IB DP Business Management: Communication and Industrial/employee relations (HL only) – Revision Notes

These notes condense sections 2.6 (Communication) and 2.7 (Industrial/employee relations) of the IB Business management guide, first assessment 2024. Section 2.6 is SL and HL. Section 2.7 is HL only. For full explanations and worked examples, read the study guide. Test yourself with the practice questions. See also the course hub, the checklist and the free diagnostics.

Where the guide names a term without defining it, the definitions below are the standard textbook account.

What the guide lists

Section	Content point	Depth	Level
2.6	Formal and informal methods of communication for an organization in a given situation	AO3	SL and HL
2.6	Barriers to communication	AO2	SL and HL
2.7	Sources of conflict in the workplace	AO2	HL only
2.7	Employee approaches: collective bargaining, work-to-rule, strike action	AO3	HL only
2.7	Employer approaches: collective bargaining, threats of redundancies, changes of contract, closure, lockouts	AO3	HL only
2.7	Resolution: conciliation and arbitration; employee participation and industrial democracy; no-strike agreement; single-union agreement	AO3	HL only

AO2 means apply and analyse. AO3 means synthesize and evaluate, so these notes flag the trade-off to weigh for each AO3 point.

2.6 Communication: definitions

• Communication: passing information, ideas or instructions from a sender to a receiver so that the message is understood.
• Formal communication: through official channels, usually planned and recorded.
• Informal communication: outside official channels, unplanned and rarely recorded.
• Grapevine: the unofficial network through which news and rumour travel.
• Vertical communication: up or down the hierarchy. Horizontal communication: between people at the same level.
• One-way: no reply expected. Two-way: feedback is built in.
• Barrier: anything that stops a message being sent, received or understood as intended.

Formal versus informal: what to weigh

	Formal	Informal
Examples	Meetings with minutes, emails, memos, reports, intranet, notice boards, appraisals, presentations	Corridor chat, lunch talk, messaging between colleagues, social events, the grapevine
Strengths	Record, consistency, accountability, clear authority	Speed, flexibility, builds relationships, quick feedback
Limits	Slow, impersonal, often one-way, can be rigid	No record, rumour and distortion, uneven reach
Best for	Safety, legal, contractual or policy messages; large audiences	Quick questions, morale, testing reactions, small teams

Method in steps: choosing a method (AO3)

1. Identify the message: urgent, sensitive, complex, routine?
2. Identify the audience: how many, where, and on what shifts?
3. Decide whether a record is needed.
4. Decide whether feedback is needed (two-way) or not (one-way).
5. Pick a main method, and name a supporting one that covers its gap.
6. Judge: say which is best in this case and why the other is weaker here.

Barriers to communication

• Language and jargon.
• Cultural differences in norms about directness, status and gestures.
• Noise and distraction.
• Information overload.
• Many levels of hierarchy, which delay or filter messages.
• Status and attitude, such as staff afraid to speak up.
• Poor channel choice.
• Technology problems or lack of access.
• Lack of feedback.
• Distance and time zones.

Method for AO2 answers: name the barrier, link it to a fact in the case, explain the effect on the business (errors, delay, low morale, lost sales), then say what could reduce it.

2.7 Industrial/employee relations (HL only)

Sources of conflict

• Pay and benefits.
• Working conditions, hours and rotas.
• Job security, redundancies and closure fears.
• Change in technology or working practices.
• Management style and poor communication.
• Differences in aims between owners or managers and employees.

Approaches to conflict

Action	Who	Meaning	Effect and risk
Collective bargaining	Employees and employers	Negotiation between employer and employee representatives	Stronger voice for staff and a settled outcome, but talks take time and may fail
Work-to-rule	Employees	Do only what the contract and rules require	Output falls, pay continues, but goodwill is lost
Strike action	Employees	Stop work completely	Heavy pressure on employer, but lost pay for staff
Threats of redundancies	Employers	Warn that jobs may go	Pressure on staff, but trust and skilled staff may be lost
Changes of contract	Employers	Alter terms such as hours or pay	Can force change, but may provoke strikes
Closure	Employers	Shut a site	Drastic and costly, with large effects on the community
Lockouts	Employers	Stop staff entering until terms are accepted	Output stops for both sides, so very costly

Conflict resolution

Approach	What it is	Strength	Limit
Conciliation	Neutral third party helps the sides reach their own agreement	Keeps control with the sides	No outcome is forced
Arbitration	Neutral third party rules on the dispute	A definite result	Sides may feel the ruling was imposed
Employee participation and industrial democracy	Staff take part in decisions through consultation, councils or representation	Staff feel heard, so less conflict	Slower decisions
No-strike agreement	Union agrees not to strike, usually in exchange for an agreed way of settling disputes	Continuity of output	Removes staff’s strongest tool
Single-union agreement	Employer bargains with one union for all staff	Simpler, quicker bargaining	One union may not represent every group

Must-know distinctions

• Conciliation helps the sides agree. Arbitration produces a ruling.
• Work-to-rule: staff keep working to the letter of the rules. A strike: staff stop work.
• Strike: employee action. Lockout: employer action.
• Collective bargaining appears on both lists: employees and employers both take part.
• Industrial democracy is about involvement in decisions. A no-strike agreement is about not stopping work.
• Formal is not always better than informal. Fit to the situation decides.

