IB Business Management HL 2.3.3 Leadership styles Question Bank
Practise IB Business Management SL/HL 2.3.3 by applying leadership styles concepts to exam-style questions.
- Syllabus
- First assessment 2024
- Course
- Business management HL
- Level
- HL
Exam points
- identify the relevant model, concept or evidence
- apply the correct subject framework to the question
- evaluate the result using clear evidence and subject terminology
2.3.3—Leadership styles question 1
[Maximum number: 4]
FrioAire Appliances (FA)
FrioAire Appliances (FA) manufactures medium-priced and medium-quality refrigerators. It is a multinational public limited company. Its factory is located in a less economically developed country that has high unemployment, a tradition of autocratic leadership and labour costs lower than FA's home country. The factory is profitable, and FA pays consistently good dividends. Market growth for medium-priced and medium-quality refrigerators is limited.
As part of a strategic objective to increase productivity and to enter a fast-growing market for high-priced and high-quality refrigerators, F A is considering building a new factory in and relocating production to Germany. This would require closing the factory in the less economically developed country. The new factory will:
- use innovative technologies, including advanced robotics and 3D processes
- require fewer employees, but those it does require will need to have better skills and qualifications.
Germany has a highly skilled, qualified and productive workforce. The new factory would allow FA to reposition its products. However, FA would need to raise significant finance to build and equip the new factory.
FA's leadership style at the factory in the less economically developed country is autocratic. Members of FA's board wonder whether this style would be suitable for the new factory in Germany, where workers have more bargaining power because of their high skill level and the labour-friendly cultural traditions. In Germany, FA would have to follow more regulations regarding the environment, health and safety, and employee rights.
FA workers in the less economically developed country are very loyal to F A, which has continued operation through a civil war at significant cost to itself (for security). If FA were to close in the less economically developed country, the workers would not find such good jobs.
Explain one benefit and one cost to FA of using an autocratic leadership style.
Explain one benefit and one cost to F A of having an autocratic leadership style.
In the stimulus it is indicated that F A has an autocratic leadership style. This style appears to dovetail with the culture of the less economically developed country. Also, the factory is profitable and has been efficient through lower costs. It is possible that the leadership style fosters loyalty in this country because of the cultural fit. Accept the likelihood that workers are less skilled and less educated and likely to accept poorer working environment due to high unemployment rate
The costs to FA include that autocratic leadership may stifle creativity and innovation, which could be available in a more democratic system. Also workers less likely to accept a demotivating work environment as they have a high degree of industrial relations leverage. Productivity in Germany could be higher than in a less economically developed country. The fact that F A 's leadership is thinking of
relocating to Germany indicates that they see problems in moving to a new, higher-price segment.
Mark as 2+2.
Award [1] for each relevant benefit / cost explained and [1] with application to FA. Award up to a maximum of [2] per benefit/cost explained.
[2] cannot be awarded per benefit / cost if the response lacks either explanation and / or application.
For example: For an identification/description of a benefit / cost with or without application [1]. For explanation of a benefit / cost with no application [1].
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