Английский для менеджеров

Competence encompasses an individual‘s technical and interpersonal knowledge and skills. Does the person know what he or she is talking about? You're unlikely to listen to or depend on someone whose abilities you don't respect. You need to believe that the person has the skills and abilities to carry out what he or she says they will do.

Consistency relates to an individual‘s reliability, predictability, and good judgment in handling situations. ‗Inconsistencies between words and action decrease trust.‖ This dimension is particularly relevant for managers. ―Nothing is noticed more quickly… than a discrepancy between what executives preach and what they expect their associates to practice.‖

Loyalty is the willingness to protect and save face for another person. Trust requires that you can depend on someone not to act opportunistically.

The final dimension of trust is openness. Can you rely on the person to give you the full truth?

Imagine you're the new CEO of a multi-billion dollar corporation. You're succeeding the founder's son-in-law who held the position for more than 33 years – growing it to the company that it is today. Your predecessor was dynamic. You're considered mellow and laid back.

201

And he's not really leaving, just going to the position of Chairman of the Board to "keep an eye" on things. How would you feel and what should you do? Well, that's exactly what Robert E. Brown, CEO of Bombardier, the Canadian-based manufacturer of such products as snowmobiles, rail cars, and aircraft had to ask. His answer is trust. By building trust with his employees – focusing on his integrity, competence, consistency, loyalty, and openness – his transition will be made that much easier.

WHY IS TRUST ONE FOUNDATION OF LEADERSHIP?

Trust appears to be a primary attribute associated with leadership. In fact, if you look back at our discussion of leadership traits, honesty and integrity were found to be among the six traits consistently associated with leadership.

As one author noted: "Part of the leader's task has been, and continues to be, working with people to find and solve problems, but whether leaders gain access to the knowledge and creative thinking they need to solve problems depends on how much people trust them. Trust and trust-worthiness modulate the leader's access to knowledge and cooperation."

When followers trust a leader, they are willing to be vulnerable to the leader's actions – confident that their rights and interests will not be abused. People are unlikely to look up to or follow someone who they perceive as dishonest or who is likely to take advantage of them. Honesty, for instance, consistently ranks at the top of most lists of characteristics admired in leaders. "Honesty is absolutely essential to leadership. If people are going to follow someone willingly, whether it be into battle or into the boardroom, they first want to assure themselves that the person is worthy of their trust."

Now, more than ever, managerial and leadership effectiveness depends on the ability to gain the trust of followers. For instance, work process engineering, downsizing, and the increased use of temporary employees have undermined a lot of employees' trust in management. A recent survey of employees by a firm in Chicago found 40 percent agreed with the statement: "I often don't believe what management says.' In times of change and instability, people turn to personal relationships for guidance, and the quality of these relationships are largely determined by level of trust. Moreover, contemporary management practices such as empowerment and the use of work teams require trust to be effective.

WHAT ARE THREE TYPES OF TRUST?

There are three types of trust in organizational relationships: deterrence-based, knowledge-based, and identification-based. Let's briefly look at each of these.

Deterrence-based Trust

The most fragile relationships are contained in deterrence-based trust. One violation or inconsistency can destroy the relationship. This form of trust is based on fear of reprisal if the trust is violated. Collaborators who are in this type of relationship do what they say because they fear the consequences of not following through on their obligations.

Deterrence-based trust will work only to the degree that punishment is possible, consequences are clear, and the punishment is actually imposed if the trust is violated. To be sustained, the potential loss of future interaction with the other party must outweigh the profit potential that comes from violating expectations. Moreover, the potentially harmed party must be willing to introduce harm (for example, I have no qualms about

202

speaking badly of you if you betray my trust) to the person acting distrustingly.

Most new relationships begin on a base of deterrence. Take, as an illustration, a situation of selling your car to a friend of a friend. You don't know the buyer. You might be motivated to refrain from telling this buyer about all the problems that you know the car has. Such behavior would increase your chances of selling the car and securing the highest price. However, you don't withhold information; you openly share the car's flaws. Why? Probably because of fear of reprisal. If the buyer later thinks you deceived him, he is likely to share this with your mutual friend. If you knew that the buyer would never say anything to the mutual friend, you might be tempted to take advantage of the opportunity. If it's clear that the buyer would tell and that your mutual friend would think considerably less of you for taking advantage of this buyer-friend, your honesty could be explained in deterrence terms.

