Текст 4 Excerpts from “The End of Chimerica”

The financial crisis of 2007-2009 marks the beginning of the end of the Chimerican relationship. First, the Chinese authorities understand that heavily indebted American consumers cannot be relied upon to return as buyers of Chinese goods on the scale of the period up to 2007. Second, the Chinese dislike their exposure to the U.S. dollar in the form of close to two trillions of USD-denominated reserve assets. But the temptations to continue business as usual are also great on both sides. In order to stimulate their ailing export industries, the Chinese authorities seem resolved to carry on pegging their currency to the dollar. American policy makers seem equally willing to prolong America's addiction to cheap money as long as the economy is in precarious state.

This paper argues that the end of Chimerica is desirable, though the divorce needs to be amicable and its costs kept down. In the light of our analysis, currency adjustments must become a top priority in the international political debate. The world economy's key structural imbalance is that the second biggest economy in the world has pegged its currency to that of the largest economy at a strongly undervalued exchange rate. In the depressed conditions caused by the financial crisis, this peg poses a double threat. First, it limits U.S. recovery by overvaluing the dollar in key Asian markets. Secondly, as the dollar weakens against other developed world currencies—notably the euro and the yen—the burden of adjustment falls disproportionately on Europe and Japan, since dollar depreciation translates automatically into renminbi depreciation, through the action of the peg. This is a recipe for protectionist responses and new distortions.

Historically, big adjustments in relative production costs and income levels have generally come about as exchange rate adjustments. Between 1960 and 1978, for example, the deutsche mark appreciated cumulatively by almost 60 per cent against the dollar, while the Japanese yen appreciated by almost 50 per cent. The lesson from history is that exporters can live with substantial exchange rate revaluations when major gains in productivity are being achieved. The world—and particularly China—should prepare for similar adjustments if it is to draw the right conclusions from the current financial crisis.

Chimerica and the crisis

China's integration into the world economy was by far the most important development of the economic history of the past decade. In the 1990s Zhu Rongji and his right-hand man Wen Jiabao embraced foreign trade and foreign direct investment as cornerstones of a new Chinese development strategy. They convinced other members of the leadership in Beijing to embark on a strategy of export-led growth following the examples of its East Asian neighbors, Japan and Korea, but also imitating the policies adopted by many European economies under the post-war Breton Woods system. Following substantial renminbi devaluation in 1994 and the opening up of the economy to FDI, the strategy quickly bore fruit as multinational companies started to relocate production to China. The Chinese export machine began to take off rapidly after WTO accession in 2001, generating higher and higher trade surpluses. Exports in 2000 were in the range of $250 billion, but climbed to $1.3 trillion in 2008. China's current account surplus in 2001 was a mere $17 billion.

By the end of 2008, it was approaching $400 billion. As exports expanded, the authorities in Beijing consistently bought dollars to avoid appreciation of their currency. China's currency interventions served two goals: first, to promote export competitiveness, since export industries provided rapid productivity gains as well as new jobs and income; second, to build up reserves as a cushion against the risks associated with growing economic and financial integration, painfully illustrated by the experience of other countries in the 1997-8 Asian Crisis. For political reasons, the Communist Party leadership in Beijing feared financial instability even more than other governments and was unwilling to subject itself to the vagaries of international capital markets.

The result of sustained currency intervention was a vast accumulation of dollar denominated securities in the reserves of the People’s Bank of China and the State Agency for Foreign Exchange (SAFE). Already by 2000 China had currency reserves of $165 billion, slightly above 10 per cent of GDP. In 2009 currency reserves reached $2.3 trillion, equivalent to more than 50 per cent of China's annual output. As we and others have argued, such persistent currency intervention caused a growing distortion in the global cost of capital: the real economic shock of China's integration into the world economy should have led to a lower capital-labor ratio and hence higher real interest rates. But global interest rates—both long-term and short-term—continued to fall.

