A Report on Business Models and HRM in Various Organizations

This report delves into the intricate relationship between various business models and Human Resource Management (HRM) practices. It begins by defining the significance of HRM as a crucial asset within organizations, emphasizing its role in setting up processes like recruitment and payroll. The report then explores diverse business models such as hidden revenue (used by Google and Facebook), David Ulrich's model, franchise (exemplified by McDonald's), HR operating model, freemium (seen in Netflix and Hotstar), one-for-one (TOMS shoes), bricks-and-click (Tesco), and nickel and dime (Air Asia). Each model's implications for HRM are discussed, highlighting how HRM supports strategic partnerships, change management, administrative expertise, and employee advocacy. The report underscores how these models influence profitability, competitive advantage, and organizational efficiency. The report concludes by summarizing the key findings and emphasizing the importance of aligning HRM strategies with the chosen business model for optimal performance. This report is a valuable resource for students studying business and management.

MANAGING AND CO-
ORDINATING THE HUMAN
RESOURCE FUNCTION

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY ..................................................................................................................................1
Different type of business's models used by various organisation..............................................1
CONCLUSION................................................................................................................................3
REFERENCES................................................................................................................................4

INTRODUCTION
Human resources are the personnel of a business or organization, regarded as a
significant asset in terms of skills and abilities. HR set up is the process through which higher
authorities create masters for setting up all activities. Human resource department has to set up
for various deeds such as leave, recruitment, payroll setup. They are engaged in performing
various functions like managing and co-ordinating people. Present study will lay emphasis on
Marks and Spencer which has made use of different model that is more flexible and dynamic.
Study will tell about different models and the type of organisation using it (Ulrich and et.al.,
2015). Report will also highlight the ways in which human resource can set up firms by using
different models.
MAIN BODY
Different type of business's models used by various organisation
Various type of business's model have been used by organisation in order to increase
their efficiency and productivity. Business model is basically a plan for the successful operation
of a business, identifying sources of revenue, the intended customer base, products, and details of
financing. Models are basically utilised to increase companies profitability and competitive
advantage. It can include the following:
Hidden revenue business model: This business model is been used by Facebook and
Google. This model provides various features to people for free to cost to use. They offer free
apps and platforms for a broad audience (billion people worldwide) while monetizing the data of
the same users. Each time user click on the link provided by Google , they create the highest
revenue. This can also be used by organisation in order to enhance there profitability and earning
capabilities. It is very a hidden way to generate and create revenue. In this model employees of
the firm are paid on the basis of there performance. Google by using this model has made a
revenue of $574,2000 million in year 2015.
David Ulrich’s model: HRM is essential function of business and enterprise cannot
perform well in the absence of well set hr. This model supports in mobilizing multifaced roles so
that all people can perform their job efficiently. In order to set up Hrs, authority has to play role
of Hr business partner. Individual is required to build strategic partnership and have to develop
strong relationship with stakeholders. This helps in designing recruitment process and identifying
top talent. Human resource business partners aims to increase productivity and development
1

skills so that overall goal of business can be accomplished. Change agent is another role that may
help in set up of human resource department in different business. Professionals have to take
responsibilities for communicating information so that all people can be aware with changes and
can accept modifications easily. HR supports the innovations and lead initiatives so that
employees can perform their work easily. They work as administrative experts and record data of
all workers properly. This makes them able to prepare payrolls. Employee advocate is another
core HR role. That makes them able to protect interest of people working in business. HR can be
set up by using David Ulrich's model. In this human resource can do the role of strategic partner,
change agent, administrative expert and employee champion.
Franchise model: Under this model firm is been engaged in letting other business's
owners sell their own product. Here consists of a franchisor and franchisee. Franchisor ask
franchisee to sale there product. It is one of the most flexible and dynamic model which can be
used by various organisations. Like for example Mac Donald is been engaged in making use of
this franchise model (Business models, 2013). This model is very beneficial for the firm as
business's owners need not spend their own substantial amount of money in creating and
developing the organisation. It also removes the uncertainty related to loss or any other thing for
starting a new business's model. To set this model human resource department can assist
organisation. They can communicate policies and rules of franchising to franchisee. Also, the
new firm can learn various methods of performing the transactions with the established
industries. In this model franchisee has to give franchisor the licensing fees. It is one of the most
important model for creating cost benefit for the firm. Mac Donald is been using it for many
years. Average annual profit of Mac Donald by using franchising as its business's model is
$150,000 roughly per year (Laurent, 2016). So, it is the most prominent and used business's
model.
HR operating model: This framework allows business in aligning their HR functions
and making strategies to manage people well. HR department has to manage talent and have to
prepare rewards. Business partnering aids in setting up the HR activities in the organisation. This
is generally applies in new firms that have recently established their branch. HRTransformation
requires a compilation of strategic changes to the HR function to support the effective execution
of people strategies.
2

