Identification with the organization (manager and staff adherence to company objectives and policies; enjoying working with organization).

So, we are able to observe that corporate culture reminds the typical social organization, and large organizations can even impose their traditions to the society. This proves that organizations form an irreplacible part of contemporary world, as each of us is a mere link in the great chain of production.

People in organizations. Entrepreneurs.

One can hardly argue with the statement that our planet host a great number of unique residents. Actually, all people considerably differ in intelligence, skills, appearance, character, manners, motivation, social position, economic and marital status, affected by inborn or external factors. Although philosophers proclaimed the idea of global equality many centuries ago, it still remains a tempting myth, as it doesn’t correlate with the true human nature. The unexpectedly long list of points of diversity is sometimes considered as the key to global evolution, but for an economist it is a source of opportunities, prospects and potential threats, as businesses co-exist in a hostile competitive environment, where the human capital can easily tip the balance. We already mentioned that an organization is a community of different people who work on the same problem. Therefore, many scientists have developed some abstract models, describing a typical person, which explain how to control large aggregations of people effectively and with maximum gain. Douglas McGregor systematized their conclusions and offered two main theories, which defend different approaches, concerning the human nature and, in turn, the optimal managerial style.

The first theory (or even a class of theories) is usually referred to as theory X. The theory supports the traditional view on our psychology and claims that negative attitude to work is a universal people’s quality. Developing the thought, we may say the average person is innately lazy, irresponsible, selfish, ignorant and security oriented. It allows to conclude that most people are fully indif­ferent to the needs of the entity they work for, and their independent actions inevitably lead to undesirable consequences. Because of these characteristics, the average person must be threatened, co­erced, and controlled. In fact, the vast majority of people prefer to be di­rected and controlled in exchange for security and complete absence of responsibility. Because people are basically cunning and immature, management should experience lit­tle difficulty in using an authoritative and manipulative style of overall supervision.

Still, putting this exquisite sequence of actions into practice, many directors faced some obvious difficulties. The facts were relentless: the theory had to be upgraded. That’s why McGregor offered another solution, now known as theory Y. It is based on the opposite initial assumptions – people hate work because of the excessive interference of managers into their activity! According to theory Y, everyone has a capacity for developing interest in his/her work and for working effectively without external control. At first sight the concept may sound revolutionary, but with every new year it is becoming more and more popular with managers of different levels.

Referring to these theories, we should always bear in mind: statistic calculations rarely meet real-world situations, and Average is a statistical concept, and while creating staff policy we should not forget about individual approach – probable, the most feasible variant available.

Nevertheless, choosing a managerial style doesn’t put an end to all problems. The labor market is overfilled with millions of CVs and offers. To find a necessary candidate in this torrent of information, a company needs to develop a system of requirements, which can shorten the list of applicants. The most widely accepted patterns are a job description and job speci­fication. The former is a broad statement of the purpose, scope, duties and responsibilities of a particular job, whereas the latter includes a detailed statement of the physical and mental activities involved in the job. The specification usually includes concrete terms of behaviour the worker should follow. As I see it, a job description helps to attract initial applicants, and a job specification helps to differentiate among them and to employ the most suitable ones.

Creating a job specification in the Middle Ages, where only 100 crafts existed, was not a bothering task. But nowadays a great variety of specializations makes it a real challenge. Usually we speak of 5 categories, covering a considerable part of this range of skills.

Unskilled. Many jobs do not require any special training or previous experience, for example cargo carrying, dishwashing or assem­bly work. These occupations are often repetitive and boring, whereas the wages are relatively low.

Mechanical or motor skills. Some types of actions cannot be performed by people who lack these qualities. I mean operating industrial machinery, blacksmithing, tailoring and many other jobs.

Still nowadays manufacturing processes are becoming more complex, and some workers need intelligence and knowledge, which is the 3^rd group. Also people with such skills are often employed in the non-productive sector and work as teachers, lawyers, scientists. The importance of knowledge is very high, as it leads to innovation and creativity, which results in better performance.

The skills I described above may be developed by training or attending an educational institution. But managerial skill is truly a rare inborn ability. It requires not only pure knowledge, but some creative ways to motivate people and organize their work effectively. That is why a good manager is often an irreplaceable specialist, hunted by a number of respectable firms.

The last type of skills is closely connected with the previous one. Making decisions is a daily routine of a top-level manager; it requires rationality, ability to risk, to calculate various options and to foresee the consequences of your actions. What can be said exactly is that such specialists (stock traders, anti-crisis managers etc.) are widely demanded in many economic areas, especially in the private sector.

