2. Management applies to any kind of organization.
1b Bilateral Monopoly
A market containing a single buyer and a single seller, or the combination of a monopoly market and a monopsony market. In such, market price and output will be determined by the non economic forces like bargaining power of both buyer and seller. A bilateral monopoly model is often used in situations where the switching costs of both sides are prohibitively high. Bilateral monopoly situations are commonly analyzed using the theory of Nash bargaining games.
An example of a bilateral monopoly would be when a labor union and a monopolist negotiate. A market dominated by a profit-maximizing monopoly tends to charge a higher price. A market dominated by a profit-maximizing monopsony tends to pay a lower price. When combined into a bilateral monopoly, the buyer and seller both cannot maximize profit simultaneously and are forced to negotiate a price and quantity. Then resulting price could be anywhere between the higher monopoly price and the lower monopsony price. Where the price ends ups depends on the relative negotiating power of each side.
The bilateral monopoly model, with a single buyer and a single seller, can be used to analyze many types of markets, but it is most relevant for factor markets, especially those for labor services.
The bilateral monopoly model was developed to explain assorted labor markets operating in the early days of the U.S. industrial revolution, the late 1800s and early 1900s?iDuring this period, large industrial activities (factories, mines, lumber operations) commonly created monopsony markets by dominating the labor market of a given community (a so-called company town). The expected monopsony outcome, especially low wages, inevitably resulted.
The workers sought to counter these less than desirable situations, by forming labor unions. The expressed goal of most unions was to monopolize the selling side of a labor market AND balance the monopsony power of the employer. This resulted in a bilateral monopoly.
Bilateral Monopoly
Choose the Proper Answer:
1. Bilateral monopoly is:
a) a market form in which a small number of sellers dominate on the market or industry;
b) a market form in which only one buyer faces many sellers;
c) a market form containing a single buyer and a single seller.
2. In the market, where a bilateral monopoly exists, price and output will be determined by:
a) bargaining power of a buyer and a seller;
b) bargaining power of a buyer;
c) bargaining power of a seller.
3. A market dominated by a profit-maximizing monopoly tends to charge:
a) a lower price;
b) a higher price;
c) it depends on the situation.
4. A market dominated by a profit - maximizing monopsony tends to pay:
a) a lower price;
b) a higher price;
c) it depends on the situation.
5. The bilateral monopoly model was developed to explain assorted:
a) resource markets;
b) labor markets;
c) financial markets.
2b CAREERS
A second significant issue in the manager's future relates to her career, particularly to what might be called forced mobility. In the past people started working for a company right after college. One or more job changes in the early years were normal, but by midcareer most people had settled with one company. In this age of retrenchment and down-sizing, however, it is becoming increasingly common for organizations to fire people in the middle of or later in their careers. It is also becoming more common for managers to move frequently, some for extra pay, some as a way to accelerate advancement, and others in order to find new challenges.
These and other changes suggest that managers need to take a new view of their careers. In particular, they must do two things. First, they will be held more accountable for their contributions to the organization for the "value added" to the company. Today, companies want tangible evidence of what an individual is contributing to the bottom line. For example, Citibank recently terminated several dozen managers who did nothing but supervise the work of others, because it felt that these people added nothing directly to the company's profitability..
Second, managers will have to recognize that they are very likely to experience job changes, regardless of their preferences. It used to be that a manager who was fired had reason to be embarrassed. Now, however, more and more people are coming to see that forced mobility is nothing to be ashamed of. In fact, it has become the rule rather than the exception.
DRUGS AND DRUG TESTING
An issue that has only recently emerged as a major factor in the manager's job is drugs and drug testing. The stress inherent in management, high salaries in the executive ranks, freedom of movement, and peer pressure have combined to cause many managers to experiment with painkillers and stimulants as well as with cocaine and even heroin. As The Manager's Job 21.1 points out, the consequences of drug abuse in the workplace can be significant.
