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mistakes in the interview summary below. Read the summary. Then listen to the interview and correct the mistakes.

The changing needs of customers

Customer needs are changing because of developments in three key areas: environmental issues, technology and time.

The change in social environment concerns the type of households that we live in. The classic family unit - mother, father and family pets - only constitutes about 50% of the UK population, and is being replaced by a variety of other forms. These include single-person households, single-parent households, and households where children share a house - but live as individuals rather than as a single family.

The changes caused by technological developments are being driven in particular by the rapid expansion m the use of e-mail and the growing importance of household appliances.

Finally, as our lives become less busy, customers are starting to expect 'value for time' when making a purchase. This can mean saving customers' time, for example through Internet shopping: or. on the other hand, creating an environment where shopping is treated as a business transaction that customers actually want to spend time on and enjoy.

Discuss these questions.

1What does the Henley Centre do?

2Amazon.com and the bookshop chain Waterstones both offer 'value for time' but in different ways. What are the differences?

3Which is more important to you when making a purchase: 'value for time' or 'value for money'? Why?

DISCUSSION QUESTIONS

1.Is globalization good or bad for businesses?

2.Are consumers in your country concerned about the environmental policies of businesses?

3.Would you pay more for things produced in environmentally-friendly manner? If so, why?

4.What are the risks of e-commerce for a) the companies involved b) their customers?

5.How can businesses use the Internet effectively?

6.How important is it for companies to anticipate future trends in consumer behaviour? What methods can they use to do so?

7.Can you predict possible changes to products and services by the year 2030?

8.How do you see businesses developing in the future?

9.What are the implications for the way international managers will need to work in the future and also for the training and education they will need?

10.What personal qualities and suitability factors for the position in a global company would you list in your letter of application ?

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CASE STUDY

Background

KGV is a traditional high-street music retailer. Based in Amsterdam, it has 12 stores in the Netherlands, three of which are megastores. Some years ago, it expanded into the rest of Europe and now owns 65 stores – eight of these are megastores.

The company is at present going through a difficult period. Over the last three years, profits have steadily fallen, from € 450 million to e290 million. The megastores‘ sales have risen by 8%, accounting for 55% of the company‘s turnover, but the increased revenue has been achieved only by heavy expenditure on advertising and promotion. Fierce competition, a narrow product range and a lack of innovation are some of the reasons for KGV‘s poor performance. The management are concerned, especially, that they are not exploiting the opportunities offered by selling through the Internet.

Market study

A study by KGV's Marketing Department was recently carried out and it produced the following findings:

1It is estimated that, in five years' time, 70% of all music products will be bought via the Internet.

2Sixty-five percent of consumers under the age of 30 prefer to do their shopping via the Internet.

3KGV's customers would like stores to provide a wider product range (see chart 1).

4Average spending per month in KGV's medium-sized stores is highest among the 41-60 age group (see chart 2).

5Spending on music products by the over-60 age group will increase significantly in the next ten years in Europe.

6The various age groups have clear preferences as to the type of music they enjoy and purchase (see chart 3). Listen to a conversation between Michael Johnson, a director of KGV, and Hanna Driessen, the recently appointed Financial Director of the company. They are discussing the company's strategy before a forthcoming management meeting about KGV's future. Make short notes on the opinions they express.

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CHART 1: Preferences for additional products /

CHART 3:Preferences of

services (% of respondents for each category)

consumers for music products

 

 

Age 18-40

Age 41

 

 

 

 

+

 

 

 

spoken word (talking

4

44

 

 

 

books)

 

 

 

 

 

computer games

62

15

 

 

 

holiday information

35

48

 

 

 

computer software

58

32

 

 

 

banking services

25

12

 

 

 

concert tickets

70

75

 

 

 

 

 

 

 

 

Writing

You are the Managing Director of KGV. Write an e-mail to a director of the company who was unable to attend the management meeting. In the e-mail, summarise the discussion and decisions of the meeting and ask the director for his/her comments.

