5. Employment

Personnel is the Cinderella of company departments. Production managers manage production, sales heads head up their sales teams, but personnel directors do not, strictly speaking, direct personnel.

They act more as facilitators for other departments: they deal with recruitment in conjunction with department managers, they administer payment systems in tandem with accounts, they are perhaps present at performance appraisal reviews when employees discuss with their managers how they are doing, they may be responsible for providing training, in industrial relations they are involved in complaints and disputes procedures, and they often have to break the news when people are dismissed.

Companies like to say that people are their most valuable asset, and personnel management has in many organisations been renamed human resources management to reflect this.

HRM specialists may be involved in:

introducing more 'scientific' selection procedures: for example the use of tests to see what people are really like and what they are good at, rather than just depending on how they come across in interviews.

-implementing policies of empowerment, where employees and managers are given authority to make decisions previously made at higher levels.

-actions to eliminate racial and sexual discrimination in hiring and promotion and to fight harassment in the workplace: bullying and sexual harassment.

-incentive schemes to increase motivation through remuneration systems designed to reward performance.

But their services may also be required when organisations downsize and delayer, eliminating levels of management to produce a lean or flat organisation, trying to maintain the morale of those that stay and arranging severance packages for employees who are made redundant, sometimes offering outplacement services, for example putting them in touch with potential employers and advising them on training possibilities. (These packages are not to be confused with the compensation packages of top managers: their basic salary and other benefits.)

Professional people who are made redundant may be able to make a living as freelancers, or in modern parlance, portfolio workers, working for a number of clients. They hope to be on the receiving end when companies outsource activities, perhaps ones that were previously done in-house.

This is all part of flexibility, the idea that people should be ready to change jobs more often, be prepared to work part-time and so on. The message is that the era of lifetime employment is over and that people should acquire and develop skills to maintain their employability.

Read on

W Cascio: Managing Human Resources, McGraw Hill, 1995

For more speculative writing on what motivates people in the era of downsizing and globalisation, see Charles Handys later books, such as:

The Empty Raincoat, Hutchinson, 1995

The Hungry Spirit, Hutchinson, 1997

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6. Trade

International trade takes place within the framework of agreements worked out by countries in the World Trade Organisation (WTO), formerly known as the General Agreement on Tariffs and Trade (GATT). Over the last 50 years trade barriers have been coming down and free trade, open borders and deregulation now form the ideal for almost all nations, even if the situation is far from one of complete laisser-faire, with no government intervention. Protectionism is no longer the order of the day in most places; even if same developing countries argue that protectionist measures are the way to get their economies going, they avoid using the term.

Trade negotiations are well-known for their epic eleventh-hour negotiating sessions, where individual nations argue for what they see as their specific interests. Countries argue for protection of their strategic industries, ones they consider vital to future prosperity such as the electronics industry in the developed world. A less developed country beginning car assembly might want to protect it as an infant industry. European farmers argue for their subsidies, where governments guarantee farmers a higher price than they would normally get, making it hard for developing nations to compete in agricultural products. The French argue for cultural protection, pointing out the uniqueness of their film industry and winning restrictions, or quotas, on the number of Hollywood products that Europe imports.

Countries accuse each other of dumping, where exported goods are sold at less than in the home market, or for less than they cost to produce, usually in order to gain market share in the export market. The offending country may reply that it has a comparative advantage in producing these goods (the ability to produce them cheaper than anyone else) and that they are not selling at below cost.

Of course, there are trading blocks with no trade barriers at all such as the single market of the European Union. The North American Free Trade Organisation, or NAFTA (the US, Canada and Mexico) is also eliminating its tariff walls and customs duties. Their equivalents in Asia and Latin America are ASEAN and MERCOSUR.

One major concern in international trade between smaller companies is payment. The exporter wants to be sure about getting paid and the importer wants to be sure of getting the goods. A common solution is the letter of credit mentioned in the unit, where a bank guarantees payment to the exporter's bank once it receives the related shipping documents, including the clean bills of lading, showing the goods have been shipped without damage or other problems. Shipping terms like CIF, or Carriage insurance freight, where the exporter pays for insurance of goods while they are being transported, are part of the standard: Incoterms defined by the International Chamber of Commerce. These terms are used in standard contracts that form the basis, with adaptations, for most international trade contracts.

Read on

Peter Briggs: Principles of International Trade and Payments, Blackwell Paperback, 1994

Joanne Gowa: Allies, Adversaries, and International Trade, Princeton University Press, 1995

The Financial Times Exporter Surveys appear in the paper every two or three months and are valuable sources of information.

The international Chamber of Commerce has very good documentation on international trade. Some of it is very pedagogical in approach, with typical trade transactions explained in cartoon form, and easily adaptable for language teaching. It is based at 38 Cours Albert 1er, 75008 Paris and a website at www.iccwbo.org

Government-sponsored export credit guarantee organisations play a big role in assisting exporting and assuring they will be paid. In the United States, the Ex-lm Bank is extremely important. Its website is: www.exim.gov