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Main Activities

Providing services and products for the oil, gas and electricity industries.

Recent Developments

Cornerstone have recently bought the French white goods company, Jean Metrot. Jean Metrot are well-known for producing cookers and refrigerators, as well as the range of household appliances. They have their headquarters to the east of Paris, and two other factories in the North of France.

Reasons for Cornerstone’s acquisition

1.Cornerstone will expand sales of Metrot products in Europe.

2.It will use Metrot as a base for launching its own products in Europe.

3.Metrot’s biggest asset is its valuable land. Cornerstone could use this to grow the company or may sell off some of the land to finance the acquisition.

Comment

Metrot is an excellent acquisition. There may be problems when US style management is introduced. Metrot has always been family-owned, and Chief executive, Jean Metrot, takes a personal interest in his employees.

The new Chief Executive will be Hugh Whitman. In his early 30s, trained at Harvard University, Whitman was formerly Executive Vice President of the Cornerstone Group.

Jean Metrot will remain on the board as an adviser.

Listening

Listen to a television interview on Cornerstone’s plans for Metrot

Problems

It is now nine months later. The change of ownership and new management style at Metrot have caused many problems. The memo below illustrates some of the difficulties.

Staff are very unhappy with the present changes.

As a result, productivity has fallen and staff turnover is high. Let me summarize some of the reasons for the staff’s low morale.

1.Factory inspections. American managers are always checking up on us and taking notes. No one knows why they are doing this or what they are up to.

2.Redundancies. Since June, about 60 employees from the Development Department have lost their jobs. They were given no reasons. The staff thinks that this is unprofessional.

3.Further changes. People are looking for new jobs elsewhere. They want to move before they are pushed. People are afraid that the new management will relocate

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both of the factories.

4.Management style. Staff constantly complain about the silly changes the new management are making. I enclose a list of comments made to me by our members.

‘They are trying to do everything too fast – A new computer system, learning English, and maybe other languages, new product ranges, new customers.’

‘There was a family atmosphere before. The management really cared about us. Everything was more informal.’

‘We don’t know where the company is going now. We’ve no idea what our strategy is, what our objectives are.’

‘We get e-mail messages from Dallas telling us what to do. Surely they can trust the management over here to make the policies and decisions?’

Task

A meeting of senior managers has been called to resolve the problems. One team, led by the new Chief Executive, Hugh Whitman, consists of American Executives The other is made up of senior executives of Metrot who have kept their jobs under the new management.

Divide into two groups: Cornerstone executives and executives of Metrot. Each group prepares separately for the meeting. They hold the meeting as one group. The Agenda is as follows:

1.Reasons for the resistance to change.

2.Suggestions for managing the change more effectively.

3.Action plan to raise staff morale and resolve the present problems.

Unit 5 Decision Making

Words to remember:

to decide on the spot – принимать спонтанное решение to give a refund – возвращать деньги; возмещать убытки a hunch (a gut-feeling) – интуиция, предчувствие insufficient information – недостаточная информация

to weigh up (to consider) – рассматривать, взвешивать option – выбор, альтернатива

to secure a contract – получить контракт outside personnel – специалисты со стороны

to constrain ( to restrict) – ограничивать, стеснять constraint – ограничение, принуждение

to step up (to raise) – увеличивать

to refurbish – обновлять, ремонтировать to update – улучшать, модернизировать

to upgrade – улучшать, повышать качество

to drop existing line – отказаться от существующей линии

Starting up

Which ideas below do you agree with? Which do you disagree with? Why?

1. Before making a decision:

2.If a choice has cost you a lot of time and money, stick to it.

3.Rely on the past to help you make a decision.

4.Reduce all decisions to a question of money.

5.Be totally democratic in group decision-making.

Reading

You will read the text where you are advised how to make a right decision.

The text explores how managers and specialists solve problems and make decisions both individually and in groups. Decision-making is an integral part of the planning process. Planning is making decisions about the goals of an organization and about alternative ways of achieving these goals.

In carrying out management functions, such as planning, organizing, motivating and controlling, a manager will be continually making decisions. Decision-making is a key management responsibility.

Some decisions are of the routine kind. They are decisions which are made fairly quickly, and are based on judgement. Because a manager is experienced, he knows what to do in certain situations. He does not have to think too much before taking actions. For example, a supervisor in a supermarket may decide, on the spot, to give a refund to a customer who has brought back a product. The manager does not have to gather a great deal of additional information before making the decision.

Other decisions are often intuitive ones. They are not really rational. The manager may have a hunch or a gut-feeling that a certain course of action is the right one. He will follow that hunch and act accordingly. Thus, when looking for an agent in an overseas market, a sales manager may have several companies to choose from. However, he may go for one organization simply because he feels it would be the most suitable agent. Such a decision is based on hunch, rather than rational thought.