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INDIVIDUAL AND GROUP ACTIVITIES

Speaking

Convincing a sponcor

Like Patagonia, many companies sponsor, or contribute money towards, events or activities to maintain their image or to create a new image. Sponsorship can cover a whole range of activities including sport, education and local community projects depending on the type of image the company wants to project. For example, IBM sponsored the 2000 Olympic Games in Sydney, and Coca-Cola sponsors 151 American college students every year.

1.In pairs, make a list of companies which sponsor activities like those mentioned above. What kind of image does each company want to project through its sponsorship?

2.In groups, choose one of the following projects which need sponsorship.

3. Choose an international company to approach for sponsorship. Discuss what your project can offer them and prepare the arguments that you will use to persuade them to sponsor your project. Look at checklist of questions opposite that a company will ask itself before sponsoring a project. How would you answer these questions?

1.Will the project appeal to our customers?

2.Does it have a logical link with our company? If not, could one be developed?

3.Is it unique or one of many similar things on offer?

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4.Will there be other sponsors? If so, are they our competitors?

5.What kind of media coverage does the project offer? (for example, local press, TV, company name / logo on T-shirts, programmes etc.)

6.What are the chances of it being successful? (We don't want negative publicity.)

7.If our sponsorship is a success, will there be future opportunities to continue our connection with the project?

8.Does it present an opportunity to invite our employees or shareholders as observers or participants?

9.Are any of our customers involved directly or indirectly in this project?

WRITING

1.In the same groups, write a letter to the company asking them to consider your request for sponsorship. Use the guidelines below to help you.

2. Read the other groups' letters. Consider each one as if you were the company directors. Which project would you choose and why?

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VOCABULARY

Study the following words and phrases

 

 

abandon

despite

increase decrease

repay

accelerate

destroy

increasingly

resist

according to

digitize

influence/impact/effect

respect

accuse

diminishing

instantly

retain

acquire

disruptive

interpersonal

reward

advance

diversity

likewise

rigid

advantageous

drop

linked to

share

affect/influence

emerge

luxury

shift

ambivalent

enrich

make a difference

shortage

appropriate

essentially

merge

should this happen

attractive

exercise

middle-of-the-road

shrink

available

exist

negotiate

similarly

basically

fair

nevertheless

slightly

blind

favour

no doubt

stable

carry out

foreseeable

numerous

sufficient

common

frustrating

particularly

supply

compete

generally

pass down

survive

 

speaking

 

 

competitor

get noticed

perceive

sustainable

conduct

have the edge

primarily

temporary

consequent

hold a view

prominent

the same

controversial

hold back

rapidly

threaten

corporate social

however

rather

tidal

responsibility

 

 

 

currently

hypocrisy

recently

underlie

customer loyalty

ideally

recognize

undertake

decline

in essence

reduce

view

demand

in spite of

rely on

whereas

dependency

in terms of

remain

willing

 

 

 

work out

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SUPPLEMENTARY READING

UNIT 1

TEXT 1

ART OR SCIENCE?

Management is the art and science of making appropriate choices. To one degree or another, we are all involved in managing and are constantly making decisions concerning how to spend or use our resources.

Like most things in our modern, changing world, the function of management is becoming more complex. The role of the manager today is much different from what it was one hundred years, fifty years or even twenty-five years ago. At the turn of the century, for example, the business manager's objective was to keep his company running and to make a profit. Most firms were production oriented. Few constraints affected management's decisions. Governmental agencies imposed little regulations on business. The modern manager must now consider the environment in which the organisation operates and be prepared to adopt a wider perspective. That is, the manager must have a good understanding of management principles, an appreciation of the current issues and broader objectives of the total economic political, social, and ecological system in which we live, and he must posses the ability to analyze complex problems.

The modern manager must be sensitive, and responsive to the environment – that is he should recognize and be able to evaluate the needs of the total context in which his business functions, and he should act in accord with his understanding.

Modern management must posses the ability to interact in an ever-more-complex environment and to make decisions that will allocate scarce resources effectively. A major part of the manager‘s job will be to predict what the environment needs and what changes will occur in the future.

Organizations exist to combine human efforts in order to achieve certain goals. Management is the process by which these human efforts are combined with each other and with material resources. Management encompasses both science and art. In designing and constructing plans and products, management must draw on technology and physical science, of course, and, the behavioral sciences also can contribute to management.

