IB Business Management Unit 2 [SL&HL]

Demography

Demography

The statistical study of population characteristics, using data such as birth rates, death rates, ageing populations and net migration rates.

Flexitime

A system that enables workers to have a degree of autonomy to determine when they work, so long as they complete their work by set deadlines.

Gig Economy

Refers to labour markets where workers are typically on short-term, temporary contracts or carry out freelance work as independent contractors.

Homeworking

an aspect of flexitime whereby people work from their own homes.

Human Resource Management (HRM)

refers to the role of managers in planning and developing the organization’s people. This is done through interrelated functions such as the recruitment and selection, as well as training and development of employees.

Human Resource Planning / Workforce Planning

the management process of forecasting an organization’s current and future staffing needs.

Migrant Workers

people who move to other countries in search of better job prospects and opportunities.

Mobility of Labour

the extent to which workers are flexible enough to move to different locations (geographical ———) and/or their flexibility in changing to different jobs (occupational ———).

Net Migration

measures the difference between the number of workers entering a country (im——-) and the number of people leaving (e——-).

Portfolio Workers

those who simultaneously carry out a number of different jobs, oſten for various contractors, usually on a temporary basis.

Six change approaches

John P. Kotter’s model for reducing the impact of change and resistance to change.

Consists of these strategies/approaches

(i) education and communication,

(ii) participation and involvement,

(iii) facilitation and support,

(iv) negotiation and agreement,

(v) manipulation and co-option

(vi) explicit and implicit coercion.

Teleworking

refers to working away from the office by using electronic forms of communication, such as telephones, the Internet and email.

Workforce

refers to the number of employees at any one point in time for a particular organization.

Accountability

describes the extent to which a person is held responsible for the success or failure of a task or job.

It allows senior managers to have better control over the running of their organizations.

Bureaucracy

the official administrative and formal rules of an organization that govern business activity.

It involves prescribed rules and policies, standardized procedures and formal hierarchical structures.

Centralisation

occurs when the majority of decision making is done by a very small number of people (usually the senior leadership team) who hold decision-making authority and responsibility.

Chain of Command

refers to the formal line of authority, shown in an organization chart, through which formal communications and orders are passed down.

Decentralisation

occurs when decision making authority and responsibility are shared with others in the organization.

Delayering

the process of removing levels in the hierarchy to flatten the organizational structure, thereby widening the span of control in the hierarchy.

Delegation

the empowerment of a person lower down in the organizational structure by passing on control and decision-making authority to complete a certain task or role.

Flat / Horizontal Organisational Structure

there are only a few layers in the formal hierarchy and hence managers have a relatively wide span of control.

Hierarchy

refers to the organizational structure based on a ranking system.

Each ——— level refers to a different rank with its associated degree of authority and responsibility.

Levels of the hierarchy

the number of layers of formal authority in an organization.
The number of levels is shown in an organization chart.

Line Manager

refers to the person directly above an employee

in the organizational structure.

Managers

the people responsible for the day-to-day running of the business or a department within the organization.

Matrix Structure

refers to a flexible type of organizational structure of representatives from different departments, temporarily working together on a particular project or job.

Organization by function

refers to structuring a workforce according to business functions, i.e. specialized roles or tasks such as marketing or finance and accounts.

Organization by product

refers to structuring a workforce according to the goods or services produced or sold.

Each department focuses on a different product within the organization’s overall product portfolio.

Organization by region

refers to structuring a workforce according to different geographical areas, based on where the firm’s operations are.

Organization chart

is a diagrammatic representation of a firm’s formal structure of human resources.

Organizational structure

refers to the formal interrelationships and hierarchical arrangements of human resources within a business.

Outsourced workers

in Charles Handy’s Shamrock Organization, are the individuals or organizations hired on a contract basis to carry out specific but non-core roles.

Peripheral workers

according to Charles Handy, are the contingent workers consisting of part-time and temporary staff hired by the organization to provide greater flexibility.

Professional core

according to Charles Handy, are the core workers consisting of full-time specialists (professionals) who are vital for the organization’s operations and survival.

project-based organization

arranges human resources around particular projects, each led by a project manager.