The accumulation of large war chests of foreign reserves through currency intervention opened up a Pandora's box of financial distortions. Ben Bernanke argued that a “glut” of savings from emerging markets was a key factor in the decline of U.S. and global real-long term interest rates, despite the parallel fall in U.S. savings and the fact that the U.S. deficit manifested itself before the Chinese surplus. Lower interest rates in turn enabled American households to increase consumption levels and worsened the imbalance between savings and investment. And, because foreign savings were predominantly channeled through government (or central bank) hands into safe assets such as Treasuries, private investors turned elsewhere to look for higher yields. This led to a more general re-pricing of financial risk, which in turn incentivized financial engineers to develop new financial products such as securitized debt instruments. This is not to say that reserve accumulation was the only cause for the current crisis. The financial disaster that began in 2007 had multiple causes: regulation built on the idea of the efficiency of financial markets; incentives for bankers that encouraged them to focus on short-term profits and stock market performance; a Federal Reserve policy of ignoring asset bubbles; and, last but not least, the willingness of Anglo-Saxon households to turn themselves into highly leveraged, unhedged investment vehicles that speculated on real estate.

Beijing cannot be blamed for the reckless lending and borrowing engaged in by Western financial institutions. Yet had it not been for the Chinese willingness to fund America’s consumption and real estate speculation habit, long-term interest rates in the United States would almost certainly have been substantially higher, acting as a circuit breaker for the housing bubble. It was not “financial terror” that brought Chimerica to an abrupt end, as some commentators had feared. The main threat, as it turned out, was the distortion of global interest rates and the complacency it generated. Bankrolled by China, the U.S. economy overdosed on debt.

With the benefit of hindsight, it is easy to argue that a world order built on net capital flows from China to America was bound to end in tears. (That was why our term “Chimerica” was always intended as a play on the word “chimera”.) In the past decade capital was flowing in large quantities on a net basis to an economy that presumably had a lower marginal productivity of capital than the lender economy. Capital flows that were not driven by higher rates of return on investment financed a boom in consumption and a decade of household dis-saving. Investment spending in the U.S. did not increase in the past decade and capital inflows merely substituted for household savings.

Текст 5. The case for Chinese currency adjustment

The Chimerican era is drawing to a close. After the bursting of the debt and housing bubbles, U.S. household savings will have to rise again. Washington aims to buffer this necessary adjustment by running sizeable budget deficits. Public dis-saving can temporarily compensate for higher private savings to maintain final demand, but the American consumer faces a lengthy adjustment period and will ultimately have to pay the bill for this fiscal largesse. Beijing's first response to the collapse in global demand was to loosen credit and pump money into domestic construction and infrastructure projects.

In the first six months of 2009 the government in Beijing ordered the banks to make new loans of close to 10 trillion renminbi or about 40 per cent of GDP. If these numbers can be trusted, China is going through one of the most remarkable experiments in monetary history. Stimulating domestic demand is, of course, the right policy response. But while these policies may ease the transition towards a more balanced economy, albeit at a cost to future taxpayers, a structural adjustment will still have to occur in the international economy. U.S. consumption will have to grow considerably less than U.S. production for a sustained period.

As long as exchange rate policy implicitly taxes consumption and subsidizes exports in China, surpluses will persist and a reorientation towards domestic growth will face important structural headwinds. Sooner or later relative prices between the two economies will have to change (Feldstein, 2008). A major exchange rate revaluation is in the American interest for at least three reasons.

First and foremost, exchange rate adjustment would help the reorientation of the U.S. economy. Chinese currency policy effectively forces an overvalued real exchange rate on the United States. Simply put, because Beijing keeps the exchange rate fixed, the dollar cannot devalue against China (and other parts of Asia) despite the large U.S. trade deficits. This makes it impossible for the American economy to earn its way out of the slump. Without an exchange rate adjustment, the United States will be forced to run expansive domestic policies if it wants to achieve full employment. In theory, to be sure, the United States could deflate to regain competitiveness against Asia, but deflation is out of the question for such a highly leveraged economy.

Second, by allowing the United States to import demand from abroad, exchange rate adjustment would lessen the potentially dangerous reliance of U.S. economic policies on measures to stimulate domestic demand. American fiscal policy is clearly on an unsustainable path and it is hard to judge the consequences of the financial distortions and potentially inflationary outcomes caused by zero interest rates and quantitative easing. To the extent that exports could become a meaningful source of U.S. growth again, such highly experimental policies could be ended sooner.

