internal posts are
usually advertised on
staff noticeboards, in
newsletters or via
staff emails.
 BUSINESS MANAGEMENT
Advantages and disadvantages of internal
recruitment

Advantages Disadvantages
• Cost effective • Fewer applicants
• No need for induction training • ‘Dead wood’ from employees that
have worked in the firm for a long
• Reduced risk
time with outdated working practices
• Motivational • Time consuming
• Internal politics
 BUSINESS MANAGEMENT
External
recruitment
• This is the process of
hiring people from
outside the
business.
• Methods used to recruit
externally include:
• Newspaper
advertising
• Specialist trade
publications
• Employment
agencies
• Job centres
• Headhunting
 BUSINESS MANAGEMENT
Advantages and disadvantages of external
recruitment

Advantages Disadvantages
• ‘New blood’ from people hired to • Greater degree of uncertainty
bring in new ideas and creative • Time consuming
ways of thinking
• Expensive
• Wider range of experiences
• Larger pool of applicants
 BUSINESS MANAGEMENT

Theory of
knowledge

How can we possibly

know the true meaning
of motivation theory if
the theorists (such as
Taylor, Maslow or
Herzberg) are no longer
alive?
 BUSINESS MANAGEMENT
BM Toolkit:
Gantt charts in recruitment
and selection (HL only)

1. Interview a firm of your choice

about how long they take for each
stage of the recruitment and
selection process.
• The interviewee can be anyone who
is familiar with the organization’s
recruitment and selection process.
2. Construct a Gantt chart for the firm’s
recruitment and selection process.
 BUSINESS MANAGEMENT

Over to you

• Hoang textbook
• Review Questions
• Questions 7 to 14
• Page 178
 BUSINESS MANAGEMENT

Organizational culture (HL only)

Topic 2: Human resource management
 BUSINESS MANAGEMENT

Unit content
Assessment
Content
objective
Organizational culture AO1
Types of organizational culture (e.g. Charles Handy’s Gods of
AO2
management)
Cultural clashes when organizations change, including but not
limited to when organizations grow and merge and when AO3
leadership styles change
Business Management Toolkit:
• Hofstede’s cultural dimensions
Organizational culture and the business management concepts
 BUSINESS MANAGEMENT

Organizational culture
 BUSINESS MANAGEMENT

Organizational
culture
 BUSINESS MANAGEMENT
Components of
organizational culture
Organizational
• Organizational culture Beliefs culture
can be defined as what is
considered ‘normal’ to a
firm.
• i.e. the character or
personality of
an organization.
• It is largely based on the
Attitudes Values
following characteristics
of managers and
employees:
 BUSINESS MANAGEMENT

Benefits of a strong organizational culture

Creates a sense of Promotes Reduces mistakes Minimizes

belonging and cohesion, so and problems when
security for staff people do the right misunderstandings conflict occurs
things
 BUSINESS MANAGEMENT

Approaches to
learning

• Hoang textbook
• Activity 11.1 Thinking
and communication
skills
• Page 182
 BUSINESS MANAGEMENT

Types of organizational culture (e.g. Charles

Handy’s Gods of management)
 BUSINESS MANAGEMENT

Elements of corporate culture

• The acronym NORMS© can be used to remember the determinants
of organizational culture.

N O R M S
Nature of the Organizational Rewards Management Sanctions
business structure style
 BUSINESS MANAGEMENT
Nature of the
business
• The mission, aims
and objectives of a
business will shape
a its culture.
• e.g., NGOs will
have a very
different
culture
from profit-driven
businesses.
 BUSINESS MANAGEMENT
Organizational
structure
• Flat structures will
encourage a
collaborative culture.
• Tall structures will
generally have a
culture of working in
small independent
teams.
 BUSINESS MANAGEMENT
Rewards
• Appropriately remunerated
employees are more likely
to develop a strong and
united culture.
• Turnover will be high if
employees are not
remunerated appropriately.
• This makes it difficult to
build a sense of unity
among staff as they have
spent little time working
together.
 BUSINESS MANAGEMENT
Management
styles
• Decentralized firms will create
a culture of independent
problem solving.
• Centralized firms will create a
culture of referring problems
to management instead of
employees driving solutions.
• Some firms closely monitor
their employees, building a
culture of mistrust and blame.
 BUSINESS MANAGEMENT

