Paper 1

• Delayering


  Removing layers of the workplace (usually involves senior management)
• Tall structure


  • Long chain of command - narrow span of control (usually large corporations - more chance for promotion but more controlling)
• Flat structure


  • Short chain or command but wide span of control (fewer chances for promotion and more independence)
• Matrix structure


  • Individuals work in groups/teams as well as their own department and function (Team working, efficiency and emphasis on skills)
• Span of control


  Total number of people someone is directly responsible for
• Taylor's scientific management theory


  Workers should be given repetitive work and piece rate (financial incentives)
• Mayo's human relations


  Hawthorne effect (recognition of a group)
• Maslow's hierarchy of needs


  • Physiological needs, safety, love and belong, esteem and self-actualisation (bottom to up)
• Herzberg's two factor theory


  • Hygiene - what needs to be met (working conditions and pay) and Motivators - what increases productivity (recognition and promotion)
• Bonus


  A payment in addition to wage
• Piece rates


  A payment based on per unit produced
• Performance-related pay


  Additional payment on top of wage based on performance targets being met
• Commission


  Percentage payment on a sale made
• Profit sharing


  Workers are given a certain amount of profit made
• Empowerment


  Giving authority and right to decision making
• Job enlargement


  Horizontally extending - more work to do
• Job enrichment


  Vertically extending - more responsibility
• Job rotation


  Allowing workers to try new tasks and roles (reducing repetition)
• Delegation


  Passing authority further down the hierarchy
• Leadership


  Way in which one person influences the actions and behaviour of others
• Management


  Art of getting things done through people
• Laissez-faire


  • Employees are encouraged to make all decisions with certain limits
• Paternalistic


  • Leader makes all the decision with interests of workers in mind
• Autocratic leadership


  • Leader makes all decision (army - needs to follow orders)
• Democratic leadership


  • Leadership that involves others but leader makes final decision (consultative or persuasive)
• Entrepreneur


  Individuals who set up a business themselves and are involved in the risk in this
• Intrapreneur


  Employees who find and develop initiatives using entrepreneurial skills for their employer without risking their own money
• Profit maximisation


  An attempt to make enough profit as possible
• Profit satisficing


  An attempt to make profit to satisfy needs of owner
• Aim


  What a business tries to achieve in the long term
• Objectives


  The goals that help the business to achieve its long term purpose
• Sales maximisation


  An attempt to either sell as much as possible (in terms of volume) or generate as much revenue as possible (value)
• Articles of association


  A document that provides information on the internal running of the business
• Certificate of incorporation


  A document that declares that a business is allowed to operate as a limited company
• Deed of partnership


  A binding legal document that declares the right of partners
• Limited liability


  When owner(s) have a separate legal identity to the business
• Unlimited liability


  Both the owner and the business have the same entity - liable for all debts
• Sole trader


  A business that has a single owner
• Partnership


  A business that has more than one owner (usually up to 20 owners)
• Primary sector


  Agriculture - natural resources