Afterwards Marshal’s analysis was downplayed, and the work of more formal economists of the 1800s (such as Leon Warlas, Francis Edgeworth, and Antoine Cournot) was seen as the basis of the science of economics. Economic analysis that focuses only on formal interrelationships is called Walrasian economics….
Text 3
“INTERNATIONAL” MANAGERS
Managers who can operate effectively across cultures and national borders are invaluable in global business. As more and more companies expand abroad, competition for top talent to run new international operations will steadily grow.
The 2010s will test the capacities of multinational corporations to react rapidly to global changes in human resources as in all other areas of the company.
Global selection systems enable a company to find the best person anywhere in the world for a given position. The system measures applicants according to a group of 12 character attributes. These twelve categories are: motivations, expectations, open-mindedness, and respect for other beliefs, trust in people, tolerance, personal control, flexibility, patience, social adaptability, initiative, and risk-taking, sense of humor, interpersonal interest, and spouse communication. An effective international executive displays a combination of desirable personal qualities. These include adaptability, independence, leadership, - even charisma.
What part can management education play in developing the international manager? A good deal. Management education can provide training in international marketing, finance and such international relations. Knowledge areas the international manager will need include understanding of the global economy and foreign business systems, international marketing, international financial management, political risk analysis and the ability to analyze and develop sophisticated global strategies.
We can also point to skills such as communication, leadership, and motivation, decision-making, team-building and negotiation. Research indicates that national cultural differences can have important effects. The international manager is said to spend over half of his or her time in negotiation. International managers should know how foreign cultures affect organizational behaviour and management style. They should understand how their own culture affects their own style.
Text 4
SCIENTIFIC MANAGEMENT
No one has had more influence on managers in the 20th century than Frederick W. Taylor, an American engineer. He set a pattern for industrial work which many others have followed, and although his approach to management has been criticized, his ideas are still of practical importance.
Taylor founded the school of Scientific Management just before the 1914-18 war. He argued that work should be studied and analyzed systematically. The operations required to perform a particular job could be identified, then arranged in a logical sequence. After this was done, a worker’s productivity would increase. The new method was scientific. The way of doing a job would be no longer be determined by guesswork and rule-of-thumb practices. If the worker followed the prescribed approach, his-her output would increase.
Taylor’s solutions to the problems were based on his own experience. He conducted many experiments to find out how to improve productivity. He felt that managers used not the right methods and the workers didn’t put much effort into their job. He wanted a new approach to be adapted to their work. The new way as follows:
1. Each operation of a job was studied and analyzed;
2. Using the information, management worked out the time and method for each job, and the type of equipment.
3. The work was organized so that the worker’s only responsibility was to do the job in the prescribed manner.
4. Men with the right physical skills were selected and trained for the job.
The weakness of his approach was that it focused on the system of work rather than on the worker. With this system a worker becomes a tool in the hands of management. Another criticism is that it leads to deskilling – reducing the skills of workers. And with educational standards rising among factory workers, dissatisfaction is likely to increase.
Text 5
THE BASICS OF CORPORATE STRUCTURE
CEOs[††], CFOs[‡‡], presidents and vice presidents: what’s the difference? With the changing corporate horizon, is has become increasingly difficult to keep track of what people do and where they stand on the corporate ladder. Should we be paying more attention to news relating to the CFO or the vice president? What exactly do they do?
Corporate governance is one of the main reasons that these terms exist. The evolution of public ownership has created a separation between ownership and management. Before the 20th century, many companies were small, family owned and family run. Today, many are large international conglomerates that trade publicly on one or many global exchanges.
In an attempt to create a corporation where stockholders’ interests are looked after, many firms have implemented a two-tier corporate hierarchy. On the first tier is the board of governors or directors: these individuals are elected by the shareholders of the corporation. On the second tier is the upper management: these individuals are hired by the board of governors. Let’s begin by taking a closer look at the board of governors and what its members do.
Board of Directors.