Sanctions
• A firm with rigid rules
and harsh consequences
can create a culture of
resentment.
• However, one that has too
few consequences can
encourage staff to be slack
(e.g. being late to work or
frequent absenteeism).
 BUSINESS MANAGEMENT
Theories about
corporate culture
• There is no single
dominant type of
organizational culture.
• Therefore, various
types of organizational
theories exist, most
notably those
suggested by
Professor Charles
Handy.
 BUSINESS MANAGEMENT

Charles Handy’s Gods of management

• Handy described four types of organizational culture:
Type of culture Description
• Power radiates from just a few individuals.
Zeus • Few rules and little bureaucracy.
(Power) • Flat structure with swift decision-making.
• People have clearly delegated authority within a highly
Apollo
defined structure.
(Role) • A tall, bureaucratic structure with slow decision-
making.
• Emphasizes the achievement of goals.
Athena • Team-based organization with no single power source.
(Task) • Employees are highly empowered.
• These cultures exist in firms where staff are in similar
Dionysian
positions with similar expertise (e.g. accountants or
(Person)
doctors).
 BUSINESS MANAGEMENT

Over to you

• Hoang textbook
• Question 11.1 Warwick Park
School
• Page 184
• Answer all parts
 BUSINESS MANAGEMENT

Approaches to
learning
• Hoang textbook
• Activity 11.2 Thinking
and social skills
• Page 183
 BUSINESS MANAGEMENT

Cultural clashes when organizations change,

including but not limited to when
organizations grow and merge and when
leadership styles change
 BUSINESS MANAGEMENT

Cultural clashes
• Culture clashes exist
when there is conflict
between two or more
cultures within an
organization.

Culture gaps
These are the differences between the desired culture
of a business and the culture that actually exists.
 BUSINESS MANAGEMENT

Common causes of culture clashes

Mergers and Changes in
Growth of firms acquisitions leadership
• Internal growth is likely • The combining of two or • Leaders have a huge
to lead to a more formal, more firms can cause influence on corporate
hierarchical culture clashes if there is culture.
organizational structure. a large cultural gap. • When leaders change, this
• This can lead to more • The culture of the more will also change a
bureaucracy and a dominant company organization’s culture.
power oriented culture. tends to prevail OR
• Culture clashes can also • A new hybrid
occur from growth into culture develops.
overseas markets.
 BUSINESS MANAGEMENT

The impact of
leadership on
organizational
culture
 BUSINESS MANAGEMENT
Consequences of cultural clashes

Misunderstandings and Discontented staff Resistance to change

miscommunications

Compromises need to be High costs implementing National culture clashes

reached change
 BUSINESS MANAGEMENT

Over to you

• Hoang textbook
• Question 11.2 Organizational
culture at Lenovo
• Page 187
• Question 11.3 The Body
Shop
• Page 188
• Answer all parts
 BUSINESS MANAGEMENT

• Cultural intelligence (a.k.a. cultural quotient) is the

Concepts in BM: ability of an individual to change and adapt to
change occupational, corporate and national cultures.
• This is important as it measures the ability of people
to understand and adjust to unfamiliar situations.
 BUSINESS MANAGEMENT

Approaches to
learning

• Hoang textbook
• Activity 11.3 Thinking
and communication
skills
• Page 189
BM BToUoSlIkNitE: SS
MANAGEMENT
Hofstede’s cultural
dimensions and national
cultures (HL only)

1. How do national cultures

affect corporate cultures?
2. Is there a strong
relationship between the
two in your country?
 BUSINESS MANAGEMENT

