Text XI. Company growth. Public relations

Read and translate the text.

Answer the questions on the text below:

Why is the company growth important?

Why must productivity improve?

How do companies try to solve the problem of growth?

What are the key elements needed for steady growth?

Why does the image of a company depend on public relations?

Why are public relations considered a part of marketing?

How should public relations be organized?

Growth, company

The company that does not grow each year in revenue and profit is headed for trouble. The reason for this is that expenses are going to rise a little bit every year because producers cannot increase prices as the prices of the services they use are increased. Therefore, productivity must improve every year in order to meet the demands of the business.

Unfortunately, some companies try to force this growth by artificial meats, such as acquisitions. Acquisitions provide temporary relief because the earnings and the revenue of another company are absorbed. However, debt and goodwill require expenses that may drag it all down. A company should grow because it has products and services customers want, not because somebody has an ego trip.

Just taking care, or planning well, does not seem to cause growth. There has to be a sound product, a striving organization, and leadership with integrity. A company grows at its own rate, which only changes when the company becomes too cumbersome to manage.

Public relations

The image that companies project depends very much on the communications they put out to the community. This does not mean bombarding newspaper and magazine editors with information about the company. It does mean being prepared to respond and having a thought-out standard position. Public relations has to be looked at as arm of marketing, although the two should never work for each other.

The best thing that can happen for a company or an organization is third-person credibility. This comes from customers, suppliers, and community people who respond to media requests.

Whether the company’s image is important or not in the overall scheme of things, this cannot be taken for granted. A firm public relations strategy, developed with the help of a knowledgeable public relations firm, will help keep the company out of trouble. I think it is not a good idea to seek publicity, but it is sensible to respond to requests for information. A professional, well-balanced response that is not self-serving will go a long way in gaining friends for the company.

Sum up the information you have learned from the text and say whether you agree or disagree with the key issues.

Speak about your viewpoint on the subject and give your reason or examples.

Final test

International management

Managers in all kinds of businesses are paying attention to what is going on across the borders and overseas. Many companies do business with and have their own operations in foreign countries. Many of them are classified as multinational corporations, i.e. companies with operating facilities, not just sales offices, in foreign countries.

The term “multinational” is used for a company which has subsidiaries or sales facilities throughout the world. Another expression for this type of business enterprise is “global corporation”.

Such companies control vast sums of money and they operate in countries with widely differing political and economic systems. There are two main reasons for the development of multinationals.

Firstly, when companies found that their national markets had become saturated, they realized that they could only increase profits by setting up subsidiaries abroad.

Secondly, if a country set up trade barriers – usually tariffs or quotas - against a company’s products, then the only alternative for the company was to establish a factory or sales organization in the country concerned. The economic boom of the 1960-s led to a rapid growth of globe-trotting enterprises. In the highly industrialized countries rising incomes attracted the multinationals; in developing countries, the availability of cheap labour lured many companies into building new factories and assembly plants.

The managers of those businesses that are part of international trade have become engaged in international management – managing resources (people, capital goods, money, inventories and technology) across national boundaries and adapting management principles and functions to the demands of foreign competition and environments. The demands on such managers have never been greater than they are today.

All businesses involved in international trade, whether they are multinational corporations or small international suppliers, require the services of men and women who love a challenge – the challenge of working in the ever-changing environment of international trade.

Such people need to thrive on the unexpected, the new, the different and the unique. If they are to work abroad, outside their native land, they need sincere interest in and respect for the host country’s people, traditions, history and culture. They must have expertise in the host country’s language, business customs, economy, and commercial laws. And above all, they need to be patient and flexible. The international manager working in a host country can be a native of that country, a native of the parent company’s country, or a native of a third country. Most multinational corporations employ a mixture of three in their foreign operations.

Before sending a manager to a foreign country, the parent company will usually see to it that a certain amount of training is absorbed. Courses and seminars in the host country’s history, customs, laws, language, and other areas help to prepare the manager and his or her family members for what awaits abroad.

