UGB224 - Business Management: HRM, Motivation & Operations Analysis

This report delves into key areas of business management, focusing on Human Resource Management (HRM) at BMW, motivation theories (Maslow's hierarchy of needs and McGregor's Theory X and Theory Y), and operations management at Zara. It addresses HRM challenges faced by BMW during international expansion, including hiring, retention, and maintaining organizational culture. The report also discusses the impact of increased overseas production on HRM policies and the advantages and disadvantages of performance-related pay. Furthermore, it explores how to manage an aging workforce. The analysis of motivation theories includes a critique of McGregor's theory by Hofstede and a comparison of Maslow's hierarchy with Taylor's scientific management principles. Finally, the report touches on Herzberg's Two-Factor Theory, differentiating between hygiene factors and motivators.

Business Management

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK...............................................................................................................................................3
Human Resource Management...................................................................................................3
Motivation...................................................................................................................................6
Operations Management.............................................................................................................9
CONCLUSION .............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
The workforce of a company is essential to it's proper functioning and human resource
management is an important area of management which pertains to the process of treating
employees better and making them achieve more. Through HRM, organizational productivity is
increased by better and more optimized use of a firm's human resources. Apart from proper
management of human resources, it is very important for a firm to keep it's workforce motivated
as productive and focused employees are only gained through a positive work culture and a
business environment which makes the employees feel loved and appreciated (Andriani, and
et.al., 2019). Operations management is also a key aspect of management which refers to
streamlining and administering various business practices and departmental routines to achieve
the highest form of productivity and efficiency possible.
This report will focus on the 3 key areas of business management mentioned above and
discuss about the context of Human resource management by focusing on BMW which is a
vehicle manufacturing market giant established in 1916 and is headquartered in Munich. Major
theories of motivation including Maslow's hierarchy of needs and McGregor's Theory X and
Theory Y along with operations management in the context of Zara which is a flagship clothing
chain store founded in 1975 by Amancio Ortega and has it's headquarters in Arteixo, Spain.
TASK
Human Resource Management
HRM in recent years has emerged as the most pivotal function of management as an
organization's direct survival and profitability is depended upon the work force's attitude, level of
commitment and overall level of motivation. Human Resource is a very complex element and is
subject to change and challenges with every move the business makes including expansion and
increase of product distribution facilities (Bendul and Erfurth, 2019). A company which has
recently undergone major progress in global franchising and business scale and expanded it's
distribution outlet services is BMW which despite being a massive manufacturer of luxury auto-
mobiles is still likely to be subject to a variety of human resource related problems which are
stated herein. When a company expands it's business concerns internationally like BMW, hiring and
recruiting talented and diligent employees is a major roadblock towards success.

Organizations like BMW thrive on expert leadership and a talented and highly motivated
workforce which takes pride in working for such a luxurious and popular brand which
might not always be the case when increasing foreign hires to work in offshoot locations. Retaining and rewarding employees for performing exceptionally is also a problem of
HRM that is encountered by companies like BMW when expanding globally as among the
shifting business routines and managing different operations while upscaling the
business, driving growth through proper incentives is very important. Lack of motivation
in a new business location or distribution facility affects BMW's productivity and
reputation. Market leaders and reputed companies like BMW are known and regarded for their
positive and morally headstrong organizational culture which can be difficult to replicate
at it's newly acquired and built facilities for the sake of expansion (Bertato, 2018).
Building an efficient organizational culture is a complex HRM challenge in
international business.
BMW's market image is robust and very well marketed, it is associated with luxury,
quality and precision driven auto-mobile engineering which focuses on satisfying customers by
providing them cutting edge modern vehicles. In order to consolidate the image it has made and
to reinforce it's beliefs in providing the best possible products and services to it's customers, the
behaviour of it's workforce should reflect it's commitment, moral values and quality of
excellence in it's business operations. The behaviour expected from BMW's employees is top of
the line and completely customer driven, they should understand the needs of people and work in
accordance to deliver them the best customer service as possible (Braganza, and et.al., 2021).
They should be high on motivation and committed to making the best possible auto-mobile
products day in and day out. Employees at BMW should also be very skilled at both professional
and soft skills and they should be thoroughly versed in the mission and vision statement of the
company. Certain HRM practices can be used to encourage this behaviour which are stated here. In order to make the employees of their company market oriented and understand the
needs of their targeted market segment, BWM can seek to undergo proper induction
training at the start of the employee's joining to familiarize them with the company's