Another example of deterrence-based trust is a new manager-employee relationship. As an employee, you typically trust a new boss even though there is little experience to base that trust on. The bond that creates this trust lies in the authority held by the boss and the punishment he or she can impose if you fail to fulfill your job-related obligations.

Knowledge-based trust

Most organizational relationships are rooted in knowledge-based trust. That is, trust is based on the behavioral predictability that comes from a history of interaction. It exists when collaborator have adequate information about someone to understand them well enough to be able to accurately predict their behavior.

Interestingly, at the knowledge-based level, trust is not necessarily broken by inconsistent behavior. If you believe you can adequately explain or understand another's apparent violation, you can accept it, forgive the person, and move on in the relationship. However, the same inconsistency at the deterrence level is likely to irrevocably break the trust.

In an organizational context, most manager-employee relationships are knowledge based. Both parties have enough experience working with each other to know what to expect. A long history of consistently open and honest interactions, for instance, is not likely to be permanently destroyed by a single violation.

Identification-based trust

The highest level of trust is achieved when there is an emotional connection between the parties. It allows one party to act as an agent for the other and substitute for that person in interpersonal transactions. This is called identification-based trust. Trust exists because the parties understand each other's intentions and appreciate the other's wants and desires. This mutual understanding is developed to the point that each can effectively act for the other.

Controls are minimal at this level. You don't need to monitor the other party because unquestioned loyalty exists.

The best example of identification-based trust is a long-term, happily married couple. A spouse comes to learn what's important to his or her partner and anticipates those actions. The partner, in turn, takes this for granted. Increased identification enables each to think like the other, feel like the other, and respond like the other.

You see identification-based trust occasionally in organizations among people who have worked together for long periods of time and have a depth of experience that allows them to know each other inside and out, This is also the type of trust that managers ideally seek in teams. Team members are so comfortable and trusting of each other that they can anticipate each other and freely act in each's absence. Realistically, in the current

203

work world, most large corporations have broken the bonds of identification trust they may have built with long-term employees. Broken promises have led to a breakdown in what was, at one time, a bond of unquestioned loyalty. It's likely to have been, replaced with knowledge-based trust.

LEARNING TO INFLUENCE

The first thing to remember is that you can't have influence without integrity. If you're selfish or act out of vested interest, people will always suspect your motives - trustworthiness is often judged by whether or not you have an axe to grind.

So far as tactics are concerned, there are three main approaches: consultation, persuasion and inspiration.

Consultation

Simply announcing decisions tends to encourage disagreement and provoke challenge; you need to build your credibility and establish a reputation for being fairminded and reasonable first.

If team members participate in planning and implementation, they will feel useful and respected, and will develop a sense of shared ownership of a project, strategy or change. As a result they will be more committed to making it a success.

So you should draw out others' contributions, building on and extending their ideas, rather than countering with alternatives. Open-ended questions (such as 'How would you see that developing?' or 'What would you expect the consequences to be?') should gently encourage people to see the value of what you are proposing. You should also be quick to give credit for others' ideas and suggestions, and be willing to delegate responsibilities, wherever possible. The more involved people are, the more they will feel they are working towards a shared goal, and the better the result is likely to be.

In addition, there should be fewer demands on you in terms of follow-up and supervision.

Consultation is especially appropriate if you have the authority to plan a task or project but are relying on other people to help implement the plans.

Inspiration

Inspiration appeals to people's emotions, ideals, aspirations and values. It encourages personal commitment, and channels energy into working toward a common purpose. It is the most crucial element in your ability to sell an idea to others.

To gain commitment to a request or proposal, you'll need to show that it has exciting possibilities and generate a shared identity for your team -a common vision of the future. You then need to convince team members that through their collective and individual efforts this vision can become a reality.

Persuasion

Persuasion involves the use of logical arguments, factual information, opinions and ideas. Its aim is to convince others that your request or proposal is feasible and consistent with shared objectives.

In order to persuade people, or sell them on an idea,' you must be forward with your proposals and suggestions and not afraid of others' reactions to them. Effective persuasion requires persistence and energy.

