A Level Business: Leadership and Human resource management (HRM) strategy (Cambridge 9609)

This guide teaches sections 7.3 Leadership and 7.4 Human resource management (HRM) strategy of the Cambridge International AS & A Level Business 9609 syllabus for examination in 2026, 2027 and 2028. Topic 7 is an A Level topic. The syllabus says that Paper 3 and Paper 4 are based on A Level content (topics 6.1 to 10.4), with AS content assumed, so these sections are examined through case studies.

Use it with the revision notes and the practice questions. Earlier work you will draw on: section 2.1 HRM, motivation and management and the Topic 7 practice questions. Course links: the Cambridge A Level Business hub, the printable checklist and the free diagnostics.

All businesses are invented. Money is in dollars.

What 7.3 and 7.4 cover

Part	Content
7.3.1 Leadership	Purpose; roles (directors, managers, supervisors, worker representatives); qualities of a good leader
7.3.2 Theories	Trait, behavioural, contingency, power and influence, transformational
7.3.3 Emotional intelligence (EQ)	Goleman’s four competencies
7.4.1 Approaches to HRM	Hard and soft HRM; flexible contracts; poor performance; improving performance; MBO; IT and AI

7.3.1 Leadership

Purpose of leadership. Leadership sets a direction and persuades people to follow it. It turns objectives into a vision people understand, motivates staff, makes decisions and guides the business through change.

Leadership roles. Different people lead at different levels.

Role	What it does
Directors	Set the strategy and objectives, appoint senior managers and answer to the owners
Managers	Turn strategy into plans, organise resources and lead departments
Supervisors	Direct day-to-day work, solve problems on the spot and pass information up and down
Worker representatives	Speak for employees, put their views to management and take part in consultation

A worker representative usually has influence rather than authority over decisions, but can shape colleagues’ opinion.

Qualities of a good leader. Typical qualities are vision, clear communication, decisiveness, integrity, empathy, willingness to delegate, adaptability and the confidence to take responsibility. No list suits every business. A start-up facing uncertainty may need decisiveness and adaptability most. A hospital team may need empathy and integrity most. Choose the qualities the case makes important and link them to a result such as motivation or lower turnover.

7.3.2 Theories of leadership

The syllabus names five types of theory. Where it does not give the detail, the descriptions below are the standard forms.

Trait theory. Good leaders have certain personal characteristics, such as confidence or drive, so leaders are born. Strength: it lists qualities to look for when appointing. Weakness: no single set of traits works everywhere, and it ignores learning and the situation.

Behavioural theory. What leaders do matters, not what they are. Behaviour can be learned, so leaders can be trained. A common split is between task-focused behaviour (targets, deadlines) and people-focused behaviour (support, welfare). Weakness: it assumes one best behaviour, but the best mix changes with the people and the problem.

Contingency theory. There is no one best style. The best leadership depends on the situation: the task, the skills and attitude of the team, the time available and the leader’s own strengths. A leader may need to be directive in a crisis and consultative with experts. This links to the management styles in motivation and management.

Power and influence. Leaders get things done through the power they hold. A standard classification gives five bases:

• Legitimate: the formal authority of the position.
• Reward: the ability to give pay, promotion or praise.
• Coercive: the ability to punish.
• Expert: respected knowledge or skill.
• Referent: staff admire and identify with the leader.

Reward and coercive power can produce compliance but not commitment. Expert and referent power tend to win willing effort, and they stay with the person rather than the job title.

Transformational leadership. The leader inspires followers to move beyond self-interest to achieve a shared vision, through charisma, communicating a compelling purpose, challenging staff to think differently and showing interest in each person’s development. It is often set against transactional leadership, which relies on rewards and penalties for meeting set targets. Strength: it suits change and builds commitment. Weakness: it depends on one inspiring person, may be draining for staff, and a vision can be wrong.

Which theory when? Match the case. A crisis points to contingency (a directive approach for now). A business needing big change points to transformational. A question on why a manager is obeyed but not respected points to power and influence.

7.3.3 Emotional intelligence (EQ)

Emotional intelligence is the ability to understand and manage your own emotions and those of other people. The syllabus gives Goleman’s four competencies:

Competency	Meaning for a leader
Self-awareness	Knows own strengths, limits and effect on others
Self-management	Controls impulses and stays calm and consistent under pressure
Social awareness	Reads others’ feelings and needs, including empathy
Social skills	Builds relationships, communicates, resolves conflict and influences people

A leader high in EQ is likely to motivate staff and handle conflict well, which can lower absenteeism and labour turnover. A high-EQ leader can still make poor strategic decisions, so EQ is one factor, not a guarantee.

7.4.1 Approaches to HRM

Hard and soft HRM

Hard HRM treats employees as a resource to be used at lowest cost. It uses close control, tight targets, and flexible or short-term contracts. Soft HRM treats employees as a valuable asset to be developed. It uses training, involvement, communication and long-term commitment. Hard HRM may cut costs quickly but risk low morale and high turnover. Soft HRM may cost more but build skill and loyalty. A business may use both, for different groups.