Theory of
knowledge

Are there any areas of

Business Management not
impacted by culture? What
does this enable us to
know about the discipline
of Business Management?
 BUSINESS MANAGEMENT

Over to you

• Hoang textbook
• Review Questions
• Page 190
 BUSINESS MANAGEMENT

2.6 Communication
Topic 2: Human resource management
 BUSINESS MANAGEMENT

Unit content
Assessment
Content
objective
Formal and informal methods of communication for an
AO3
organization in a given situation
Barriers to communication AO2
Business Management Toolkit:
• Business plans
Communication and the business management concepts
 BUSINESS MANAGEMENT
Redundancies at
Better.com
Watch the following video of how
the CEO of Better.com
communicated to 900
employees that they were to be
made redundant and answer the
following questions:
1. Why was the CEO’s method
of communicating the
redundancies so
controversial?
2. How could the CEO have
improved the way he
communicated information
about the redundancies?
 BUSINESS MANAGEMENT
The purpose of
communication The objectives of communication
• Brainstorm as many include to:
reasons why a • Instruct
business needs/wants • Clarify
to communicate to its • Interpret
stakeholders. • Notify
• Write each reason • Warn
down onto an • Receive feedback
individual sticky note. • Review
• Inform
 BUSINESS MANAGEMENT

Formal and informal methods of

communication for an organization in a
given situation
 BUSINESS MANAGEMENT

Communication
• Communication is the
transfer of information
from one party to
another.
• Channels of
communication refers
to the method(s)
through which
communication takes
place.
 BUSINESS MANAGEMENT

Internal versus external communication

Internal External

• This refers to communication

• This refers to communication
conducted between members of
within the business
one organization and members
organization.
of another.
 BUSINESS MANAGEMENT

Formal versus informal communication

Formal Informal
• This refers to all official channels • This refers to all unofficial, natural
of communication. and unstructured communication.
• They are directly related to work • They are free of organizational
matters. formalities.
• Formal communication can be • Informal groups tend to occur
done through open channels naturally because members share
(available to all) or through common interests, not because
restricted channels (for information they are formally part of the
of a confidential nature). organizations.
 BUSINESS MANAGEMENT
Categorize each of the below channels of communication
(HINT! There may be more than one category for each
one) Communication Formal Informal Internal External
1. The marketing director emails the marketing
department to announce employees have
permission to work from home 3 days per
week.
2. A behind-the-scenes video of a factory is
uploaded onto social media to showcase how
the firm employs sustainable business practices.
3. Rumours are swirling about possible
redundancies due to recent budget
cuts.
4. An employee informs their line manager
that they are resigning from their position by
letter.
5. The finance department is passing around
a birthday card to be signed for the finance
 BUSINESS MANAGEMENT

Methods of
communication
• Methods of communication for
an organization include
channels of communication
that are:
• Verbal
• Written
• Visual
• Non-visual
 BUSINESS MANAGEMENT
List as many examples of verbal
Verbal communication that would occur in the work
communication place.
• This refers to
communication via the
use of spoken words.
Examples of verbal communication include:
• It allows for two-way • Giving instructions or information via a public
communication announcement
between a sender and • Formal business meetings
receiver. • Job interviews
• Job appraisals
• Feedback and
• Verbal presentations
clarification can be • Conversations in formal and informal settings
sought immediately.
 BUSINESS MANAGEMENT
Advantages and disadvantages of verbal
communication

