IB Business Management - Unit 2

Gig-economy

Self employed people (e.g. uber drivers, deliveroo)

Flexible working (Flexitime)

Home-working/teleworking

Labour mobility

The ability of workers to move between jobs, industries, or geographic locations in response to changing economic conditions.

Demographic changes

Shifts in population characteristics, such as age, gender, and ethnicity, that can impact workforce availability and demand.

Immigration

The process of individuals moving to a country to live and work, often impacting labor supply and diversity in the workforce.

Delegation

Managers passing on of control and decision-making authority to trusted employees/staff within the business

Span of control

Number of employees that a manager directly oversees

Levels of hierarchy

The organisation structure based on ranking system

Chain of command

Formal line of authority through which communications and orders are passed down in organisations

Bureaucracy

Execution of tasks that are governed by official administrative and formal rules of an organisation

Decentralization

Decision-making authority and responsibility are shared with others

Managers

Someone who is in control and has the command. They do all the planning, coordination, and they delegate tasks to subordinates.

Leaders

Someone who inspires others, takes responsibility, motivates others, and is influential towards other co-workers

Autocratic leadership

One who centralizes decision making power. Top down decision making, no feedback from others. Just listen and do.

Democratic leadership

Someone who involves and considers employee views in the decision making, but in the end still make the decision themselves

Laissez-faire leadership

A results only environment, where only the outcome matters and not what happens in between. (e.g. you can have an entire months holiday as long as our work for the month is handed in)

Paternalistic leadership

Treat their employees as if they were family members, with their best interests at heart. Lots of close contact/communication and checking in with you
Negative —> not trusting that they can do something by themselves

Positive —> trying to empower them (“I believe in you son!”)

Situational leadership

Changing the type of leadership you used based on the situation, or to suit people’s needs

Scientific thinking

Based on objectivity, facts and empirical evidence. Decisions are made rationally and logically, meaning that they are simpler to justify

Intuitive thinking

Based on personal beliefs, perceptions, and instincts

Taylor’s scientific management motivation theory

He assumes that employees are motivated by pay and money, so that productivity can be improved by setting output and efficiency targets relating to pay

Maslow’s hierarchy of needs theory

He believed that people would need to satisfied with their lower level needs before they can progress to higher level needs.

1. Physiological needs (basic needs e.g. air, water, food)

   Business terms: amount of money earned to meet these basic needs

2. Safety needs (business providing job security, sick pay, maternity leave, pensions (retirement income))

3. Love and belonging needs (human desire to be accepted as part of a group/family)

   Business terms: opportunities to work in teams as well as compliance with anti-discrimination laws

4. Esteem needs (the desire for recognition from others and to feel good about themselves)

5. Self-actualization needs (forces that drive people to become the best that they can be)

Herzberg’s motivation-hygiene theory

He believed that there are two factors affecting the level of motivation in a workplace: hygiene factors (causes of dissatisfaction), and motivators (causes of satisfaction)

Employers can improve employee motivation by:

1. Job enlargement (giving workers more variety in what they do, making the work more interesting, not harder)

2. Job enrichment (giving workers more complex and challenging tasks to exploit their potential)

3. Job empowerment (delegating decision making authority to workers over their areas of the job, helping to boost their overall level of morale)

McClelland’s acquired needs theory

1. Need for achievement (the drive to excel, achieve in relation to a set of standards)

2. Need for power (the need to influence the behaviour of others)

3. Need for affiliation (the need to have good social and working relationships with colleages)

Criticism —> no extrinsic motivation

Deci and Ryan’s self determination theory

A psychological framework.

1. Autonomy (the need to have control over what a person does)

2. Competence(the need to feel confident and competent in doing a particular task)

3. Relatedness (the need to interact, be connected to, and experience caring for others)

Criticism —> no extrinsic motivation

Adam’s equity theory

• Employees are motivated by fairness and equity in a workplace

• Inputs (e.g. employee effort) need to be balanced with outputs (e.g. recognition from managers), otherwise employees will be demotivated

• Employees will only be motivated if their input to output ratio is deemed to be fair in relation to that of others in the workplace

Criticism —> subjectivity

Vroom’s expectancy theory

Employees will only be motivated if they see that their efforts will lead to the desired outcome.