When saying “private sector” we usually mean companies, owned by entrepreneurs. They are people who organize and manage their own business. Entrepreneurs form a limited social group, and not due to legal restrictions (most governments encourage entrepreneurship!). A great deal of people are satisfied with a nine-to-five exis­tence, security and assured weekly paychecks. The entrepreneur desires financial independence, achieved by a well-thought strategy and calculated risks. They usually enjoy freedom and even become addicted to it. In order not to go out of business, entrepreneurs do scrupulous planning, establish contacts with partners or competitors and consider all factors which may have potential impact on their firms. Such an active way of life is simply unacceptable for an average person, and entrepreneurship remains a privilege of creative and decisive people.

Activities performed by entrepreneurs are uncountable, as they are stimulated by demand, which tends to fluctuate, following macroeconomic situation, fashion or customers’ preferences. So are the personal features of the businessmen. Actually, entrepreneurs are a thick layer, uniting people of different age, sex, religion, people with different education and starting opportunities. Business may bring prosperity to a 15-yar old boy, an owner of an internet-shop, or to a 90-year old man, an owner of an insurance company. Still, the research, carried out by American investigators, helps to fathom the factors crucial for success.

First, most prosperous businessmen are men. The quantity of women in this area is growing, as it is an attractive way to get rid of men, on which women traditionally depended, but the total number is still low. Then, most of them have positive relation with their parents (who else can provide you with advice or financial assistance?) and began business at the early age (an arguable statement for our country, where starting business by a young pupil is a miracle). Moreover, businessmen raised their start-up capital with the help of bank loans and received proper fundamental education, adding theoretical knowledge to their practical skills.

Other features are much less determined and may vary in different regions. So, most entrepreneurs are middle-aged people, who already have experience and still possess creativity. Probably, they are active and sociable people, who like ventures and who are always ready to act in fast-changing circumstances. Their initial investments may vary from $100 to $1000000; a common sum is between $20000 and $50000 (although nowadays these statistics seem wrong due to constant inflation and weakening of the US dollar). Normally such start-up capital is not enough to establish a manufacturing firm, so the most popular sphere for newcomers is retailing (it’s chosen by 50% of businessmen). Retailing is not only cheap to start, but also offers stable demand, minimized risks and fast payback, but the high competition makes entrepreneurs improve their business, which sometimes results in expanding to a manufacturing or service company.

To conclude we may say that entrepreneurship is an engine of modern market economies, a source of original ideas, innovation and lower prices for customers. We don’t have to worry, whether our demands may be satisfied, till initiative people keep entering a dangerous, but very attractive sphere of business.

International Business and Trade

International business relations are much older than we usually think. The epoch of global economy began, when prehistoric hunters first reached a tribe of prehistoric farmers and exchanged their products. Nowadays we define international business as all business transactions, involving 2 or more countries, and such a wide notion brings us to the idea, that international business is an extremely complex system, including different types of activities. Typically for market economy, people or organizations, involved in foreign business affairs, aim to maximize their profits, but the rule doesn’t work when we speak about governments, which may be motivated not only by profit prospects, but by other forces, like supporting financial stability or acquiring irreplaceable goods, needed to satisfy some vital social needs.

When describing a phenomenon, we should analyze its reasons. Fortunately, economic theory has already completed this task, and signed out three major factors, making firms to pursue international business. They are sales expansion, resource acquisition and diversification.

The first reason is easily explained, as even in huge countries domestic market is limited by the number of population, and for some categories it’s much narrower. Many developing states have constructed high-tech industries with the help of western investments and sell the products to other countries, as local population simply cannot afford them! Generally, even if you have a plenty of rich customers, you are still interested in entering a foreign market. There an organization may become a monopolist, which allows to set price above the market. Another strategy is applicable, when the demand for the particular good is elastic. By reducing its price and expanding its sales, a company makes a higher profit, and customers are satisfied with cheap goods available on the market. Many TNCs follow this business scheme and sell more than 50% of their production abroad.

But before selling goods, you need to produce them. Process of production implies combining different resources and transforming them into the output. Internal resources markets may offer an unacceptable price, and some kinds of resources may inaccessible at all! That’s why large companies, like petroleum refiners, fully exist on imported raw materials. However, in most cases, searching for outer supplies is motivated by making higher profits. Multinationals establish their plants in the 3^rd world countries, due to the cheaper labor force and favorable legislation. It can surely poorly affect the quality of goods, but for the manufacturer the potential use exceeds this small disadvantage.

