H
Habitual buying behavior Pattern of consumer purchases done out of habit or inertia, and not as deliberate choices or after study of product information.
Hackman-Oldham job-enrichment model Assessment of employee relations, guided by certain job characteristics that enhance personal satisfaction and work outcomes.
Halal Acceptable under Islamic law, especially in regard to injunctions against usury and applied to banking.
Halo effect In social psychology, the result of one dominant characteristic creating a favorable impression among associates. Compare HORN EFFECT.
Halsey, Frederick A. (1856–1935) Engineer and economist, father of the HALSEY-WEIR INCENTIVE SCHEME, by which incentives are introduced based on past production records. This was a revolutionary idea at the time, and was supported by the American Society of Mechanical Engineers.
Halsey-Weir incentive scheme Program whereby incentive bonuses are paid when production targets are exceeded, but not necessarily in proportion to the increase in production.
Hamel, Gary Management expert who introduced the concept of core competencies, and who stressed the need for strategizing as an ongoing, radical, and inclusive process for shattering assumptions about corporate governance.
Hammer, Michael Management consultant, co-author with James Champy of the book Reengineering the Corporation (1993).
Handy, Charles Management consultant known for his work on management structures and the future of work. Among the concepts that he has introduced are SHAMROCK ORGANIZATION, FEDERAL ORGANIZATION, DOUGHNUT PRINCIPLE, and portfolio working. Author of the book Understanding Organizations (1976).
Hang Seng index Arithmetically weighted index based on the capital value of selected stocks on the Hong Kong Stock Exchange.
Haram Forbidden under Islamic law, especially as relating to banking and the charging of interest on loans.
Hard-core unemployed Segment of the labor-age population that is willing to work but cannot find jobs.
Hard currency Money that is easily convertible into other currencies, such as the U.S. dollar and the pound sterling.
Hard landing Sustained period of economic growth that ends with the economy nosediving into a RECESSION.
Harrad Domar model Standard developmental model for economic growth, developed by Sir Roy Harrod in 1939 and Evsey Domar in 1946.
Harriman Forbidden under Islamic law, especially as relating to banking and the charging of interest on loans.
Harrington, H. James Author and consultant in the field of process improvement. His books include The Improvement Process (1997) and High Performance Benchmarking (1996).
Harsanyi, John Hungarian-Australian-American economist and winner of the Nobel Prize in Economics in 1994. He is best known for his contributions to the study of GAME THEORY and its application to economics, especially for his developing the highly innovative Bayesian Games, which are based on incomplete information. He also contributed to the study of equilibrium selection.
Harvard case method Teaching technique developed at Harvard Business School, in which students learn business operations by examining case studies.
Harvesting strategy Technique for making a short-term profit from a product before reducing the marketing support, such as advertising, and withdrawing it from the market.
Harvey, Jerry B. Professor Emeritus of Management at George Washington University. His research dealt with the ethical and moral issues of organization. He published two books: The Abilene Paradox and Other Meditations on Management and How Come Every Time I Get Stabbed in the Back, My Fingerprints Are on the Knife?
Hawthorne effect Improvement in worker performance as a result of supervision and observation, more than from external or environmental factors. This was a conclusion of the HAWTHORNE STUDY.
Hawthorne study Research conducted at the Western Electric Company’s Hawthorne plant in Chicago in the 1920s and 1930s, which formed the basis for modern industrial human relations. Its principal conclusion is known as the HAWTHORNE EFFECT. The study explored the effects and benefits of the physical environment on productivity, and discovered that workers’ positive perceptions of a company’s labor-friendly attitudes were more consequential in raising productivity than were actual reforms in the manufacturing process.
Hay method Job evaluation system based on three core factors: know-how, problem solving, and accountability, developed by the Philadelphia-based Hay Group.