vision and mission. Through regular and rigorous training schedules, a skilful workforce
worthy of working for BWM can be easily formed.
 To keep it's employees fully committed and motivated to keep with the super high
efficiency in product service and delivery that BMW is known for, the HRM management
should design a handsome pay structure and channels of appraisal should be best in the
market which aligns with BMW's products and market image.
Increased production overseas can have various effects on a company's workforce and
it's human resource management policies some of which are listed in brief here. The problems of managing work distribution and employee workload is a major
headache for HRM in case of increment in overseas production as a production increase
increases the amount of work employees undertake and proper delegation and record of
work being done is hard to do in a globalized business environment. Increasing the capacity to do business in foreign locations in tricky because each country
has it's own subset of tax rates, benefit requirements and regulations related to society
and the environment (Goede and Boshuizen‐van Burken, 2019). The HRM policies must
be updated and must be considerate of rules and culture of different countries. Since the firm cannot directly control the workforce from it's home location or
headquarters, the harassment and employee leave policies of HRM have to be updated in
accordance with an increment in it's production and operations overseas. Leave policies
have to be considerate and lenient to promote a healthy culture while strict anti
harassment rules must be put in place to control the behaviour in new locations.
PRP or performance related pay links the financial remuneration received by employees
with their overall level of performance displayed. PRP has various advantages and
disadvantages described herein.
Advantages: By creating standards for measuring an employee's performance, a company can single
out weak employee performance and find reasons behind the same resulting in betterment
of the company.

 Top performers in a company are paid much better and this motivates and drives them to
stay for long periods of time increasing retention.
Disadvantages: The standards to measure employee performance are often sub-par which leads to
employee disengagement and high level of demotivation in the less compensated
workforce.
 The level and ceiling of the compensation given to employees must be researched as too
many incentives to many employees in a bid to keep them motivated can eat a firm's
profits.
Having a higher proportion of old and ageing workforce can have many benefits for
BMW as they are an untapped well of professional and on the job acquired skills and experiences
which makes them a very valuable asset for technical and human resource departments of BMW
(Lee, and et.al., 2018). At the same time, BMW is also subject to high rates of employee
absenteeism, a loss and fluctuation in operational efficiency and dealing with loss of output due
to having an aged workforce. HRM practices can change to deal with this in the following
manner. Build policies to give attractive bonuses and incentives to encourage older employees to
stay motivated and keep going the extra mile without taking breaks. Foster a mentoring culture in the company where the senior members of the workforce
interact, teach and prepare young workers to take up their roles and competencies for
future.
 Help facilitate automation and artificial intelligence to make complex jobs semi or fully
automatic and using experience of old employees for areas requiring human experience.
BMW has used this method to successfully combat an ageing workforce.
Motivation
Without focused and committed employees who feel actual drive to perform their
everyday routine for a company, there has to be a strong motivation inculcated in each and every
one of them (Mariappanadar, 2019). There are several major theories which relate and explain
the concept and usage of motivation among which is McGregor's theory of X and Y. This theory
states that there are 2 major approaches to employee management, one is Theory X which