Flexible working contracts

Contract	Advantage to business	Disadvantage to business
Temporary	Labour matches demand; no long-term commitment	Low loyalty; repeated recruitment and training
Zero hours	Pay only for hours needed	Insecure staff, high turnover, poor commitment
Part-time	Cover peak times; flexible	More staff to manage; less continuity
Full-time	Continuity, commitment and skills	Fixed cost even when demand is low
Annualised hours	Hours set per year, spread to match demand; less overtime	Planning is complex; staff may resent unpredictable weeks
Flexi-time	Staff choose start and finish within limits; can raise morale	Cover may be thin; harder to arrange meetings
Home working	Saves office costs; wider recruitment	Harder to supervise; weaker team spirit
Shift working	Longer opening or production hours	Higher pay, tiredness, handover problems
Job sharing	Skills retained; cover for absence	Handover and communication issues
Compressed hours	Same hours in fewer days; less travel	Long days can reduce quality
Gig economy	Paid per task; no sick or holiday pay; scalable	Little control or loyalty; reputation risk

For employees the same features cut both ways: flexibility and work-life balance against insecurity and less pay.

Worked example: annualised hours at Gaskelling Garden Centre. A contract is 32 hours a week, 52 weeks, so 32 × 52 = 1,664 hours a year. The centre needs 40 hours a week for 20 busy weeks (800 hours). The remaining 1,664 − 800 = 864 hours are spread over 32 weeks: 864 ÷ 32 = 27 hours a week. With a fixed 32-hour week at 11 an hour, busy weeks need 8 hours of overtime at time and a half: 8 × 16.50 × 20 weeks = 2,640. Quiet weeks pay 5 spare hours: 5 × 11 × 32 = 1,760. The annualised contract avoids 4,400 per employee.

Measuring poor employee performance

Performance is measured against a standard. Common measures:

• Labour productivity: output ÷ number of employees.
• Labour turnover (%): leavers ÷ average employees × 100.
• Absenteeism rate (%): days lost ÷ days available × 100. These are the standard forms.
• Quality and complaints: defects, returns, customer complaints.
• Targets and appraisals: results against agreed objectives.

Worked example: Torvale Joinery. Average employees were 50 last year and 48 this year. Output was 13,200 and 14,400 units.

Productivity: 13,200 / 50 = 264; 14,400 / 48 = 300
Change: (300 - 264) / 264 = 13.6%
Turnover: 9 leavers / 48 x 100 = 18.75%
Absence: 540 days / (48 x 250) x 100 = 4.5%

Productivity rose, yet turnover of 18.75% suggests problems. One figure never tells the whole story, so compare measures with past years and rivals.

Causes. Poor recruitment or selection, too little training, low motivation, weak leadership, unclear objectives, poor working conditions or equipment, and personal or health problems.

Consequences. Lower output and quality, higher unit costs, lost customers, low morale, more absence and turnover, and the cost of discipline and replacement.

Strategies for improving performance

Match the strategy to the cause. For a skills gap: training or coaching. For low motivation: a better pay system, job enrichment or recognition (see motivation and management). For unclear aims: clear objectives and feedback, including MBO. For weak supervision: leadership training. For poor conditions: better equipment or hours. If all else fails: warnings, redeployment or dismissal.

Management by Objectives (MBO)

Under MBO the business’s objectives are cascaded into objectives for each department and employee, which are agreed with the employee.

Implementation, step by step: set business objectives; share them; agree specific, measurable individual objectives; give the resources and authority to meet them; monitor and review progress regularly; reward results and set new objectives.

Worked example: Sandergate Opticians. The firm wants sales up 10%, from 1,200,000 to 1,320,000. Branch A, now at 450,000, agrees an objective of 495,000. Its manager gets control of the local advertising budget and meets the owner each quarter.

Usefulness: staff know what to aim for and feel involved, and the business can compare results with aims. Limitations: it takes time, objectives may be set too easily or out of date, and it may focus staff on measurable targets only. It works best with skilled, trusted staff.

The changing role of IT and AI in HRM

IT holds employee records in one system, supports online recruitment, training and payroll, and tracks performance data. AI can screen applications, answer staff queries and analyse patterns in turnover or absence to help planning. Benefits: speed, lower administration cost and consistent handling of data. Risks: bias copied from past data, loss of personal contact, privacy worries about monitoring staff, system cost and over-reliance. Decisions affecting people still need human judgement.

Exam technique

Papers 3 and 4 give a case study. The syllabus says the last part of Question 3 and of Question 4 on Paper 3, Question 5 on Paper 3, and both essays on Paper 4 should show evaluation. Use the case figures, weigh both sides, then give a reasoned judgement. Judge leadership by context and flexible contracts by the workforce and the market.

Common errors

• Calling any firm leader “transformational”.
• Treating hard HRM as bad and soft HRM as good in all cases.
• Giving an advantage to employees when the question asks about the business.
• Computing labour turnover with the starting figure, not the average.
• Naming a strategy without linking it to the cause of the poor performance.

Frequently asked questions

Which leadership theories are in Cambridge 9609 section 7.3? The syllabus names five types: trait, behavioural, contingency, power and influence, and transformational leadership.

What is Management by Objectives (MBO)? Under MBO, the business’s objectives are cascaded into objectives for each department and employee, agreed with them and reviewed. It is most useful when staff are skilled and trusted and results can be measured.

Is hard HRM always worse than soft HRM? No. Each can suit different groups of staff or situations, so judge which approach fits the business and evidence in the case rather than treating one as always better.

How are IT and AI changing HRM? They support online recruitment and automated screening, online training, central records and payroll, and performance tracking. The risks include hidden bias, data privacy concerns and staff feeling watched.

Official syllabus

Cambridge International AS & A Level Business 9609 syllabus for examination in 2026, 2027 and 2028, published by Cambridge University Press & Assessment. This guide covers sections 7.3.1 to 7.3.3 and 7.4.1.