Hayek, Friedrich August von (1899–1992) Austrian-British economist best known as a defender of classical liberalism. He is one of the major political philosophers of the 20th century. In 1974 he shared the Nobel Prize in Economic Sciences with Gunnar Myrdal for his “pioneering work in the theory of money and economic fluctuations and penetrating analysis of the interdependence of economic, social, and institutional phenomena.” His classic work was The Road to Serfdom.
Hayes, Robert H. (1936–) Professor at Harvard Business School. Author of Restoring our Competitive Edge: Competing Through Manufacturing (1984).
Headcount In business, the number of employees in an organization.
Headhunter An employment agency or its representative that specializes in recruiting executives.
Heavy-half theory In marketing, the idea that half the customer base for a product is responsible for 80% of its purchases.
Hedge Financial transaction designed to mitigate the risk of other, related transactions. For example, the purchase of a large quantity of securities or raw materials can be hedged by insuring against the risk of their failure through purchase of a FUTURES CONTRACT.
Hedge fund Speculative, largely unregulated fund that provides very high returns. Typically these are mutual funds or partnerships that exploit market anomalies to make substantial gains. They accept only investors with large portfolios and many are domiciled in offshore tax havens.
Helgeson, Sally Business consultant and author whose book The Female Advantage (1990) studied female management styles and examined the effects of changing technology, demographics, and the knowledge economy on leadership patterns.
Helicopter factor Influence of leadership that views a whole field in a panoptic or stereoscopic fashion, rather than in narrow segments, and thus gains a broad perspective on an operation.
Henderson, Bruce Australian-born founder of the Boston Consulting Group, responsible for introducing the terms BOSTON MATRIX (Boston box) and EXPERIENCE CURVE.
Herding cats Description of managing a disparate group of people with conflicting interests and values.
Herfindahl index In marketing, a tool to measure the degree of competition in a particular industry, examining the proportion of market shares of all known players. The index reflects the distribution of those market shares, giving weight to the largest players, and is thus a better measure than CONCENTRATION RATIOS.
Herstatt risk Potential that a transaction may not be settled as expected and that the party may renege on its obligations. Named after the Herstatt Bank failure in 1974. Also termed counter-party risk.
Herzberg, Frederick Irving (1923–2000) American psychologist, noted for introducing the concept of job enrichment and the motivator-hygiene theory, also known as the two-factor theory. His 1968 article “One More Time: How do you Motivate Employees? in Harvard Business Review sold millions of reprints.
Herzberg’s two-factor theory Explanation of employee motivation, introduced by early work theorist FREDERICK HERZBERG and covering the quality of supervision, job security, remuneration, and physical working conditions, whose absence may cause dissatisfaction but whose presence may not create satisfaction. Herzberg divided motivational factors into two classes: motivators (or satisfiers) and dissatisfiers (or hygiene factors). The latter, though not motivators in themselves, cause dissatisfaction if absent.
Hesiflation State of reduced growth in the economy, combined with strong inflationary pressures; term coined by Henry Fowler, Secretary of the Treasury during the Eisenhower administration.
Heuristics Problem-solving techniques that help managers arrive at solutions through experimentation, trial and error, and evaluation.
Hidden unemployed People who, though unemployed, do not appear in government statistics. This group includes workers who are chronically unemployed, those who have stopped looking for work and no longer qualify for unemployment benefits, and the long-term unemployed who have opted out of the labor market.
Hidden persuader Motivational and manipulative technique used in advertising; term popularized by popular writer VANCE PACKARD.
Hierarchy of effects In marketing, measurement of the impact of advertising and promotion on a target audience, progressing from awareness to action.
Hierarchy of needs See MASLOW’S MOTIVATIONAL HIERARCHY.
Hierarchy of objectives Taxonomy of corporate objectives, proceeding from short term through intermediate to long term.
High-contact culture In international business, a society in which it is acceptable to have physical contact, such as hugging, in public.
High-context culture In international business, a society in which feelings or emotions are not openly expressed. Verbal communication can be understood only within the cultural context and their meaning is tied to its cultural nuances.
