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Text 1 Company Organization
By incorporation, there is formed a corporate person which is separate from the servants who work for it or the shareholders who are members of it, whether it be a small family company, the shareholders of which actively participate in decision making and day-to-day administration, or a large industrial concern, wherein ownership (by the shareholders) and management (by the board of directors) may be largely divorced from each other. The organic structure of this corporate person and the constitutional relationship between the company’s different organs are determined by the decisions of the members recorded in the articles of association and resolutions of meetings. In this fashion they determine how decisions are to be effected and how acts of the organs take effect as acts of the company itself.
The primary organ is the general meeting of the shareholders. It provides the forum in which all members are entitled to participate and vote. It will devolve powers of management to another organ, the board of directors, but retaining the ultimate say in general policy and decision-making, albeit decision-making in general meeting may be manipulated by the board.
The relationship between the general meeting and the board is not entirely clear. In theory, the ultimate decision-making power lies in the general meeting. It can override the wishes of the directors and take away from them the powers devolved to them. In practice, it tends to follow the lead suggested by the directors.
Text 2 ` The Board of Directors
The board of directors of a limited company is primarily responsible for determining the objectives and policies of a business. It’s the directors who determine the direction the business is going to take. They will need to ensure that the necessary funds are available and will appoint key staff to whom they will delegate the authority to run the business on a day-to-day basis. They will need to design an effective organization structure so that there is both a chain of command linking one level of management with another and an effective communication network so that instructions can be passed downwards and information passed upwards.
The directors are appointed by the shareholders, normally at the company’s annual general meeting, at which the chairman of the board will be expected to account for their stewardship during the previous year. The company’s accounts will be presented to the shareholders at that time so they can judge for themselves whether or not the board has been successful.
Direction in business is like strategy in a war situation. The strategic decisions determine the areas in which the company’s resources will be employed. Above all it involves planning to ensure that the business first survives and then flourishes. Strategic decisions, made by the board of directors, are concerned with the disposition of resources. This contrast with the tactical decisions by means of which the senior executives (appointed by the directors) carry out in detail the plans conceived or approved by the board of directors. The fact that boards of directors tend to meet rather infrequently, say once a week, means that part-time directors can be elected to the board. Since they will not have departmental responsibilities within the company, they are often described as non-executive directors. Non-executive directors are not managers of the company; they are outsiders, often directors of other companies. There are arguments in favour of such directors: though they may lack a detailed knowledge of the company’s activities, they may bring expertise to the board. Some are lawyers, or experts in tax affairs, some have particular knowledge of the industry or of particular areas. Some represent influential groups of shareholders whose support is necessary if the board is going to carry out its plan, while others are directors in a number of companies and are used to interlock boards within a group of companies. For example, a holding (or patent) company may appoint a director from their board to serve on the board of a subsidiary company, with a view to keeping a watching brief on the directors’ activities.
Assignments to text 3:
1. Read the headline. Make suggestions as for kinds of meetings described.
2. Write down the questions the answers to which you’d like to find in this text.
3. Read the text and find the most essential statements. Do they contain the answers to your questions?
4. Translate the text.
5. Explain the following and suggest Russian equivalents:
· show of hands
· class meeting
Text 3 ` Meetings
Fundamental decisions concerning the company’s activities and future are decided in general meetings of the shareholders. Usually they are confined to the single annual general meeting (A.G.M.) which must be held in each calendar year for declaring dividends, considering accounts and the reports of auditors and directors, and for electing directors and auditors. Extraordinary general meetings may be called when the need arises. Meetings of a particular class of members or creditors are called class meetings.
The power of decision as to the following generally rests in the general meeting: winding-up; changes in the memorandum and articles; payment of dividends; changes in capital structure; disposal of a substantial part of the undertaking; and the appointment, remuneration and control of directors. In addition, the general meeting can generally act where the board is unwilling or unable (e.g. because of deadlock) to exercise its powers.
The meeting has as chairman, a person elected by the members, generally the managing director or another director. A member may move any resolution on the subject matter indicated in the notice. Members may speak to the motion, after which a vote is taken. A show of hands (on which proxies cannot vote), with one vote per person voting, may decide the issue. But a poll can be demanded by a specified number of shareholders or by the chairman, exercising his power to give effect to the true sense of the meeting. On a poll, each share generally carries one vote, but a member is not obliged to cast all his votes or to cast all those he does use the same way; hence, a nominee shareholder can give effect to the wishes of different beneficial owners.
