management

Національний банк України Українська академія банківської справи

Кафедра іноземних мов

THE BASIS OF GLOBAL MANAGEMENT. THEORY AND PRACTICE.

Part I

Методичні рекомендації для самостійної роботи (домашнє читання)

Для студентів 1 курсу спеціальності “Менеджмент”

факультету загальної економічної підготовки денної форми навчання

Суми УАБС 2004

УДК 802.0 (073) О-75

Рекомендовано до видання методичною радою загальноеконо-мічного факультету Української академії банківської справи, протокол № 8 від 18.05.2004. Розглянуто та схвалено на засіданні кафедри іноземних мов, протокол № 12 від 11.05.2004.

Укладачі: асистент

Д.О. Медведовська; асистент

О.Є. Туленцева Рецензенти:

кандидат філологічних наук, завідувач кафедри практики романо-германських мов Сумського державного педагогічного університету

ім. А.С. Макаренка Л.М. Гаврило;

кандидат філологічних наук, доцент С.В. Дорда

Відповідальний за випуск кандидат філологічних наук, доцент

І.А. Бокун

О-75 The Basis of Global Management. Theory and Practice. Part I: Основи глобального менеджменту. Теорія та прак-тика. Частина І: Методичні рекомендації для самостійної роботи (домашнє читання) / Уклад.: Д.О. Медведовська, О.Є. Туленцева. – Суми: УАБС, 2004. – 34 с. – (Англійсь-кою мовою). Методичні рекомендації складені за навчальною програмою викла-дання англійської мови з курсу “Business English” для спеціальності “Менеджмент зовнішньоекономічної діяльності”. Призначені для студентів І курсу денної форми навчання. Видання розроблене як базо-вий посібник для засвоєння студентами теоретичних та практичних знань з основ глобального менеджменту. Рекомендації складаються з двох розділів, кожен з яких містить текс-ти, вправи на засвоєння лексичного матеріалу та вправи на розвинен-ня комунікативних навичок студентів.

УДК 802.0(073)

© Українська академія банківської справи, 2004

CONTENTS Chapter 1. Management: Science, Theory and Practice ....................................... 4

Unit 1. Definition of Management. Managerial Functions ................................... 4

Text 1. Introduction to Management................................................................ 4

Text 2. Managerial skills and the organizational hierarchy ............................. 6

Text 3. Women in the organizational hierarchy............................................... 8

Text 4. The Goals of Managers and Organizations ......................................... 9

Text 5. The most admired companies in America. ........................................ 12

Text 6. Productivity, Effectiveness and Efficiency........................................ 14

Unit 2. Managing: Science or Art........................................................................ 15

Text 1. Managing: Science or art? ................................................................. 15

Text 2. The Role of Management Theory...................................................... 18

Text 3. Management Techniques or Fads? .................................................... 19

Text 4. The Systems approach to Operational Management ......................... 21

Text 5. The Functions of Managers ............................................................... 25

SUMMARY......................................................................................................... 31

KEY IDEAS AND CONCEPTS FOR REVIEW................................................ 32

LITERATURE..................................................................................................... 32

Українська академія банківської справи 4

CHAPTER 1. Management: Science, Theory and Practice

Unit 1. Definition of Management. Managerial Functions Pre-reading activities:

1. When and why managing activity appeared first? 2. Where it can be applied? 3. Did the importance of management change through years?

Text 1. Introduction to Management Management is the process of designing and maintaining an envi-

ronment in which individuals, working together in groups, efficiently ac-complish selected aims. This basic definition needs to be expanded: 1. As managers, people carry out the managerial functions of planning, or-

ganizing, staffing, leading, and controlling. 2. Management applies to any kind of organization. 3. It applies to managers at all organizational levels. 4. The aim of all managers is the same: to create a surplus. 5. Managing is concerned with productivity; this implies effectiveness and

efficiency. The Functions of Management

Many scholars and managers have found that the analysis of manage-ment is facilitated by a useful and clear organization of knowledge. In studying management, therefore, it is helpful to break it down into five managerial functions — planning, organizing, staffing, leading, and con-trolling — around which can be organized the knowledge that underlies those functions. Thus, the concepts, principles, theory, and techniques of management are grouped into these five functions.

This framework has been used and tested for many years. Although there are different ways of organizing managerial knowledge, most text-book authors today have adopted this or a similar framework even after ex-perimenting at times with alternative ways of structuring knowledge.

Although the emphasis in this book is on managers' tasks that pertain to designing an internal environment for performance within an organiza-tion, it must never be overlooked that managers must operate in the exter-nal environment of an enterprise as well. Clearly, managers cannot perform their tasks well unless they have an understanding of, and are responsive to, the many elements of the external environment – economic, technological, social, political, and ethical factors that affect their areas of operations. Moreover, many organizations operate now in different countries. There-fore, this book takes a global perspective of managing.


Management as an Essential for Any Organization Managers are charged with the responsibility of taking actions that

will make it possible for individuals to make their best contributions to group objectives. Management thus applies to small and large organiza-tions, to profit and not-for-profit enterprises, to manufacturing as well as service industries. The term “enterprise” refers to businesses, government agencies, hospitals, universities, and other organizations, since almost eve-rything said in this book refers to business as well as nonbusiness organiza-tions. Effective managing is the concern of the corporation president, the hospital administrator, the government first-line supervisor, the Boy Scout leader, the bishop in the church, the baseball manager, and the university president.

Managerial Functions at Different Organizational Levels and Women in Management

In this book, no basic distinction is made between managers, execu-tives, administrators, and supervisors. To be sure, a given situation may differ considerably among various levels in an organization or various types of enterprises. Similarly, the scope of authority held may vary and the types of problems dealt with may be considerably different. Furthermore, the person in a managerial role may be directing people in the sales, engi-neering, or finance department. But the fact remains that, as managers, all obtain results by establishing an environment for effective group endeavor.

All managers carry out managerial functions, but the time spent for each function may differ. Figure 1-1 shows an approximation of the rela-tive time spent for each function, although top-level managers in modern corporations probably spend more time leading than the researchers found. Top-level managers spend more time on planning and organizing than do lower-level managers. Leading, on the other hand, takes a great deal of time for first-line supervisors. Time spent on controlling varies only slightly for managers at various levels.

FIGURE 1-1 TIME SPENT IN CARRYING OUT MANAGERIAL FUNCTIONS


Post-reading activities. 1. Explain the meaning of the words in italics in English. Consult the Eng-

lish-English dictionary, if you need. Discuss it with your partner. 2. Read the following statements and decide whether they are true or false:

a) management applies to any kind of organization (both to profit and nonprofit enterprises);

b) managers carry out four functions: organizing, staffing, leading and controlling;

c) management applies to managers at all organizational levels the time spent on each function being the same on any level of the or-ganization;

d) the aim of all managers is to create a surplus; e) managing is concerned with efficiency which implies productivity

and effectiveness. 3. Match the definitions to the terms.