However much you hear about «scientific management» or «management science», in handling people aid managing organizations it is necessary to draw on intuition and subjective judgment. The science portion of management is expanding, more and more decisions can be analyzed and programmed, particularly with mathematics. But although the artistic side of management may be declining in its proportion of the whole process it will remain central and critical portion of your future jobs. In short:

Knowledge (science) without skill (art) is useless, or dangerous;

Skill (art) without knowledge (science) means stagnancy and inability to pass on

learning;

Like the physician, the manager is a practitioner. As the doctor draws on basic sciences of chemistry, biology, and physiology, the business executive draws on the sciences of mathematics, psychology, and sociology.

1.The function of management is becoming more complex. Why?

2.What must management possess nowadays?

3.Management encompasses both science and art. In what can we see it?

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TEXT 2

PRINCIPLES OF THE MANAGEMENT

Different scholars offer different sets of principles of management. The most famous are the following fourteen. But the main principle should be read as follows:

«there is nothing rigid or absolute in management affairs, it is all a question of proportion». Accordingly if you view the following list of these principles as a set of important topics and sometimes applicable guidelines for managers, you will be keeping close to the spirit in which they were originally suggested.

1.Division of work. Within limits, reduction in the number of tasks a worker performs or the number of responsibilities a manger has can increase skill and performance.

2.Authority. Authority is the right to give orders and enforce them with reward or penalty. Responsibility is accountability for results. The two should be balanced, neither exceeding nor being less than the other.

3.Discipline. Discipline is the condition of compliance and commitment that results from the network of stated or implied understandings between employees and managers. Discipline is mostly a result of the ability of leadership. It depends upon good supervisors at all levels making and keeping clear and fair agreements concerning work.

4.Unity of command. Each employee should receive orders from one superior

only.

5.Unity of direction. One manager and one plan for each group of activities having the same objective is necessary to coordinate, unify, and focus action.

6.Subordination of individual interests to general interest. Ignorance, ambition, selfishness, laziness, weakness, and all human passion tend to cause self-serving instead of organization-serving behavior on the job. Managers need to find ways to reconcile these interests by setting a good example and supervising firmly and fairly.

7.Remuneration of personnel. Various methods of payment may be suitable, but amounts should reflect economic conditions and be administered to reward well-directed effort.

8.Centralization. Like other organisms, organizations need direction and coordination from a central nervous system. But how much centralization or decentralization is appropriate depends upon the situation. The degree of centralization that makes best use of the abilities of employees is the goal.

9.Scalar chain (line of authority). The scalar chain is the chain of command ranging from the top executive to the lowest ranks. Adhering to the chain of command helps implement unity of direction, but sometimes the chain is too long, and better communications and better decisions can result from two or more department heads solving problems directly rather than referring them up the chain until a common superior is reached.

10.Order. Both equipment and people must be well chosen, well placed, and well organized for a smooth-running organization.

11.Equity. Kindliness and justice will encourage employees to work well and be

loyal.

12.Stability of tenure of personnel. Changes in employee assignments will be necessary, but if they occur too frequently they can damage morale and efficiency.

13.Initiative. Thinking through a plan and carrying it out successfully can be deeply satisfying. Managers should set aside personal vanity and encourage employees to do this as much as possible.

14.Esprit de corps. Build teamwork.

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1. Dwell on the importance of each principle in the work of a manager. Try to exemplify your answer.

TEXT 3

SCIENTIFIC MANAGEMENT

No one has had more influence on managers in the 20th century than Frederick W.Taylor, an American engineer. He set a pattern for industrial work which many others have followed, and although his approach to management has been criticized, his idea are still of practical importance.

Taylor founded the school of Scientific Management just before the 1914-18 war. He argued that work should be studied and analyzed systematically. The operations required to perform a particular job could be identified, then arranged in a logical sequence. After this was done, a worker‘s productivity would increase, and so would his/her wages. The new method was scientific. The way of doing a job would no longer be determined by guesswork and rule-of-thumb practices. If the worker followed the prescribed approach, his/her output would increase.