Worked reminder: pay gap

A firm has 80 staff at an average of 30,000 each, so payroll is 80 × 30,000 = 2,400,000. A claim of 4% costs 96,000 and an offer of 2.5% costs 60,000. The gap is 36,000, or 450 per employee. Compare this gap with the cost of a stoppage before judging how far each side should move.

Building an AO3 answer on these topics

For a question that asks you to evaluate, justify or recommend, a reliable shape is:

1. A short judgement in your first sentence, so the reader knows your position.
2. Two or three reasons for it, each tied to a fact or figure in the case.
3. The strongest counter-point, with the reason you still hold your view.
4. A closing sentence that names the conditions under which you would change your mind, such as a longer dispute, a larger workforce or a more sensitive message.

The guide’s command-term glossary defines evaluate as weighing up strengths and limitations, and justify as giving valid reasons or evidence to support a conclusion. Use those meanings to decide what your answer must contain.

Linking the two sections

Poor communication is itself a source of conflict. A rumour on the grapevine about closure can start a dispute before any official decision exists. Equally, employee participation and industrial democracy are communication tools as well as resolution tools, because they create two-way channels between staff and managers. When a case mixes both topics, say how better communication could prevent the dispute or shorten it.

Quick self-test

1. Define informal communication.
2. State two formal methods of communication.
3. Give two barriers to communication that can arise on a multi-site business.
4. Distinguish a lockout from a strike.
5. State two sources of conflict in the workplace.
6. Outline what work-to-rule involves.
7. Distinguish conciliation from arbitration.
8. Explain one reason an employer might prefer a single-union agreement.
9. Explain one risk of a no-strike agreement for employees.
10. A union claims 4% and the employer offers 2.5% on a payroll of 2,400,000. Calculate the cost gap.

Answers

1. Communication outside official channels, such as chat in the corridor or on a messaging app, which is not planned or usually recorded.
2. Any two: meetings with minutes, emails, memos, reports, notice boards, intranet, appraisals, presentations.
3. Any two: time zones and distance, language, cultural differences, technology access, many levels of hierarchy.
4. A strike is employees stopping work. A lockout is the employer keeping employees out of the workplace until terms are accepted.
5. Any two: pay, hours or conditions, job security, change, management style, poor communication.
6. Staff do exactly what the contract and rules require and give up extras such as unpaid overtime, so output falls while they are still at work and paid.
7. In conciliation a neutral party helps the sides reach their own agreement. In arbitration a neutral party gives a ruling.
8. Bargaining with one union is simpler and quicker than dealing with several, which can mean fewer conflicting demands.
9. Staff give up their strongest form of pressure, so if the agreed procedure is slow or unfair they have limited ways to push for change.
10. 96,000 minus 60,000 is 36,000.

Where marks are usually lost

• Describing a method of communication without judging whether it suits the situation.
• Listing barriers with no link to facts in the case.
• Writing that informal communication is unreliable and stopping there, with no benefit named.
• Mixing up conciliation and arbitration.
• Describing a lockout as something unions do.
• Saying a strike harms only the employer, when staff lose pay.
• Giving one side only in an evaluate or recommend answer.
• Ending without a clear judgement tied to the business in the case.

Frequently asked questions

What is the difference between formal and informal communication? Formal communication goes through official channels and is usually planned and recorded, such as meetings with minutes, emails and reports. Informal communication happens outside official channels, such as corridor chat or the grapevine, and is fast and flexible but leaves no record and can spread rumour.

What is the difference between a strike and a lockout? A strike is action by employees, who stop work completely and normally lose pay. A lockout is action by the employer, who keeps employees out of the workplace until they accept terms.

What does a work-to-rule involve? In a work-to-rule staff do exactly what their contract and rules require and give up extras such as unpaid overtime. Output falls while they are still at work and still paid.

How do you structure an AO3 answer on communication or conflict in IB Business Management? Open with a short judgement, give two or three reasons tied to facts or figures in the case, deal with the strongest counter-point, and close by naming the conditions under which you would change your view. The guide’s glossary defines evaluate as weighing strengths and limitations and justify as giving valid reasons or evidence for a conclusion.

Official syllabus

IB Business management guide, first assessment 2024, International Baccalaureate Organization: sections 2.6 and 2.7 (2.7 is HL only).