Freemium model: In order to establish the firm in market various organisations make use
of freemium model in which the company is engaged in providing there services free of cost to
users or consumers. It can be for a period of one month or 15 days. Like for example Hot-star,
Netflix are providing first month free service to the consumer. It is basically used in order to
make people aware about the services which are been given by these companies. The freemium
model tends to work well for Internet-based businesses with little customer acquisition costs but
high lifetime value.
It is most beneficial for the new firm who are going to start there business's. It supports
them in establishing it and also attract many consumers towards it. This model also help
companies in creating bond and build relationship with the customer's or there clients. It has
supported Netflix in making a profit of around $45,000 last year (Schuler and MacMillan,
2014). It has supported them in increasing there profitability and revenue. Also, with the
enhanced profit, employee's of the company also get motivated because of it. The Freemium
model lays keen emphasis on easily establishing the firm and give them a consumer base.
One for one business's model: This type of business's model is been used by
organisation who want to help public and create a social image in the market. TOMS shoes is a
firm which is been engaged in using the one for one business's model. In this they take old shoes
from the kids or young adults and provide them with new shoes. These are been exchanged with
those children who can not afford to buy a new pair. It is a non profit business's model which
supports organisation in creating a unique and good image in mind of public. This kind of model
might be seen as a sort of hybrid that combines profit with non-for-profit models (Schneider,
2018). TOMS shoes has created reasonable amount of profit by making a good image in the
market. This has supported them in attracting more consumers. From the other business's
models, this model can assist company in building there brand image and equity in the market.
Because of the model TOMS shoes has been able to increase there profit over the years. Firm has
not been in loss from the past so many years. Consumers prefer to buy shoes from the industry.
Bricks and click business's model: Bricks and click business's model is been used by
Tesco where they provide benefit to there consumers that they can buy the product online and
can collect it from stores. This gives business's advantage of doing and performing task on online
and offline basis. With help of this model, the firm can explore wide range of consumers. It
supports in enhancing there profitability and revenue. Doing business's online and offline can
3

attract large range of consumers. This has increased the operational efficiency and reduce there
cost of performing tasks. It has supported organisation in creating relationship with the
consumers.
Bricks and click business's model as comparison with another business's model is the
most flexible and used model. It gives consumer with a choice of availing the services given by
Tesco online as well as offline (Legge, 2015). This can support them in attracting more
consumers which has ultimately linked it to rise in there revenue. Employee's also get motivated
because of it. Issues in this business's model is also been solved by board of management
through online as well as offline basis. They are engaged in getting consumer feedback on online
plus offline base. It has developed there relationship with consumer.
Nickel and dime: This type of business's model is been used by various organisation like
Air Asia airlines. They are engaged in providing air tickets to the customer's at low price but
inside the air craft, firm is involved in charging for every food item been offered by them. In this
cost sensitive item will be charged at slightly low basis and revenue will be created from the
other things. This is the perfect model for creating extra revenue and profit. Employees are
provided with the training on basis of this model. It supports in enhancing profit.
CONCLUSION
From, the above study it has been summarised that various type of organisation has been
engaged in following different business's models. Like one to one business's model has
supported TOMS shoes in creating different image in the market. This has also increased there
profitability.
4

REFERENCES
Books and Journals
Ulrich, D. and et.al., 2015. Human resource competencies: An empirical assessment. Human
resource management.34(4).pp.473-495.
Legge, K., 2015. What is human resource management?. In Human resource management (pp.
62-95). Palgrave, London.
Schuler, R.S. and MacMillan, I.C., 2014. Gaining competitive advantage through human
resource management practices. Human Resource Management.23(3). pp.241-255.
Laurent, A., 2016. The cross‐cultural puzzle of international human resource
management. Human resource management.25(1). pp.91-102.
Schneider, S.C., 2018. National vs. corporate culture: Implications for human resource
management. Human resource management.27(2). pp.231-246.
Online
Business models. 2013 [ONLINE] Available through: <http://entrepreneurinsight.com.my/types-
of-business-models/>
5

6