And even having a reliable supplier or market, a company should be aware of unexpected troubles. A strike or a natural cataclysm may put an end to its prosperity. To avoid wild swings in their sales and profits, many companies start international activity. For example, some companies use the fact, that business cycles in different countries don’t match and always keep their sales stable. Another reason to diversify the sources of supplies is a potential probability of a resource shock, when a monopoly supplier can set any price, and your company will have to accept it or just go out of business. In case a company cooperates with a number of foreign partners, they are likely to reduce the price in the competitive struggle.

I already mentioned that international business includes an impressive number of economic activities. Companies must choose among them, and in making these choices, the companies' own objectives and resources as well as the environments in which the firms operate should be considered.

The major sources of interna­tional revenue and expenditure for most countries are exporting and importing of goods, also known as merchandise exports and imports. These goods are often called visibles due to their material nature. Most companies operating in the international sphere chose this operational form, as it requires the least commitment and implies fewer risks. This activity brings stable income and rarely abandoned when a firm adopts other business form.

Service exports and imports refer to international earnings other than those from goods sent to another country. It is a very wide concept, as many types of services are available on the market. The most well-known is tourism and transportation. Transportation may bring revenues not only to private airlines or railways, but to entire states, which own transit ways or pipelines. For some countries tourism is the main way of forming a state budget.

Fees are another form of earnings from international activities. They are payments for the per­formance of such services as banking, insur­ance, rentals, engineering, and management. For example, a country may rent land abroad to construct military facilities on it, and order constructing these objects to a foreign company, which will later transfer the ready buildings to the owner. Providing international managerial consulting has also become a popular trend recently.

Surprisingly, but a company can make profits without performing any actions! I mean receiving royalties – payments for use of assets from abroad (copyrights, trademarks, patents etc.) Royalties are also paid for franchising, a way of doing business in which one party (the franchisor) sells an independent party (the franchisee) the use of a trademark that is an essential asset for the franchisee's busi­ness. In addition, the franchisor assists on a continuing basis in the operation of the business, such as by providing components, manage­rial services, or technology. Franchising is a good way of expansion for an exporting firm, as it requires much less investment.

In case a company needs investment, it may also turn to the international community. Foreign investors provide financial infusions in exchange for control of an organization. The degree of control may vary from supervision to complete ownership, if an investor purchases a controlling interest. Some companies may combine their efforts and form a joint venture, in order to increase profits and share risks.

The highest rank a company may achieve in foreign business is the multinational enterprise. They are huge companies with incredible financial resources, which employ thousands of people and act worldwide. Modern economies are greatly influenced by TNCs, which often have enough power to affect governments and impose their corporate philosophy.

Discussing the facts, connected with international business, we hardly think of the fact that many millenniums our ancestors lived without any trade relations. So why do nations trade? The answer lies in the principle of rationality – production of goods should be as effective as possible and should consume the minimum amount of resources. Really, nations have different quantities and qualities of economic resources and different ways of combining them. Theoretically, we may grow bananas in Minsk or produce gold from air, but the alternative costs of such actions will be too high. A country should specialize on goods and services; it can produce with relatively low alternative costs and imports the others from abroad. Sometimes governments try to beat fundamental laws of economics and order to produce all types of goods within their country’s economy, which may result in tremendous expenditures and low quality of these substitutes.

However, despite the fact the international trade can bring considerable benefits, all countries impose restrictions of one form or another to protect some of their domestic industries. Governments have to provide employment, stable salaries and sufficient living standards, whereas the motto of the free market is “Let the loser cry”. International practice usually includes the following types of restrictions: tariffs, import quotas, nontariff barriers. Tariffs are customs duties or taxes imposed by a government on the importation of a good. Tariffs maybe specific, in the form of a tax per unit of the commodity, or ad valorem, based on the value of the commodity. Reasonable taxes, as well as moderate inflation, are useful for economies, but I don’t know how to explain the 50- 100% taxes on goods, which are not produced in a country. Fortunately, it usually concerns luxurious goods and may be viewed a tax on the rich. Import quotas are laws that limit the number of units of a commodity that may be imported during a specified period. Practice says they are often violated with the help of shadow economy. The most exquisite way to say “no” to foreign traders is to impose nontariff barriers. They are laws or regulations, other than tariffs, that nations impose in order to restrict imports. For instance, many countries establish higher standards of quality or ecological standards for various kinds of imported goods than for similar goods produced domestically.

So, international business is a maelstrom, where different people, nations and views interact. This process is contradictive, but we know that the truth is always born when contrasts meet. Let us hope, that people continue to multiply their wealth by trade, and not by missiles and machine guns.