International managers perform the same functions – planning, organizing, staffing, directly and controlling – that all other managers perform. The manager of an international company must perform managerial functions in an environment far more complex than that of manager in a company not engaged in international operations, because environment the international manager faces is the total world environment. This environment is dynamic and often volatile. A manager whose company is engaged in international financial activities, for example, needs to monitor currency stability.

A manager whose company is trying to decide whether to establish a manufacturing plant or to expand its production capacity needs to analyze the political stability of the area, the government’s attitude toward foreign businesses, social unrest, and foreign policy.

Another environmental concern of the international manager is the uniqueness of each international environment. A technique or style that works in one environment may not be entirely applicable in another.

As an example, a manager who plans to utilize a particular leadership style – participative - must consider the cultural environment of the specific country where this is to be introduced – its customs, norms, values, beliefs.

If the country has its values or norms focused on a respect for authority, this participative style will not be as effective as it would in a country that values a democratic approach to leadership.

The manager must also monitor the total environment, not just environments of countries where the firm has operations. In the international environment both opportunities and threats can arise anywhere in the world. It is necessary, therefore, that the international manager be alert to global developments no matter where they occur.

People are not the same around the world. They have different languages, cultures, customs, traditions and attitudes about work and working. To accomplish the company’s objectives, the international manager works with cultures of different nations and regions that differ from his or her own cultural background.

Culture is the distinctive way of life of a group of people, their complete design for living which involves knowledge, beliefs, acts, morals and customs. It is imperative that an international manager understands the cultures of countries in which he or she operates.

Analysts who have studied the performance and problems of corporations and individuals abroad have discovered that it is the problems related to working with a different culture that are likely to influence the success or failure of the undertaking.

So, to avoid the prescription for failure, an international manager must fully understand his or her own culture and study the culture of the country where the company plans to expand its operations. Only in this can the manager be certain not to force his or her own cultural values or expectations on foreign nationals and expect them to behave as he or she would.

International managers must recognize the influence of culture and modify their own personal behaviour and approaches.

A few of the differences employees have around the world revolve around their attitudes about company loyalty, the roles of different social groups in their environment, the value of work in their lives, and the value of time. In Japan, for example, company loyalty is strong among Japanese nationals. The normal mode of operation for Japanese managers is to be subtle, to suggest. Though they dislike and generally do not give orders, they have found that in America they must.

An international manager may be presented with a number of communication dilemmas. Not only words, but body language as well differs from one ethnic or cultural group to another. For example, it is considered an insult by Arabs to cross your feet or legs or to show the bottoms of your shoes to them.

The parent company may wish to transact business in English and dollars, but it will have to adjust to Japanese, Korean, German and other languages and currencies. The manager in a host country may be Swiss, the parent company may be American, and the host country may be France. Some method to reconcile the communications difficulties needs to be effective if the multinational corporation is to be successful.

Relying on translators can be tricky. Host country nationals may pretend lack of understanding when it is in their interest to do so. Certain words do not have direct translations or will come out with an imprecise meaning. Host country managers need a working knowledge of the language of their workforces and an understanding of their customs as well.

As the international operations continue to evolve and the business becomes increasingly involved in international business activities, top management makes a commitment to perceive the organization in a global perspective. At this point the company has entered the global structure phase. Decisions that previously were made separately by domestic and international parts of the company are made at the corporate headquarters for the total enterprise. Corporate decisions are made with a total company perspective for the purpose of achieving the company’s overall mission and objectives.

The shift to a global perspective needs to be accompanied by an organization structure that will achieve these objectives. The structure will evolve into one with functional, product or geographic features. The final structure will be based on worldwide product groups, worldwide area groups or a mixture of the two.

For reasons outlined above, international management becomes the focus of many educational programmes because the international manager needs an in-depth understanding of a foreign country – its people, customs, laws, history and language.

Tasks