Assignments to the text 4:
1. Read the text and find answers to the following questions:
· What is the most common view to levels of management?
· Are there any differences in responsibilities of the managers?
2. After second reading write down all the words and word combinations describing activities and responsibilities of managers.
3. Translate the text.
4. Think if responsibilities and functions of managers differ from those of entrepreneurs.
5. Assess your potential for being a manager.
Text 4 Levels of Management
Managers can be differentiated according to their level in the organization. Although large organizations typically have a number of levels of management, the most common view considers three basic levels: top, middle and first-line managers.
Top managers. Top managers make up relatively small group of executives who control the organization. Titles found in this group include president, vice president, and chief executive officer (CEO).
Top managers establish the organization’s goals, overall strategy, and operating policies. They also officially represent the organization to the external environment by meeting with government officials, executives of other organization, and so forth. The job of a top manager is likely to be complex and varied. Top managers make decisions about such activities as acquiring other companies, investing in research and development (R&D), entering or abandoning various markets, and building new points and office facilities. They often work long hours and spend much of their time in meetings and on the telephone.
Middle managers. Middle management is probably the largest group of managers in most organizations. Common middle-management titles include plant manager, operations manager, and division head. Thus, the general manager of a Ford assembly plant in Detroit is a middle manager.
Middle managers are primarily responsible for implementing the policies and plans developed by top management and for supervising and coordinating the activities of lower-level managers. Plant managers, for example, handle inventory management, quality control, equipment failures, and minor union problems. They also coordinate the work of supervisors within the plant. In recent years, many organizations have thinned the ranks of middle managers since 1982, and Du Pont has made cuts of 15 percent. Still, middle managers are necessary to bridge the upper and lower levels of organization and to implement the strategies developed at the top. They can also be a significant source of information and productivity when given the autonomy to make decisions affecting their operating units.
First-line managers. First-line managers supervise and coordinate the activities of operating employees. Common titles for first-line managers are foreman, supervisor, and office manager. These are often the first positions held by employees who enter management from the ranks of operating personnel. In contrast to top and middle managers, first line managers typically spend a large proportion of their time supervising the work of subordinates.
Assignments to text 5:
1. Read the headline. What areas of management do you know?
2. Read the text and say what functional areas of management are described.
3. Are these areas typical for all kinds of companies?
4. What is the most important area of management to your mind? Does your answer depend on a company’s profile?
Text 5 Areas of Management
Managers at different levels may work in various areas within an organization. At any given firm, there may be marketing, financial, operations, human resource, administrative, and other kinds of managers at all three levels.
Marketing manager. Marketing managers are those whose primary duties are related to the marketing function – getting whatever the organization produces (be it Ford automobiles, Newsweek magazines, or Associated Press news reports) into the hands of consumers and clients. Key areas of concern are product development, promotion, and distribution. Given the importance of marketing for virtually all organizations, the development of managers in this area can be critical. John Akers, CEO of IBM, spent much of his career as a marketing manager.
Operations managers. Operations managers are primarily concerned with establishing the systems that create an organization’s products and services. Typical responsibilities include production control, inventory control, quality control, plant layout, and site selection. James Olson, CEO of AT&T spent much of his career as an operations manager.
Human Resource Managers. Human resource managers are concerned with hiring, maintaining, and discharging employees. They are typically involved in human resource planning, employee recruitment and selection, training and development, designing compensation and benefit systems, formulating performance appraisal systems, and discharging low-performing and problem employees. Until the last several years, human resource managers were not considered to be particularly important in many organizations. Top managers now recognize their value, however, in part because of increased awareness of contributions of human resources and in part because of the complex legal environment of human resource management. Consequently, although no large companies have CEOs from the ranks of human resource executives, these activities are now making great strides up the organizational ladder.
Assignments to text 6:
1. Read the text and scan for different kinds of managers described in the text. Write them down into your notebook.
2. After the second reading concentrate on the sentences characterizing activities of the managers mentioned. Add to the list that you’ve done for Text 3.
3. Explain what “specialized manager” means?
4. Read and translate the last paragraphs of the text. Do you share this opinion? Give your reasons.