Practice Unit 2: HR Management - Motivation, Structure, Hierarchy with authentic IB Business Management exam questions for both SL and HL students. This question bank mirrors Paper 1, 2, 3 structure, covering key topics like systems and structures, human behavior and interaction, and sustainability and ethics. Get instant solutions, detailed explanations, and build exam confidence with questions in the style of IB examiners.
Paper
Level
Question 1
HLPaper 3
LuminaCare
Resource 1 – Company profile and financial context
LuminaCare is a Ghana-based, for-profit social enterprise that manufactures solar-powered medical devices for rural clinics and maternal health centers across Sub-Saharan Africa. Its flagship product is a solar fetal heart monitor, which allows midwives to detect complications during pregnancy without relying on grid electricity. The company raised seed capital from impact investors but has now reached an inflection point: demand has grown by 300%, and LuminaCare must decide whether to pursue a $2.5M Series A equity round or take on $1.2M in concessional debt from a development bank.
Resource 2 – CFO’s internal memo (Finance)
“Our burn rate is steady, but we’ve reached our credit limit with suppliers. We operate on 90-day payment terms with clinics, so cash flow is always tight. Series A equity gives us the scale to meet demand and build a second facility—but would dilute founder control and introduce board-level oversight. The concessional loan is low-interest and non-dilutive but comes with covenants: quarterly EBITDA targets, strict capex limits, and donor-style reporting. Any miss could trigger loan restructuring or early repayment.”
Resource 3 – HR performance dashboard (Q1–Q2 2025)
| Metric | Value |
|---|---|
| Staff turnover (last 6 months) | 22% |
| Time to fill technical roles | 49 days (↑ 24%) |
| % of roles with formal job descriptions | 58% |
| Managerial span of control | Avg. 12 direct reports |
| Avg. team engagement score | 67/100 (↓ from 78) |
| The head of HR notes that burnout and unclear career paths are leading to attrition, especially among product engineers and field deployment staff. |
Resource 4 – Marketing team proposal
“Clinics love our mission—but most have no idea who we are until we show up at trade shows. We need to invest in inbound marketing, including a multilingual website, CRM tools, and a referral rewards program for midwives. More crucially, we’re perceived as a donor-funded nonprofit, not a serious tech company. To attract hospital procurement officers and larger buyers, we must reposition the brand to emphasize product quality, not just affordability and ethics.”
Resource 5 – Email thread: CEO to CFO and Marketing Lead
Resource 6 – Feedback from key field partners
“We rely on LuminaCare’s devices, but their response time for repairs has worsened.” “Sometimes we get different pricing from different reps. There’s no standard process.” “I love the mission—but our procurement officer wants a brand that feels serious. A logo change isn’t enough.”
1.[2]
With reference to Resource 3, describe one HR issue that may be impacting LuminaCare’s ability to scale sustainably.
2.[6]
Explain one financial challenge and one marketing challenge LuminaCare may face if it accepts the concessional loan.
3.[17]
Using all the resources provided and your knowledge of business management tools and theories, recommend a possible plan of action for LuminaCare over the next five years.
Question 2
SLPaper 2
BeanBar Ltd.
BeanBar Ltd. is a medium-sized company that sells gourmet coffee beans online and in retail stores. The business recently launched a new premium coffee blend and carried out primary market research to better understand customer preferences before the launch. The findings helped inform the company’s updated marketing plan, which included promotional discounts and revised packaging.
Although initial sales were strong, the marketing manager is concerned that poor internal communication between the finance and sales teams may be affecting financial performance. The finance team has noted rising costs, while the operations team wants to reinvest in product development.
Table 1 shows selected financial data for the past two months.
Table 1: Selected financial data for BeanBar Ltd. for 2024
| Item | Month 1 ($) | Month 2 ($) |
|---|---|---|
| Revenue | 100,000 | 90,000 |
| Cost of goods sold | 40,000 | 42,000 |
| Expenses | 30,000 | 35,000 |
| Net profit | ? | ? |
| Current assets | 60,000 | 50,000 |
| Current liabilities | 30,000 | 40,000 |
1.[2]
Calculate the net profit for Month 1 and Month 2. Show all your working.
2.[2]
Calculate the current ratio for Month 2. Show all your working.
3.[2]
Explain one reason why a fall in net profit might concern the finance team.
4.[2]
Identify one method of primary market research used by businesses like BeanBar Ltd.
5.[2]
Outline one problem that may arise from poor internal communication between departments.
Question 3
HLPaper 2
EcoEnergy Corp (EEC)
EcoEnergy Corp (EEC) is a multinational company specializing in renewable energy solutions. It has recently experienced rapid growth due to rising global demand for sustainable energy.
EEC currently uses a functional organizational structure, but senior management is considering transitioning to Charles Handy's "Shamrock Organization" model to improve efficiency and flexibility. The company faces external challenges such as fluctuating energy prices, regulatory changes, and the need for constant innovation.
1.[4]
Explain two features of Charles Handy’s "Shamrock Organization" model.
2.[6]
Analyze how changing to a Shamrock Organization could affect EcoEnergy Corp’s levels of hierarchy and delegation practices.
3.[10]
Discuss whether EcoEnergy Corp should adopt the Shamrock Organization model given external factors such as regulatory changes and the need for innovation. Justify your answer.
Question 4
SLPaper 2
NutriWell Ltd (NW)
NutriWell Ltd (NW) is a rapidly growing business in Canada specializing in health supplements and wellness products. Due to significant growth, NW recently restructured its organizational structure, changing from a flat organizational structure to a hierarchical structure with clearly defined roles and formal reporting lines.
The new structure created communication challenges, resulting in employees feeling disconnected from senior management. This has led to declining employee motivation and productivity, increasing the need for effective human resource management (HRM).
NW is also planning to launch a new range of vegan supplements targeting young adults. To support this launch, NW must undertake comprehensive market research to identify consumer preferences and behavior.
The company's marketing team argues that a successful marketing strategy depends heavily on effective internal communication between departments, including marketing, production, and HR.
1.[2]
Define the term ‘organizational structure’.
2.[4]
Explain two roles of human resource management (HRM) at NW.
3.[4]
Explain two benefits of effective internal communication for NW’s marketing strategy.
4.[4]
Explain two reasons why NW should conduct market research before launching its new vegan supplements
5.[10]
Evaluate whether NW should revert to a flat organizational structure or retain its current hierarchical structure, considering communication, HR management, and marketing implications.