Careers
Choose the Proper Answer:
1. In the past people started working for a company:
a) after school;
b) before college;
c) after college.
2. Most people had settled with one company:
a) by midcareer;
b) in early career;
c) before pension.
3. What is becoming more common for managers?
a) to move frequently for extra pay;
b) to move rarely for extra pay;
c) to work until the retirement age in one company.
4. What evidence do companies want?
a) their advertising;
b) their work;
c) the contribution of their employees to the bottom line.
5. How many managers were dismissed by Citibank?
a) one hundred managers;
b) dozen managers;
c) several dozens managers.
3b Competition
Just as scarcity is an economic fact of life, so is competition. If you set out to sell a product or service in a society like ours, chances are that someone else will be trying to sell something similar. And because potential customers are free to buy where they please, you must compete with your rivals for those customers' business. You might choose to compete in one of three ways: price, quality, or innovation.
Competition and price Say that you're interested in selling blue jeans in your community. If your rival is selling blue jeans for $28 a pair, you might try attracting business by offering the jeans for $25. The catch, of course, is that you'll get $3 less than your rival does for each pair you sell, and you'll still have to cover the same expenses-buying the jeans from the manufacturer, paying rent on your store, and so forth. How, then, can you charge less and still make a worthwhile profit? The answer- you hope-is that the lower price will attract more customers. Even though you make less money than your rival does on each pair of jeans, you'll sell more of them and so come out with a good overall profit.
A business owner who can improve efficiency and reduce operating costs may be able to lower prices without settling for a smaller profit per unit. If you are selling blue jeans, for example, you may find that installing a new lighting system cuts the electric bills. You can maintain your profits at a lower selling price and pass the savings along to customers."
Head-on competition like this tends to keep prices down, which is good for the buying public. At the same time, it holds out the promise of great profits to the business that can sell more of its product or service than competitors do.
Competition, quality, and service Instead of cutting prices on your blue jeans, you may decide to compete for customers by offering higher-quality goods or better service than your rival does. You may have to charge $32 for each pair of jeans, but customers who want a better fit, more contemporary styling, or a helpful sales clerk will probably be willing to pay the extra amount.
Although a business that deals in luxury goods may attract fewer customers, those who do buy spend more money. Thus, the business may well end up with an equal or a greater total profit. This possibility provides a practical incentive for businesses to maintain high standards and increases the choices available to consumers.
Competition
Choose the Proper Answer
1. In a society like ours if you want to sell a product or service there are chances that someone:
a) will be trying to prevent you;
b) will be trying to sell something similar; «
c) will be trying to assist you.
2. In what ways can you compete with your rivals?
a) price, quality or advertisement;
b) price, quality or service;
c) price, quality or innovation.
3. Can you still make a worthwhile profit if you get less money for each pair of jeans than your rival does?
Yes, the lower price will attract more customers;
No, you'll still have to cover the same expenses;
Yes, if you have a bigger area of the store.
4. Head-on competition tends to:
keep prices down, which is good for the buying public;
keep prices higher, which is bad for the customers;
keep prices down, which is bad for the buying public.
5. Businesses that deal in luxury goods attract:
more customers, who spend more money buying goods;
fewer customers, who spend more money buying goods; -
more customers, who spend less money buying goods.
4 b Competitive conditions
Because many customers compare prices before buying, companies need to consider the competition in making their pricing decisions. If most strollers are selling for 60$ or less, for example, you might assume that Apricas should be priced in that range.
But Kenzo Kassai follows a policy of pricing above the market-that is charging prices higher than those of competitors. His choice is appropriate because he wants consumers to perceive a price-quality relationship. By charging a premium, he conveys the message that Apricas are better than competing strollers(hence the higher price). A premium price is also appropriate when the producer wants to appeal to a status-conscious buyer. The expence of owning a Rolls-Royce is part of its cachet. Other firms follow the practice of pricing with the market. Sometimes this policy of underselling in the competition is used as a way of breaking into an established market. Volkswagen initially priced its automobiles in this manner. Some firms rely totally on lower prices to attract consumers.D 15 count stores use this approach. Pricing below the market is a particularly effective way to capture a larger share of the market. A third alternative is pricing with the market. Generally, this means following the pricing policy of a major company in the industry. This company is known as the price leader. By pricing with the market, companies avoid the effort required to find out what the consumer would actually pay.