With persuasion, the basis for agreement and approval is the soundness of your reasoning. Remember, the more important the issue, the more people will scrutinize your reasons, so be prepared!

204

You also need to cover all angles. The more arguments you can offer, the more likely people are to find at least one of them convincing. However, make sure each argument is sound, or you could end up weakening your position. You should also try to cover all the possible objections to your idea, and argue convincingly against them.

Persuasion is the most direct form of influence, and is most appropriate when you need to sell an idea to a large number of people.

INFLUENCING PEOPLE

Have you been a part of a group that seldom agrees on what should be done and spends a long time making decisions? It is interesting to see what the leader of a group does when the group is not working well. Some leaders will complain and criticize group members. Others will give up on the group and attempt to do the work themselves. Neither of those responses improves the group's effectiveness. Effective leaders must be able to influence members. Influence enables a person to affect the actions of others.

Kinds of Influence

There are several kinds of influence a leader can use.

Position influence is the ability to get others to accomplish tasks because of the position the leader holds. If the leader can influence an employee's job rating, wages, and chances for promotion, it is likely that the employee will respond to the leader's requests.

Reward influence results from the leader's ability to give or withhold rewards. Rewards may be in the form of money or job benefits. Rewards can be non-monetary, such as recognition and praise. Leaders can use rewards in a negative way by requiring people to work overtime or by criticizing rather than praising employees.

Expert influence arises when group members recognize that the leader has special expertise in the area. Suppose a group of inexperienced salespeople have a manager with years of successful selling experience. They will likely look to the manager for guidance.

Identity influence stems from the personal trust and respect members have for the leader. If the leader is well liked and is thought to have the best interests of the group in mind, members are likely to support the leader.

The influence of leaders is not always positive. It may not be effective for a long period. If a manager is not viewed as an expert and is not well liked, he or she will have to rely on position and reward influence. It is not easy to continue to get people to do things for you just because you are their manager. They will probably do just enough to get by, get a reward, or avoid punishment. Most leaders try to develop expert and identity influence.

205

UNIT 9

HOW TO BUILD RELATIONSHIPS

How you build relationships will rely a lot on your individual style, but here are some useful guidelines:

•Take time to establish rapport. Building good relationships is not an optional extra to be squeezed in whenever you have a few moments; it's a cornerstone of your success as a manager.

•Establish why you need a good relationship. Find a common objective, such as improving performance by 10 per cent, and focus on that. Remember that you're not

206

building a relationship with a person just to be nice, it's in the interests of the business.

•Be patient - building a relationship takes time.

•Avoid being self-absorbed - focus on the other person. Rather than worrying about your image, whether or not the other person like you, or your own wants and needs, try to put yourself in their shoes. However, don't fall into the trap of assuming you know what's best for people, or what they want, without asking them. Listen carefully, and always check understanding and assumptions.

•Don't try to turn people into clones of yourself, and don't expect them always to have the same outlook as you. Try to develop your empathy and understanding. Team relationships work best when people are complementary - where there is a balance of skills, experiences and outlooks -not when everyone is the same.

•Don't merely tolerate differences, exploit them. This involves the following steps: identify the difference; allow for it; enjoy it; and finally, exploit it! This is, of course, far easier said than done. To exploit differences successfully, it's essential to focus on the benefits of the particular skills and qualities of each individual and the way in which they operate. It's also useful to recognize that this is a two-way process - the other person may also have difficulties with the way you work, and they too will need to learn how to gain from it!

•Be tolerant of people's weaknesses. Everyone has them - even you! Remember that a weakness is often the flip-side of a strength.

•Be open and master the art of feedback. Don't put off tackling difficult issues - they'll only fester.

•Take genuine pleasure in other people and their success. Understand that, as a manager, their success is your success.

•If you're changing your behaviour or approach, explain your rationale, describing what you seek to achieve and asking for feedback. If you change overnight without explanation, people will be suspicious of your motives - particularly if it's a one-off change, or your behaviour is inconsistent.

•Remember to like yourself and what you're doing, and behave in a way that ensures you will continue to do so. Not only will you sleep easier at nights, but other people will respond to your self-respect and integrity.

COMMON MISTAKES

It's useful to be aware of some of the most common mistakes in handling personal relations.

Firstly, don't assume you automatically have rights over people. Good relationships are based on trust and respect, which you have to earn.