High-involvement management Approach to management that encourages employee participation in decision making, training, incentives, and sharing of information as a means of cementing loyalty to the company.
High-involvement product Consumer product that is not purchased lightly or offhand, but only after considerable deliberation and comparative shopping, and thus the purchase represents an informed and deliberate choice.
Hirano, Horoyuki See FIVES METHODOLOGY.
Hired gun In business, an outside consultant or adviser who proffers advice during crises.
Histogram Graphical display of data using bars of different heights.
Historical cost In finance, the value of a unit of stock or other asset calculated on the basis of its original cost, rather than in terms of current dollars after INFLATION.
Historical cost accounting Bookkeeping system in which assets are valued at their original cost rather than in current dollars after INFLATION. Inflation often makes this type of accounting misleading, but it is fairly objective and difficult to manipulate or inflate.
Hockey-stick growth Very rapid, exponential growth of a company, in which the trajectory resembles a hockey stick.
Hofstadter, Douglas Richard (1945–) American expert in cognitive sciences whose book, Godel, Escher, Bach: An Eternal Golden Braid, won the Pulitzer Prize in non-fiction in 1979.
Hofstadter’s law Formulated by cognitive scientist DOUGLAS HOFSTADTER, the observation that everything takes longer than planned, and that planning must always take into account delays and roadblocks that will lengthen the time for completion.
Hofstede, Geert Dutch business executive and consultant who investigated the interaction between culture and business in transnational settings.
Holding company Parent company that holds shares in other companies without necessarily managing them. Holding companies have a distinctive management structure, made up of the CEOs of the subsidiaries. In some cases, subsidiaries of holding companies have considerable autonomy, although their operations are subject to tight financial control. Traditionally, holding companies are unstable because the companies acquired through diversification often have dissimilar corporate cultures and different operating procedures. Often, there is little strategic fit between the acquirer and the acquired. But as the two are integrated, new priorities emerge, as do new structures. Holding companies often exist for legal and fiscal reasons, as well as to cushion the tax burden.
Holding pattern Undesirable human relations situation where an employee is in limbo after return from an overseas assignment.
Holdout In finance, a creditor who refuses to renegotiate with a firm in financial distress, holding out in the hope of getting better terms.
Holism Philosophy that the whole is greater than the sum of its parts and that therefore an organism needs to be judged in totality. In business, a holistic brand is one that is seen to be emblematic of an entire company or corporation.
Holistic evaluation Assessment of a plan or project not simply on its economic merits but also on its impact upon all human and environmental elements.
Home run In business, an excellent or memorable performance.
Homoffice Blended term for home office.
Hooper rating Percentage of people listening to a radio program or station; similar to Nielsen ratings.
Horizontal communication Communication between employees at the same hierarchic level. Distinguished from UPWARD COMMUNICATION and DOWNWARD COMMUNICATION.
Horizontal integration Meshing of marketing or production departments handling products or services with comparable consumer bases.
Horizontal structure Organizational operation primarily formed around a small number of core processes or work flows linking the activities of employees to the needs of suppliers and customers. The work is performed by teams rather than individuals, and while still hierarchical, it is flatter than a traditional organization. In a horizontal structure, the focus of decisions and resource allocation is on continuous performance improvement. Information and training occur on a JUST-IN-TIME basis rather than on need to know, and career progression is within the process rather than by function, making the individuals generalists rather than specialists. Compensation is based on team performance.
The four key quantitative performance indicators are based on customer need and are tied to work flow. These indicators are order generation and fulfillment, new product development, integrated logistics, and branch management. Cross-functional teams are created based on work flow and not individual tasks, and these are connected both upstream and downstream. A team leader is appointed, and everyone involved receives an assignment, with measurement systems set up. Leadership is important but so are teams that own the processes. Hierarchy is also important, but the teams constitute the rungs of the ladder. Work teams are self-managed and empowered; as problems develop, decisions are made quickly and action is taken in real time, without interrupting work flow. DELAYERING is used to combine related but formerly fragmented tasks, eliminating activities that do not add value or contribute to corporate goals. The work is driven by a desire to achieve customer value and product improvement, rather than shareholder value.