1) effectiveness a) directing or running a business 2) planning b) achievement of objectives 3) productivity c) achievement of ends (objectives)

with the least amount of resources 4) efficiency d) organizing how a company should

be run to make increased profit 5) management e) the output-input ratios within a

time period with due consideration 4. On the basis of the text write 5 questions to ask your partners to find out

how they understand the information. Text 2. Managerial skills and the organizational hierarchy

Managerial skills and the organizational hierarchy Robert L. Katz identified three kinds of skills for administrators. To

these may be added a fourth—the ability to design solutions. 1. Technical skill is knowledge of and proficiency in activities involv-

ing methods, processes, and procedures. Thus, it involves working with tools and specific techniques. For example, mechanics work with tools, and their supervisors should have the ability to teach them how to use these tools. Similarly, accountants apply specific techniques in doing their job.

2. Human skill is the ability to work with people; it is cooperative ef-fort; it is teamwork; it is the creation of an environment in which people feel secure and free to express their opinions.

3. Conceptual skill is the ability to see the “big picture”, to recognize significant elements in a situation, and to understand the relationships among the elements.

4. Design skill is the ability to solve problems in ways that will bene-fit the enterprise. To be effective, particularly at upper organizational lev-


els, managers must be able to do more than see a problem. They must have, in addition, the skill of a good design engineer in working out a practical solution to a problem. If managers merely see the problem and become “problem watchers”, they will fail. Managers must also have that valuable skill of being able to design a workable solution to the problem in the light of the realities they face.

The relative importance of these skills may differ at various levels in the organization hierarchy. As shown in Figure 1-2, technical skills are of greatest importance at the supervisory level. Human skills are also helpful in the frequent interactions with subordinates. Conceptual skills, on the other hand, are usually not critical for lower-level supervisors. At the mid-dle-management level, the need for technical skills decreases; human skills are still essential; the conceptual skills gain in importance. At the top man-agement level, conceptual and design abilities and human skills are espe-cially valuable, but there is relatively little need for technical abilities. It is assumed, especially in large companies, that chief executives can utilize the technical abilities of their subordinates. In smaller firms, however, techni-cal experience may still be quite important.

FIGURE 1-2 SKILLS AND MANAGEMENT LEVELS

Supervisors Percent of job Skills vary in importance at different management levels

Post-reading activities 1. Explain the meaning of the words in italics in English. Consult the Eng-

lish-English dictionary if you need. Discuss it with your partners. 2. Complete the following sentences.

a) technical skill is knowledge of and proficiency in activities involv-ing ______ processes, and ___________;

b) to be effective particularly at upper organizational levels, managers must be able to do more than see a _________;

c) managers must also have that valuable skill of being able to design a ______ _____ to the problem in the light of the realities they face;


d) _________ __________ are usually not critical for lower-level su-pervisors;

e) it is assumed, especially in large companies, that _______ _______ can utilize the technical abilities of their subordinates.

3. Fill in the table concerning the importance of kinds of skills for manag-ers at different levels. Explain your point of view.

Lower-level managers

Middle managers

Top-level managers

Technical skill

Human skill

Conceptual Skill

Design skill

4. On the basis of the text write 5 questions to ask your partners to find out how they understand the information.

Text 3. Women in the organizational hierarchy In the last decade or so, women have made significant progress in ob-

taining responsible positions in organizations. Among the reasons for this development are laws governing fair employment practices, changing so-cietal attitudes toward women in the workplace, and the desire of compa-nies to project a favorable image by placing qualified women in managerial positions.

In 1965, readers of the Harvard Business Review were surveyed to determine their attitudes toward women in business organizations. About half of the men and women (and there was not much difference between them) responding felt that women seldom expected to achieve or even de-sired positions of authority.

Twenty years later, in 1985, the results showed that the attitudes toward women in business had changed significantly. Only 9 percent of the men and 4 percent of the women in the survey thought that women do not aspire to top positions. Moreover, it was found that men increasingly saw women as competent, equal colleagues. However, over 50 percent of those answering in the survey thought that women would never be completely accepted in business. This may indeed be discouraging to those women who aspire to top management positions. Yet, 20 years ago, few people would have ex-pected the progress toward equality that has been made since 1965.

Some evidence suggests that women do have difficulties making it to the top. For example, there are no women on the way to the chief executive


officer's job in the Fortune 500 corporations. Discrimination has been given as one reason, according to a Fortune article. On the other hand, Ma-risa Bellisario is one of the most successful executives in Italy, with the press calling her “Lady Computer” and the “manager in jeans” (she occa-sionally wears jeans at work). In fact, companies such as IBM, AT&T, and GTE Corporation have unsuccessfully tried to recruit her.

Another success story involves the internationally oriented Ellen Han-cock, a high-ranking top executive at IBM. She heads the company's striv-ing telecommunications business. Educated as a mathematician, she started as a programmer in 1966 and achieved a top position in the 1980s. With computer networking booming, especially in Europe, she decided to relo-cate her headquarters in London, where she began directing IBM's opera-tion in Europe in 1991. Her international outlook is shown by her statement that “having a line of business headquartered in Europe will give us a dif-ferent perspective on all our markets”.

Post-reading activities. 1. Explain the meaning of the words in italics in English. Consult the Eng-

lish-English dictionary if you need. Discuss it with your partner. 2. Fill in the grid below with the main points about two women in business

Marisa Bellisario Ellen Hancock

Company

Sphere of work

Country/city

Education

3. Think about the position of women in organizations. Explain the situa-tion and its reasons on the following points

before now in future


Text 4. The Goals of Managers and Organizations Nonbusiness executives sometimes say that the aim of business man-

agers is simple – to make a profit. But profit is really only a measure of a surplus of sales dollars (or any other currency) over expense dollars. For many business firms, an important goal is the long-term increase in the


value of their common stock. In a very real sense, in all kinds of organiza-tions, whether business or nonbusiness, the logical and publicly desirable aim of all managers should be a surplus. Thus, managers must establish an environment in which people can accomplish group goals with the least amount of time, money, materials, and personal dissatisfaction or in which they can achieve as much as possible of a desired goal with available re-sources. In a nonbusiness enterprise such as a police department, as well as in units of a business (such as an accounting department) that are not re-sponsible for total business profits, managers still have goals and should strive to accomplish them with the minimum of resources or to accomplish as much as possible with available resources.