Another common mistake is being too eager. Rapport takes time to develop, and often there are barriers to overcome. What's more, no two relationships are the same - each develops at its own pace. So don't try to force it, and don't give up too soon - the breakthrough might be just around the corner.

You should also beware of taking things personally. 'I disagree' doesn't mean 'I think you're stupid' or 'I don't like you.' And 'I agree' doesn't necessarily mean 'I think you're brilliant' or 'I like you'! Remember, for the most part disagreements are about ideas.

Once you have established a good relationship, it's vital not to take the other person for granted. You must continue to show that you respect and value someone, if you want the same in return.

Finally, bear in mind that deception can shatter relationships. Ideally, you should

207

try to tell the whole truth, all the time. Being open and honest establishes trust. However, there are of course times when complete honesty can do more harm than good, so be prudent and think about the possible impact of what you say.

UNIT 10

GLOBALIZATION: THREAT OR OPPORTUNITY?

I. Introduction

The term "globalization" has acquired considerable emotive force. Some view it as a process that is beneficial – a key to future world economic development – and also inevitable and irreversible. Others regard it with hostility, even fear, believing that it increases inequality within and between nations, threatens employment and living standards and thwarts social progress. This brief offers an overview of some aspects of globalization and aims to identify ways in which countries can tap the gains of this process, while remaining realistic about its potential and its risks.

Globalization offers extensive opportunities for truly worldwide development but it is not progressing evenly. Some countries are becoming integrated into the global economy more quickly than others. Countries that have been able to integrate are seeing faster growth and reduced poverty. Outward-oriented policies brought dynamism and greater prosperity to much of East Asia, transforming it from one of the poorest areas of the world 40 years ago. And as living standards rose, it became possible to make progress on democracy and economic issues such as the environment and work standards.

By contrast, in the 1970s and 1980s when many countries in Latin America and Africa pursued inward-oriented policies, their economies stagnated or declined, poverty increased and high inflation became the norm. In many cases, especially Africa, adverse external developments made the problems worse. As these regions changed their policies, their incomes have begun to rise. An important transformation is underway. Encouraging this trend, not reversing it, is the best course for promoting growth, development and poverty reduction.

The crises in the emerging markets in the 1990s have made it quite evident that the opportunities of globalization do not come without risks – risks arising from volatile capital movements and the risks of social, economic, and environmental degradation created by poverty. This is not a reason to reverse direction, but for all concerned – in developing countries, in the advanced countries, and of course investors – to embrace policy changes to build strong economies and a stronger world financial system that will produce more rapid growth and ensure that poverty is reduced.

How can the developing countries, especially the poorest, be helped to catch up? Does globalization exacerbate inequality or can it help to reduce poverty? And are countries that integrate with the global economy inevitably vulnerable to instability? These are some of the questions covered in the following sections.

II. What is Globalization?

Economic "globalization" is a historical process, the result of human innovation and technological progress. It refers to the increasing integration of economies around the world, particularly through trade and financial flows. The term sometimes also refers to the movement of people (labor) and knowledge (technology) across international borders. There are also broader cultural, political and environmental dimensions of globalization that are not covered here.

208

At its most basic, there is nothing mysterious about globalization. The term has come into common usage since the 1980s, reflecting technological advances that have made it easier and quicker to complete international transactions – both trade and financial flows. It refers to an extension beyond national borders of the same market forces that have operated for centuries at all levels of human economic activity – village markets, urban industries, or financial centers.

Markets promote efficiency through competition and the division of labor – the specialization that allows people and economies to focus on what they do best. Global markets offer greater opportunity for people to tap into more and larger markets around the world. It means that they can have access to more capital flows, technology, cheaper imports, and larger export markets. But markets do not necessarily ensure that the benefits of increased efficiency are shared by all. Countries must be prepared to embrace the policies needed, and in the case of the poorest countries may need the support of the international community as they do so.

III. Unparalleled Growth, Increased Inequality:

20th Century Income Trends

Globalization is not just a recent phenomenon. Some analysts have argued that the world economy was just as globalized 100 years ago as it is today. But today commerce and financial services are far more developed and deeply integrated than they were at that time. The most striking aspect of this has been the integration of financial markets made possible by modern electronic communication.