Many decisions are more difficult to make since they involve problem-solving. Very often, they are strategic decisions involving major courses of action which will affect the future direction of the enterprise. To make good decisions, the manager should be able to select, rationally, a course of action. In practice, decisions are usually made in circumstances which are not ideal. They must be made quickly, with insufficient information. It is probably rare that a manager can make an entirely rational decision.

When a complex problem arises, like where to locate a factory or which new products to develop, the manager has to collect facts and weigh up courses of action. He must be systematic in dealing with the problem. A useful approach to this sort of decision-making is as follows: 1) defining the problem; 2) analyzing and collecting information; 3) working out options and 4) deciding on the best solution.

As a first step, the manager must identify and define the problem. And it is important that he does not mistake the symptoms of a problem for the real problem he must solve. Consider the case of a department store which finds that profits are falling and sales decreasing rapidly. The falling profits and sales are symptoms of a problem. The manager must ask himself what the store’s real problem is. Does the store have the

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wrong image? Is it selling the wrong goods? Or the right goods at the wrong prices? Are its costs higher than they should be?

At this early stage, the manager must also take into account the rules and principles of the company which may affect the final decision. These factors will limit the solution of the problem. One company may have a policy of buying goods only from home suppliers; another firm might, on principle, be against making special payments to secure a contract; many enterprises have a rule that managerial positions should be filled by their own staff, than by hiring outside personnel. Rules and policies like these act as constraints, limiting the action of the decision-taker.

The second step is to analyze the problem and decide what additional information is necessary before a decision can be taken. Getting the facts is essential in decisionmaking. However, as already mentioned, the manager will rarely have all the knowledge he needs. This is one reason why making decisions involves a degree of risk. It is the manager’s job to minimize that risk.

Once the problem has been defined and the facts collected, the manager should consider the options available for solving it. This is necessary because there are usually several ways of solving a problem. In the case of the department store, the management may decide that the store has the wrong image. A number of actions might be possible to change the image. New products could be introduced and existing lines dropped; advertising could be stepped up; the store might be modernized and refurbished or customer service might be improved.

It is worth noting that, in some situations, one of the options may be to take no action at all. This is a decision just as much as taking a more positive course of action. Peter Drucker, in his book The Practice of Management, gives a good example of the noaction option. He writes about a shipping company which, for twenty years, had problems filling a top position. Each person selected got into difficulties when doing the job. In the twenty-first year, a new President asked, ”What would happen if we didn’t fill it?” The answer was “Nothing”. It then turned out that the position had been created to perform a job that had long since become unnecessary.

Before making a decision, the manager will carefully assess the options, considering the advantages and disadvantages of each one. Having done this, he will have to take a decision. Perhaps he will compromise, using more than one option. Thus, the manager of the department store may solve his problem by making changes in the product range, increasing advertising and improving the interior of the store.

Comprehension / interpretation

Decide whether the following statements are true or false.

1.Before taking a routine decision managers must collect a great deal of information.

2.When choosing an overseas agent most managers rely on their intuition.

3.When a firm dismisses one of its junior managers it is making a strategic decision.

4.Managers cannot always wait until they have all the necessary information before taking important decisions.

5.The first thing managers must do when solving a problem is to collect all the facts.

6.Because of their company’s rules and policies managers may not be able to take certain actions in order to solve a problem.

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7.After collecting all of the necessary information managers have to identify the various actions they could take to solve a problem.

8.When important decisions have to be made managers need to use a systematic process of decision-making.

Listening 1

You will hear the managers of a retail group discussing problems at their store in Paris. Listen to them, discuss their problems. If you were the managers of their company, what steps you would take to revive the company.

Language focus

1.Make the matching of the words and phrases from the text with their

2.Replace the words in italics with the words from exercise 1.

1.Gerard Philips set up (____) a company in Eindhoven.

2.The company initially specialized in (____) making carbon-filament lamps.

3.Developments in new lighting technologies fuelled a steady plan for growth (____).

4.In 1983 the company introduced (____) the compact disc onto the market.

5.Each day its factories produce (____) a total of 50 million integrated circuits.

6.Royal Phillips Electronics is run (____) by the Board of Management.

7.The Supervisory Board carefully watches (____) the general course of business.

8.Policies are put into practice (____) by the Group Management Committee.

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9.The Group of Management Committee serves to ensure that important matters (____) are shared across the company.

10.Internal rules and principles of the company don’t limit (____) the actions of

top management.

11. An intuition (____) based on expertise is always kept in mind (____) while taking an important decision.

3. Verbs and prepositions

Some verbs are always followed by the same preposition. Look at the example:

The policies of the company are implemented by the Group Management Committee, which consists of the members of the Board of Management.

Match the prepositions with the verbs below

Complete the sentences using verbs and prepositions from exercise above in the correct form.

1.In the purchasing department there is a manager, and five employees who ____

her.

2.In the beginning, the company ____ making carbon-filament lamps.