Which are the excellent companies? In a society such as that in the United States, profitability is an important measure of company excellence. At times, however, other criteria are also used that frequently coincide with financial performance. In their book In Search of Excellence, Tho-mas Peters and Robert Waterman identified 43 companies that they re-garded as excellent. In choosing some of the firms, they considered factors such as growth of assets and equity, average return on total capital, and similar measures. They also asked industry experts about the innovative-ness of the companies.

The authors identified eight characteristics of excellent enterprises. Specifically, these firms: • were oriented toward action; • learned about the needs of their customers; • promoted managerial autonomy and entrepreneurship; • achieved productivity by paying close attention to the needs of their

people; • were driven by a company philosophy often based on the values of their

leaders; • focused on the business they knew best; • had a simple organization structure with a lean staff; • were centralized as well as decentralized, depending on appropriateness

Two years after In Search of Excellence was published, Business Week took a second look at the companies that Peters and Waterman had considered excellent. The magazine's survey revealed that at least 14 of the 43 companies did not measure up very well to several of the eight charac-teristics of excellence. Nine companies showed a great decline in earnings. While Peters and Waterman have been criticized in several respects (their methods of collecting and interpreting the data, for example, such as exten-sive use of anecdotes and quotations from leaders in the field rather than more scientific research sources), the performance review of the firms indi-


cated that success may be only transitory and that it demands continuing hard work to adapt to the changes in the environment.

The late Professor George Odiorne, widely recognized for his contri-butions to management by objectives, researched the performance of stock prices of the so-called excellent companies. A few companies did very well indeed; but about an equal number did very poorly. Odiorne's analysis was based on this question: If you had invested $1000 in stocks of the compa-nies, how well would you have done? Three companies—Wal-Mart, Amoco, and Intel—performed very well. On the other hand, Avon, Allen Bradley, and Data General did very poorly. In short, if people had invested in all companies considered excellent, the return on their investment would have been mixed at best.

One could take a position that factors other than stock prices should be used as criteria for excellence. Still, the characteristics of excellence identified by Peters and Waterman can have a downside: 1. A bias for action can also mean an argument against long-range, strate-

gic planning. 2. Staying close to the customer could also mean producing anything the

customer wants, even at great cost and without regard to whether or not it fits into the product line.

3. Promoting autonomy and entrepreneurship can also mean pursuing new ideas without considering their suitability for a long-term strategy.

4. Hands-on, value-driven managing can also result in top managers be-coming so involved in the details of the operation that they lose sight of the overall objectives of the firm.

5. Sticking to the knitting could be used as an excuse for not searching for meaningful acquisition or mergers.

6. Using a simple form and a lean staff could also be an argument against meaningful staff work such as that done by strategic planners. Doing and thinking (by staff) are important.

The danger of these prescriptions is that they could result in myopic managing, that is, management with insufficient foresight. A well-known economist making his point for short-term solutions to economic problems said that in the long term we are all dead. Peters and Waterman seem to take this position with respect to managing. Yet we know that many Japa-nese companies have been successful precisely because they considered the long-term implications of their decisions.

Certainly, Peters and Waterman have done a great service by encour-aging companies to have a second look at their managerial approaches. On the other hand, unquestioned pursuit of these authors' management pre-scriptions can lead to the misapplication of their suggestions. The effective manager is a situational manager who evaluates each approach in light of


the circumstances and selects the one that most effectively and efficiently achieves individual and organizational goals.


lish-English dictionary if you need. Discuss it with your partner. 2. Complete the following sentences

a) for any business firms, an important goal is the long-term increase in the value of their ______ _______;

b) in a nonbusiness enterprise managers still have goals and should strive to accomplish them with the minimum of ________;

c) the magazine’s survey revealed that at least 14 of the 43 companies did not ______ ______ very well to several of the eight characteris-tics of _________;

d) in short, if people had invested in all companies considered excel-lent, the ______ on their ________ would have been mixed at best;

e) the effective manager is a ___________ manager. 3. Think about some companies you know well. Do they possess the char-

acteristics of excellent enterprises? Can they be considered excellent companies?


Text 5. The most admired companies in America Fortune magazine questioned more than 8000 senior executives, out-

side directors, and financial analysts about the reputation of Fortune 500 companies on eight criteria: the quality of management; the quality of products or services; innovativeness; the value of long-term investment; financial soundness; competence to attract, develop, and keep good people; corporate responsibility toward the community as well as the environment; and the way corporate assets are used.

The most admired among the 307 companies identified in 1992 was Merck (pharmaceuticals), followed by Rubbermaid (rubber and plastic items), Wal-Mart Stores (retailing), Liz Claiborne (apparel), and Levi Strauss Associates (also apparel). These companies were followed by sixth-ranked Johnson & Johnson (pharmaceuticals), Coca-Cola (beverages), and 3M (scientific and photo equipment). PepsiCo (beverages) and Procter & Gamble (soaps and cosmetics) were equally ranked in ninth place.

As in the 1991 ranking, notably absent in the top ten were IBM and other computer companies. Procter & Gamble dropped from third place in 1991 to ninth in 1992. Levi Strauss, on the other hand, improved its 1991 ranking (from twentieth to fifth) and became the first private company in the top ten.


Customers come first: An important aspect of excellence. Custom-ers are the reason why businesses exist. Yet this point often tends to be for-gotten, although there is ample evidence that staying close to customers can pay off handsomely. Here are some examples: • after a disappointing 1984 model year, the Cadillac division of General

Motors tried another approach in designing the new De Ville model. The company invited customers to tell them what they wanted. Fur-thermore, they let them test-drive the cars and asked for their opinions and suggestions. The result: a 36 percent increase in sales of the Fleet-wood and De Ville models in the last quarter of 1988;

• but customer service goes beyond reaching the ultimate consumer. At Domino’s Pizza, emphasis is also placed on the service the headquar-ters provides for its chain stores. Similarly, firms that supply pizza in-gredients are evaluated on their service orientation. Bonuses are given for good service and quality;

• satisfied customers account for the success of Lands' End, a mail-order house. Customers' trust goes so far that the customers think the com-pany would not sell them anything the people at Lands' End would not buy or wear. A big part of the profits is used for capital expenditures to serve customers even better.