Finally, a Chinese exchange rate adjustment would reduce the risk of potentially grave trade frictions not only between the United States and Asia, but also between Europe and Asia. China's implicit dollar peg leads to the paradoxical situation that the renminbi devalues on a trade-weighted basis as the dollar continues its downward trajectory against the other major currencies. Sooner or later Europe, Japan and the other Asian economies will have to object if Chimerica as a bloc devalues against the rest of the world. If the United States is serious about its commitment to globalization and free trade, it cannot connive at a policy of Sino-American competitive devaluation that creates new distortions for the world economy.

A case can also be made that revaluation is in the Chinese interest. A further substantial increase in the volumes of U.S. government debt and dollars in circulation cannot be in the interest of biggest holder of U.S. Treasuries. After a decade of rapid reserve accumulation, policy makers in Beijing discovered in early 2009 how far their growth strategy had made them dependent on policy choices in Washington D.C. that were dictated primarily by domestic concerns. In short order, the U.S. government announced a $1.5 billion budget deficit and the Federal Reserve decided to buy hundreds of billions of government and agency debt. Recent Chinese statements questioning the future of the dollar as an international reserve currency (for example the proposal that the IMF's Special Drawing Rights become an alternative to dollars) have to be understood in this context. Beijing knows very well that in the short term there is no good alternative to the dollar. It is the vehicle currency for more than 80 per cent of Asian trade. It remains the predominant currency in central bank reserves. For historical and political reasons, Asian governments are reticent to accept their neighbors' currencies as a store of value.

True, the euro now offers financial markets of depth and liquidity comparable with those of the United States. Yet meaningful diversification of reserves is ultimately incompatible with a dollar-only peg. In theory, Beijing could diversify out of Treasuries into other fixed income assets or equities. But not many countries will accept large equity stakes of the Chinese government or government-controlled companies in key sectors of domestic industries. This explains why the preferred Chinese strategy at the time of writing is to acquire stakes in commodity-producing assets like mines and oilfields in comparatively poor and politically unstable countries where concerns about foreign ownership are less of a political obstacle. But such a policy does not address the underlying problem of renminbi undervaluation.

In brief, the sooner China faces the fact that it cannot avoid sizeable losses – say about 20 per cent of GDP in renminbi terms – on its dollar reserves, the better. These financial losses will be a modest price to pay for a development model that propelled China from Third World status to an economic powerhouse in less than 15 years and will in any case be more than compensated for by the increase in the dollar value of China's vast stock of RMB assets. With seven million jobs lost, the U.S. economy so far has taken a disproportionate share of the economic costs of the Chimerican divorce. It is in the interests of both sides that China play its role in the rebalancing of the world economy—to say nothing of the interests of the rest of the developed world, notably America's partners in Europe and Japan, who are taking most of the strain of the dollar-renminbi slide.

Текст 6 Theory of Knowledge for /The Encyclopaedia Britannica/

Bertrand Russell

Theory of knowledge is a product of doubt. When we have asked ourselves seriously whether we really know anything at all, we are naturally led into an examination of knowing, in the hope of being able to distinguish trustworthy beliefs from such as are untrustworthy. Thus Kant, the founder of modern theory of knowledge, represents a natural reaction against Hume's skepticism. Few philosophers nowadays would assign to this subject quite such a fundamental importance as it had in Kant's "critical" system; nevertheless it remains an essential part of philosophy. It is perhaps unwise to begin with a definition of the subject, since, as elsewhere in philosophical discussions, definitions are controversial, and will necessarily differ for different schools; but we may at least say that the subject is concerned with the general conditions of knowledge, in so far as they throw light upon truth and falsehood.

It will be convenient to divide our discussion into three stages, concerning respectively (1) the definition of knowledge, (2) data, (3) methods of inference. It should be said, however, that in distinguishing between data and inferences we are already taking sides on a debatable question, since some philosophers hold that this distinction is illusory, all knowledge being (according to them) partly immediate and partly derivative.

The definition of knowledge. The question how knowledge should be defined is perhaps the most important and difficult of the three with which we shall deal. This may seem surprising: at first sight it might be thought that knowledge might be defined as belief which is in agreement with the facts. The trouble is that no one knows what a belief is, no one knows what a fact is, and no one knows what sort of agreement between them would make a belief

true. Let us begin with belief.

