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Management means the members of administration of a business or an organisation. They may be or may be not the owners of the business. But they are always selected by the owners to be responsible for different functions of the organisation. A typical organisation has three layers of management: the senior management, the middle management and the junior management.
Heads of major departments within the organisation make the senior level. Leaders of sections make the middle management level. The junior management level provides a link with the rest of the workforce. The word "management" has also another meaning. F. Pitt and V. Baker in "Management and Information" define it as "the making of decisions on the allocation of resources".
The common essential of all management activity is the flow of information. That is, the inward flow of data on which decisions can be based and the outward flow of the decisions.
A good definition of a manager is given by W. Brown and E. Jaques. A manager is "an individual who is accountable for more work than he/she can do themselves and who gets some of it done through other people". This definition is related to managers who function at all levels.
The main functions of a manager are:
1. to forecast and plan (seeing into the future and drawing up plans of action);
2. to organise (to put plans into operation);
3. to command (to get the best performance from the staff);
4. to co-ordinate (to make it sure that each department's efforts harmonise with those of other departments);
5. to control (to see that everything works according to plan).
Traditionally, there are the two styles of management - autocratic and
democratic. Let us consider them.
Autocratic managers set objective for the group demonstrating their power and authority. They give orders and expect group members to obey iliem without any question. It is clear that in such situations group members do not make their own decisions.
Democratic managers, on the contrary, let group members set their own objectives. If they give orders they explain why and give reasons for lheir orders. Group members take part in decision making, they express different points of view. What is more, democratic managers take into onsideration all their opinions before making a final decision. They also demonstrate the fact that the opinions of group members influence a final decision.
Researches show that the democratic style of management is much more effective. It leads to higher labour productivity, feelings of involvement into business and job satisfaction.
Of course, the autocratic management style can also achieve high productivity. However, researches show that such group members experience conflicts with management more often. They also show dissatisfaction with their work more often.What modern researches also showed is that managers adopt more than one style in different situations.So, how do management styles vary? Let us consider the following table:
High Tells - manager makes decision and informs the group
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Sells - manager makes decision and explains it to the group
Consults - manager listens to suggestions, then makes decision
Shares - manager defines limits and lets the group make decision
Low Delegates - manager allows group members to operate
within defined limits
Source: Tannebaum and Schmidt Harvard Business Review
Questions
1. What is the meaning of the word "management"?
2. What layers of management has a typical organisation?
3. All management activity is the flow of information, is not it?
4. Explain your understanding of it.
5. What a definition of a manager do you know?
6. What are the five main functions of a typical manager?
7. What is the difference between autocratic and democratic managers?
8. What kind of manager do you prefer? Why?
9. What do modern researches show?
Text MANAGEMENT QUALITIES
The Institute of Manpower Studies (IMS) has made research concerning management qualities and published a report about it. The report is very interesting and became popular among specialists.
It is not for the first time that the question of management qualities is put into the focus of attention. John Banham has already said much about it. It is Banham who thinks that we need to have chartered managers as we have chartered accountants or chartered auditors. "If we want to attract the most talented people in our business, management must become a profession with its own qualifications", he often repeats.
Much interesting on this question was said in the book "The leadership Force" by John Kotter of Harvard Business School. He points out that modern business in the new environment requires more new skills and approaches than most managers needed in the second half of the XX century. Traditional management and administrative ability differ from modern demands. "Operating in the new environment requires leadership", J. Kotter says. It also demands making "innovative decisions", analysing hard data, "minimising commercial risk". One of the authors of the report "What Makes a Manager?" Wendy Ilirsh (IMS) carried out much research work to find out typical managers' qualities. Hirsh worked in real companies and asked a lot of questions before he came to the conclusion that the most typical management qalities of to-day are the following: communication, leadership, initiative, innovation, etc.
41
Text A. Banks
Text B. Selecting a bank
Text C. About International Banking
1. Read the following words and word combinations and learn their meanings by heart:
savings-bank
savings -
a source -
a source of credit -
a depositor - ,
a depositary
a withdrawal -
a commercial bank --
a loan
a letter of credit (L/C) -
a trust - ', 2
a goldsmith -
an interest -
interest-free -
to select -
a selection - ,
integrity ;
to take into consideration -
an offer to offer -
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a rate -
reasonable - ,
confidence -
to require -
a requirement -
a connection - '
an insurance
activities -
indebtedness -
an amount
expenses -
in regard to -
proof- ', 2
future prospects -
a foreign exchange currency -
to give notice -
the Middle Ages -
middle -
a choice -
There are different banks. They may be classified according to different services they perform.
