Read and memorize the following words, words combinations and word-groups:
1. The merger wave, which in 1998 was a predominantly American affair, is now sweeping over Europe. Cross-border deals, such as Daimler-Benz's takeover of Chrysler, accounted for a quarter of mergers in 1998; more are expected as firms go global.
2. In many cases this consolidation makes sense - at least on paper. But just as certain as the flow of deals is that most will be failures. Study after study of past merger waves has shown that two out of every three deals have not worked.
3. Success in the future will depend more than ever on the merged companies' ability to create added value. And that will depend mainly on what happens after the deal has been done. Yet many deal makers have neglected this side of the business. Once the merger is done, they simply assume that computer programmers, sales mangers and engineers will cut costs and boost revenue according to plan.
4. Yet, just when post-merger integration has become decisive, it has become harder to pull off. Not only are modern firms complicated global affairs, but executives are putting today's deals together in a hurry. Few give enough thought to the pitfalls.
5. One set of obstacles is “hard” things, such as linking distribution or computer systems. In particular, many recent mergers have been undone by the presumption that information technology is easy to mesh together.
6. More difficult are the “soft issues”; and here the same word keeps popping up - culture. People never fit together as easily as flow charts. Culture permeates a company, and differences can poison any collaboration. After one large US merger, the two firms had a row over the annual picnic: employees of one company were accustomed to inviting spouses; the others were totally against the idea. The issue was resolved by inviting spouses only in alternate years.
7. Two new things have made culture clashes harder to manage. The first is the growing importance of intangible assets. Inan advertising agency, for instance, most of the value can walk out of the door if key people leave.
8. The second new thing is the number of cross-border mergers. In this area DaimlerChrysler may prove to be an interesting case study in differing management cultures. One worry is compensation: Chrysler's pay levels are much higher than the German company's. So a US manager posted to Stuttgart may end up reporting to a German manager who is earning half his salary.
9. Nor is pay the only difference. Chrysler likes to pride itself on its flexible approach, where speed and ingenuity are prized. When designing new models, teams of engineers, designers and marketing people work on each model. Daimler-Benz has a more traditional structure, in which designers and marketing people mix less and engineers are in charge.
10. Some recent deals will no doubt prove a stunning success. Nevertheless, there are three ominous signs about the current merger boom. First, much of the attention seems to be on the deal itself rather than the integration that must follow. Second, many deals are rushed. And third, mergers have too often become a strategy in their own right.
11. So the things that are so impressive about today's mergers - their size, complexity and daring - could count against them if the economy turns down.
From The Economist
Exercise 1. Find where in the text it is said about the points given below. Put down the number of the paragraph:
1. three ominous signs about the current merger boom
2. study results of past merger waves
3. the role of culture in mergers
4. things have made culture clashes harder to manage
5. set of obstacles in merging
Exercise 2. Say if the following statements are true or false:
1. The majority of mergers take place in the USA.
2. Many international mergers are failures.
3. Many mergers are done too quickly.
4. Connecting different computer systems together is not usually a problem.
5. Chrysler's pay levels are much lower than the German company's.
6. Engineers have a high status at Daimler-Benz.
7. Most attention is concentrated on what to do after the merger is completed.
8. Some recent deals will prove a stunning success.
Exercise 3. Answer the following questions:
1. What will success of the merged company depend on in the future?
2. Why have many recent mergers been undone?
3. Does culture permeate greatly a company?
4. What are three ominous signs about the current merger boom?
5. What are new things have made culture clashes to manage?
6. What is prized at Chrysler?
7. How are new models made in Chrysler and Daimler-Benz?
Exercise 4. Explain why the merger wave is now sweeping over Europe.
Exercise 5. Prove that success will depend on the merged companies’ ability to create added value.
Exercise 6. List pitfalls for merged companies.
Exercise 7. Comment why post-merger integration has become decisive.
Exercise 8. Compare company structure of Chrysler and Daimler-Benz .
Exercise 9.Make up a plan covering the main ideas. Discuss the text according to the plan.
Texts for translation into Ukrainian in a written form
Information technology management (or IT management or Management information system ) is a combination of two branches of study, information technology and management.
There are two incarnations to this definition. One implies the management of a collection of systems, infrastructure, and information that resides on them. Another implies the management of information technologies as a business function.[
The first definition stems from the practice of IT Portfolio Management and is the subject of technical manuals and publications of various information technologies providers; while the second definition stems from the discussion and formation of the Information Technology Infrastructure Library (ITIL).
The ITIL has been in practice throughout regions of the world mainly conducted by IT service providers consulting companies. The relative paucity in the use of the best practice set can be attributed to a lack of awareness among IT practitioners. However the lack of ready-to-use tools also presents a significant barrier.
Some organizations that value such practices tend to engage consultants to introduce the practice. Such implementations can conflict with the home-grown culture due to a lack of internal buy-in. Other organizations implement the practices by spending resources to develop in-house tools. Most in-house developed tools tend to focus on one or a few specific areas where the organizations feel the most pains. To reap the full advantages, tools will need to be integrated with the organization's IT data in the center.
Management Information System
Managers at both large and small companies continually need to collect and valuate information. Sources of crucial information may be external
(customers, distributors, competitors, consultants ) or internal ( staff specialists, sales representatives, production people ). The managers who use this information include those who make decisions about what will be sold, those who decide how it will be produced, those who decide what prices will be charged. All these managers need a carefully planned and organized management information system ( MIS )that provides timely and effective information to support their decision making.