Traditionally, a "belief" is a state of mind of a certain sort. But the behaviorists deny that there are states of mind, or at least that they can be known; they therefore avoid the word "belief", and, if they used it, would mean by it a characteristic of bodily behavior. There are cases in which this usage would be quite in accordance with common sense. Suppose you set out to visit a friend whom you have often visited before, but on arriving at your destination you find that he has moved, you would say "I thought he was still living at his old house." Yet it is highly probable that you did not think about it at all, but merely pursued the usual route from habit. A "thought" or "belief" may, therefore, in the view of common sense, be shown by behavior, without any corresponding "mental" occurrence. And even if you use a form of words such as is supposed to express belief, you are still engaged in bodily behavior, provided you pronounce the words out loud or to yourself. Shall we say, in such cases, that you have a belief? Or is something further required?

It must be admitted that behavior is practically the same whether you have an explicit belief or not. People who are out of doors when a shower of rain comes on put up their umbrellas, if they have them; some say to themselves "it has begun to rain", others act without explicit thought, but the result is exactly the same in both cases. In very hot weather, both human beings and animals go out of the sun into the shade, if they can; human beings may have an explicit "belief " that the shade is pleasanter, but animals equally seek the shade. It would seem, therefore, that belief, if it is not a mere characteristic of behavior, is causally unimportant. And the distinction of truth and error exists where there is behavior without explicit belief, just as much as where explicit belief is present; this is shown by the illustration of going to where your friend used to live. Therefore, if theory of knowledge is to be concerned with distinguishing truth from error, we shall have to include the cases in which there is no explicit belief, and say that a belief may be merely implicit in behavior. When old Mother Hubbard went to the cupboard, she "believed" that there was a bone there, even if she had no state of mind which could be called cognitive in the sense of introspective psychology.

In order to bring this view into harmony with the facts of human behavior, it is of course necessary to take account of the influence of words. The beast that desires shade on a hot day is attracted by the sight of darkness; the man can pronounce the word "shade", and ask where it is to be found. According to the behaviorists, it is the use of words and their efficacy in producing conditional responses that constitutes "thinking". I It is unnecessary for our purposes to inquire whether this view gives the whole truth about the matter. What it is important to realize is that verbal behavior has the characteristics which lead us to regard it as pre-eminently a mark of "belief", even when the words are repeated as a mere bodily habit. Just as the habit of going to a certain house when you wish to see your friend may be said to show that you "believe" he lives in that house, so the habit of saying "two and two are four", even when merely verbal, must be held to constitute "belief " in this arithmetical proposition. Verbal habits are, of course, not infallible evidences of belief. We may say every Sunday that we are miserable sinners, while really thinking very well of ourselves. Nevertheless, speaking broadly, verbal habits crystallize our beliefs, and afford the most convenient way of making them explicit. To say more for words is to fall into that superstitious reverence for them which has been the bane of philosophy throughout its history.

Belief and behavior. We are thus driven to the view that, if a belief is to be something causally important, it must be defined as a characteristic of behavior. This view is also forced upon us by the consideration of truth and falsehood, for behavior may be mistaken in just the way attributable to a false belief, even when no explicit belief is present-for example, when a man continues to hold up his umbrella after the rain has stopped without definitely entertaining the opinion that it is still raining. Belief in this wider sense may be attributed to animals-for example, to a dog who runs to the dining-room when he hears the gong. And when an animal behaves to a reflection in there; this form of words is permitted by our definition. It remains, however, to say what characteristics of behaviour can be described as beliefs. Both human beings and animals act so as to achieve certain results, e.g. getting food. Sometimes they succeed, sometimes they fail-, when they succeed, their relevant beliefs are "true", but when they fail, at least one is false. There will usually be several beliefs involved in a given piece of behaviour, and variations of environment will be necessary to disentangle the causal characteristics which constitute the various beliefs. This analysis is effected by language, but would be very difficult if applied to dumb animals. A sentence may be taken as a law of behaviour in any environment containing certain characteristics; it will be "true" if the behavior leads to results satisfactory to the person concerned, and otherwise it will be "false". Such, at least, is the pragmatist definition of truth and falsehood.