Advantages Disadvantages
• Low or zero cost. • No permanent record of most oral
• Detailed questions can be asked. communication for future reference.
• Information communicated may be
• Questions can be answered with little
incomplete, untruthful or open to
delay plus quick and spontaneous
misinterpretation.
feedback.
• Confidential information may be difficult to
• Interviews and presentations show
communicate, especially if many people are
an employee’s communication
involved.
abilities.
• Facial reactions, body language and tone • Meetings and interviews can be very
of voice can be used to inform meaning time- consuming.
and intent.
 BUSINESS MANAGEMENT
List as many examples of written
Written communication that would occur in the work
communication place.
• This refers to
communication
methods that use the
written word. Examples of written communication include:
• Letters
• These provide a • Memoranda
permanent record of • Reports
documented • Notices
messages for future • Executive summaries
reference. • Abstracts
• Research proposals
 1. List as BUSINESS
many examples of visual
MANAGEMENT
communication that occur in the work place.
Visual 2. List as many examples of
communication visual communication from the
• This refers to the use of BMT.
visual stimuli to communicate 1. Examples of visual communication include:
information or ideas. • Bar charts
• Pie charts
• They enhance
• Infographics
communication because • Line graphs
they: • Histograms
• Can be understood easily • Videos
• Communicate ideas
quicker than words 2. Examples from the BMT include:
• Often cheaper to produce • The BCG matrix
that pages full of text • Decision trees
• Cater for visual learners • Gantt charts (HL only)
• May have longer lasting • Force field analysis (HL only)
impact. • Critical path analysis (HL only)
• Linear regression (HL only)
 BUSINESS MANAGEMENT
List as many examples of electronic non-
Non-verbal verbal communication methods that would
communication occur in the work place.
• Except for oral
communication, all
forms of
communication can
come under the Examples of electronic non-verbal
category of non- communication include:
verbal • E-mail
communication. • Video conferencing
• Mobile devices
 BUSINESS MANAGEMENT
Advantages and disadvantages of electronic
communication

Advantages Disadvantages
• Increasingly important in a • Need to purchase and maintain
global business world. expensive computer hardware
• Faster and cheaper and software.
communication over long • Business comes to a standstill if
distances. technical problems or power
outages occur.
 BUSINESS MANAGEMENT

The impact
of an internet
outage on
Canadian
businesses
 BUSINESS MANAGEMENT

Over to you

• Hoang textbook
• Question 12.1 E-mail usage at
work
• Page 198
• Question 12.2 The importance
of non-verbal communication
• Page 199
• Answer all parts
 BUSINESS MANAGEMENT
Selecting the
best methods of
communication
• Businesses will use a Factors affecting the selection of
mix of communication communication methods:
• Personal preferences
methods to fit their
• Organizational structures
requirements and • Security issues and concerns
situations. • Skills and training of users
• Ease of use
• Size of business
 BUSINESS MANAGEMENT
Recommend a communication method for the
following scenarios:
Recommendation
Scenario
with explanation
1. A small coffee shop with four employees.
2. An urgent message communicating to all employees in a large firm
about an impending hurricane expected to disrupt travel to and from
the office.
3. A multinational corporation with offices in many countries that operate
in different languages.
4. A newly established hair salon wishing to announce its presence in
a small town.
5. A bank that prides itself on its ethics in addressing concerns for
financial privacy of its customers.
6. A large firm in multiple locations in one country with a tall
organizational structure.
 BUSINESS MANAGEMENT

Barriers to communication
 BUSINESS MANAGEMENT
Communication
barriers
• This refers to
anything that can limit
or impede the
effectiveness of
communications.
Common causes of BUSINESS MANAGEMENT
communication
failure
High costs Fear of technology
• Not all firms may be able to afford good • Some people have a fear of using new
communication networks and to train all communication technologies as they find
employees to become effective them confusing and difficult to
communicators. understand.
Technological breakdowns Internal politics
• Computer viruses, power outages and • This occurs when there is conflict in the
technological failures prevent organization, thus resulting in rumours
communication. and harmful gossip.
Jargon Geographical location and distance
• Technical language used by professionals • Remote areas may have limited
can cause problems with non-specialists. communications access.
Common causes of BUSINESS MANAGEMENT
communication
failure (continued)
Physiological barriers
• Physical and biological factors such as
hearing or sight impediments can hinder
the effectiveness of communication.
Cultural ignorance
 BUSINESS MANAGEMENT