Elected by the shareholders, the board of directors is made up of two types of representatives. The first type involves individuals chosen from within the company. This can be a CEO, CFO, manager or any other person who works for the company on a daily basis. The other type of representative is chosen externally and is considered to be independent from the company. The role of the board is to monitor the managers of a corporation, acting as an advocate for stockholders. In essence, the board of directors tries to make sure that shareholders’ interests are well served.
Board members can be divided into three categories:
- Chairman - Technically the leader of the corporation, the chairman of the board is responsible for running the board smoothly and effectively. His or her duties typically include maintaining strong communication with the chief executive officer and high level executives, formulating the company’s business strategy, representing management and the board to the general public and shareholders, and the maintaining corporate integrity. A chairman is elected from the board of governors.
- Inside Directors – These directors are responsible for approving high-level budgets prepared by upper management, implementing and monitoring business strategy, and approving core corporate initiatives and projects. Inside directors are either shareholders or high-level management from within the company. Inside directors help provide internal perspectives for other board members. These individuals are also referred to as executive directors if they are part of company’s management team.
- Outside directors – While having the same responsibilities as the inside directors in determining strategic direction and corporate policy, outside directors are different in that they are not directly part of the management team. The purpose of having outside directors is to provide unbiased and impartial perspectives on issues brought to the board.
Text 6
THE JOB OF MANAGEMENT
A strong management is the backbone of any successful company. This is not to say that employees are not also important, but it is management that ultimately makes the strategic decisions. You can think of management as the captain of a ship. While not physically driving the boat, he or she directs others to look after all the factors that ensure a safe trip.
Management Career Paths
A management career path is not a straight line. Nor is it the same for everyone. Yet all management career paths have a starting point. All have milestones along the way. Each paths leads managers to what they need to know based on where you are in your career and where your interests lie. On each visit you can go further along the path retrace steps along the same path, or start down a new path. Five paths are listed below
1. Considering Management
This person wonders whether a management career if for them. Maybe someone has suggested it. Maybe they just feel they can do it better than their current boss. Take this path to learn more about what management does and whether management might be for you.
2. Just Starting Management
This person has just started or is about to start, their first management job. This path will guide you through those first confusing challenging days and months. It takes you through the basic knowledge needed to be a manager and how to deal with the problems that crop up.
3. Going for it
This person has decided to try the management career path. They have no management experience yet, but are interested and motivated. This path leads to the knowledge and skill needed to land that first management job.
4. Experienced manager
This manager has had several years experience in management. He or she has had time to make mistakes and achieve some successes in the real world and now want to improve. This path leads to the resources to improve their skills and their promotion potential.
5. Management Pros and Consultants
These are veteran managers interested in increasing and sharing their professional knowledge and experience. They have managed different and difficult opportunities, but they know there is always more to learn. This path connects them with their peers and to cutting-edge theory.
Text 7
LONDON AND FINANCE
London, the capital of the United Kingdom, is a political, cultural, commercial, industrial and financial centre of the country. At the same time London is one of the world’s financial capitals. The business centre of London is the City, where numerous banks, various exchanges, insurance offices, shipping and other companies have their head offices.
London is also the headquarters of many prominent international banking and insurance concerns which deal in foreign shares, insurance and bonds and handle English investments in other countries.
The central feature of government finance is the Bank of England, founded under a royal charter as a private company in 1694 to provide loans to the Government and nationalized in 1946 by Act of Parliament. The Bank of England is the country’s national bank, it carries out government monetary policies and acts as the ‘banker’s bank’ for privately owned banks and other Commonwealth nations.
Most domestic banking operations of the United Kingdom are carried on by the commercial clearing banks. The main commercial banks are Lloyds Bank, Barclays Bank, Midland Bank and National Westminster Bank, often referred to as ‘the Big Four.
Paper currency in circulation is issued by the Bank of England. The monetary unit is the pound sterling equal to 100 pence.
Text 8
THE LONDON STOCK EXCHANGE
London, the capital of the United Kingdom, is a political, cultural, commercial, industrial and financial centre of the country. At the same time London is one of the world’s financial capitals. The business centre of London is the City, where
numerous banks, various exchanges, insurance offices, shipping and other companies have their head offices.