features an authoritarian style with relentless control and supervision and Theory Y which is a
participative style of management with a democratic and holistic approach for employee
motivation and development.
McGregor's theory also takes a lot of assumptions which are given below.
Assumptions of Theory X:
1. Most employee's are lazy and do not appreciate their work.
2. People are resistant to organizational change and do not have high career aspirations
3. The workforce has to be under constant supervision with limited freedom.
Assumptions of Theory Y:
1. Employees can be motivated to achieve organizational objectives.
2. Each and every member of the company has the latent potential for personal
development
3. Employees need and deserve operational freedom to function properly with a positive
mindset.
McGregor's theory is popular but Hofstede pointed out in his organizational research that it just
like many other popular theories of management is based on western observations which are
inherently different from new economic power in the east. This statement is true to some extent
as the difference between two separate business firms operating in different hemispheres of the
world is immense. The employee and labour laws, industry unions, cultural differences and
personal approaches in finance and operations are all different which makes westernised laws
redundant in many departments (Nölke, 2019). However theories of McGregor are still
successful in most parts in the world because it focuses on the organization's workforce and
methods of effective managing which are key skills required at every level of the business firm.
Maslow's hierarchy theory of needs is one of the most popular theories of motivating a
workforce and divides the process of employee motivation into 5 broad needs in increasing order
of effectiveness stated below. Physiological needs-Basic needs which are necessary for survival and leading a
respectable life such as food, clothes and shelter. Safety needs-At this stage an employee prioritizes personal safety and workplace
stability.

 Love and belonging needs-Employees look for personal connection and prioritize being
in a group to feel loved and get rid of loneliness. Esteem needs-Gaining respect and recognition from their peers and society at large is
the foremost aim for most employees at this stage of the theory.
 Self Actualization-At the apex level of motivational drive, the employees become self
sufficient and look to realize their complete potential using every resource available.
Maslow's theory gained wide acceptance just like Principles of Scientific management given by
Frederick Taylor but both the theories complement one another yet are very different in their
approaches. Taylor advocated that money is the sole motivator for employees and they should
receive bonuses solely based on performance and the entire workforce could be treated in a
standardised manner like machines (Oldman and Tomkins, 2018). This theory is contrasted by
Maslow's hierarchy of needs as Maslow divided the idea of motivation as specific needs which
enabled management to deal with employees according to their desires rather than a machine like
approach.
Herzberg's Two Factor Theory is a very popular model of motivation that states 2 distinct
factors which are responsible for job dissatisfaction called Hygiene factors and those responsible
for employee satisfaction called Motivators, some of them are given below.
Hygiene Factors:
1. Strict Company Policies
2. Unruly Supervision
3. Poor Work conditions and work relations with peers and superiors
Motivators:
1. Achievement
2. Recognition
3. Career advancement and growth
The major difference between these 2 concepts of Herzberg's theory is that simply focusing on
motivating employees will not result in organizational growth. Motivators alone won't result in a
positive work culture in the company with every employee satisfied and delivering great
productivity if hygienic factors are still there. However a company solely getting rid of the
disrupting factors of hygiene is not going to be effective either. Both these factors of Herzberg

differ and complement each other as the organisation needs to get rid of hygiene factors which
are detrimental to employee growth along with building strong motivators to keep motivation
levels high.
A psychological contract is a contrasting element when compared to a physically signed and
legally bound employee contract as it is the collection of all the miscellaneous and informal
expectations and commitments of one side to the other in an employer and employee
relationship. Assurances from an employer differ in various cases as when it comes to
employee's career, they expect stable job security, unbiased opportunities for promotion and
constant training and development to become better skilled individuals (Ott and Michailova,
2018). In contrast for somebody who's involved in part time work while studying, the
expectations from their respective lawyers is different and includes low and manageable
workload and task distribution, supportive managers and superiors and flexibility in working
hours.
Operations Management
Process Consistency is a simple system which is put in place by businesses of all sorts to
help achieve their organizational goals and objectives and provide ease to businesses in
identifying the strengths and weaknesses of their business operations. There are many
managerial challenges when it comes to setting up an operations system in fast moving and
expanding industries like fashion which are listed herein. Rapidly changing consumer trends is a tricky challenge for managers in the fashion
industry as trends in beauty and apparels come and go with lightning speed which makes
it difficult to satisfy customers and build a reliable operations system. Digitalization in the post COVID-19 world has been a big challenge for managerial
operations as fashion firms have been forced to adapt an online strategy and deal with
the absence customers at their physical stores. Setting up operational efficiency between different departments is also a tough ask for
operational managers as a fast paced industry like fashion needs seamless coordination
between all dimensions of the business.
A global clothing powerhouse and the biggest brand under Spanish fashion group,
Inditex, Zara provides modest to high priced clothing facilitating top market trends which helps