Such structures allow increased flexibility to adjust quickly to market changes and to adopt rapid innovations.

Responsibility

refers to who is in charge of whom and in what role or capacity.

Roles and responsibilities can be seen in an organization chart.

Shamrock Organization

refers to Charles Handy’s model that organizations are increasingly made up of core staff who are supported by peripheral workers and outsourced workers (consisting of consultants and contractors).

Span of control

refers to the number of subordinates overseen

by a manager, i.e. the number of people who are directly

accountable to the manager.

tall (or vertical) organization structure

means that there are many layers in the hierarchy and hence managers have a narrow span of control.

Autocratic leadership

refers to leaders who adopt an authoritarian approach by making all the decisions rather than delegating any authority to their subordinates.

Instead, the autocratic leader simply tells others what to do.

Democratic Leadership

refers to the leadership approach that considers the views of others when making decisions.

This participative leadership style means that decision-making is decentralized.

Functions of management

refers to the roles of managers, namely the planning, organizing, commanding, coordinating and controlling of business operations.

Intuitive thinking and management

based on personal beliefs, perceptions and instincts or gut feelings.

This approach to management and leadership considers issues that are not necessarily quantifiable.

Laissez-faire leadership

an approach based on having minimal direct input into the work of employees.

Instead, —— leaders allow subordinates to make their own decisions and to complete tasks in their own way.

Leadership

the skill of getting things done through other people by inspiring, influencing and invigorating them to achieve organizational goals.

Leadership style

refers to the ways in which decision makers behave or reveal their behaviour.

These styles or approaches are categorized as autocratic, paternalistic, democratic, laissez-faire or situational.

Management

the practice of achieving an organization’s objectives by using and controlling the available human and non-human resources of the business in an effective way.

Manager

someone with decision-making authority within an organization and has responsibility for problem solving in order to achieve specific organizational goals.

Paternalistic Leaders

treat their employees as if they were family members, guiding them through a consultation process and acting in the perceived best interest of their subordinates.

Scientific Thinking and Management

based on objectivity, facts and empirical evidence.

This approach to the management and leadership follows a formal and prescribed procedure.

Situational Leadership

refers to the approach that considers there is no single leadership style that suits all situations.

The optimal style depends on situational factors, such as the attitudes, behaviour, and competencies of managers and workers.

360-degree appraisal

involves collecting evidence about the appraisee’s job performance from a range of stakeholders who work with the employee.

Acquired Needs Theory

coined by D. McClelland, suggests that three types of needs must be satisfied to boost motivation: the need for achievement, power and affiliation.

Appraisal

the formal assessment of an employee’s performance in fulfilling their job based on the tasks and responsibilities set out in their job description.

Commission

a type of financial reward that pays workers a certain percentage of the sale of each good or service that they are responsible for.

Differentiated Piecework

an incentive scheme that rewards more productive workers who exceed a pre-determined benchmark.

Division of Labour

the process of breaking down different aspects of a job or task and assigning different people to each particular part of the work in order to improve efficiency and output.

Empowerment

a non-financial motivator that involves developing the potential of workers or teams by granting them the authority to make decisions and to execute their own ideas to solve business problems.

Employee share ownership schemes

a type of payment system that rewards staff by giving them shares in the company or by selling the shares at a discounted price.

Equity theory

J.S. Adams’ theory of motivation, which suggests that people make comparisons of perceived fairness in the workplace based on the ratio of their input (effort) to output (rewards).

Esteem needs

Maslow’s hierarchy of needs refers to the desire of people to feel respected, having value and having self-respect.

Expectancy Theory

V. Vroom’s theory -
Assumes that people behave in a certain way in exchange for rewards based on their conscious expectations.
He argued that people only put in the effort to do a job if they expect that their role will help to achieve the required result.

External Recruitment

the process of hiring people from outside the business.

Formative Appraisal

the planned and ongoing process in which data and evidence are used to inform employees about what to do to improve their work practices.

Fringe Payments

Financial rewards paid in addition to a worker’s wages or salaries, such as subsidised meals, housing allowance and pension fund contributions.

