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TEST 2

Management: Managers’ Roles and

Steps in Successful Decision Making

1.What fields of economics demand management?

2.What roles do managers play in business activities? Can we classify these roles into a few groups?

3.Is management art or science? How can you prove it?

(Management is art because….

Management is science because …..)

4.Some people are born managers. Is it always genes or a gift of nature?

5.What qualities should a good manager have?

6.Do we need to study management?

7.What is a liaison?

8.What are the responsibilities of entrepreneur?

9.What functions of a manager are the most important? Study the standard steps of purchasing decision process and say if they match the algorithm of successful decision-making?

Steps of Purchase Decision Process (The Activities of a Buyer)

1.Problem recognition. (The buyer is aware he /she has got a problem, a need).

2.Information search. (The buyer collects information about alternatives of the prospect buy).

3.Alternatives evaluation (The buyer analyses alternatives in the light of various criteria. Different groups of buyers will have different priorities and different criteria).

4.Purchase decision.

5.The outcome.

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10. Read three short stories about experience with bosses and finish sentences:

If I were a manager, I …

If I am a manager, I …

If I become a manager, I …

If I became a manager, I …

Bosses

I

I was working as a sales assistant in a shoe shop at that time and my first boss was great. I loved her. I knew she was under a lot of pressure to sell more because it was not a very successful company, but she was always calm and positive and incredibly enthusiastic. Those are great qualities in a boss. It was not an exciting job but she made it fun. She was very patient with customers, she was a good listener, and she understood exactly what they really wanted.

Her only fault was that she just expected us to work through our lunch break when the shop was busy. It was embarrassing1 to tell her if I arranged to meet a friend because she was so enthusiastic. So sometimes it was difficult to have life outside of work.

I work in the Promotions department of a bank now but I always remember my first boss. She was a great role model. It‟s important to treat your customers and staff well and listen to them.

II

My first job was for a big insurance2 company. I was eighteen and I worked in the Human Resources department. It was great. There were about fifteen women and I was the only guy3 except for my boss. I didn‟t like him very much. I think he

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was competent, I think he was knowledgeable about the job but I can‟t think about any other positive things to say about him. He made people feel stressed when he talked to them, in fact, he was always in panic. He didn‟t have a sense of humor at all. And he was not a good communicator which is strange for the head of the Human Resources department. I learned that it is important for a boss to be a good communicator and to be calm, of course.

III

My first boss was very funny. He was the director of a language school, and I was teaching there during my summer holidays from the university. To be honest, the school was very badly organized because he was disorganized very much. But he was an inspiring4 person and I think it‟s very essential in a boss.

He was imaginative, enthusiastic and he created a very positive atmosphere.

I am not a boss now but if I become one, it is very important to create a positive atmosphere. Your staff must enjoy the work and if they are happy and motivated, they can deal with any problems.

Notes: 1- было неудобно; 2- страхование; 3 – парень; 4 -энтузиаст

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Units 3 Types of Companies

Text 1

Overview of Business Ownership in the USA

Glossary

Sole traders make up 65% of all businesses but earn only 16 % of total earnings in the USA. Corporations while fewer in number can be quite large. They make up only 24% of the enterprises. 11% is partnerships. Some of partnerships are really profitable, but these are few. As statistics shows partnerships as a form of business is not popular in the USA. The greater part of the earnings about 80% is made by the corporations.

Sole traders or sole proprietorships. To form a sole proprietorship is rather easy in the USA that is why there are about 19 million sole traders in the country. To start working, a

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sole trader must obtain two numbers: state sales tax number

(номер в налоговом управлении для отчета о доходах с продаж) and state and federal unemployment compensation number (номер социального страхования для выплаты пособия по безработице от властей штата и федеральных властей).

Sole traders have substantial tax benefits: the owner pays taxes only on the income earned from the business. He or she files only one tax form since the owner and the business are one and the same.

At the same time sole traders face problems with limited credit; the interest rate for loans to small business is the highest – 12 %.

Partnerships. Compared to sole traders, partnerships have better access to capital. Banks prefer to lend to partnerships over sole traders, because all partners are liable (responsible) individually and jointly for the entire amount of a loan. Tax benefits for partnerships are similar to those of sole traders. If a partnership has two owners who share investment and profit 50/50, each will have to pay an equal share of tax.

