8. Think it over and fill in the table:

The following statements about public corporations relate either to the ways in which they can benefit the general public or are open to criticism. Classify the statements according to these factors in the table below.

1. Their large size makes it very difficult to manage them effectively with the result that economic resources may be wasted.

2. An industry can be planned from the point of view of its long-term future without worrying about short-term profits.

3. Important basic industries can be controlled in the public interest.

4. A lack of competition from other similar industries can lead to inefficiency.

5. There is little stimulus to work hard and make the business profitable because they use public rather than private capital.

6. Goods and services can be provided on the basis of social need.

7. Adequate finance can be provided for new projects which may not be profitable in the near future.

Public corporations	a	b	c	d	e	f	g
benefits
criticism

9. Read the text and answer the questions.

Some companies have developed into massive organizations. In recent years two types of large private corporation have evolved:

Multi-national corporations.

A multi-national company is a private ‘holding’ company with shares in many subsidiary companies. The head office of a multi-national is located in a host country and its operations will be carried out by different subsidiary companies located in different countries. Companies within a multi-national are connected by share ownership and by managerial control.

Conglomerate companies.

A conglomerate is a company which deals with a wide range of different products. It is a holding company which is the major shareholder in a series of unrelated subsidiary firms.

Questions:

1. What types of large private corporations have evolved in recent years?

2. What do these two types of business organization have in common?

3. What is the difference between these two types of business organization?

4. How are multi-nationals managed?

5. Could you give any examples of multi-nationals and conglomerates?

6. What kind of a company would you like to work for: state-owned, private limited company, multi-national corporation, etc.? Why? Give your reasons.

Business Structure

Each company whether it is large or small has its business structure. Many companies have much in common in their structures. Top Management of a corporation consists of the board of directors and the executive officers. The board of directors determines basic company policies and appoints the executive officers. These officers include a chairman of the board or chief executive officer, a president, and a number of vice presidents. They are responsible for carrying out the decisions of the board of directors and the stockholders. The executive officers also select the managers of various departments of the corporation. The Managing Director (sometimes called the Chief Executive, or the president in Russia or the USA) is the head of the company.

The Chairman of the Board is in overall control and may not be the head of any department. Under him there are executive managers, responsible for the work in different departments.

The number of departments in a corporation depends on the size of the company and on the nature of the goods and services it provides. For example, a corporation with many employees may need a personnel department. A manufacturing firm may need a research department to study ways of developing new products or improving existing ones. Most corporations have departments that handle three basic business activities – production, finance, and marketing.

The production department consists of several divisions: Production, Packaging, Distribution, Quality and Maintenance.

The marketing department plans how to sell new products and may include advertising division as well. There may be several divisions in the Finance Department connected with customer accounts, wages and salaries, financial services, taxation, investment and cash management. Personnel department recruits new employees and organizes training courses.

The above-mentioned departments are headed by managers. The Manager is in charge of its day-to-day running, and he reports to the Director. The Director is responsible for strategic planning and for making decisions.

Various personnel in each department report to the manager. For example, the Sales Representative reports to the Sales Manager – the head of Sales department, which sells the products and sends them to the customers.

Before starting your business, while producing a business plan, you should think of the business structure of your future enterprise so it includes all necessary specialists for your firm. Creating the suitable business structure may be one of the parts of your business success.