Herzberg’s motivation-hygiene theory

A theory that looked at factors that must be met in order to prevent dissatisfaction and the factors that actually motivate employees.

Hierarchy of Needs

refers to A. Maslow’s theory of motivation,
that people are motivated by different levels of needs:

• physiological

• safety

• social

• esteem

• self-actualization

Hygiene Factors

parts of a job that F. Herzberg referred to that do not increase job satisfaction but help to remove dissatisfaction, such as reasonable wages and working conditions.

Induction Training

a type of training aimed at introducing new employees to the organization.

Internal Recruitment

involves hiring people who already work for the business to fill a vacant post.

Job Enlargement

refers to increasing the number of tasks that an employee performs, thereby reducing or eliminating the monotony of repetitive tasks.

Job Enrichment

involves giving workers more responsibilities and more challenging jobs.

Job Rotation

a form of job enlargement whereby workers are given different tasks, but of the same level of complexity, to help reduce the problems associated with repetitive tasks.

Labour Turnover

measures the percentage of the workforce that leaves the organization in a given time period, usually one year.

Maslow’s hierarchy of needs

outlines five levels of needs, from satisfying physiological needs to self-actualization.

Lower order needs must be met before people progress up the ——-.

Motivation

refers to the desire, effort and passion to achieve something.
It is the willingness to complete a task or job with intent and purpose.

Motivators

the factors that F. Herzberg considered to increase job satisfaction and motivation levels, such as praise and recognition.

Movement

according to F. Herzberg, occurs when people do something because they need to, so they feel obliged to do so.

National Minimum Wage

the lowest hourly pay that all firms must remunerate their workers, as stipulated by the government.

Non-Financial Rewards

non-monetary factors that motivate people by offering psychological and intangible benefits, i.e. factors not directly linked to money.

Off-the-job Training

refers to training conducted off-site, such as at a tertiary college or hotel conference centre.

On-the-job Training

refers to training carried out whilst at the workplace.

For example, the training can be delivered by a manager, supervisor or other specialist.

Performance-related pay (PRP)

a payment system that rewards people who meet set targets over a period of time.

The targets can be on an individual, team or organizational basis.

Piece Rate

payment system that rewards people based on the amount that they produce or sell.

Thus, their pay is directly linked to their level of productivity.

Physiological needs (or basic needs)

Maslow’s hierarchy of needs are the requirements for human survival, including food, water, shelter and warmth.

Productivity

measures the level of output per worker.

It is an indicator of motivation as employees tend to be more productive with increased levels of motivation.

Profit-related pay

a type of financial reward system which remunerates workers a certain percentage or amount of the annual profits that the firm earns.

Purpose

a non-financial reward, refers to the opportunity to make a difference.

Remuneration

means the overall compensation package, such as salaries, commission, profit-related pay, performance-related pay, share ownership schemes and fringe benefits.

Safety needs (or security needs)

In Maslow’s hierarchy of needs are the requirements that make people feel safe, such as job security.

Salary

a type of financial payment that rewards workers a fixed annual amount of money, usually paid per month.

Scientific management

developed by F.W. Taylor, suggests that specialisation and division of labour help to increase the level of productivity.

This is especially the case if pay is linked to a piece-rate reward system.

Self-actualization

in Maslow’s hierarchy of needs refers to the highest level of needs, which occurs when people become the very best that they can be and fulfil their potential.

Self-appraisal

Involves employees appraising themselves based on a set of pre-determined criteria.

Self-determination theory

coined by E. Deci and R. Ryan, describes three core requirements that facilitate growth and motivation in people: autonomy, competence and relatedness.

Social needs (or love and belonging needs)

Maslow’s hierarchy of needs refers to the requirement to be accepted by others.

Summative Appraisal

a written description of an employee’s performance at work, summarizing what s/he has done and achieved during given period of time, usually a year

Teamwork

a form of non-financial motivation, which involves the combined efforts of a group of workers to achieve organizational goals.

Time rate

A payment system that rewards staff for the time (rather than output) that they put into work.
It is expressed per period of time, e.g. $10 per hour or $5,000 per month.

Training

The process of providing opportunities for workers to learn and acquire employment-related skills and knowledge.