Truth in logic. There is also, however, a more logical method of discussing this question. In logic, we take for granted that a word has a "meaning"; what we signify by this can, I think, only be explained in behaviouristic terms, but when once we have acquired a vocabulary of words which have "meaning", we can proceed in a formal manner without needing to remember what "meaning" is. Given the laws of syntax in the language we are using, we can construct propositions by putting together the words of the language, and these propositions have meanings which result from those of the separate words and are no longer arbitrary. If we know that certain of these propositions are true, we can infer that certain others are true, and that vet others are false; sometimes this can be inferred with certainty, sometimes with greater or less probability. In all this logical manipulation, it is unnecessary to remember what constitutes meaning and what constitutes truth or falsehood. It is in this formal region that most philosophy has lived- and within this region a great deal can be said that is both true and important, without the need of' any fundamental doctrine about meaning. It even seems possible to define "truth" in terms of "meaning" and "fact", as opposed to the pragmatic definition which we gave a moment ago. If so, there will be two valid definitions of "truth", though of course both will apply to the same propositions.

The purely formal definition of "truth" may be illustrated by a simple case. The word "Plato" means a certain man; the word "Socrates" means a certain other man; the word "love" means a certain relation. This being given, the meaning of the complex symbol "Plato loves Socrates" is fixed; we say that this complex symbol is "true" if there is a certain fact in the world, namely the fact that Plato loves Socrates, and in the contrary case the complex symbol is false. I do not think this account is false, but, like everything purely formal, it does not probe very deep.

Текст 7 . Coca-Cola. History of Advertising

Advertising for Coca-Cola began within days of the creation of the new soda fountain beverage in 1886. Early advertising on oilcloth signs (“Drink Coca-Cola. Delicious. Refreshing”) focused simply on consumer awareness of the existence of the refreshing beverage. Countless novelty items depicting the trademark were given away at sales locations, creating an important channel for constant product promotion. In 1894, the first outdoor painted wall on a drugstore in Cartersville, Georgia, became the forerunner of thousands to follow until nationwide use of billboards began in 1925.

Since the 1920s, radio has been an important medium of communication and continues to be a large segment of the merchandising mix for the Company. Coca-Cola became one of radio’s first commercial sponsors during the 1930s. In 1950, the Company’s first network television advertising appeared during, a live Thanksgiving special featuring Edgar Bergen and .Charlie McCarthy. Use of this all-powerful new medium quickly grew to giant proportions.

As bottlers began selling Coke in bottles, availability skyrocketed. Advertising followed the lead to make Coca-Cola the best-known soft drink in the world. Now-famous print ads, featuring fine illustrations by top artists including Norman Rockwell, projected memorable images of the drink’s quality in leading magazines. And it is unlikely that any commercial slogan will ever surpass the lasting impact of “The Pause that Refreshes” which appeared first in The Saturday Evening Post in February of 1929.

Through holiday advertising for Coca-Cola in 1931, artist Haddon Sundblom introduced the world to the image of Santa Claus as we know it today. In his paintings, Mr. Sundblom depicted the 20th century Santa Claus with the flowing white beard, rosy cheeks, brilliant red outfit and portly silhouette that has become the standard against which all other Santas are measured. Until then, Santa had been depicted as everything from a pixie to an elf to a frightening gnome. The popular Santa “portraits” continued as holiday ads in the’50s and’60s.

Early advertising discouraged calling the product “Coke.” Consumers were urged to ask for Coca-Cola by its full name because nicknames encouraged substitution. But the name “Coke” was here to stay. So in 1941, the Company used “Coke’’ in advertising and in 1945, “Coke” was registered as a trademark by the U.S. Patent and Trademark Office.

Whatever the medium, advertising for Coca-Cola has reflected the changing moods of America - from flappers through wartime, to the rock ’n’ roll 1960s, and on to the rappin’ 1990s.

Today, advertising for Coca-Cola and the Company’s other products is carefully aimed toward individual tastes while still underscoring the universal appeal of refreshment.

Ad Creation

Advertising the world’s best-known consumer product demands the talents of professionals in many different areas. The Company enlists the very best experts in the creative, media planning and buying, research and sales promotion arenas from several advertising agencies to work in cooperation with its internal marketing and media teams. Because these agencies are used exclusively for ad creation, the Company chooses not to accept ideas from the general public.

Coca-Cola is the world’s most global brand; we’re doing business in almost 200 countries. It is imperative that we know our consumers well. Through the use of presearch methods and trends studies, we feel we are the world’s most knowledgeable consumer marketing organization.

