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Unit 2 Organization Structure

1 Introduction

1.1.Read the text title and hypothesize what the text is about. Write down your hypothesis.

1.2. What do you know concerning this issue? List your ideas in the table left column "I know ".

1 I

1.3 Do you know answers to these questions? Write down your short answers in the space given after each question.

1

2

te successfully? !

3

4

5

6

л ь v: ,f . і. • . .. , . ,v .' . .,..p:!i-:-.:v.is; :

7

і.4 Circle in the list the words and expressions you know. Write down their translation in the table and calculate the percentage of your lexical competence.

1

9

of

2

10

day-to-day

3

11

subsidiary

4

12

accountable

5

13

6

14

to yield profits

7

to bear in mind

15

to elect

8

■. raw materials

16

Company Organization

A business company is an institution established for the purpose of making profit. It's a big organization which is operated by individuals. Their share of ownship is represented by shares. In order to operate successfully a big company has to have its strategy. The company strategy must be flexible enough and take into account the changing market conditions. The main objective here is to gain a market share, and in order to achieve it, it's necessary to reduce prices. But if you reduce prices, your margins will be lower, and that will cut profits.

If you can slowly increase production, you will be able to cut unit costs though it seems to be a long-term prospect. Unit costs can come down if you invest in new plants and machines. Let's try to define the company strategy from the point of view of the market and manufacturing.

If you think that increased market share is the main objective in the company strategy, you are highly mistaken. First of all you should go in for a higher profitability. If you can upgrade the products, you are sure to get better prices and therefore higher profits.

You should bear in mind that the market is very competitive

now. If you increase prices, whatever the quality, sales may drop rapidly. Let's look at the problems from the manufacturing view-point. If you can reduce costs in manufacturing, it'll put you in a strong position and enable you to adapt to the market. The only way you can become flexible enough is to subcontract more of the production. It means job losses if you can do that, but the jobs which remain will be more secure.

The typical organization of a company is as follows. At the top there's the Board of Directors. Their job is to administrate the company, make general policies, and so on. There are two kinds of directors: so to say non-executive directors (not full-time employees). They are the sort of people who have some standing in various parts of the business world and are in a position to help the company to succeed. They only appear when there are meetings of the Board. But the second lot of directors - the executive directors - are full-time employees of the company. Most of them are managers of the departments.

The absolute head of the company is the Chairman of the Board, and his job is to take the chair at meetings of the shareholders, and the Board of Directors, and to

represent the company's interests at outside functions. He does not take

much part ІП the running of the business. Then comes the Managing Director whose job is to coordinate the policies decided by the directors, and see that they are implemented. It is carried out through various departmental managers. The first one is the Production Manager, who is responsible for seeing that our products are made properly and on time. The Marketing Manager's main job is to sell the products. Then there's the Purchasing Manager, who makes sure the company has the raw materials for the Production Manager to make the products. Then comes the Chief Accountant, who is in charge of the financial picture of the company and keeps books. Then there's the Company Secretary, whose job is to organize the work of the Board of Directors. And the Personal Manager brings up the rear. He recruits people to work in the company, and looks after their welfare.

The organizational structure of a British company is as follows: the Managing Director is responsible for running the whole company, and is accountable to the Board. He is assisted by four executive departments. Theses are: Human Resources (Personnel) department, Management Services department, Finance department, Research & Development department (R&D).

Human Resources Dpt. is responsible for personnel, training and management development.

Finance Dpt. takes care of corporate finance and accounting.

Management Services Dpt. is in charge of rationalization throughout the

company.

R&D Dpt. is responsible for new product development.

Under the Managing Director there are five Regional Managers; each of them is responsible for the day-to-day management of a territory (North, South-East, West and Central Regions). The five regions are supported by two sections - Marketing and Technical Services. In addition to the parent there are several subsidiaries.

The subsidiaries report to the Export Sales department, which in turn is accountable to the Board.

Export and Sales Dpt. is responsible for selling the company's product. Technological Dpt. is responsible for the mode of production and elaborating new technologies.

Marketing Dpt. is in charge of marketing activities of the company. Production Dpt. deals with all aspects of production. Promotion Dpt. is in charge of advertising activities. Commercial Dpt. is responsible for trading activities of the company.

Board of Directors performs three main functions: appoints the administration, considers general policy questions, makes corporate decision and exercises control over the activities of administration. It also sees to it that the enterprise (business) can yield profits, that shareholders can get high income on their stocks, and it must also analyze its own activities.

The highest managerial organ of a Stock Company is the Assembly of Shareholders which elects the Board of Directors, and the letter elect their supreme governor.

There are many types of business organizations:

- limited company (firm where sharehoMers liability is limited); multinational company (organization operating in several countries); parent company (company which owns another);

subsidiary company (firm owned by a parent one);

holding company (parent company without commercial activity);

  • public company (company whose shares are publicly available);

  • private company (company whose shares are not publicly available); nationalized company (company owned by the state);

  • offshore company (firm based in a tax haven to avoid higher taxation); cooperative (democratic firm owned by workers).

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