Consequences of poor communication

Loss of
Low Costly competitive- Lack of
employee errors and ness due to coordination
morale mistakes lower and control
productivity
 BUSINESS MANAGEMENT

Over to you

• Hoang textbook
• Question 12.3 The Global
Office
• Page 202
• Question 12.4 OCR’s
examination paper blunder
• Page 202
• Answer all parts
 BUSINESS MANAGEMENT

Theory of
knowledge

If a manager cannot
communicate something
to others, can this still be
considered as
understanding and
knowledge?
 BUSINESS MANAGEMENT

BM Toolkit:
Business plans

Examine how elements of a

business plan can be used to
communicate the aspirations of an
organization.
 BUSINESS
Benefits of improved MANAGEMEN
Limitations of improved T
communication systems communication systems

Improved speed, access and Cost (financial and time) in

accuracy of communication. integrating new systems.

Improved motivation and Potential threats to security with

productivity. data breaches and leaks.

Greater potential to reach a

wider audience and target The need for an effective change
markets. in a management plan.

• Effective communication is essential to any sustainable business

Concepts in BM: strategy.
change and • It is particularly important in times of change, in order to reduce
sustainability resistance to change.
• Introducing new and improved changes to communication systems
have their benefits and limitations.
 BUSINESS MANAGEMENT

Approaches to
learning

• Hoang textbook
• Activity 3.3 Research
skills
• Page 12.1
 BUSINESS MANAGEMENT

Over to you

• Hoang textbook
• Review Questions
• Page 204
 BUSINESS MANAGEMENT

2.7 Industrial/employee relations

(HL only)
Topic 2: Human resource management
 BUSINESS MANAGEMENT
Unit content
Assessment
Content
objective
Sources of conflict in the workplace AO2
Approaches to conflict in the workplace by:
• Employees – collective bargaining, work-to-rule and strike action
• Employers – collective bargaining, threats of redundancies, changes of contract AO3
, lockouts and closure
The following approaches to conflict resolution:
• Conciliation and arbitration
• Employee participation and industrial democracy AO3
• No-strike agreement
• Single-union agreements

Business Management Toolkit:

• Contribution and force field analysis
Industrial/employee relations and the business management concepts
 BUSINESS MANAGEMENT
McStrike:
Unhappy workers
walk out
1. What objectives are the
striking employees
hoping to achieve?
2. Is McDonalds likely to
attempt to meet the
demands of the striking
employees?
3. Other than strike
action, what other
actions can employees
take to reach their
objectives?
 BUSINESS MANAGEMENT

Sources of conflict in the workplace

 BUSINESS MANAGEMENT
Sources of conflict
• Conflict refers to a situation of friction or mutually exclusive goals between two or
more parties.

Sources of Consequences of
conflict include unresolved conflict:
differing: • Hindered productivity
• Needs and • Reduced morale
wants • Inappropriate
• Perceptions conduct
• Values • Fuel internal politics
• Power • Reduced
• Feelings and collaboration
between teams
emotions
 BUSINESS MANAGEMENT

Approaches to conflict in the workplace

by:
• Collective bargaining • Collective bargaining
• Employees: • Employers:
• Work-to-rule • Threats of redundancies
• Strike action • Changes of contract
• Lockouts
• Closure
 BUSINESS MANAGEMENT

Industrial conflict
• Industrial conflicts arise
between employers
and employees when
they have strong
differences of opinion
about issues at work.
• Employers and
employees must
negotiate to come to a
mutually beneficial
solution in order to
resolve conflict.
 BUSINESS MANAGEMENT

Representatives in industrial conflict negotiations

Employers
• Employers are
represented by
senior management
teams or
employers’
associations.