An example of these efforts is the ongoing Global Teenager Project. With ethnographic research as our primary tool, we can describe our primary target consumers and their changing needs and environment. Once we know about our consumers, we must be single-minded in our pursuit of creative excellence to reach them...

In 1993, The Coca-Cola Company moved its agency work for our Global Brands, on a skill match basis, to a roster of more than fourteen agencies. These agencies have skills that directly align with the strategic needs of the brand to which they are assigned.

Every notable campaign begins with extensive testing and research, from which come hundreds of promotional ideas and seasonal slants with campaign potential. After an idea is agreed upon with Company management, these agencies work to create, develop and implement the product advertising including television, radio and print media. The commercial music is usually written by composers under contract by the ad agencies. Specialists also write the lyrics.

Additionally, our advertising and marketing programs address the burgeoning choices offered by technological advances. We will continue to be at the forefront whether the medium is simply one of 500 television channels or any other vehicle on the information highway.'

The multiplicity of agencies and media reflect the Company’s drive to communicate. We must reach our consumers in a language they understand and in accessible and appropriate media.

Marketing Philosophy,

As Stated in ‘Coca-Cola, A Business System Toward 2000: Our Mission in the 1990s’, the Company is committed to building aggressively on its marketing strength in order to achieve profitable growth in this decade and beyond.

Because of the complexities of operating a business in more than 195 countries and provinces, tailoring marketing programs to certain regions of the world is critical to the Company’s continuing success. For example, in new markets such as Poland and India, the Company’s marketing goal is very basic, and efforts are more focused on simply establishing a viable bottling system.

In emerging markets, however, the primary concern is how to build enough bottling plants to meet demand. Marketing goals then become more diverse as the soft drink industry expands, product availability increases and consumer desire evolves for wider product range and choice in package types and sizes.

In highly developed markets, such as North America and most of Western Europe, marketing efforts capitalize on more sophisticated emerging consumer preferences, such as the fast-growing market for low-calorie beverages or alternative beverages.

Текст 8. Managers and Leaders

What is the ideal way to develop leadership? Every society provides its own answer to this question, and each, in groping for answers, de­fines its deepest concerns about the purposes, distributions, and uses of power. Business has contributed its answer to the leadership ques­tion by evolving a new breed called the man­ager. Simultaneously, business has established a new power ethic that favors collective over individual leadership, the cult of the group over that of personality. While ensuring the competence, control, and the balance of power among groups with the potential for ri­valry, managerial leadership unfortunately does not necessarily ensure imagination, cre­ativity, or ethical behavior in guiding the des­tinies of corporate enterprises.

Leadership inevitably requires using power to influence the thoughts and actions of other people. Power in the hands of an individual entails human risks: first, the risk of equating power with the ability to get immediate re­sults; second, the risk of ignoring the many dif­ferent ways people can legitimately accumu­late power; and third, the risk of losing self-control in the desire for power. The need to hedge these risks accounts in part for the de­velopment of collective leadership and the managerial ethic. Consequently, an inherent conservatism dominates the culture of large organizations. In The Second American Revolu­tion, John D. Rockefeller III describes the con­servatism of organizations:

“An organization is a system, with a logic of its own, and all the weight of tradition and iner­tia. The deck is stacked in favor of the tried and proven way of doing things and against the tak­ing of risks and striking out in new directions.^”

Out of this conservatism and inertia, organi­zations provide succession to power through the development of managers rather than indi­vidual leaders. Ironically, this ethic fosters a bureaucratic culture in business, supposedly the last bastion protecting us from the- en­croachments and controls of bureaucracy in government and education.

Manager vs. Leader Personality

A managerial culture emphasizes rationality and control. Whether his or her energies are directed toward goals, resources, organization structures, or people, a manager is a problem solver. The manager asks: “What problems have to be solved, and what are the best ways to achieve results so that people will continue to contribute to this organization?” From this perspective, leadership is simply a practical ef­fort to direct affairs; and to fulfill his or her task, a manager requires that many people op­erate efficiently at different levels of status and responsibility. It takes neither genius nor heroism to be a manager, but rather persis­tence, tough-mindedness, hard work, intelli­gence, analytical ability, and perhaps most im­portant, tolerance and goodwill.