Successes are not magical. In fact, the reasons behind them are decep-tively simple — for example, imagining oneself as a customer. But this ori-entation must be taught to all employees, who have to be monitored so that the company's philosophy is put into practice. Bureaucracy should be kept at a minimum so that customers do have access to communicate their satis-faction as well as dissatisfaction to upper-level managers. Service does not end with a sale but continues to make customers come back.


lish-English dictionary if you need. Discuss it with your partner. 2. Read the following statements and decide whether they are true or false:

a) Procter & Gamble improved its ranking comparing with the 1991 results;

b) fortune magazine questioned more then 8000 senior executives, outside directors, and financial analysts about the reputation of For-tune 500 companies on nine criteria;

c) the Cadillac division of General Motors invited customers to tell them what they wanted and let them test drive the cars;

d) at Domino’s Pizza they evaluate firms that supply pizza ingredients and give bonuses for goal service and quality;

e) customers should have access to communicate their satisfaction as well as dissatisfaction to first-level supervisors.


3. On the basis of the text write 5 questions to ask you partners to find out how they understand the information.

4. Consider the examples from General Motors, Domino’s Pizza, Land’s End. Work in groups of three or four. Choose one of the companies from

the following list: British Airways, Coca-Cola, Daewoo, Nestlé, Shell, Deutsche Bank, L’Oréal.

Think about any possible ways for this company to stay close to cus-tomers. What can make clients think that company’s philosophy is: Cus-tomers come first.

Text 6. Productivity, Effectiveness and Efficiency Another way to view the aim of all managers is to say that they must

be productive. After World War II the United States was the world leader in productivity. But in the late 1960s the deceleration of productivity growth began. Today the urgent need for productivity improvement is rec-ognized by government, private industry, and universities. Often one looks to Japan to find answers to productivity problem, but one tends to overlook the importance of effectively performing the basic managerial and non managerial activities.

Definition of productivity. Successful companies create a surplus through productive operations. Although there is not complete agreement on the true meaning of productivity, let us define it as the output-input ra-tio within a time period with due consideration for quality. It can be ex-pressed as follows:

outputs Productivity = ————— (within a time period, quality considered)

inputs

The formula indicates that productivity can be improved (1) by in-creasing outputs with the same inputs, (2) by decreasing inputs but main-taining the same outputs, or (3) by increasing outputs and decreasing inputs to change the ratio favorably. Companies use several kinds of inputs, such as labor, materials, and capital. Total-factor productivity combines various inputs to arrive at a composite input. In the past, productivity improvement programs were mostly aimed at the worker level. Yet, as Peter F. Drucker, one of the most prolific writers in management, observed, “The greatest opportunity for increasing productivity is surely to be found in knowledge work itself, and especially in management”.

Definitions of effectiveness and efficiency. Productivity implies ef-fectiveness and efficiency in individual and organizational performance. Effectiveness is the achievement of objectives. Efficiency is the achieve-ment of the ends with the least amount of resources. Managers cannot


know whether they are productive unless they first know their goals and those of the organization, a topic that will be discussed in Chapter 6.


lish-English dictionary if you need. Discuss it with your partner. 2. Complete the following sentences:

a) today the urgent need for _________ _________ is recognized by government, private industry and universities;

b) productivity can be defined as the output-input ratio within a _______ ______ with due consideration for _______;

c) companies use several kinds of ______, such as labor, materials, and capital;

d) Peter F. Druckers is one of the most prolific writers in _________; e) productivity implies effectiveness and efficiency in individual and

organizational ________. 3. On the basis of the text write 5 questions to ask your partners to find out

how they understand the information. For Discussion

1. Summarize the information given in the Unit 1. Write key points on the following:

management skills women excellent companies

2. Divide into groups of three. You’ll have the following parts: the inter-viewer, public administrator, business manager. You should discuss how the job of public administrator differs from that of business man-ager. How do they know how well their organization is performing? What are the criteria for measuring effectiveness and efficiency?

Unit 2. Managing: Science or Art Pre-Reading Activities.

1. Is managing a science or art? Could the same explanation apply to engi-neering or accounting?

2. What kinds of books you may read on management (textbooks or popu-lar books) in English, Russian or Ukrainian. Do you have any of them at home?

Text 1. Managing: Science or art? Managing, like all other practices—whether medicine, music compo-

sition, engineering, accountancy, or even baseball — is an art. It is know-how. It is doing things in the light of the realities of a situation. Yet manag-


ers can work better by using 'the organized knowledge about management. It is this knowledge that constitutes a science. Thus, managing as practice is an art; the organized knowledge underlying the practice may be referred to as a science. In this context science and art are not mutually exclusive; they are complementary.

As science improves, so should art, as has happened in the physical and biological sciences. To be sure, the science underlying managing is fairly crude and inexact. This is true because the many variables with which managers deal are extremely complex. Nevertheless, such manage-ment knowledge can certainly improve managerial practice. Physicians without the advantage of science would be little more than witch doctors. Executives who attempt to manage without management science must trust to luck, intuition, or what they did in the past.

In managing, as in any other field, unless practitioners are to learn by trial and error (and it has been said that managers' errors are their subordi-nates' trials), there is no place they can turn to for meaningful guidance other than the accumulated knowledge underlying their practice.

The Elements of Science Science is organized knowledge. The essential feature of any science

is the application of the scientific method to the development of knowl-edge. Thus, a science comprises clear concepts, theory, and other accumu-lated knowledge developed from hypotheses (assumptions that something is true), experimentation, and analysis.

The Scientific Approach The scientific approach, schematically shown in Figure 1-3, first re-

quires clear concepts — mental images of anything formed by generali-zation from particulars. These words and terms should be exact, relevant to the things being analyzed, and informative to the scientist and practitio-ner alike. From this base, the scientific method involves the determination of facts through observation. After classifying and analyzing these facts, scientists look for causal relationships. When these generalizations or hy-potheses are tested for accuracy and appear to be true, that is, to reflect or explain reality, they are called “principles”. They have value in predicting what will happen in similar circumstances; Principles are not always un-questionably or invariably true, but they are considered valid enough to be used for prediction.

Theory is a systematic grouping of interdependent, concepts and prin-ciples that gives a framework to, or ties together, a significant area of knowledge. Scattered data, such as the notations left on a blackboard after a group of engineers has been discussing a problem, are not information


unless the observer has knowledge of the theory that will explain relation-ships. Theory is, as Homans has said, “in its lowest form a classification, a set of pigeon holes, a filing cabinet in which fact can accumulate. Nothing is more lost than a loose fact”.

FIGURE 1-3 THE SCIENTIFIC APPROACH.


lish-English dictionary if you need. Discuss it with your partner. 2. Match the definition to the terms.