1. Expectancy (whether employees feel they have the ability to complete the task)

2. Instrumentality (whether employees believe they will be rewarded if the task is completed)

3. Valence (whether employees value the reward upon completion of the task)

Financial rewards

Methods that businesses use to motivate workers that involve some form of money payment

Salary

Reward set at a fixed annual rate but paid on a regular basis

Wages

Reward for labour services usually expressed as an hourly rate (time) or measurable quantity of output

Commissions

Pays workers based on a proportion of sales or output they have contributed

Performance-related pay (PRP)

Rewards employees who meet certain goals. Can be paid through:

• Pay rise: an increase in salary/wages due to meeting or exceeding a pre-determined target

• Performance bonus: paid as a one-off reward to workers who have reached or exceeded output or quality targets

• Gratuity: paid to staff who completed their employment contracts

Profit-related pay

• Involves linking salaries and wages to the level of profits in the organization

• The greater the profits, the higher the pay

• Usually paid as an annual bonus

• Amount paid is usually linked to each employee’s salary and the length of service, so those on higher salaries and who have been in the organisation the longest are rewarded the most

Employee share ownership schemes

Rewards workers, managers, and directors by giving them shares in the company or by selling the shares at a discount price

Fringe payments (financial perks)

Monetary benefits to employees in addition to their wages/salaries (e.g. health insurance, housing allowance, staff discount, gym membership, paid holiday, sick leave)

Job enrichment

Giving workers more challenging jobs with more responsibilities, therefore they have greater autonomy and authority in their work and have better opportunities to accomplish their jobs

Job rotation

Changing the exact specifications and tasks that an employee may carry out while they are working

Job enlargement

Refers to broadening the number of tasks that an employee performs, but the basic nature of the job remains the same

Empowerment

Giving workers autonomy in decision making and execute their own ideas to solve business problems. They take initiative and have a say in how things are done, so they feel trusted and have pride in their work

Purpose (opportunity to MaD)

Employees may be motivated by using their work to help others, to make a different to the world (e.g. doctors, firefighters, teachers, etc.)

Induction training (AKA introduction training)

It is the training for new staff, usually brand new staff. Includes showing employees the facilities, meeting new people, rules of the business, IT (not necessary if the business is recruiting internally)

On the job training

It is the training carried out whilst at the workplace, involving: demonstrations, shadowing, and mentoring.

Off the job training

It is training that is conducted off-site, usually involving the employee being excused from work for one day for the training to take place

Appraisals

Formal assessments of an employee’s performance in a job, usually when a senior manager sets up a meeting with an employee to talk about their progress

Formative appraisal

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

Summative appraisals

It is the written description of an employee’s performance or work, summarizing what the employee has done and achieved during the year

360 degree feedback

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

Self-appraisal

It involves employees appraising themselves based on a set of pre-determined criteria. Appraisees are expected to be honest about their strengths and weaknesses

Internal recruitment

Recruiting people from inside the business (e.g. a promotion)

External recruitment

Recruiting people from outside the business

Zeus - Power culture

When a dominant individual holds the decision-making power. Power is very centralized and there is little bureaucracy

Apollo - Role culture

A structured organisation with roles, policies, and procedures. Individual job roles are clearly stated. Employees only do tasks that they are assigned to do, and it is not flexible, since people stick to their lanes

Athena - Task culture

It is all about getting the job done and solving the problems. There is no single source of decision making power. Employees are given autonomy to use their initiative to complete their work, showing that they are trusted. The leader is simply there to facilitate, not to direct employees

Dionysian - Person culture

Employees feel that they are more important than the organisation itself, and they can easily go wok for a competitor if they got fired. Common in professions such as accountants, consultants, lawyers, surgeons. (e.g. LeBron James is more well known than the team he plays for)

Culture clash

It exists when there is conflict or incompatibility between two or more cultures within an organisation

Formal communication

Official communication, some are private, some are open (e.g. school newsletter, invitation to a meeting, invoices)

Informal communication

Unofficial and unstructured communication. It is natural (e.g. informal meetings, messaging apps, conversations, informal emails)

Barriers to communications

Factors the prevent information from being transferred effectively/accurately

Trade Unions

It is an organisation whose members unite to protect employees employment rights and welfare. Employees are usually represented by a trade union in their approach to conflict in the workplace

Collective bargaining

Process in which industrial disputes are settled by negotiations between employers and employees or by their respective representatives

Work to rule

An employee sticks to exact what it says in their contract and does nothing more, nothing less. This way they are still doing their job, and they can’t get dismissed because they are not breaking any rules

Go slow

Employees deciding to work at a slower pace. They cannot get dismissed because they are still doing their job, and their contract does not specify how fast they need to work, unless they are paid per piece of product they produce

Strike!

When all employees choose one day to not go to work, to prove a point to the manager/government they are trying to negotiate/bargain with. It is the nuclear option.

Threats of redundancies

Employers dismissing employees as a result of their demands

Closure and lock-outs

Employer version of a strike. Employers locking their employees out of the business until conflict is resolved, meaning that employees don’t get paid. It is the nuclear option.

Employee participation and industrial democracy

The involvement of workers in the decision making process of an organisation

No-strike agreement

An agreement where strikes and lock-outs are off limits

Single-union agreement

Everyone in the business must join the same union, as different unions may have different terms

Conciliation and arbitration

Someone in the middle who talks to both sides of the conflict and negotiate. A go-between for both parties