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III. It is a well-known fact that motivation is one of the major concerns of managers. After reading the information below say what inducements to work are offered at Fanuc. Give your arguments.

Organizations offer the individual inducements to work and to work hard. These inducements are both extrinsic and intrinsic.

Extrinsic rewards include wages, salary, bonuses, commission payments, working conditions, a car, pension, etc.

Those rewards attract most of us into the workplace in the first place. They provide a more likely explanation for the level of employment where necessity is the motivator.

Intrinsic rewards imply the goal satisfaction of working – lifestyle, comfort, a sense of achievement, companionship, status, public acclaim, challenge, interesting tasks, etc.

These rewards of work are often referred to collectively as job satisfaction. It is recognized that individuals at work are motivated by the sort of rewards

that are available.

IV. What characteristics does Dr. Inaba have? Prove your answer.

V. Make a detailed plan of the text. Render the text expressing your opinion.

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Text 22

I. Listen to a native speaker and try to memorize the pronunciation of the words. Try to imitate the pronunciation.

II. Can efficient operations management help the company to become competitive? Read the information about Caterpillar and confirm the answer.

CATERPILLAR USES OPERATIONS MANAGEMENT

TO BECOME COMPETITIVE AGAIN

Caterpillar is a name known for quality. Since the 1920s, it has been the world pacesetter in earth-moving equipment. More than half its business is conducted overseas. The company had experienced 50 straight years of profits until 1982, when it lost $180 million. During the next 2 years, Caterpillar lost approximately $770 million more. The almost $1 billion in losses stemmed from a number of causes, including construction markets that collapsed around the globe; oil and other commodity prices that plummeted, killing the demand for mining, logging, and pipe-laying equipment; competition from other companies, particularly Japan-based Komatsu; the rising dollar, which made its products more expensive for international customers; a slowdown in major highway projects; and a 7-month strike by Caterpillar workers. “Almost overnight the whole world changed for us,” recalls George Schaefer, Cat’s chairman and chief

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executive officer. The company knew that it had to change. By 1985, Caterpillar had turned around, and it has been making a profit ever since.

Caterpillar’s return to profitability came about as a result of very deliberate actions. The company began to concentrate on driving costs down and improving its enviable reputation for quality. Cat slashed its work force by one-third, or 30,000 jobs. It also closed seven factories and canceled construction of its partially completed 1.8-million-square-foot parts distribution center in its headquarters town of Peoria, Illinois.

An important part of its new direction is the decision to completely redesign and outfit its remaining 30 factories, a sweeping $1.2 billion modernization program. The program, called Plant with a Future (PWAF), is aimed at overhauling all 36 million square feet of Caterpillar’s factory space. If things go as expected, the program, which began in 1985, will have more than paid for itself by the early 1990s. Because of a new computerized inventory system alone, the company expects to save a cumulative $850 million. PWAF is bringing about a complete change in Cat’s tooling and manufacturing methods. “We are not going to compete with the Japanese by doing what they did 5 years ago,” says Pierre Gueridon, the executive vice president in charge of PWAF.

As part of the change, Cat is reworking its traditional manufacturing process, whereby components or products are worked on in specialized areas, such as grinding or heat-treating. Instead, activities will be grouped by “cells,” a form of flexible manufacturing whereby machines and workers operate in groups that together can perform a variety of operations on products. For example, it previously took 11 workers to machine, burr, balance, and wash planet carriers, a basic part of a transmission. Now two workers do it, running a manufacturing cell consisting of six flexible computerized machines. With the new machines in the cells, setup time for working on new tasks takes seconds (compared with 4 hours to 2 days with older machines). Furthermore, there is little need for adjustments because the computer monitors the machine settings, so there is little scrap. Ultimately, the various cells will be linked by computer and will also be tied into the materials supply system. The revamped factories will use computerized machine tools, laser-read bar codes, and automated carrier systems for materials, but they will stop short of computerized integration of everything from engineering to finance. The changes have not been implemented without some difficulties. For example, the changes in the manufacturing process have required radical changes in attitudes about how products are made. Workers now need to work in teams, be trained to handle multiple tasks, and take responsibility for the quality of their work. First-line and middle managers worry about the prospect of their authority eroding as the system becomes less hierarchical and everyone becomes more dependent on the latest technology. “When you go through changes, there’s just a fear of the unknown,” notes Gerald Flaherty, vice president for employee relations. “You’re asking some

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people to go into a classroom who haven’t been in one for 25 years.” During the last several years, the union has made some grudging concessions, such as allowing the number of job classifications to be reduced from 418 to 150. Such concessions came only after Caterpillar agreed to stringent job security provisions.