At the heart of the City is the London Stock Exchange where millions of shares and securities are traded daily. There are also exchanges in several other cities of the United Kingdom but the London Stock Exchange is the most important. Here through the Exchange members the investor can buy or sell shares in any of the thousands of companies which are quoted on the Exchange and many more companies which are quoted on recognized exchanges overseas. The London Stock Exchange offers the largest range and number of securities quoted on any Stock Exchange in the world. In volume of business it ranks third to New York and Tokyo.
London is also the headquarters of many prominent international banking and insurance concerns which deal in foreign shares, insurance and bonds and handle English investments in other countries.
Text 9
A VEXING MARKET
The urge to call the market's direction is fierce. Trouble is that is devilishly hard to do. It's best to be wary of those who build their investment strategies around market timing. Also dangerous: people who think they see turning points at which all the old laws about investing are repealed. In the late 1990s a lot of investors were convinced that technology had given rise to a new paradigm in which the market's direction would be ever sky- ward. The mantra of that era -"It's different this time"—came crashing down when investors realized that profit-free Internet companies weren't such a good idea after all.
Vintage periodicals give us a window on how wrong market forecasts can be. My collection of market memorabilia includes the 1979 BusinessWeek issue with the infamous "Death of Equities" cover. I also retain a lesser-known and more accurate FORBES issue from a month later, "Back From the Dead?", pooh-poohing the silly notion that stocks were finished just because there had been a prolonged bear market. The roaring 1980s gave lie to the BusinessWeek story. One thing that hasn't changed is the long- term viability and resilience of the stock market.
Let's look at what has changed. Another old magazine I own, a 1950 Time, had a cover highlighting very cheap blue chips with very high yields. General Motors had a price/earnings multiple of 6 and a dividend yield of 11%, Boeing a 7 P/E and an 8.6% yield, Phelps Dodge a 7 PIE and an 8.3% yield. At the time the S&P 500 had an average PIE of 7 and yielded 6.9%. All this came at a time when long-term Treasuries offered a mere 2.3% yield to maturity.
Text 10
STOCK MARKETS
Today the S&P 500 has a 19 PIE and a 2% dividend yield. It's not as cheap as it was 55 years ago. But does that mean that stocks are a bad buy? No. The current market is different in that it is the first bull market in the last half-century where multiples have contracted. At the start of this bull market in October 2002, the market P/E was 27. Stocks have since climbed, yet multiples are down because earnings have climbed even faster.
My firm recently analyzed the market's reaction to three dozen monthly economic indicators and found that the ones with the greatest effect are not those that measure the economy, inflation or monetary conditions. Rather, the sharpest moves come from sentiment measures such as consumer confidence.
Technical analysis doesn't offer much help here. Technicians, noting the strength in the advance-decline line lately, have forecast at least six more months of higher prices. Of course, when more stocks are advancing than declining it is a bullish signal. These same worthy souls apparently have forgotten the lesson of 1999, when they argued that the market was going down because that indicator was negative; the S&P ended that year with a 19% gain. My hint on the advance-decline line is that within a bullish climate it tends to peak 12 months before the market. No one can tell when it is peaking until afterward, though.
Text 11
INTRODUCTION TO ECONOMIC ACTIVITY
Economic activity began with the caveman, who was economically self-sufficient. He did his own hunting found his own shelter, and provided for his own needs. As primitive populations grew and developed, the principle of division of labour evolved. One person was more able to perform an activity than another and therefore each person concentrated on what he did best. While one hunted, another fished. The hunter then traded his surplus to the fisherman, and thus each benefited.
In today's complex economic world, neither individuals nor nations are self-sufficient. Nations have utilized different economic resources; people have developed different skills. This is the foundation of world trade and economic activity. As a result of this trade and activity, international finance and banking have evolved.
For example, the United States is a consumer of coffee, yet it does not have the climate to grow any of its own. Consequently, the United States must import coffee from countries (such as Brazil) that grow coffee. On the other hand, the United States has large industrial plants capable of producing a variety of goods, which can be sold to countries that need them.