1) concept a) determination of facts through ob-servation

2) method b) a systematic grouping of concepts and principles that ties together a significant area of knowledge

3) science c) achievement of the ends with the least amount of resources

4) effectiveness d) mental image of anything formed by generalization from particulars

5) theory e) organized knowledge 6) efficiency f) achievement of objectives


3. Speak on the figure. 4. On the basis of the text write 5 questions to ask your partners to find out

how they understand the information. Text 2. The Role of Management Theory

In the field of management, then, the role of theory is to provide a means of classifying significant and pertinent management knowledge. In the area of designing an effective organization structure, for example, there are a number of principles that are interrelated and that have a predictive value for managers. Some principles give guidelines for delegating author-ity; these include the principle of delegating by results expected, the princi-ple of equality of authority and responsibility, and the principle of unity of command.

Principles in management are fundamental truths (or what are thought to be truths at a given time), explaining relationships between two or more sets of variables, usually an independent variable and a dependent variable. Principles may be descriptive or predictive, but not prescriptive. That is, they describe how one variable relates to another—what will happen when these variables interact. They do not prescribe what people should do. For example, in physics, if gravity is the only force acting on a falling body, the body will fall at an increasing speed; this principle does not say whether anyone should jump off the roof of a high building. Or take the example of Parkinson's Law: Work tends to expand to fill the time available. Even if Parkinson's somewhat frivolous principle is correct (as it probably is), it does not mean that a manager should lengthen the time available for people to do a job. As another example, in management the principle of unity of command states that the more often an individual reports to a single supe-rior, the more likely it is that the individual will feel a sense of loyalty and obligation and the less likely it is that there will be confusion about instruc-tion. The principle merely predicts. It in no sense implies that individuals should never report to more than one person. Rather, it implies that if they do so, their managers must be aware of the possible dangers and should take these risks into account in balancing the advantages and disadvantages of multiple command.

Like engineers who apply physical principles to the design of an in-strument, managers who apply theory to managing must usually blend principles with realities. An engineer is often faced with the necessity of combining considerations of weight, size, conductivity, and other factors in designing an instrument. Likewise, a manager may find that the advantages of giving a controller authority to prescribe accounting procedures throughout an organization outweigh the possible costs of multiple author-ity. But if they know theory, these managers will know that such costs as


conflicting instructions and confusion may exist, and they will take steps (such as making the controller's special authority clear to everyone in-volved) to minimize disadvantages.


lish-English dictionary if you need. Discuss it with your partner. 2. On the basis of the text write 5 questions to ask your partners to find out

how they understand the information. 3. What other laws or principles do you know? How they could be under-

stood? And how they should be understood? Text 3. Management Techniques or Fads?

Techniques are essentially ways of doing things, methods of accom-plishing a given result. In all fields of practice they are important. They certainly are in managing, even though few really important managerial techniques have been invented. Among them are budgeting, cost account-ing, network planning and control techniques like the Program Evaluation and Review Technique (PERT) or the Critical Path Method (CPM), rate-of-return-on-investment control, and various devices of organizational devel-opment, all of which will be discussed in later chapters. Techniques nor-mally reflect theory and are a means of helping managers undertake activi-ties most effectively.

A management fad can be defined as a managerial interest or prac-tice followed for a period of time with exaggerated zeal or craze. But fads come and go – some slowly, others quickly; some survive and others fall by the wayside. These managerial fads can be found in all managerial func-tions. Business Week identified some that are out and some that are cur-rently in vogue. Let us look at some of those that are “in” in the various managerial functions.

Fads in planning? One of the fashionable buzzwords is strategic alli-ance, which essentially means that companies cooperate, as in forming a joint venture. These alliances even cut across national boundaries: Ameri-can Telephone and Telegraph joins forces with Olivetti in Italy (this alli-ance was not successful and broke up in 1989); General Motors builds cars with the Japanese car manufacturer Toyota.

Fads in organizing? Corporate culture is also “in”. It pertains to the values and beliefs shared by employees and the general patterns of their behavior.

Fads in staffing? Organizations have to be staffed by people who are not only competent but also healthy. This requires wellness or fitness pro-grams and the management of stress. Over 90 percent of the 500 largest companies in the United States have a wellness program or are assisting


employees in managing stress or improving their health. Paying for per-formance is also currently fashionable. This simply means measuring the contributions of individuals and rewarding them accordingly. Another term you may hear at times is demassing, which is a euphemism for laying of employees or demoting managers.

Fads in leading? Then there is the intrapreneur, a person who acts like an entrepreneur but does so within the organizational environment. Gifford Pin-chot, who coined the term, describes intrapreneurs as “those who take hands-on responsibility for creating innovation of any kind within an organization. The intrapreneur may be the creator or inventor but he or she is always the dreamer who figures out how to turn an idea into a profit-able reality”.

Fads in controlling? People admire success. Managers, rightly or wrongly, look to Japan to solve their productivity or quality problems. Thus, quality circles, widely used in Japan, are seen as a way of improving quality and making U.S. products more competitive.

Fads can become techniques, and they may contribute to the function-ing of the organization. However, if they are considered short-term solu-tions to deep-seated problems, or if they are considered quick fixes, then their value may be questioned. On the other hand, if they are integrated into a comprehensive system of management with a real commitment to mana-gerial excellence, then they will be useful techniques.


lish-English dictionary if you need. Discuss it with your partner. 2. Complete the following sentences:

a) the really important ___________ __________ are budgeting, cost accounting, and network planning and control techniques;

b) techniques normally reflect __________ and are _________ of helping managers undertake activities most effectively;

c) a management fad can be defined as a managerial _______ or prac-tice followed for a period of time with ________ real or craze;

d) corporate culture pertains to the _______ and shared by employees; e) paying for performance means measuring the ______ of individuals

and rewarding them accordingly; f) the ________ may be the creator or inventor but he is always the

dreamer; g) if ________ are integrated into a comprehensive system of man-

agement with a real commitment to managerial excellence, then they will be useful _______.


3. Give the term to the definition: a) _________ ________ a managerial interest or practice followed for

a period of time with exaggerated read or craze; b) _______ - the essential meaning of this is that companies cooper-

ate, as in forming a joint venture; c) ________ - means values and beliefs shared by employees and the

general patterns of their behavior; d) _________ - means measuring the contributions of individuals and

rewarding them accordingly; e) __________ - laying off employees or demoting managers; f) __________ - takes hand-on responsibility for creating innovation

of any kind within an organization. 4. On the basis of the text write 5 questions to ask your partners to find out

how they understand the information. Text 4. The Systems approach to Operational Management An organized enterprise does not, of course, exist in a vacuum.