Horn effect Carryover results of a negative first impression of a person, especially a candidate for employment, affecting later judgment during an interview. See also HALO EFFECT.
Hoshin planning (Japanese for “compass needle”) Japanese management strategy by which organizational goals are deployed throughout an organization and consist of five elements: vision, targets, planning, execution, and audits.
Hostile bid Takeover bid for control of a company, made against the wishes of the board of directors or its shareholders.
Hot desking Working without one’s own desk in an office; instead, using the desks of other employees who are away on assignments. As a result of increased technology and greater mobility of personnel, the definition of an office as a desk and a chair is being displaced by that of a peripatetic situation, or wherever the employee is working at the time. Support services can be transferred easily, and all communication devices can be mobile. Formerly, the corner office was looked upon as a status symbol, but status now goes wherever the employee goes.
Hot money In finance, money that moves at short notice from one financial instrument to another, in the hope of gaining more interest or avoiding political instability.
Hot stove In human resources, disciplinary action that is immediate, consistent, impersonal, and swift—similar to the effects of a person touching a hot stove.
Hotelling, Harold (1895–1973) American mathematician and economic theorist. He served as Professor of Mathematical Statistics at the University of North Carolina at Chapel Hill. He played a prominent role in the development of mathematical economics. A number of theories and principles in this field bear his name: Hotelling’s T-Square Distribution, Hotelling’s Law, Hotelling’s Lemma, and HOTELLING’S RULE. He made pioneering studies in nonconvexity in economics associated with market failures.
Hotelling’s rule In environmental economics, the principle that the satisfactory rate of depletion of nonrenewable resources is achieved when the extraction costs rise at the same rate as the interest rate. Developed by economist HAROLD HOTELLING in his 1931 paper on the subject.
House of quality Planning tool that brings engineers and customers together in the design process and that integrates customer needs into the design and development cycle.
Howard Sheth model Category of consumer behavior that illustrates the influence of advertising and promotion, developed by market research experts John A. Howard and Jagdish N. Sheth.
Hub and spoke Organizational model resembling the hub and spoke of a wheel, in which the subordinates form the spokes and the supervisor or manager is at the center.
Human asset accounting Measurement of the value of a company’s personnel and their expertise, applied to accounting as are other physical assets.
Human capital Coined by economist and sociologist GARY BECKER, a term that denotes the general or specific skills acquired by a worker in the course of training or on the job. It characterizes wages as a return on human capital invested in work.
Human engineering See ERGONOMICS.
Human information processing Cognitive action in which thought, memory, interpretation, and decision making convert information into usable ideas.
Human relations school School of industrial sociology associated with Australian psychologist and sociologist ELTON MAYO, which sees better relationships between management and workers as the key to greater productivity. The role of management is, therefore, supportive and not directive.
Human relations theory Management philosophy that studies the role of non-work-related factors in motivating employees, such as professional pride, self-actualization, sense of belonging, and quest for achievement. Leadership styles, attitudes, and relationships can influence these factors.
Human resource accounting Theoretical approach to quantifying the contribution of HUMAN CAPITAL, showing it on the assets side of the balance sheet.
Human resource management Direction of the activities of employees with a view to maximizing their potential and professional participation in achieving corporate goals and targets. Also termed PERSONNEL MANAGEMENT.
Hurdle rate Minimum acceptable return on a project or development.
Hygiene factor See HERTZBERG’S TWO-FACTOR THEORY.
Hyperinflation Condition of economic RECESSION during which money loses so much value as to become useless and the monetary system breaks down to be replaced by barter, as occurred in the Weimar Republic in the 1920s.
Hypothecation 1. Authority given to a banker to sell goods pledged as security for a loan. 2. Dedication of a tax to meet a specific need or obligation, as in taxes on cigarette sales that are channeled into healthcare.