Taylor‘s solutions to the problems were based on his own experience. When he was with Bethlehem Steel, Taylor criticized management and workers. He conducted many experiments to find out how to improve their productivity. He felt that managers used not the right methods and the workers did not put much effort into their job. They were always ‗soldiering‘ – taking it easy. He wanted both groups to adopt a new approach to their work. The new way was as follows:

1.Each operation of a job was studied and analyzed;

2.Using the information, management worked out the time and method for each job, and the type of equipment to be used;

3.Work was organized so that the worker‘s only responsibility was to do the job in the prescribed manner;

4.Men with the right physical skills were selected and trained for the job.

The weakness of his approach was that it focused on the system of work rather than on the worker. With this system a worker becomes a tool in the hands of management. Another criticism is that it leads to de-skilling – reducing the skills of workers. And with educational standards rising among factory workers, dissatisfaction is likely to increase. Finally, some people think that it is wrong to separate doing from planning. A worker will be more productive is he/she is engaged in such activities as planning, decision-making, controlling and organizing.

1.Give some information about F.W Taylor and his contribution to management.

2.Speak for and against his principles.

TEXT 4

MANAGEMENT BY OBJECTIVES

Management by objectives (MBO) is a system which was first described by Peter Drucker in 1954. Since then, MBO has attracted enormous interest from the business world, and its principles have been applied in many of the world‘s largest companies.

P. Drucker emphasized that an organization and its staff must have clear goals. Each individual must understand the goals of the enterprise he/she works for, and must make contribution to them. It is also vital that the individual knows what his/her manager expects of her. An individual must know what sort of results he/she is expected to

159

achieve.

If an organization uses MBO approach, it must pay careful attention to planning. A special feature of MBO is that the subordinate participates with the manager in developing objectives.

Various kinds of MBO systems are used in organizations. Here is an example of how a programme might work in a company. The programme consists of several stages.

First, the subordinate‘s job is defined. Next, his/her current performance is evaluated.

Then, new objectives are developed by the subordinates and their managers. Finally, the programme is put into action. Later, there are periodic reviews of the person‘s performance, and his/her progress is checked.

The subordinates and the manager discuss the objectives and make plans for achieving them. The manager may help in some way, perhaps by providing more training for the subordinate or buying more modern machines. From time to time, the subordinate and the manager meet to discuss progress. It is vital that the manager receives feedback from the subordinate on performance and achievements.

There are many benefits of MBO. The system helps the subordinates to see clearly their role in the organization. They have a say in how their job is performed, and what goals should be. Workers feel more responsible and motivated. MBO is a good technique for assessing the individual‘s performance. People are judged on results, rather than on the personal feelings and prejudices of the managers.

The main limitations of the system are that it is time-consuming and may create a lot of paperwork. In practice, MBO programmes are often fully supported by managements. This could be because managers are not always skilled at interviewing and giving guidance.

1.Who is the ‗father‘ of MBO?

2.What are the principles of the system?

3.How does the programme work?

4.What are the benefits and limitations of the system?

REPUTATION MANAGEMENT

by Roger White Integrity and reputation are the only real assets held by partners in professional services firms; when one is lost, everything else follows. For that reason, every firm must

develop a plan to prepare for the day its corporate integrity is threatened.

A problem becomes a crisis when the media starts paying attention to it, amplifies it, and matters escalate rapidly out of your immediate control. It affects the everyday life of the organisation, with real and lasting risks to the firm's image and reputation. When, where, and how the crisis is resolved is entirely in your hands.

Would you know what to do if a problem at your firm were to evolve into a genuine crisis? Having navigated through a variety of crises, I have learned a number of hard lessons, culminating in the following "top 10 tips" for managing in a crisis.

1.Don't panic! Stay calm, think clearly, and act fast. Remember to look at issues from an external-not an internal-viewpoint.

2.Manage the response early and from the top. Your CEO or senior partner should stand up and be the voice of the firm. Find agreement on your crisis strategy, get the commitment of top management, and then provide decisive leadership. Indecision from the top, slow or late responses to the media will make you a bigger target.

3.Put someone clearly in control of managing the crisis. Your point person should

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