Rather, it is dependent on its external environment; it is a part of larger sys-tems such as the industry to which it belongs, the economic system, and society. Thus, the enterprise receives inputs, transforms them, and exports the outputs to the environment, as shown by the very basic model in Figure 1-4. However, this simple model needs to be expanded and developed into a model of operational management that indicates how the various inputs are transformed through the managerial functions of planning, organizing, staffing, leading, and controlling. Clearly, any business or other organiza-tion must be described by an open-system model that includes interactions between the enterprise and its external environment.

Inputs and Claimants The inputs from the external environment (see Figure 1-5) may in-

clude people, capital, and managerial skills, as well as technical knowledge and skills. In addition, various groups of people make demands on the en-terprise. For example, employees want higher pay, more benefits, and job security. On the other hand, consumers demand safe and reliable products at reasonable prices. Suppliers want assurance that their products will be bought. Stockholders want not only a high return on their investment but also security for their money. Federal, state, and local governments depend on taxes paid by the enterprise, and they also expect the enterprise to com-ply with their laws. Similarly, the community demands that enterprises be “good citizens”, providing the maximum number of jobs with a minimum of pollution. Other claimants to the enterprise may include financial institu-tions and labor unions; even competitors have a legitimate claim for fair


play. It is clear that many of these claims are incongruent, and it is the manager's job to integrate the legitimate objectives of the claimants. This may need to be done through compromises, trade-offs, and denials of the manager's own ego.

FIGURE 1-4 INPUT-OUTPUT MODEL

The Managerial Transformation Process It is the task of managers to transform the inputs, in an effective and

efficient manner, into outputs. Of course, the transformation process can be viewed from different perspectives. Thus, one can focus on such diverse enterprise functions as finance, production, personnel, and marketing. Writers on management look on the transformation process in terms of their particular approaches to management. Specifically, writers belonging to the human behavior school focus on interpersonal relationships, social systems theorists analyze the transformation by concentrating on social in-teractions, and those advocating decision theory see the transformation as sets of decisions. However, the most comprehensive and useful approach for discussing the job of managers is to use the managerial functions of planning, organizing, staffing, leading, and controlling as a framework for organizing managerial knowledge; therefore, this is the approach used as the framework of this book (see Figure 1-5).

The Communication System Communication is essential to all phases of the managerial process for

two reasons. First, it integrates the managerial functions. For example, the objectives set in planning are communicated so that the appropriate organi-zation structure can be devised. Communication is essential in the selec-tion, appraisal, and training of managers to fill the roles in this structure. Similarly, effective leadership and the creation of an environment condu-cive to motivation depend on communication. Moreover, it is through communication that one determines whether events and performance con-form to plans. Thus, it is communication that makes managing possible.


The second purpose of the communication system is to link the enter-prise with its external environment, where many of the claimants are. For example, one should never forget that customers, who are the reason for the existence of virtually all businesses, are outside a company. It is through the communication system that the needs of customers are identified; this knowledge enables the firm to provide products and services at a profit. Similarly, it is through an effective communication system that the organi-zation becomes aware of competition and other potential threats and con-straining factors.

External Variables Effective managers will regularly scan the external environment.

While it is true that managers may have little or no power to change the ex-ternal environment, they have no alternative but to respond to it. The forces acting in the external environment are discussed in various chapters, espe-cially in Chapters 3, 4, and 7.

Outputs It is the task of managers to secure and utilize inputs to the enterprise,

to transform them through the managerial functions — with due considera-tion for external variables — into outputs.

Although the kinds of outputs will vary with the enterprise, they usually include many of the following: products, services, profits, satisfaction, and in-tegration of the goals of various claimants to the enterprise. Most of these out-puts require no elaboration, and only the last two will be discussed.

The organization must indeed provide many “satisfactions” if it hopes to retain and elicit contributions from its members. It must contribute to the satisfaction not only of basic material needs (for example, employees' needs to earn money for food and shelter or to have job security) but also of needs for affiliation, acceptance, esteem, and perhaps even self-actualization so that one can use his or her potential at the workplace.

Another output is goal integration. As noted above, the different claimants to the enterprise have very divergent — and often directly oppos-ing – objectives. It is the task of managers to resolve conflicts and integrate these aims.

Reenergizing the System Finally, it is important to notice that in the systems model of opera-

tional management some of the outputs become inputs again. Thus, the sat-isfaction and new knowledge or skills of employees become important hu-man inputs. Similarly, profits, the surplus of income over costs, are rein-vested in cash and capital goods, such as machinery, equipment, buildings, and inventory. You will see shortly that the model shown in Figure 1-5 will serve as a framework in this book for organizing managerial knowledge.


SYSTEMS APPROACH TO MANAGEMENT

EXTERNAL ENVIRONMENT

Outputs 1. Products. 2. Services 3. Profits 4. Satisfaction 5. Goal integration 6. Other



lish-English dictionary if you need. Discuss it with your partner. 2. Speak on the Figure 1-5 3. According to this figure speak about the inputs and outputs in a factory,

hospital, educational institution. What is common and what is different? 4. On the basis of the text write 5 questions to ask your partners to find out

how they understand the information. Text 5. The Functions of Managers

The functions of managers provide a useful structure for organizing management knowledge (see the central part of Figure 1-5). There have been no new ideas, research findings, or techniques that cannot readily be placed in the classifications of planning, organizing, staffing, leading, and controlling.

Planning Planning involves selecting missions and objectives and the actions to

achieve them; it requires decision making, that is, choosing future courses of action from among alternatives. There are various types of plans, rang-ing from overall purposes and objectives to the most detailed actions to be taken, such as ordering a special stainless steel bolt for an instrument or hiring and training workers for an assembly line. No real plan exists until a decision — a commitment of human or material resources or reputation —has been made. Before a decision is made, all that exists is a planning study, an analysis, or a proposal; there is no real plan. The various aspects of planning are discussed in Part 2 of this book.

Organizing People working together in groups to achieve some goal must have

roles to play, much like the parts actors fill in a drama, whether these roles are ones they develop themselves, are accidental or haphazard, or are de-fined and structured by someone who wants to make sure that people con-tribute in a specific way to group effort. The concept of a “role” implies that what people do has a definite purpose or objective; they know how their job objective fits into group effort, and they have the necessary au-thority, tools, and information to accomplish the task.

This can be seen in as simple a group effort as setting up camp on a fishing expedition. Everyone could do anything he or she wanted to do, but activity would almost certainly be more effective and certain tasks would be less likely to be left undone if one or two persons were given the job of gathering firewood, others the assignment of getting water, others the task of starting a fire, others the job of cooking, and so on.


Organizing, then, is that part of managing that involves establishing an intentional structure of roles for people to fill in an organization. It is in-tentional in the sense of making sure that all the tasks necessary to accom-plish goals are assigned and, it is hoped, assigned to people who can do them best.