Another conception of leadership, however, attaches almost mystical beliefs to what a leader is and assumes that only great people are worthy of the drama of power and politics. Here leadership is a psychodrama in which a brilliant, lonely person must gain control of himself or herself as a precondition for control­ling others. Such an expectation of leadership contrasts sharply with the mundane, practical, and yet important conception that leadership is really managing work that other people do.

Two questions come to mind. Is this leader­ship mystique merely a holdover from our childhood—from a sense of dependency and a longing for good and heroic parents? Or is it , true that no matter how competent managers are, their leadership stagnates because of their limitations in visualizing purposes and gener­ating value in work? Driven by narrow pur­poses, without an imaginative capacity and the ability to communicate, do managers then per­petuate group conflicts instead of reforming them into broader desires and goals?

If indeed problems demand greatness, then judging by past performance, the selection and development of leaders leave a great deal to chance. There are no known ways to train “great” leaders. Further, beyond what we leave to chance, there is a deeper issue in the relationship between the need for competent managers and the longing for great leaders.

What it takes to ensure a supply of people who will assume practical responsibility may inhibit the development of great leaders. On the other hand, the presence of great leaders may undermine the development of managers who typically become very anxious in the rela­tive disorder that leaders seem to generate.

It is easy enough to dismiss the dilemma of training managers, though we may need new leaders or leaders at the expense of managers, by saying that the need is for people who can be both. But just as a managerial culture dif­fers from the entrepreneurial culture that de­velops when leaders appear in organizations, managers and leaders are very different kinds of people. They differ in motivation, personal history, and in how they think and act.

Attitudes Toward Goals

Managers tend to adopt impersonal, if not passive, attitudes toward goals. Managerial goals arise out of necessities rather than de­sires and, therefore, are deeply embedded in their organization’s history and culture.

Frederic G. Donner, chairman and chief ex­ecutive officer of General Motors from 1958 to 1967, expressed this kind of attitude toward goals in defining GM’s position on product de­velopment:

“To meet the challenge of the marketplace, we must recognize changes in customer needs and desires far enough ahead to have the right products in the right places at the right time and in the right quantity.

“We must balance trends in preference against the many compromises that are neces­sary to make a final product that is both reli­able and good looking, that performs well and that sells at a competitive price in the neces­sary volume. We must design not just the cars we would like to build but, more important, the cars that our customers want to buy.”

Nowhere in this statement is there a notion that consumer tastes and preferences arise in part as a result of what manufacturers do. In reality, through product design, advertising, and promotion, consumers learn to like what they then say they need. Few would argue that people who enjoy taking snapshots need a camera that also develops pictures. But in re­sponse to a need for novelty, convenience, and a shorter interval between acting (snapping the picture) and gaining pleasure (seeing the shot), the Polaroid camera succeeded in the marketplace. It is inconceivable that Edwin Land responded to impressions of consumer need. Instead, he translated a technology (po­larization of light) into a product, which prolif­erated and stimulated consumers’ desires.

Текст 9. Success story. Japan . P. Drucker

In general, the history of working and worker is not a particularly happy one.

But here are significant exceptions. Again and again, we find either a period or a particular or­ganization in which working is achievement and fulfillment. The usual case is a great national emergency, in which the worker sees himself contributing to a cause. This hap­pened, for instance, in Great Britain in the months after Dunkirk. On a smaller scale it occurred in the United States during World War II. Jobs did not change. Bosses did not become more intelligent or more humane. But the basic satisfaction of working changed completely, if only for a limited period.

This can also be achieved, examples show, without great national emergency, indeed, without any outside spur. Robert Owen made his workers achieve in his Lanark textile mills in Scotland 150 years ago—and he did not do anything revolutionary.

There are similar exceptions to be found in modern industry. The most important—if only because of its success in worldwide economic competition—is Japan’s organization of working and worker.

At first sight, nothing looks more like the extreme of Theory X than a Japanese fac­tory or office. Japan is not a permissive country, but a very rigid one. Its way of managing working and worker is anything but flexible. But it differs significantly from any other way we know, whether rigid or flexible, autocratic, or democratic. At the same time its way is not hoary tradition. The most important features of the Japanese system were de­veloped in the twenties and thirties of this century and for use in modern large-scale or­ganization. The main impetus was the importation of Taylor’s scientific management, which began around 1920.