A management information system, as the name implies, is made up of several components. Perhaps the most important is the people. Everyone in a company is a potential beneficiary of the system and a potential source of input, although usually only some are given access to it or the responsibility for reporting facts and figures. Furthermore, in companies with extensive and well-organized management information systems, a MIS manager is given responsibility for co-coordinating the flow of information and overseeing the specialists who work with the system.
A second component of management information system is procedure. To be efficient and effective, a MIS should specify what kind of information is needed, where it comes from, how it is to be supplied to the system, how it is to be manipulated, where it is to go, and what format it is to be supplied.
Most managers’ regular jobs are interrupted occasionally by a crisis. Since such an event is an extreme of one sort or another, its consequences can also be extreme. So the proper handling of crisis is of vital importance to a business. The classic case of crisis management occurred in 1990 when the Perrier bottled water company withdrew 160 million bottles from shops around the world after unacceptably high levels of benzene had been found in its water.
Learning about crisis management is a bit like learning the safety instructions in an aircraft before takeoff: you hope you will never need them, but you are not going to skip the class. Here are a few widely recommended hints.
· Look out for advance warning of an impending crisis.
· Have a contingency plan and an alternate product or process ready.
· Speed of reaction is vital.
· Do not overreact.
· Watch out to see if competitors are trying to take advantage of your crisis.
· Be prepared to give up market share initially.
· Do not assume that everybody is hostile, and do not clam up.
· A crisis is the time to call upon goodwill that has been fostered during the good times.
A company that has a regular system for involving its employees in decision making is using participative management. Rather than being a particular manager’s style, participative management is an overall approach adopted by an organization. It has been widely and successfully used in Japan, and some American companies have practiced it for many years.
The participative approach to management is considered an important tool for today’s companies. It works when employees have knowledge and experience that can make a positive contribution to the decision-making process.
The success of participative management depends on managers who are willing t involve others and lead them in productive meetings and group problem-solving sessions. It is up to the manager to solicit ideas and encourage and debate. Although participative management does improve human relations, its major value is in improving productivity and quality while reducing costs.
Texts for annotation and reviewing
Texts for annotation
Use the following phrases for annotation:
1. The text/article under review…(gives us a sort of information about … )
2. The article deals with the problem …
The subject of the text is …
3. At the beginning (of the text) the author describes … (dwells on …, explains …, touches upon …, analyses …, comments …, characterizes …, underlines …, reveals …, gives account of …)
The article begins with the description of …, a review of …, the analysis of …
The article opens with …
4. Then (after that, further on, next ) the author passes on to …, gives a detailed (thorough) analysis (description), goes on to say that …
5. To finish with, the author describes –
At the end of the article the author draws the conclusion that …; the author sums it all up (by saying… )
6. In conclusion the author …
Lowest cost isn’t always the answer
Visit any western toy superstore, and most of the basic products will say “Made in China” or, perhaps, Malaysia or Indonesia. Until, that is, you reach the Lego section. Suddenly, the boxes are more likely to identify Denmark, Switzerland or the US as the country of origin.
It might seem logical that a global company, selling into a multitude of country markets and measuring its market share in global terms, should place production facilities wherever costs are lowest. But Lego, the privately-owned Danish company, has for years concentrated its manufacturing in Europe and the US, arguing that this best satisfies design and quality requirements. For Lego the notion of cost is only a small part of the production picture.
So how does a global company go about organizing its manufacturing network? The decision has become more complicated over the past two decades due to a number of factors. On the one hand, trade barriers across much of the world have declined sharply. Simultaneously, a range of new markets - notably in Asia and Eastern Europe - has opened to foreign investment.
This has made global production much more possible. But it has also reduced the need for many overseas plants. Markets that previously demanded local production facilities - because tariff levels made importing far too expensive - can now be supplied from other countries.
Plainly, in this newly-liberalized environment, basic manufacturing costs do become more significant. But there are limits to a purely cost-driven approach. Many companies have built their current production structure through acquisitions over a number of years, rather than in a planned way.
Another problem is that costs themselves can be subject to rapid change, making today's Indonesia, for example, tomorrow's Hong Kong. This adds a further dimension to any global company's investment decision-making. The reality is that manufacturing businesses also need to think: how quickly can we pull the plug?
Some companies have addressed this issue through what is called the “part configuration” model. This involves selecting a number of regional manufacturing bases which are viewed as longer-term investments, and augmenting them with lower-skilled assembly plants, which can more easily be moved between markets.
The availability of suitable employees also needs to be examined when investment decisions are being made. There may be close links between manufacturing and product innovation and if too much focus is put on low-cost assembly operations, product innovation tends to suffer.
Perhaps the hottest topic is whether a global company needs to be a producer at all. Outsourcing of production to other suppliers gives a company more flexibility, and fits well with a global strategy. A business may be better placed to supply differentiated products into different regional markets, and it can probably adjust more swiftly to changing cost considerations. These operational advantages come in addition to the financial benefits of outsourcing, such as lower capital employed.
But there can be pitfalls. Perhaps no company exemplifies the outsourcing trend better than Nike, the sports shoe group. On paper, its strategy of subcontracting the production of its shoes to local factories looks eminently sensible. But these arrangements have turned into a public relations disaster in recent years, as human rights campaigners have complained of “sweatshop” conditions in many of the Asian plants producing Nike products. Lack of ownership, it seems, does not bring freedom from responsibility.