The purpose of an organization structure is to help in creating an envi-ronment for human performance. It is, then, a management tool and not an end in and of itself. Although the structure must define the tasks to be done, the roles so established must also be designed in the light of the abilities and motivations of the people available.

Designing an effective organization structure is not an easy manage-rial task.

Many problems are encountered in making structures fit situations, in-cluding both defining the kinds of jobs that must be done and finding the people to do them.

Staffing Staffing involves filling, and keeping filled, the positions in the or-

ganization structure. This is done by identifying work-force requirements; inventorying the people available; and recruiting, selecting, placing, pro-moting, appraising, planning the careers of, compensating, and training or otherwise developing both candidates and current jobholders so that tasks are accomplished effectively and efficiently.

Leading Leading is influencing people so that they will contribute to organiza-

tion and group goals; it has to do predominantly with the interpersonal as-pect of managing. All managers would agree that their most important problems arise from people — their desires and attitudes, their behavior as individuals and in groups — and that effective managers also need to be effective leaders. Since leadership implies followership and people tend to follow those who offer a means of satisfying their own needs, wishes, and desires, it is understandable that leading involves motivation, leadership styles and approaches, and communication.

Controlling Controlling is measuring and correcting individual and organizational

performance to ensure that events conform to plans. It involves measuring performance against goals and plans, showing where deviations from stan-dards exist, and helping to correct them. In short, controlling facilitates the accomplishment of plans. Although planning must precede controlling, plans are not self-achieving. Plans guide managers in the use of resources


to accomplish specific goals; then activities are checked to determine whether they conform to the plans.

Control activities generally relate to the measurement of achievement. Some means of controlling, like the budget for expenses, inspection re-cords, and the record of labor-hours lost, are generally familiar. Each measures, and each shows whether plans are working out. If deviations persist, correction is indicated. But what is corrected? Activities, through persons. Nothing can be done about reducing scrap, for example, or buying according to specifications, or handling sales returns unless one knows who is responsible for these functions. Compelling events to conform to plans means locating the persons who are responsible for results that differ from planned action and then taking the necessary steps to improve performance. Thus, outcomes are controlled by controlling what people do.

Coordination, the Essence of Managership Some authorities consider coordination to be a separate function of

the manager. It seems more accurate, however, to regard it as the essence of managership, for achieving harmony among individual efforts toward the accomplishment of group goals. Each of the managerial functions is an exercise contributing to coordination.

Even in the case of a church or a fraternal organization, individuals of-ten interpret similar interests in different ways, and their efforts toward mu-tual goals do not automatically mesh with the efforts of others. It thus be-comes the central task of the manager to reconcile differences in approach, timing, effort, or interest and to harmonize individual goals to contribute to organization goals.


lish-English dictionary if you need. Discuss it with your partner. 2. Match every sentence to the function it refers to:

1) planning; 2) organizing; 3) staffing; 4) leading; 5) controlling; 6) coordination. a) all managers would agree that their most important problems arise

from people – their desires and attitudes, their behavior as individu-als and in groups – and that effective managers also need to be ef-fective leaders;


b) it is intentional in the sense of making sure that all the tasks neces-sary to accomplish goals are assigned and, it is hoped, assigned to people who can do them best;

c) it involves measuring performance against goals and plans, show-ing where deviations from standards exist, and helping to correct them;

d) it requires decision making, that is, choosing future courses of ac-tion from among alternatives;

e) many problems are encountered in making structures fit situations, including both defining the kinds of jobs that must be done and finding the people to do them;

f) it includes such means like the budget for expenses, inspection re-cords, and the record of labor-hours lost;

g) it becomes the central task of the manager to reconcile differences in approach, timing, effort, or interest and to harmonize individual goals to contribute to organization goals.


For Discussion 1. Give the key-points of the Unit 2.

Read the case “People Express”. Donald Burr, the founder and chairperson of People Express, has been

hailed in his attempt to build a more humane organization. But his leader-ship style was changing as the organization grew. Managers at People Ex-press had a distinct managerial style: hard-driving, but giving employees a great deal of freedom. All employees are expected to carry out a great vari-ety of tasks. Thus, pilots help out in handling the baggage. Even top ex-ecutives rotate from job to job to learn the major aspects of the business. Full-time employees must buy stock in the company, although they receive a large discount.

After the company expanded and experienced its first losses, its em-phasis on participative management changed. With the acquisition of Fron-tier Airlines, Inc., People Express became the fifth largest airline in the coun-try—only 5 years after its formation in 1980. With its growth, however, the firm changed its character from a family-style organization to a more tradi-tional one. Critics maintain that within the company it is even risky to ask unpopular questions. One of the original managing directors, Lori Dubose, who was one of the architects of lifetime employment at People Express, was unexpectedly fired. She thinks now that asking Burr challenging questions was risky and probably was a mistake. Another director, Harold Parety, who did not like being told that he had to be at work from 6 a.m. to 9 p.m.


regardless of the workload, quit and formed his own airline (Presidential Airways, Inc.), applying many of People Express's managerial practices.

1) What are some of the consequences to the company of Burr’s way of firing an officer?

2) Should a company be managed the same way regardless of its size or its profitability?

2. Divide into three groups. Each group should model the situation of fir-ing one of the managers. (You should give the reasons of it; the points of view of all the participants should be evident). Role-Play the situa-tion. While one group is performing, one of the rest groups should stand the point of view of the manager to be fired and find 5 reasons to keep his (her) position and the other supports the chairman (who made the decision) and also find 5 reasons to fire.

McDonald’s: serving fast food around the world Ray Kroc opened the first McDonald’s restaurant in 1955. He offered a

limited menu of high-quality, moderately priced food served fast in spotless surroundings. McDonald's QSC&V (quality, service, cleanliness, and value) was a hit. The chain expanded into every state in the nation. By 1983 it had over 6000 restaurants in the United States.

In 1967 McDonald's opened its first restaurant outside the United States, in Canada. By 1985 international sales represented about one-fifth of McDonald's total revenues. Yet fast food has barely touched many cultures. While 90 percent of the Japanese in Tokyo have eaten a McDonald's ham-burger, few outside the cities know what a hamburger is. In Europe, McDon-ald's maintains a very small percentage of restaurant sales but commands a large share of the fast-food market. It took the company 14 years of planning before it opened a restaurant in Moscow. But the planning paid off. People stand in line up to 2 hours for a hamburger. After waiting for such a long time, they have to pay $14.40 (at the official rate) for a Big Mac and french fries. Despite the high prices, McDonald's restaurant in Moscow attracts more visitors—on the average, 27,000 daily—than Lenin's mausoleum (about 9000 people), which used to be the place to see.