The South Australian Hotels Association is an employers’ association for pubs*. This video explains
how this association was formed to represent pub owners and their bargaining power as major
employers of SA workers.
*Pubs in Australia are commonly known as hotels.
 BUSINESS MANAGEMENT

Representatives in industrial conflict negotiations

Employees
• Employees
are
represented
by trade
unions.
 BUSINESS MANAGEMENT
Employee
objectives
• Workers can have a mix of
objectives that they hope
to achieve such as:
• Increased pay/prevent
pay cuts
• More paid holidays
• Better fringe benefits
• Improved working hours
and rest breaks
• Training and development
opportunities
• Better staff facilities such
as child-care and canteen
services.
 BUSINESS MANAGEMENT
Methods to achieve employee objectives
• Employees and trade unions use the following methods to help
achieve employee objectives:

Collective Work-to- Strike

bargaining rule action
Least disruptive Most disruptive
 BUSINESS MANAGEMENT
Collective
bargaining
• Trade unions
represent employees
in negotiating with
employers.
• A workforce united
behind a trade union
representative has a
stronger bargaining
position than
individual employees.
 BUSINESS MANAGEMENT
Work-to-rule
• This occurs when
employees adhere
precisely to all rules and
regulations set by the
employer.
• Any goodwill (e.g.
replying to emails during
breaks and staying
beyond finishing time to
complete some
unfinished tasks) is
withdrawn.
• The aim is to delay
production and to reduce
productivity.
 BUSINESS MANAGEMENT
Strike action
• This is the collective
refusal by employees
to work.
• This is a highly
disruptive method of
industrial action used
when there are
widespread
disputes/grievances
amongst the
workforce.
 BUSINESS MANAGEMENT

Over to you

• Hoang textbook
• Question 13.1 Deutsche Telekom
• Page 212
• Question 13.2 Indonesia’s
national strike action
• Page 212
• Answer all parts
 BUSINESS MANAGEMENT

Approaches to
learning

• Hoang textbook
• Activity 13.1 Research
skills
• Page 211
 BUSINESS MANAGEMENT
Employer
objectives
• Employer objectives
include:
• Lower production
costs
• Improved productivity
levels
• Lower rates of
absenteeism
• Higher staff
retention
• The objectives of workers
will raise the cost of
production for employers,
thus leading to potential
conflict.
 BUSINESS MANAGEMENT
Methods to achieve employer objectives
• Employers are represented usually by management teams or employer
representatives.
• They use the following methods to help achieve their objectives:

Collective Threat of Changes of Lock-outs Closure

bargaining redundancies contract

Least disruptive Most disruptive

 BUSINESS MANAGEMENT
Collective
bargaining
• Employers will use a
team of highly skilled
negotiators in this
industrial action.
• They often set short
deadlines as a tactic
to give trade unions
little time to prepare
or fight for its case.
 BUSINESS MANAGEMENT
Threat of
redundancies
• For employees working
on finite contracts,
employers can change
the terms of their
contracts when it is time
for contract renewals.
• This can be regarded as
coercion as employees
are denied further
employment if they do not
agree to the new terms.
 BUSINESS MANAGEMENT
Changes of
contract
• For employees working
on finite contracts,
employers can change
the terms of the contracts
when it is time for
contract renewal.
• This can be regarded as
coercion as employees
are denied further
employment if they do not
agree to the new terms.
 BUSINESS MANAGEMENT
Lock-outs
• This occurs when
employers temporarily
prevent employees from
going to work.
• Locks and/or security
guards are used to
prevent employees
entering the business.
• The objective is to put
pressure on some
employees who want to
return to work so they can
get paid.
 BUSINESS MANAGEMENT
Closure
• This is an extreme
measure used when
all other approaches
to resolve a dispute
have failed.
• The business closes
its operations, so
workers will not be
able to receive their
wages and/or be
made redundant.
 BUSINESS MANAGEMENT

The following approaches to

conflict resolution:
• Conciliation and arbitration
• Employee participation and industrial democracy
• No-strike agreement
• Single-union agreement
 BUSINESS MANAGEMENT

