Limited Company.
Sole Trader.
Partnership.
I. A group of people provide the capital, set up the company and manage it together. There are two types of such a company:
a) Partners in an unlimited type of such a company are like sole traders- if the business fails they are fully liable for all debts, and may even have to sell personal assets.
In a limited type of such a company, there can be sleeping partners who do not participate in the management of the company. Sleeping partners have limited liability – in the event of bankruptcy, they only lose their investment, not their personal assets.
II. In a company like that, the capital is divided into shares, which are held by shareholders. Shareholders have limited liability, but they can vote at the Annual General Meeting to elect the Board of Directors. There are two types of this company:
in a private type of such a company, all shareholders must agree before any shares can be bought or sold;
in a public type of such a company, shares are bought and sold freely, for example on the Stock Exchange.
III. One person sets up and runs the company. The person provides all the capital and has unlimited liability for business debts, even if this means selling personal assets.
Task IX. Answer the questions:
What is a sleeping partner?
What are the advantages and disadvantages of being a sleeping partner?
What is a shareholder?
What is the difference between a shareholder and a sleeping partner?
What is the difference between a public and private limited company?
Task X. Speak on the following points:
What I have learned about a company structure.
Different company structures. Their advantages and disadvantages.
Speaking
Task I. Answer the following questions:
1. What are the key elements in a company structure?
2. What are the functions of the Board of Directors?
3. Who is responsible for making policy decisions?
4. Are executive managers in charge of determining the company strategy?
5. Whose duty is to run departments?
6. What is meant by a traditional company structure?
7. Are there any advantages of a traditional company structure?
8. What other structures do you know? Compare them.
Task II. Summarize everything you have learned on the topic.
Task III. Deliver a mini lecture on the topic “Company Structure”. Get ready to answer different questions.
Task IV. (Moodle) Make up a story about company structures.
Task V. Comment on the following:
The only things that evolve by themselves in an organization are disorder, friction, and malperformance.
(Peter Drucker)
Task VI. Role Play.
As the Chief Executive Officer of 3M company, describe the organizational chart of your company. Answer a few questions asked by the audience.
Case Study
Background:
Task I. Read the information below and say why John Smith has invited a consultant.
The company John Smith and Nancy Floid have founded works rather well. Their traveling agency is popular with clients. It is located in the center of London. In a few months’ time, it plans to open branch offices in Birmingham and Glasgow. Almost 60% of its profits come from its corporate business accounts. Its goals and philosophy are set out in the mission statement.
Our objective is to provide an outstanding travel service to the City of London. Our strategy is to rapidly expand our corporate business and to steadily develop our Travel Shop.
Our motto is “Client needs come first”.
Our main asset is our employees. We are to provide them with secure, interesting and well-paid work, in a pleasant working environment.
Although the firm is doing well, John knows that it could be more profitable if it were better organized. A consultant has done a study of the agency and recommends reorganization in management structure and working conditions.
Task II. Study the information given below and say what problems the consultant has found out.
A. Management Structure
D
irector
Director
(John Smith) (Nancy Floid)
General Manager Marketing Manager
(Alan Robinson) (Daria Bressan)
Travel Shop Manager
Accounts Manager
Office Manager
Data Processing Manager
Sales
Manager- Corporate Business(Christos)
Sales staff Accounts Staff Data Processing Sales staff
Administration Staff
Staff
Confidential
1. Alan Robinson has too much responsibility and feels much stressed. He complains also of having no contact with Nancy Floid.
2. Sales Manager-Corporate Business wants better communication with Nancy Floid. Nancy is often away on business trips, so Christos is not able to get her approval for important decisions like discounts for important customers.
3. Daria Bressan reports to Nancy Floid. However, most of her work is with John Smith, whose speciality is marketing.
4. The Accounts Department wants more cooperation with the Data Processing Department. On the other hand, Office Manager says that Data Processing Manager is always “interfering in their office”.
B. Working Conditions
1. 72 % want better facilities and more opportunity to express their opinions to the Directors.
2. 65 % find their work “interesting” and “enjoyable”. 35 % say their work “lacks variety”, mostly in Accounts, General Office and Data Processing.
3. 58 % would prefer flexitime so that they can avoid traveling to and from work during the rush hour.
4. 62 % think their pay is adequate. 38 % (mostly in Accounts, the Travel Shop and the General Office) think they are underpaid by at least 10 %. They want more perks, e.g. discounts on travel and more company social events.
5. Sales staff say they do too much underpaid overtime to complete their paperwork. There are too many complicated forms.
Case Tasks:
The company directors have created work groups to consider the reorganization.