The taste for fast food, American-style, is growing more rapidly in countries abroad than at home. McDonald's international sales have been increasing by a large percentage every year. Every day more than 18 mil-lion people in over 40 countries eat at McDonald's.

Its traditional menu has been surprisingly successful. People with di-verse dining habits have adopted burgers and fries wholeheartedly. Before McDonald's introduced the Japanese to French fries, potatoes were used in Japan only to make starch. The Germans thought hamburgers were people from the city of Hamburg. Now, McDonald's also serves chicken, sausage,


and salads. One of the latest items, a very different product, is pizza. This new venture is risky and can be either a very profitable addition or a costly experiment.

The fast, family-oriented service, the cleanliness, and the value ac-counted for much of McDonald's success. McDonald's was one of the first restaurants in Europe to welcome families with children. Not only are chil-dren welcomed, but in many restaurants they are also entertained with cray-ons and paper, a play-land, or maybe even Ronald McDonald, who can speak twenty languages.

McDonald's golden arches promise the same basic menu and QSC&V in every restaurant. Its products, handling and cooking procedures, and kitchen layouts are standardized and strictly controlled. McDonald's re-voked the first French franchises because the franchisees failed to meet its standards for fast service and cleanliness, even though their restaurants were highly profitable. This may have delayed its expansion in France.

The restaurants are run by local managers and crews. Owners and managers must attend the Hamburger University near Chicago to learn how to operate a McDonald's restaurant and maintain QSC&V. The main campus library and modern electronic classrooms (which include simultaneous trans-lation systems) are the envy of many universities. When McDonald's opened in Moscow, a one-page advertisement resulted in 30,000 inquiries about the jobs; 4000 people were interviewed, and some 300 were hired. The pay is about 50 percent higher than the average Soviet salary.

McDonald's ensures consistent products by controlling every stage of distribution. Regional distribution centers purchase products and distribute them to individual restaurants. The centers will buy from local suppliers if the suppliers can meet detailed specifications. McDonald's has had to make some concessions to available products. For example, it is difficult to intro-duce the Idaho potato in Europe.

McDonald's uses essentially the same competitive strategy in every country: Be first in a market, and establish your brand as rapidly as possible by advertising very heavily. New restaurants are opened with a bang. So many people attended the opening of one Tokyo restaurant that the police closed the street to vehicles. The strategy has helped McDonald's develop a strong share in the fast-food market, even though its U.S. competitors and new local competitors quickly enter the market.

The advertising campaigns are based on local themes and reflect the different environments. In Japan, where burgers are a snack, McDonald's competes against confectioneries and new “fast sushi” restaurants. Many of the charitable causes McDonald's supports abroad have been recommended by the local restaurants.


McDonald's has been willing to relinquish the most control to its Far Eastern operations, where many restaurants are joint ventures with local entrepreneurs, owning 50 percent or more of the restaurant.

European and South American restaurants are generally company-operated or franchised (although there are many affiliates — joint ventures —in France). Like the U.S. franchises, restaurants abroad are allowed to ex-periment with their menus. In Japan, hamburgers are smaller because they are considered a snack. The Quarter Pounder didn't make much sense to people on a metric system, so it is called a Double Burger. Some of the Ger-man restaurants serve beer; some French restaurants serve wine. Some Far Eastern restaurants offer oriental noodles. But these new items must not dis-rupt existing operations.

Despite success, McDonald's faces tough competitors such as Burger King, Wendy's, Kentucky Fried Chicken, and now also Pizza Hut. And fast food in reheatable containers is now also sold in supermarkets, delicates-sens and convenience stores, and even gas stations. McDonald's has done very well, with a great percentage of profits coming now from international operations. But can this success continue? 1. What opportunities and threats did McDonald's face? How did it han-

dle them? What alternatives could it have chosen? 2. Before McDonald's entered the European market, few people believed

that fast food could be successful in Europe. Why do you think McDonald's succeeded? What strategies did it follow? How did these differ from its strategies in Asia?

3. What is McDonald's basic philosophy? How does it enforce this phi-losophy and adapt to different environments?

4. Should McDonald's expand its menu? If you say no, then why not? If you say yes, what kinds of products should it add?

5. Why was McDonald's successful in Moscow?

SUMMARY Management is the process of designing and maintaining an environ-

ment for the purpose of efficiently accomplishing selected aims. Managers carry out the functions of planning, organizing, staffing, leading, and con-trolling. Managing is an essential activity at all organizational levels; how-ever, the managerial skills required vary with organizational levels. Al-though women have made progress in obtaining responsible positions, they still have a long way to go. The goal of all managers is to create a surplus and to be productive, that is, to achieve a favorable output-input ratio within a specific time period with due consideration for quality. Productiv-


ity implies effectiveness (achieving objectives) and efficiency (using the least amount of resources).

Managing as practice is an art; organized knowledge about manage-ment is a science. The development of management theory involves the de-velopment of concepts, principles, and techniques.

The organization is an open system that operates within and interacts with the environment. The systems approach to management includes in-puts from the external environment and from claimants, the transformation process, the communication system, external factors, outputs, and a way to reenergize the system. The transformation process consists of the manage-rial functions, which also provide the framework for organizing knowledge in this book. Throughout the book, but especially in Chapter 4 and in the part closings, international aspects of managing are emphasized.

KEY IDEAS AND CONCEPTS FOR REVIEW Management Theory Managerial functions Parkinson's Law Managerial skills in the organizational hierarchy Techniques Systems approach to

operational management Women in the organizational hierarchy Planning The goal of all managers Organizing Characteristics of excellent companies Staffing Productivity Leading Effectiveness Controlling Efficiency Coordination Concepts Scientific method Principles

LITERATURE 1. David I. Rochman, Michael H. Mescon. Business Today. Fifth Edition,

Random House Business Division, New York, 1985. 2. Greetehen N. Vik, Geannette Worlman Gilstoof. Business Communica-

tion, Irwin, Burr Ridge, Illinois, Boston, Massachusetts, Sydney, Aus-tralia, 1994.

3. Courtland L. Bovée, John V. Thill. Business Communication Today, McGraw-Hill, Inc., 1992.

Навчально-методичне видання

THE BASIS OF GLOBAL MANAGEMENT. THEORY AND PRACTICE. Part I

Основи глобального менеджменту. Теорія та практика (Частина І): Методичні рекомендації для самостійної роботи (домашнє читання)

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Редактор Н.І. Одарченко Комп’ютерна верстка Н.І. Одарченко

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