The industrial engineers in Japanese industry use the same methods, tools, and tech­niques as the Westerner to study and to analyze work. But the Japanese industrial engi­neer does not organize the worker’s job. When he has reached the point at which he un­derstands the work, he turns over the actual design of jobs to the work group itself. Actu­ally, the industrial engineer begins to work with the people who have to do the job long before he finishes his analysis. He will study the work the same way his Western counter­part does. But he will, in his study, constantly use the work force itself as his “resource.” When he has finished his analysis, the synthesis will essentially be done by the work group itself. The industrial engineer continues h activities, but he does so as “assistant” to the work group rather than as outside analyst.

The Japanese worker very largely also takes responsibility for improving his tools. Machines in modern industry are, of course, designed by the engineer, but when a new machine or a new process is being introduced, the workers are expected to take an active part in the final adjustment, the final arrangement, the specific application of machine and tools. In many businesses the work force actually participates in machine design and acts as a resource to machine or process designer.

Zen versus Confucius

The mechanism for making the worker take responsibility for job and tools is what the Japanese call “continuous training.” Every employee, often up to and including top man­agers, keeps on training as a regular part of his job until he retires. The weekly training session is a regular and scheduled part of a man’s work. It is not run, as a rule, by a trainer but by the men themselves and their supervisors. The technical people, e.g., the industrial engineers, may attend but do not lead; they are there to help, to inform, to advise—and to learn themselves.

The training session does not focus on any one skill. It is attended by all men on a given job level and focuses on all the jobs within the unit. The training session which the plant electrician attends will be attended also by the machine operator in the same; plant, by the man who sets up and maintains the machines, and by the sweeper who pushes a broom—and by all their supervisors. Its focus will be the working of the plant rather than the job of this or that man.

Similarly, the accountant is expected to be trained—or to familiarize himself in the training sessions of his office group, and through correspondence courses, seminars, or continuation schools—in every single one of the professional jobs needed in his company, such as personnel, training, and purchasing.

The president of a fairly large company once told me casually that he could not see me on a certain afternoon because he was attending his company’s training session in weld­ing—and as a student, rather than as an observer or teacher. This is unusual. But the com­pany president who takes a correspondence course in computer programming is fairly common. The young personnel man does so as a matter of course.

Underlying this is a very different concept of the purpose and nature of learning from that prevailing in the West—but also in the China of the Confucian tradition. The Confucian concept, which the West shares, assumes that the purpose of learning is to qualify oneself for a new, different, and bigger job. The nature of learning is expressed in a learn­ing curve. Within a certain period of time this student reaches a plateau of proficiency, where he then stays forever.

Continuous training gives every worker a knowledge of his own performance, of his own standards, and at the same time of the activity of his fellow workers on his level. It creates a habit of looking at “our work.” It creates a community of working and workers.

Japanese institutions are far more rigidly departmentalized and sectionalized than most Western institutions. Departments in Japan fight fiercely for their territorial integrity. They have utmost expertise in “empire building.” The individual member of a department is expected to be completely loyal to it, yet the individual employee tends to see beyond the boundaries of his own specialty and his own department. He knows what goes on, He knows the work of others, even though he himself has never performed it. He sees a genuine whole, and he is expected to be concerned with the performance of every single job in this genuine whole. He, therefore, can see his own place in, the structure and his own contribution.

Finally, continuous training creates receptivity for the new, the different, the innovative, the more productive. The focus in the training sessions is always on doing the job better, doing it differently, doing it in new ways.

The training sessions actually generate pressure on the industrial engineers. In the West, the industrial engineer starts out with the assumption of resistance to his approach by the employee, whether in manual or in clerical work. In Japan the industrial engineer tends to complain that the employees expect and demand too much from him.

The commitment to continuous training makes the entire work force in a Japanese institution receptive to change and innovation rather than resistant to it. At the same time, training mobilizes the experience and knowledge of the employee for constructive improvement.

One basic problem in studies of employee satisfaction in the West has always been that there are two kinds of dissatisfaction. There are negative and positive dissatisfaction. There is the complaint about frustration, arbitrariness, speed-up, poor pay, poor working conditions—the negative dissatisfactions. There is also impatience with poor working methods, desire to do a better job, demand for better, more intelligent, more systematic management. The Japanese continuous training mobilizes positive dissatisfaction and makes it productive.