Savings banks. These are institutions which accumulate savings in small accounts. They are also valuable sources of credit for businesses. Savings banks, as a rule, invest their funds in long-term credit instruments. That is why, most savings banks require their depositors to give notice before a withdrawal.
Commercial banks. In most countries commercial banks serve as a depository of funds and a source of credit. To-day they are active in giving short-term loans to business.
Commercial banks also deal in foreign exchange and letters of credit.
Investment banks. They do not accept checking deposits. They promote industry through the sale of large issues of stocks to investors.
Trust companies are such financial institutions which administer funds or property for the benefit of others. They serve as trustees for property or guardians of minors, or agents for stocks. In a word, they manage business in the interests of others.The banking system of modern times is very complex. If we go back as far as the Middle Ages we can find some banking practices too. The goldsmiths made fine things out of gold and silver. They kept those precious things in strong-boxes. Soon some people began to come to them to entrust money to the goldsmiths. Later on some goldsmiths found themselves in possession of large sums of money. Some of goldsmiths didn't want to keep money idle. They began to lend it at interest. At the same time the goldsmiths kept some part of money to meet possible withdrawals. It was an early step in the development of banks.
National Bank of Ukraine
To Bank Registration and Licensing Unit
Address
The Regional Office (full name) has reviewed a package of documents of the bank (full name) to obtain a license to perform banking operations. Having analyzed the documents submitted and examined the cash unit, the bank's provision with necessary banking equipment, computer technology, software, and communication means, we report.
Personnel
The bank is staffed with qualified specialists who meet the NBU requirements. (If the bank's managers do not meet the NBU requirements they are invited for an interview, on the basis of which a final conclusion is made).
In case of reprimands in writing by an NBU Regional Office, as well as violations of the current legislation, the NBU regulations or the bank's internal documents concerning each manager it is necessary to reflect them in the conclusion (in accordance with requirements specified in items 3.2, .).
Bank's premises, including the cash unit
A conclusion must contain information on the compliance of a bank's premises with the NBU requirements.
It should also include a certificate on the right to own the premises or an agreement to rent the premises for at least 5-year term, other documents, as well as information on the compliance of a cash unit with llie technical requirements specified in the Building Standards "Designing Hanks and Banking Vaults".
Bank's technological readiness
In addition, (the bank) is provided with necessary banking equipment, computers, software and communication means which meet the NBU's requirements.
Business plan
The operations that (the bank) seeks to perform will not have a negative impact on the bank's activity (the absence of excessive concentration of risky banking services in one economic sector, bank's capability to form necessary reserves) and on the economic or regional sector where the bank is created.
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Bank's internal policies
The procedure for performing operations which the bank seeks to obtain a license for is correctly determined in (the bank's) internal policies. The policies are developed in accordance with Ukraine's current legislation and the NBU regulations.
(The bank) can ensure the appropriate internal policies regulating the bank's activity licensed by the National Bank of Ukraine.
We believe that the bank (full name) is ready to perform the banking operations listed below. (To list only the operations to be licensed).
Head of the NBU
Regional Office (Signature)
Questions to Text A
1. What are the main types of banks?
2. What are their functions?
3. What is the origin of banks?
4. What can you say about the procedure for granting the licenses In perform Banking Operations?
HI
The Federal System
The Federal Reserve System of the United States performs many of the functions of the Central Bank of other countries. The territory of the United States is divided into twelve Federal Reserve Districts, each one of which has a Federal Reserve Bank in a major city. Policies of these twelve banks are uniform, however, because they are set by the Board of Governors of the Federal Reserve System.
It is precisely this Federal Reserve Board that carries out operations similar to those that are the responsibility of Central Banks in Europe, Latin America and elsewhere. For instance, member banks are told by the Federal Reserve Board what current reserve requirements are, that is, the mandatory cash ratio of holdings to liabilities.
Federal Reserve Banks may extend credit to member banks througli advances or rediscounts. The rediscounting rate is set by each of the individual member banks. The Board is also empowered to conduct certain open-market operations that can affect the money supply of the United States. For instance, the Board can buy or sell United States Governmenl securities, thus increasing or decreasing the amount of money in circulation. Other open-market interventions of the Federal Reserve Banks include the purchase and sale of investments such as bankers' acceptances and bills of exchange.
The Federal Reserve Board can also influence the volume of activity on the Stock Exchanges by setting margin requirements for the purchase of securities. In other words, the Federal Reserve Board can set the percentage of the market price of securities that a buyer must pay when buying stocks or bonds with a loan. Margin requirements thus limit the amount of credit that purchasers of securities may be given to finance their investment activity. By raising or lowering margin requirements, the Federal Reserve Board may limit or expand the volume of stock purchases.