The 20th century saw unparalleled economic growth, with global per capita GDP increasing almost five-fold. But this growth was not steady – the strongest expansion came during the second half of the century, a period of rapid trade expansion accompanied by trade – and typically somewhat later, financial – liberalization. It is possible to break the century into four periods. In the inter-war era, the world turned its back on internationalism – or globalization as we now call it – and countries retreated into closed economies, protectionism and pervasive capital controls. This was a major factor in the devastation of this period, when per capita income growth fell to less than 1 percent during 1913-1950. For the rest of the century, even though population grew at an unprecedented pace, per capita income growth was over 2 percent, the fastest pace of all coming during the post-World War boom in the industrial countries.

The story of the 20th century was of remarkable average income growth, but it is also quite obvious that the progress was not evenly dispersed. The gaps between rich and poor countries, and rich and poor people within countries, have grown. The richest quarter of the world‘s population saw its per capita GDP increase nearly six-fold during the century, while the poorest quarter experienced less than a three-fold increase. Income inequality has clearly increased. But, as noted below, per capita GDP does not tell the whole story.

IV. Developing countries: How deeply integrated?

Globalization means that world trade and financial markets are becoming more integrated. But just how far have developing countries been involved in this integration? Their experience in catching up with the advanced economies has been mixed. In some countries, especially in Asia, per capita incomes have been moving quickly toward levels in the industrial countries since 1970. A larger number of developing countries have made only slow progress or have lost ground. In particular, per capita incomes in Africa have declined relative to the industrial countries and in some countries have declined in absolute terms. The countries catching up are those where trade has grown strongly.

209

Consider four aspects of globalization:

Trade: Developing countries as a whole have increased their share of world trade–from 19 percent in 1971 to 29 percent in 1999. For instance, the newly industrialized economies (NIEs) of Asia have done well, while Africa as a whole has fared poorly. The composition of what countries export is also important. The strongest rise by far has been in the export of manufactured goods. The share of primary commodities in world exports – such as food and raw materials – that are often produced by the poorest countries, has declined.

Capital movements: Many people associate with globalization, sharply increased private capital flows to developing countries during much of the 1990s. It also shows that (a) the increase followed a particularly "dry" period in the 1980s; (b) net official flows of "aid" or development assistance have fallen significantly since the early 1980s; and (c) the composition of private flows has changed dramatically. Direct foreign investment has become the most important category. Both portfolio investment and bank credit rose but they have been more volatile, falling sharply in the wake of the financial crises of the late 1990s.

Movement of people: Workers move from one country to another partly to find better employment opportunities. The numbers involved are still quite small, but in the period 1965-90, the proportion of labor forces round the world that was foreign born increased by about one-half. Most migration occurs between developing countries. But the flow of migrants to advanced economies is likely to provide a means through which global wages converge. There is also the potential for skills to be transferred back to the developing countries and for wages in those countries to rise.

Spread of knowledge (and technology): Information exchange is an integral, often overlooked, aspect of globalization. For instance, direct foreign investment brings not only an expansion of the physical capital stock, but also technical innovation. More generally, knowledge about production methods, management techniques, export markets and economic policies is available at very low cost, and it represents a highly valuable resource for the developing countries.

The special case of the economies in transition from planned to market economies

– they too are becoming more integrated with the global economy – is not explored in much depth here. In fact, the term "transition economy" is losing its usefulness. Some countries (e.g. Poland, Hungary) are converging quite rapidly toward the structure and performance of advanced economies. Others (such as most countries of the former Soviet Union) face long-term structural and institutional issues similar to those faced by developing countries.

V. Does Globalization Increase Poverty and Inequality?

During the 20th century, global average per capita income rose strongly, but with considerable variation among countries. It is clear that the income gap between rich and poor countries has been widening for many decades. The most recent World Economic Outlook studies 42 countries (representing almost 90 percent of world population) for which data are available for the entire 20th century. It reaches the conclusion that output per capita has risen appreciably but that the distribution of income among countries has become more unequal than at the beginning of the century.

But incomes do not tell the whole story; broader measures of welfare that take account of social conditions show that poorer countries have made considerable progress. For instance, some low-income countries, e.g. Sri Lanka, have quite impressive social indicators. One recent paper finds that if countries are compared using the UN‘s Human

210