it enjoy massive popularity and a loyal customer base worldwide. Globalization has played a
huge role in bolstering Zara's success as it helped turn the entire world into one large
interconnected business hub which in turn allowed Zara to expand from it's domestic hold in
Spain to become a successful multinational clothing company. Zara in it's initial days only
focused on domestic expansion and later on it started cautiously expanding it's operations by
entering one country at a time. As the advent of globalization increased and countries became
increasingly friendlier towards outside businesses, Zara has been committed to aggressive
expansion especially in Asia. It's business tactics have also been shaped by globalization as it
started opening a flagship store in a premier location in a country before extending further and
used strategies like internation joint ventures to build operations in Japan and Germany.
Other big retailers in the market such as Marks and Spencer was a strict competitor of
Zara some years back however the clothing and food items retailer has found it tough to maintain
it's brand identity internationally and it's operational strategy differs from that of Zara and is
less efficient in the long run on a global scale. Marks and Spencer unlike Zara is much more
focused on developing a stronghold in it's domestic country of UK by paying emphasis on
domestic shopping product lines which focuses on clothes fit for every occasion for people of all
ages. It is also focusing on cost cutting by taking majority of it's operations online and establish
digital supply chains to combat discounters in a competitive industry (Shanock, and et.al., 2019).
However Marks and Spencer has lagged behind Zara due to it's international operations not being
as quick to identify market trends and it's divided focus on it's food items business segment
which it is aiming to sell using special discounts like Valentine's day discount.
The international business environment is extremely volatile as different locations play
by their own set of rules and have their own unique culture, this makes it very tough for
businesses to survive and thrive. There are various challenges in becoming and remaining a
market leader on a global scale which are described below. Cultural and Social issues keep eating away at a business internationally as they have to
be careful of each and every marketing message they send out and the products they sell
as backlashes of sensitive and religious nature can be detrimental.

 Operating and coordinating a global workforce is a major challenge as working together
and keeping tabs on personnel at remote locations is not always possible or done quickly. Nuances of foreign policies and relations can halt a business in it's tracks despite it being
market leader as government policies affect profitability and operations directly and
relations between the host and domestic country needs to be friendly for business to
happen (Größler, 2020).
 Constant need of innovation in business is needed for it to become a defining force in it's
target market as better technology and operations helps develop a competitive edge and
innovative products enjoy a much better product market cycle and shelf life.
CONCLUSION
The above mentioned report went into detail regarding the three major pillars of business
management being human resource management, motivation and operations management and it
is only through efficiency in these concepts together that a business can succeed. The elements
and strategies of human resource management was analysed in context of BMW and the
challenges it faces due to increased expansion and production overseas along with having an
older workforce along with the potential solutions. Major theories of motivation were described
and compared such as Maslow's hierarchy of needs, Herzberg's two factor theory, principles of
Frederick Taylor and McGregor's Theory X and Theory Y. The fashion industry and it's related
challenges were also stated in the operational context of Zara highlight the role globalization
played in it's success and it's strategies comparing to those of competitors like Marks and
Spencer. The report was concluded with the major barriers to become and remain a market leader
in the international business landscape and it helped in gaining a thorough understanding of the
global business environment.

REFERENCES
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