Corporations. Corporations have better access to capital, professional management, and their shareholders have limited liability. If the corporation fails, its shareholders won‟t have to sell their homes and cars to pay its debts. This is a great advantage which explains why there are a great number of small corporations in the country.

As for disadvantages there are some too. Public disclosure is considered a disadvantage by the corporation, although it serves to protect possible investors. Public disclosure means that the corporation must disclose its financial data. The information to be disclosed concerns the company‟s earnings, financial status, product offerings and the qualification of the top management.

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The purpose of this disclosure is to protect possible investors against corporate misinterpretation of facts. For corporation it is a serious minus because its competitors can have access to financial information which can disclose the corporation weaknesses and plans.

Task 1

Read the text and mark these statements as T (true), F (false) or I (irrelevant = it was not mentioned in the text).

Task 2

Answer the questions.

1.What legal forms of business are described in the text?

2.What benefits do sole traders have?

3.Do sole traders have the best access to capital?

4.What form of business has the largest number of disadvantages?

5.Which form of business is double taxed?

6.Why are partnerships not popular in the USA?

7.What is the public disclosure and what type of business has to provide it?

8.Which form of business can have the best professional management?

9.Which form of business makes the largest earnings and pays the largest taxes?

10.Do sole traders and partnerships have the same tax benefits?

11.Which form of business is the easiest to form?

12.Why do corporation have to disclose some of its financial information?

Task 3

Study the table and make up a story about forms of business in the USA. Use the words from the glossary.

Text 2

Joint Ventures (Special types of organizations)

Glossary

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A joint venture is an agreement between two or more businesses for the joint production and/or sale of goods or services. The partners in a joint venture may themselves be organized as sole traders, partnerships or corporations. Each partner is expected to bring management expertise and/or money to the venture. A joint venture is taxed just like a partnership with a proportionate share of profits or losses for each partner.

Let‟s look at international joint ventures. An international joint venture is one of the ways to enter foreign markets. Most international joint ventures begin when one company wishing to expand its markets buys a percentage of a local company operating in the foreign country of interest.

Joint ventures offer several advantages for the company looking at foreign markets. The local partner provides the foreign company with information about products, promotion and pricing in the market. Sometimes the local partner also has physical facilities, access to distribution system, a pool of trained labor and valuable contacts with local officials and the businesses. In return, the foreign company offers managerial, technical and financial assistance to the local partner. Finally, in some developing countries, the government requires that local investors be given a chance to participate in the business. In this case, if a foreign firm wants to own a portion of the business, it may have no choice but to agree to the creation of a joint venture.

Unfortunately, there are some problems with joint ventures. As in any partnership, there is always a possibility that the partners will disagree on important issues. This is even more likely to happen in international joint ventures because people involved are from different cultures. For example, marketing research is seldom used in developing countries. The partners from a developed country with a well-established practice of conducting marketing research may insist on this while the

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partners from developing countries may oppose to such research; for them it is a waste of time and money. Other potential sources of disagreement might be the dividend policy, new products and the financial contribution of each partner to the joint venture.

Task 4

Answer these questions.

1.What is a joint venture?

2.Why are international joint ventures established?

3.Are there any limitations to the forms of business organization of the partners in a joint venture?

4.If a joint venture is a kind of partnership, how are partners taxed?

5.What are the advantages of the joint venture for the local firm?

6.What benefits does the overseas partner get in a new country?

7.What problems do the partners in joint venture face?

8.Are these advantages and problems common to all partnerships, local, national and international?

9.How do you think what is the worst problems for the partners in a jointventure?

10.Do you know any successful joint ventures in Russia?

11.Would you like to be a franchisee?

Text 3

The Strange Ways Businesses Sometimes Go

Companies form alliances1 with foreign competitors to obtain new technologies, new products and access to new markets. International arrangements sometimes have strange beginnings. Texas Instruments successfully sued2 Japan‟s Hitachi for selling microchips in the USA at lower prices than in Japan. During negotiations both Hitachi and Texas Instruments learned a great deal about each other, and a certain level of mutual

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