Conflict resolution
• Conflict resolution refers to the course of action taken to resolve conflict
and differences in opinions.
• Methods of conflict resolution include:

Conciliation Employee No-strike Single

and participation agreements union
arbitration and agreements
industrial
democracy
 BUSINESS MANAGEMENT

Conciliation and arbitration

Conciliation Arbitration

• Conciliation is a process whereby • Arbitration is a process whereby the

the parties involved in a dispute parties involved in a dispute agree to use
agree to use the services of an the services of an independent arbitrator.
independent mediator. • Arbitrators act like a judge by listening
• Mediators encourage the parties to and examining the arguments put forward
negotiate, compromise and reach by both parties before making a
mutually acceptable solutions. legally binding judgement.
 BUSINESS MANAGEMENT
Employee
participation and
industrial
democracy
• Employee participation
is an example of
industrial democracy.
• Employees are given
responsibilities and
authority to
complete tasks
and are involved in
the decision-making
process.
 BUSINESS MANAGEMENT
No-strike
agreements
• Trade unions have
suffered from poor
reputations for being
disruptive to
business
activities due to strike
actions.
• A no-strike agreement is
when a trade union
have members that
agree to refrain
from strike action in
 BUSINESS MANAGEMENT
Single union
agreements
• This occurs when a firm
agrees to participate
in conflict resolution
with one specific trade
union.
• This creates fewer
disruptions by
attempting to negotiate
with multiple trade
unions with
conflicting
objectives.
 BUSINESS MANAGEMENT
Possible
outcomes in
conflict
resolution
• The approach taken to
deal with conflict
largely depends on
people’s concern for:
• Their own outcomes.
• The outcomes of
others.
 BUSINESS MANAGEMENT

Five possible outcomes to conflict resolution

• High concern for the
• High concern for outcome of both parties
others means leads to collaboration.
surrendering is the • A mutually beneficial
only option. outcome is sought by both
• This leads to a win parties.
situation for the • This is the optimal
other party. strategy to
approach conflict
• Low or no concern resolution.
for either party’s • High concern for personal
outcome simply outcomes leads to people to
means there is compete for a win-only
avoidance of the outcome.
issue causing • This leads to further/ongoing
conflict. • Moderate concern for the outcome of both disputes.
parties leads to some sort of compromise.
 BUSINESS MANAGEMENT
Factors that influence the outcomes of conflict
resolution

Level of Number of State of the Level of Public and Government

experience and members and economy demand for a media opinion intervention
skills of degree of unity product
negotiators or within trade
representatives unions
 BUSINESS MANAGEMENT

Over to you

• Hoang textbook
• Question 13.3 Human Rights
Watch and Walmart
• Page 217
• Answer all parts
 BUSINESS MANAGEMENT

Theory of
knowledge

Are perceptions,
emotion or
reasoning the main
sources of conflict?
• Casual workers in Australia are
typically paid 25% more than full- BM TooBlkUitS: INESS
time workers. MANAGEMENT
• This 25% percent loading is to Contribution and force
offset
lacksick
as of job security
leave and benefits
that full-time such
workers
field analysis of improved
casual worker benefits
enjoy.
• Watch the video and answer the
following questions:
1. Are casual wages a fixed or variable
cost for employers?
2. If casual workers are guaranteed paid
sick leave, what is likely to happen to
the total contribution needed to break
even?
3. Prepare a force field analysis of
employers considering implementing
paid benefits to casual workers.
 BUSINESS MANAGEMENT

Concepts in BM: • Automation of manufacturing is usually a result of changes in the internal

change, creativity, and/or external environment due to creative developments in technology.

• Employees commonly fear automation will result in mass redundancies.
ethics and However, this may not always be the case.
sustainability • The implementation of automation must be approached ethically in order to
sustain harmonious industrial relations for the future sustainability of a firm.
 BUSINESS MANAGEMENT

Over to you

• Hoang textbook
• Review Questions
• Page 219