Management Glossary

  Terms beginning with h
Hawthorne Effect
The name comes from a study conducted at the Hawthorne Works plant of the Western Electric Company in the 1920s. The study found that when lighting levels increased, worker productivity increased. To verify their results, the researchers lowered lighting levels below the original level to show that productivity would decrease correspondingly. Instead, they found that rather than reducing, productivity increased again. Further positive and negative changes in the work environment also induced gains in productivity. The researchers postulated that rather than responding to the changes in light levels they were responded to being treated as special by the company. This response has come to be known as the Hawthorne effect.
Contributed by: ManagerWise Staff

head hunter

A colloquial and, often, derogatory term for a recruiter who seeks out prospective employees who are qualified to fill open positions at an organization. The term head hunter typically refers to an outside contractor who is hired by a variety of companies and is usually paid only on successfully finding a candidate who is acceptable to the hiring organization and who accepts the job offer. The head hunter's fee is often, but not necessarily, set as a percentage of the hired employee's salary so the head hunter gets more to find senior executives than junior employees.

Contributed by: Managerwise Staff

Health Insurance Portability and Accountability Act

A U.S. law that is designed to, as the preamble to it states, "amend the Internal Revenue Code of 1986 to improve portability and continuity of health insurance coverage in the group and individual markets, to combat waste, fraud, and abuse in health insurance and health care delivery, to promote the use of medical savings accounts, to improve access to long-term care services and coverage, to simplify the administration of health insurance, and for other purposes."

The act is more often referred to by its acronym, HIPAA.

HIPAA affects not just health insurers and health care providers but also any organization or individual who manages, stores or handles health-related information.

Contributed by: Managerwise Staff


Reducing a risk by entering into a contract that will serve to counter all or part of the potential loss.

For example, consider the following scenario: You make a sale to a foreign company and specify the price in the buyer's currency. The nature of the sale is such that you won't receive most of the purchase price for some months, but you must begin to incur costs today, in your local currency, in order to fulfill the terms of the contract. If the rate of exchange between your local currency and the foreign currency suddenly drops dramatically and unexpectedly, then when you convert the payment you receive into your local currency it may no longer cover the costs you incurred, resulting in you taking a loss on the sale when you thought you would make a good profit. You can hedge against this risk by buying, from a currency trader, a forward contract that gives you the right to sell a specified amount of that foreign at a price (in your local currency) set in the contract and on a specified date (preferably the date you will receive payment) in the future.

Contributed by: Managerwise Staff

hedge inventory

Excess inventory that is intentionally held to protect against an unexpected event, such as a fire, natural disaster or labor strike, that might prevent the timely replenishment of that inventory. A hedge inventory of finished goods may be kept to ensure that, if such an event should occur, the company will still have goods to sell to its customers. A hedge inventory of parts or raw material may be kept to ensure that company has adequate supplies to continue operations should its suppliers' production be halted by an unexpected disruptive event.

Contributed by: Managerwise Staff

holding company
A company that does not carry on operations (making things, providing services to customers and/or selling goods or services) on its own. Rather it is set up solely to hold shares in other companies. A holding company may hold 100% of of its subsidiaries' shares or it may only hold a portion of some or all of their shares.
Contributed by: ManagerWise Staff
See: overhead cost

horizontal integration

A firm that merged with or acquires other similar firms has undertaken horizontal integration.

Contributed by: ManagerWise Staff
See: vertical integration


human resources


human resources information system

human capital
The value that potentially can be derived from the knowledge, skills, expertise and experience of individuals and groups.
Contributed by: Managerwise Staff

human resources
  1. The people who work for a company.
  2. The department that assumes primary responsibility for managing issues that arise with the hiring, firing and ongoing issues invovled in employing people in a company.
"Human resources" has generally replaced the older term "personnel".
Contributed by: ManagerWise Staff

hurdle rate of return
The minimum projected rate of return that a proposed project or new business must have before the company will agree to fund the project or business.
Contributed by: ManagerWise Staff

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