In an attempt to stimulate more worker involvement in the operations and improvement efforts, machinists take part in certifying suppliers. Since 1982, the company has certified 800 of its major suppliers, a designation that means the suppliers get preferential treatment as long as they agree to furnish parts that are close to perfect. The reject rate from certified suppliers runs 0.6 percent versus 2.8 percent for noncertified suppliers.

The company also has begun vigorously developing new products, particularly smaller machines that lend themselves to the shift in the market toward smaller construction projects. Since 1984, it has more than doubled its original product line of 150 models. As fewer superhighways are being built, the emphasis has shifted to smaller pieces of equipment. A new sprocket design has been put on all its tractors, an innovation that makes tractors last longer. In addition, Caterpillar now makes light construction equipment with Mitsubishi Heavy Industries, Ltd., a company with which Cat has had several joint ventures over the past 25 years. The joint venture manufactures products for sale both in the United States and in Pacific Rimcountries.

 Workbook Ex. 48– 50on page 120.

III. Answer the following questions.

1.What strategy role stage would you place Caterpillar in during the early 1980s?

2.Where would you place the company now? Why?

3.What approach did Caterpillar take to adjust to the suddenly shifting demand for its products that took place in the early 1980s?

4.What approaches could the company use now?

5.What operations management systems and new process technologies are in evidence as Caterpillar changes its manufacturing methods?

IV. Retell the text using the following expressions: the text is about... ; the text deals with the problem...; I know that...; it is a well-known fact...; it is worth mentioning...; as for the problem of...; it should be noted that... .

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Text 23

I. Listen to a native speaker and try to memorize the pronunciation of the words. Try to imitate the pronunciation.

II. What do you associate with the word “ethics”? Read the information below and add something to your answer.

MANAGERIAL ETHICS

Managerial ethics are standards of conduct or moral judgment used by managers of organizations in carrying out their business. Such standards arise from general norms and values of society; from an individual’s experiences within family, religious, educational, and other types of institutions; and from interpersonal interaction with others. Therefore, managerial ethics may differ among individuals. An eminent researcher in the area of social responsibility, Archie B. Carroll, notes the three major levels of moral, or ethical, judgment characterize managers: immoral management, amoral management, and moral management. “Immoral” or “unethical” management not only lacks ethical principles but is actively opposed to ethical behavior. This perspective is characterized by principle or exclusive concern for company gains, emphasis on profits and company success at virtually any price, lack of concern about the desires of others to be treated fairly, views of laws as obstacles to be overcome, and a willingness to “cut corners”. The key operating principle of immoral management is: “Can we make money with this action, decision, or behavior?” Implied in this approach is the view that other considerations matter little, if at all.

One recent study suggests that upper-level managers may not feel as much ethical pressure as do managers at the middle and lower levels. The study, which polled 6000 executives and managers in a survey sponsored by the American Management Association, asked participants to respond to the statement “I find that sometimes I must compromise my personal principles to conform to my

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organization’s expectations.” The results indicated that supervisory or first-level managers were more than twice as likely to agree than executive or top-level managers (37.1 percent versus 17.2 percent), with middle managers falling in between (22.8 percent). One possible implication is that upper-level managers may not be sufficiently aware of the pressures on middle and lower levels and, as a result, may not take sufficient action to counter such pressure.

According to a survey conducted by the Opinion Research Corporation, nearly three quarters of the major U.S. corporations have written codes of ethics. While almost all the companies say that the codes are helpful in maintaining ethical behavior among employees, only 36 percent distribute the code to all employees and only 20 percent display the code throughout the organization.

Of course, no code, guideline, or training program can truly replace an individual’s personal judgment about what is right or wrong in any particular situation. Such devices may explain what people should do, but they often fail to help people deal with the consequences of their choices. To make ethical choices may lead to unpleasant outcomes – firing, rejection by one’s colleagues, the forfeiture of potential monetary gain. Thus, managers must be prepared to confront their own conscience and weigh it against the various options available when making the difficult decisions that every manager must make.

 Workbook Ex. 51on page 120 – 121.

III. What type of management is described in each column according to the information from the text “Managerial Ethics”? Complete table 4 changing each question mark for the type of management and describe each type.

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Table 4 (Continued)

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IV. Read the following information, answer the questions and write your code of ethics.

1.Is it worth describing how employees are to deal with suppliers, customers, competitors and other constituents?

2.What is the difference and the resemblance between guidelines and codes of ethics?

The Johnson & Johnson Credo

We believe our first responsibility is to the doctors, nurses and patients,

to mothers and fathers and all others who use our products and services.

In meeting their needs everything we do must be of high quality. We must constantly strive to reduce our costs

in order to maintain reasonable prices. Customers’ orders must be serviced promptly and accurately.