3.In our company we firmly ____ the value of creativity and innovation.

4.The development of computer technology has ____ enormous changes in the way that people work.

5.Whether or not we succeed in creating and selling new products ____ a number of factors.

6.Most of our staff ____ at least one of the company’s sports or leisure clubs.

7.The Personnel Manager thinks that we would all ____ further training in how to use the office software.

8.Everybody in the organization should ____ its development.

4. Complete the following sentences with appropriate verbs:

come, take, reach, draw, give, bear, keep, make, put forward, run, put

1.Although our company wants to expand rapidly, we must ____in mind that we have limited cash to do so.

2.It is important to ____ into account all options before ____ a decision.

3.The Financial Director has ____ the conclusion that we must reduce costs by 10 %.

4.Finally, the Chairman ____ his opinion about the matter. After we had listened to him, we were able to ____ to an agreement

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5.Patricia ____ an interesting suggestion at the meeting.

6.If we don’t come up with new products, we ____ the risk of falling behind our competitors.

7.Our chairman is too old for the job. Some of the directors have ____ pressure on him to resign.

8.The writer has ____ some recommendations in his report.

9.What conclusions have you ____ from the facts given in his letter?

10.I have ____ a great deal of thought to our financial problems.

11.After five hours’ negotiation, we finally ____ agreement.

12.I don’t want to ____ action until I’ve heard everyone’s opinion.

5. Complete the following passage with the correct forms of the following words: arise(v) rise(n) rise(v) raise(v)

A serious problem has (1)____ in my company. Because the cost of living (2)____

by 6 % last year, management decided to (3)____ the salaries of all the staff. For this reason, they gave everyone a (4)____ of $10 a week. However, later on, they had to pay for this by (5)____ the prices of all our products by 10 %. Such a large (6)____ in prices made out products uncompetitive. So now, management is talking of lowering our salaries again.

6.Translate the following text into English

Влюбом бизнесе необходимо, чтобы менеджеры работали эффективно. Эффективность зависит от следующих умений:

- умения избавляться от непродуктивной, занимающей много времени деятельности. Менеджер должен научиться говорить “нет” людям, требующим его внимания по незначительным вопросам; - умения передавать полномочия, касающиеся повседневных проблем, своим

подчиненным. Важно побуждать людей вносить свой вклад в работу предприятия. Менеджеру необходимо больше времени, чтобы сосредоточиться на более важных задачах; - умения эффективно распоряжаться своим рабочим временем. Менеджеру

необходимо составлять список работ, которые должны быть выполнены в течение, например, недели, и распределять их в порядке необходимости. (list the tasks in order of priorities). Кроме того, необходимо назначать крайние сроки (set deadlines) для выполнения этих задач.

Такой рациональный подход к работе пойдёт на пользу и предприятию, и самому руководителю.

7.The use of the verbs make and do often causes difficulties.

We use do: 1. to talk about activities without mentioning what they are.

2.to talk about work or task.

3.with a determiner ( e.g. the , some) + ing

We use make: 1. to talk about creating or constructing.

2.with nouns connected with talking about sounds.

3.with nouns connected with travel.

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There are many other expressions with make and do which do not follow these guidelines. It is best to learn them or use a dictionary.

Do – good, your best, harm, (someone) a favour

Make – an appointment, a choice, a start, arrangements, money, an attempt, progress

Which of the following words are used with ‘do’, and which with ‘make’?

8.Complete the following sentences with the correct form of either ‘do’ or ‘make’, and one of the words given above. Translate them into Russian.

1.Janine, can you try to ____ me ____ with my dentist for this afternoon, please?

2.Michael, can you ____ me ____? I need to borrow a car.

3.No, we don’t know what went wrong yet, but we’re ____ some _____ .

4.He said I wasn’t working hard enough and I’d really have to ____ an ____ .

5.I can’t tell you now, but we expect to ____ a ____ early next week.

6.We’re ____ much ____ than last year; we’re definitely ____ progress.

7.We spent three days ____ to the warehouse roof after the storm last week.

8.We ____ a lot of ____ in Japan, and since the profit margin is high, we ____ a lot of ____ .

9.I checked the figures last night and found that I’d ____ a lot of ____ .

10.It’s either one or the other. You’ll have to ____ a ____ .

11.Have you had to ____ a ____ in front of an audience?

12.What is the longest ____ you’ve ever ____ to a foreign country?

13.Have you ever ____ a ____ about poor quality of something you bought?

14.Is complaining useful? Do you think it ____ any ____ ?

15.Have you ever ____ any ____ about customer service could be improved?

16.What ____ have you ____ for the next summer holidays?

Reading-Listening - 2 / Business analysis and decision-making /

Read the internal report about the investment which has gone wrong. After you have read it, discuss the questions below.

Manx Office Equipment.

Confidential report

Acquisition of Gordon brown Ltd.