Government and Business

The Government Role in the Chinese Economy

The Chinese economy has grown immensely in the past few years, and a big part of that is because of the government and the changes it has made in the economic structure of the country. Today China has the fastest growing economy on the planet and it is expected to become the strongest and largest economy in the world by the middle of the 21-st century or even earlier. At its current rate of growth, analysts see China replacing the US as the world’s top economy in about a decade. “It’s realistic to say that within 10 years China will be roughly the same size as the US economy”, says Tom Miller of GK Dragonomics, a Beijing-based economic consultancy.

It’s a growing force and it all began in 1978 when the government made the decision to lessen its restrictions and bring in more free enterprise in the economy and business. So, since 1978 the government’s role in the economy has fallen greatly, while the role of private enterprises has grown. In 1994, the pricing system was changed to allow free price movements. By the mid 1990s China was well on the path of opening up its economy. Export was flooding out and China was given the title of “the world’s factory”. Taking advantage of its huge population, China began to move up in the ranking of the world’s top economies.

But nevertheless, the government still maintains an active role in the economy. The government’s management of the economy is involved through a top-down chain of command with hundreds of ministries, commissions, administrations, bureaus, and corporations. Direct control of the economy by the government is done through designating physical output quotas, while indirect control is done through affecting market incentives.

Over the past 35 years, Chinese companies have begun to gain more and more independence from the government in a range of activities. Together with this, large-scale construction, as well as important industries and services are still managed heavily by the government through direct management and 1/3 of the country’s GDP is still generated through government-controlled industries.

Notes:

free enterprise – свободное предпринимательство

open up - активизировать

output quotas – нормы выработки

Unit 12

Corporate Culture

SOL’s Approach to Corporate Culture

As one of northern Europe’s most admired companies, SOL Cleaning Service, located in Helsinki, Finland, isn’t what you might expect. The company’s headquarters positively “explodes” with color, creativity, and chaos. Smart in bright red-and- yellow uniforms, staff hurry about, carrying laptops and the latest smart phones, as well as vacuum cleaners. All this might seem tailor-made for creative organizational types (such as software designers or advertising executives), but SOL competes in a basic and unglamorous business – industrial cleaning. It’s a high-energy, knowledge-driven organization whose business is washing hospital floors, making hotel beds, and sweeping grocery store aisles.

This is a company in which people work when they like, and flexibility is strongly tested. The philosophy of its chairman and owner is: “In a service business, if you are not happy with yourself, how can you make the customer happy?” Answering that question has made SOL wildly successful. What does the company do differently to “clean up” in an industry notorious for low wages and terrible service?

SOL is characterized by five corporate values. First, hard work has to be fun, that’s why the company’s culture is built around optimism and good cheer. SOL’s logo – a yellow happy face – is plastered on everything: from the company’s stationery to the most important financial statements. Employees enjoy the freedom of minimal rules and regulations; there are no titles, individual offices, or set working hours; and the company has eliminated all perks and status symbols.

Second, there are no low-skill jobs. The company invests significant amounts of time and money in training employees. SOL’s staff study topics such as time management, people skills, and budgeting. Training is focused on turning cleaners into customer service specialists.

Third, people who set their own targets shoot for the stars. SOL employees have significant amounts of responsibility and authority. The company’s supervisors, each of whom leads a team of up to 50 cleaners, work with the teams to create their own budgets, do their own hiring, and negotiate their own deals with customers.

The fourth value is loose organizations need tight measures. Although the chairman believes in employee autonomy, she is a fanatic about performance measurement and accountability. The company measures performance frequently, and most of these measures focus on customer satisfaction.

Finally, SOL believes that great service demands cutting-edge technology. In fact laptops and other gadgets are standard equipment for all supervisors at SOL. The company uses its intranet for scheduling training, relaying news, and informing employees about upcoming company events.

Notes:

headquarters – штаб-квартира

flexibility – гибкость

notorious – (зд.) пользующийся дурной славой, печально известный

perks – льготы, привилегии

accountability – подотчётность

cutting-edge technology – передовая технология

Unit 13

Employment

Satisfiers and Motivators

It’s logical to suppose that things like good labour relations, good working conditions, good wages and benefits, and job security motivate workers. But in “Work and the Nature of Man”, Frederick Herzberg argued that such conditions don’t motivate workers. They are merely “satisfiers” or, more importantly, “dissatisfiers”. “Motivators”, on the contrary, include things such as having a challenging and interesting job, recognition and responsibility, promotion, and so on.

However, even with the development of IT technologies, there are and always will be plenty of boring, mindless, repetitive and mechanical jobs in all sectors of the economy, and lots of unskilled people who have to do them.

So how do managers motivate people in such jobs? One solution is to give them some responsibilities, not as individuals but as part of a team. For example, some supermarkets combine office staff, the people who fill the shelves, and the people who work on the checkout tills into a team and let them decide what product lines to stock, how to display them, and so on. Other employers ensure that people in repetitive jobs change them every couple of hours, as doing 4 different repetitive jobs a day is better than doing only 1. Many people now talk about the importance of a company’s shared values or corporate culture, with which all the staff can identify: for example, being the best hotel or restaurant chain, or airline, or making the best, the safest, the most user-friendly, the most ecological and the most reliable products in a particular field. Such values are more likely to motivate workers than financial targets, which ultimately only concern a few people. Unfortunately, there is just a limited number of such goals to go round, and by definition, not all the competing companies in an industry can seriously claim to be the best.

Notes:

checkout till – касса (в магазине)

user-friendly – удобный для пользователя

Unit 14

Globalization

Global Organizations

International businesses have been around for a long time. Siemens, for instance, was selling its products in many countries in the 19-th century. Ford Motor Company set up its first overseas sales branch in France in 1908. By the 1920s, other companies, including Fiat, had gone multinational. But it wasn’t until the mid-1960s that multinational corporations (MNCs) became commonplace. These corporations – which maintain significant operations in two or more countries simultaneously but are based in one home country – inaugurated the rapid growth in international trade.

The expanding global environment has extended the goals of MNCs to create an even more generic global organization called the transnational corporation (TNC). This type of organization doesn’t seek to replicate its domestic success by managing foreign operations from its home country. Rather, decision making at TNCs takes place at the local level. Nationals typically are hired to run operations in each country. The product or marketing strategies for each country are uniquely tailored to that country’s culture. Nestle, for example, is a transnational company. With operations in almost every country on the globe, it is the world’s largest food company, yet its managers match the company’s products to its consumers. Thus, in parts of Europe Nestle sells products that are not available in the USA or Latin America.

Many large, well-known companies are moving to globalize their management structure more effectively by breaking down internal arrangements that impose artificial geographical barriers; this global type of organization is called a borderless organization. The borderless organization can be said to approach global business from the geocentric perspective. For instance, IBM dropped its organizational structure based on the country and reorganized into some industry groups.

Managers of multinational, transnational, and borderless organizations have become increasingly global in their perspectives and accept the reality that national borders no longer define ways of doing business efficiently and effectively.

Notes:

replicate – повторять, копировать

impose – навязывать

artificial – искусственный

Unit 15

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