Our suppliers and distributors must have an opportunity to make a fair profit.

We are responsible to our employees,

the men and women who work with us throughout the world. Everyone must be considered as an individual.

We must respect their dignity and recognize their merit. They must have a sense of security in their jobs.

Compensation must be fair and adequate, and working conditions clean, orderly and safe.

We must be mindful of ways to help our employees fulfill their family responsibilities.

Employees must feel free to make suggestions and complaints. There must be equal opportunity for employment, development and advancement for those qualified.

We must provide competent management, and their actions must be just and ethical.

We are responsible to the communities in which we live and work and to the world community as well.

We must be good citizens – support good works and charities and bear our fair share of taxes.

We must encourage civic improvements and better health and education. We must maintain in good order

the property we are privileged to use, protecting the environment and natural resources. Our final responsibility is to our stockholders. Business must make a sound profit.

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We must experiment with new ideas.

Research must be carried on, innovative programs developed and mistakes paid for.

New equipment must be purchased, new facilities provided and new products launched.

Reserves must be created to provide for adverse times. When we operate according to these principles, the stockholders should realize a fair return.

Whirlpool’s Code of Ethical Conduct

At Whirlpool, we share with millions of other Americans a deep concern over recent revelations of unethical and often illegal conduct on the part of some of this nation’s most prominent business people and corporations.

The purpose of this message is not to pass judgement on any of these occurrences; each must and will be judged on its own merits by those charged with that responsibility.

Rather this message is intended to place firmly on record the position of Whirlpool Corporation regarding business ethics and the conduct of every employee. It represents an irrevocable commitment to our customers and stockholders that our actions will be governed by the highest personal and professional standards in all activities relating to the operations of this business.

Over the years, circumstances have promoted us to develop a number of specific policies dealing with such critical elements of ethical business practice as conflicts of interests, gifts, political activities, entertainment, and substantiation of claims.

We also have a basic statement of ethics, which places the ultimate responsibility for ethical behavior precisely where it belongs in any organization … on the shoulders of the person in charge:

“No employee of this company will ever be called upon to do anything in the line of duty that is morally, ethically or legally wrong.

Furthermore, if in the operation of this complex enterprise, an employee should come upon circumstances of which he or she cannot be personally proud, it should be that person’s duty to bring it to the attention of top management if unable to correct the matter in any other way.”

Every Whirlpool manager carries the dual responsibility implicit in this policy statement, including the chairman of the board.

Our written policies deal with nearly all facets of business experience. We review, revise and recommunicate them to our managers on a regular basis … and we see that our managers carry on the communication throughout the company.

But as a practical matter, there is no way to assure ethical behavior with written policies or policy statements.

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In the final analysis, “ethical behavior” must be an integral part of the organization, a way of life that is deeply ingrained in the collective corporate body.

I [David R. Whitwam, Chairman of the Board] believe this condition exists at Whirlpool, and that it constitutes our greatest single assurance that this company’s employees will conduct the affairs of this business in a manner consistent with the highest standards of ethical behavior.

At Whirlpool we have certain ways of doing things. They are commonly accepted practices, enforced not by edict, but rather by a mutual conviction that they will, in the long term, work in the best interest of our customers, our stockholders, the company and all its employees.

In any business enterprise, ethical behavior must be a tradition, a way of conducting one’s affairs that is passed on from generation to generation of employees at all levels of the organization. It is the responsibility of management, starting at the very top, to both set the example by personal conduct and create an environment that not only encourages and rewards ethical behavior, but which also makes anything less totally unacceptable.

I believe this has been achieved at Whirlpool. The men who founded this company back in 1911 were individuals possessed of great integrity and honor. They fostered a tradition of ethical conduct in their business practices, and they perpetuate that tradition through careful selection of people who would one-day fall heir to leadership of the company.

The system works. Unfortunately, the system is not automatically selfsustaining; it must be constantly reaffirmed by each new generation of leaders.

As this company grows, and as the pressures upon it increase, maintaining our tradition of ethical conduct becomes an increasingly difficult task. But I am confident it will be maintained, because it is necessary for continued growth, profitability and success.

V. Are code of ethics and leadership styles interrelated? Can you say anything about an organization leader and his/her leadership style after reading a code of ethics of this organization? Read the following information and try to define a leadership style of Johnson & Johnson and Whirlpool managers.

Leadership styles can be classified on the basis of how leaders use their authority.

The three basic styles are described as autocratic, democratic and free-rein leaders.

The autocratic leader is defined as one who commands and expects compliance, who is dogmatic and positive, and who leads by the ability to withhold or give rewards and punishment.

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