Case study Background

Patagonia is a Californian company producing high-quality sportswear. Its corporate culture has its roots in the 1960s Californian counterculture of climbers and surfers with the ethic of radical environmentalism.

Although its CEO, Yvon Chouinard, is dedicated to social change he also insists on disciplined management and sound business practices. As a previous CEO of Patagonia said, “The one thing I’m clear about is that Chouinard demands 10% pretax profit”. For him, it is not a question of social good or business profit, but social good and business profit.

Task Work in small groups. You are members of the working group which will discuss suggestions for formulating a company mission. Brainstorm ideas of your own. Differentiate between the organizational goals and objectives that are more aligned with the concept of vision and those that are aligned with mission.

USEFUL TIPS Each word should be powerful and meaningful, clear and concise. Make it obvious what your business is attempting to do. It shouldn’t need explaining. A good mission statement is compelling, exciting and passionate, but realistic and achievable.

3. Identify significant factors necessary for you: the products or services you will provide, the kind of people you will need.

4. Discuss advantages and disadvantages of the suggestions. How will the mission statement keep management focused on preserving (strengthening) the company’s unique competitive niche? Does it reflect Patagonia’s business philosophy?

5. Choose the best mission to present.

6. As a member of the working group, write a memo to the CEO of Patagonia informing him of the key mission which came out of the brainstorming. You should indicate why you favour this idea.

UNIT 2 Company Structure

Those who go beneath the surface do so at their peril.

Oscar Wilde, English writer

Starting up

1. What is a structure in general? Try to give a definition.

2. Choose the main components of a structure:

Responsibilities People Conceptions Ideas

Links Mechanisms Parts Constructions

3. Company structure is often described in an organization chart or organigram, a simplified diagram showing areas of responsibility for key personnel.

What can be included into an organization chart?

3. Use the words below to create the management structure of a typical company:

Managing Director (or Chief Executive Officer) Senior management

Middle management Board of Directors

5. Why is it vital to see clearly a company structure? Give your reasons.

Vocabulary

We can describe a company in terms of:

• hierarchy

• responsibilities/functions

• titles

• affiliates

• structure

Hierarchy

1. Romford Engineering is a public limited company and its shares are quoted on the London Stock Exchange. The chart below shows the lines of communication and command between the company’s senior officials.

The company is headed by the Managing Director (MD) and Chairperson.

The Marketing Director reports to the MD.

The Marketing Director is under the MD.

The Marketing Director is accountable to the MD.

The Marketing Director is supported by an Overseas Sales Manager.

The Marketing Director is assisted by a Market Research Manager.

2. After studying the chart answer the following questions:

1. From whom do the Marketing Director, the Production Manager, the Personnel Manager and the Financial Manager in other words the Departmental Heads take their orders?

2. From whom do the Line Managers and the Chief Engineer take orders?

3. If the Managing Director and the Production Manager had a meeting, what do you think they might discuss?

4. How many executive directors are there in Romford Engineering?

5. If the Computing Manager was sending information to the Managing Director, should he send it through the Financial Director? Why?

6. How many immediate subordinates does each of the Departmental Heads have?

7. In what circumstances do you think the Marketing Director and the Production Manager might have conflicting interests?

8. Would you expect the Chief Engineer to be paid more or less than the Production Manager? Why?

9. What sort of work would you expect the Wages Officer to do?

10. If there was a dispute between one of the line managers and the Chief Engineer, how would you expect it to be settled?

11. If there was a dispute between the Marketing Director and the Financial Director, how would you expect it to be settled?

3. The illustration below shows the organization of KAF Inc. Study the organization chart and complete the paragraph which follows, using the correct form of words or phrases from the box.

CEO