IV. Which of the following disadvantages are characteristic of sole proprietorship (S), partnership (P) and companies (C)?

- Very expensive and difficult to start.

- Personal responsibility for legality and debts.

- In the case of bankrupt people who invest the most suffer the most losses.

- Difficult to control: partial appropriation of the gain is possible.

- Disappearance of the manager is a threat to the whole business.

- The shareholders’ rights are limited by the Statute.

- It is difficult to get rid of a bad partner.

- Personal touch in business.

- The large tax.

- The strictest judicial control.

Lexical exercises

Choose the necessary word from the box and put it in the sentence.

1. receipts 2. business 3.service 4. privately 5 account 6.corporation 7.forms 8.unlimited liability 9.real estate 10. general partner 11.advantage 12.profit 13. capital 14.management 15. tax benefits 16. secret partner

1. Small… are very often service industries.

2. The… industries don’t produce material goods.

3. More than 80 percent of all business… are not from sole proprietorships.

4. Less than 20 percent of European businesses are partnerships or…

5. Sole proprietorships… only a small part of all business receipts.

6. Is this bank owned publicly or…?

7. There are three… of business ownership.

8. Partnerships very often receive… from the government.

9. Limited partnership is a common form of ownership in… .

10. Partnerships have many…, one is that they receive tax benefits from the government.

11. … are the partners with unlimited liability.

12. … has the authority in management but he is not known to public.

13. A secret partner takes part in… .

14. General partners have… .

15. One advantage of a partnership is that it offers a multiple source of… .

16. A partnership can bring much… to the partners.

Case study

Power and influence

Alice Carstairs is a senior manager in commercial television station. She has worked in the job for a year, and things are not going well, as she tells her friend Jenny.

“It would be a great job,” she says, “except for one thing. I often have to see Mr. Thompson, our chief executive. He’s in charge of really important decisions, so I need to consult him when I’m working on something big.” “So what’s the problem?” Jenny asks.

“It’s his secretary,” Alice complains. “Whenever I phone her to say I need to talk to Mr. Thompson, she always says he’s busy, or in a meeting, or something like that. If I say it’s important, she wants to know what it’s about, and she says she’ll pass on a message. She never does pass on messages, and that means there are always difficulties and misunderstanding in the office. I don’t like the situation at all.”

“Why don’t you just tell Mr. Thompson?” Jenny asks. “Tell him what his secretary‘s doing, and ask him to do something about it?”

“I’d like to, but I can’t. You see, Mr. Thompson’s secretary has been friends with him for years- apparently they’re really good friends.”

Jeremy Fitzerald, Management, Black Cat Publishing, 2001, p. 55

Tasks:

1. What kind of company does Alice work in? Describe its structure in detail.

2. How long has she worked there?

3. Why is she unhappy at work?

4. What do you think she should do?

Speaking\Writing

you have recently been applying for jobs with different companies. Two companies have indicated that they may be interested in offering you employment. One company is a large multinational that employs 2,000 people at its headquarters. The other company is much smaller and employs only 120 people.

1) Write a short paragraph to explain which company you would prefer to work for, giving reasons for your choice.

2) Make up a dialogue discussing advantages and disadvantages of working in big and small companies and asking for advice where to apply.

Summing-up activity

Sentences 1 to 9 make up a short text about different ways in which companies can be structured. Complete each sentence, by taking a middle part from the second box and an end from the third box.

1. Most organizations have a hierarchical or pyramid structure,

2. A clear line or chain of command runs down the hierarchy,

3. Some people in an organization have an assistant who helps them;

4. Yet the activities of most large companies are too elaborate

5. Large companies manufacturing a wide range of products, e. g. general Motors,

6. Businesses that cannot be divided into autonomous divisions with their own markets

7. An inevitable problem with hierarchies is that people at lower levels

8. One solution to this problem is matrix management, in which people report to more than one superior

9. Another, more recent, idea is to have a network of flexible groups or teams,

a. are normally decentralized into separate operating divisions,

b. are unable to make important decisions, but are obliged to pass on responsibility to their boss,

c. can simulate decentralization, setting up divisions that use

d. instead of the traditional departments which are often at war with each other,

e. so that all employees know who their superior or boss is, to whom they report,

f. e.g. brand manager with an idea can deal directly with

g. this is an example of a staff position: its holder has no line authority,

h. to be organized in a single hierarchy and require functional organization,

i. with a single person or a group of people at the top,

j. and an increasing number of people below them at each level.

k. and is not integrated into the chain of command.

l. and who their immediate subordinates are, to whom they can give instructions.

m. each with its own engineering, production and sales departments.

n. internally determined transfer prices when dealing with each other.

o. the appropriate managers in the finance, manufacturing and sales departments.

p. they are formed to carry out a project, after which they are dissolved and their members reassigned.

q. unless responsibilities have been delegated.

r. usually with production or operations, finance, marketing and personnel departments.