Competitive Conditions
Choose the Proper Answer
1. Kenzo Kassai follows a policy of pricing:
a) above the market;
b) below the market;
c) both of them.
2. What does Kenzo Kassai want consumers to perceive?
a) an economical relationship;
b) a price-quality relationship;
c) only price relationship.
3. The expense of owning a Rolls-Royce is a part of:
a) popularity;
b) cachet;
c) price.
4. Some firms rely on lower prices in order to:
a) attract customers;
b) minimize taxes;
c) maximize profit.
5. Pricing below the market is a particularly effective way to capture:
a) a larger share of the market;
b) a smaller share of the market;
c) pricing will not influence the market.
5b-1 Consumer protection
Consumer protection laws are designed to ensure fair competition and the free How of truthful information in the marketplace. The laws are designed to prevent businesses that engage in fraud or specified unfair practices from gaining an advantage over competitors and may provide additional protection for the weak and those unable to take care of themselves. Consumer Protection laws are a form of government regulation which protects the interests of consumers. For example, a government may require businesses to disclose detailed information about products — particularly in areas where safety or public health is an issue, such as food. Consumer protection is linked to the idea of "consumer rights" (that consumers have various rights as consumers), and to the formation of consumer organizations which help consumers make better choices in the marketplace.
Consumer interests can also be protected by promoting competition in the markets which directly and indirectly serve consumers, consistent with economic efficiency, but this topic is treated in Competition law.
Consumer protection can also be asserted via non-government organizations and individuals as consumer activism.
"Consumer protection law" or "consumer law" is considered an area of public law that regulates private law relationships between individual consumers and the businesses that sell those goods and services. Consumer protection covers a wide range of topics, including but not necessarily limited to product liability, privacy rights, unfair business practices, fraud, misrepresentation, and other consumer/business interactions.
The Federal Republic of Germany is a member state of the European Union and is bound by the consumer protection directives of the European Union. Thus a large part of German consumer protection law has been enacted pursuant to European Union.
Consumer Protection Law in the Republic of China is the national special law which specifically protects the interests and safety of end-user using the products or services provided by business operators. Consumer Protection Commission of Executive Yuan serves as an ombudsman supervising, coordinating, reporting any unsafe products/services and periodically reviewing the legislation.
The United Kingdom, as member state of the European Union, is bound by the consumer protection directives of the EU. Domestic (UK) laws originated within the ambit of contract and tort but, with the influence of EU law, it is emerging as an independent area of law. In many circumstances, where domestic law is in question, the matter judicially treated as tort, contract, restitution or even criminal law.
Consumer Protection issues are dealt with when complaints are made to the Director- General of Fair Trade. The Office of Fair Trading will then investigate, impose an injunction or take the matter to litigation.
The Office of Fair Trading also acts as the UK's official consumer and competit ion watchdog, with a remit to make markets work well for consumers, and at a local, municipal level by Trading Standards departments. General consumer advice can be obtained from Consumer Direct or via a local branch of the Citizen's Advice Bureau.
Consumer Protection Choose the Proper Answer:
1. Consumer protection laws are designed:
a) - to ensure the free fl ow of truth ful і n form at і о n;
b) to ensure fair competition;
c) to ensure fair competition and the free flow of truthful information in the marketplace.
2. Consumer protection laws are a form of:
a) government regulation;
b) laws of European Union;
c) social restrictions.
3. An area of public law that regulates private law relationships between individual consumers and the businesses that sell those goods and services is:
a) consumer protection law;
b) -consumer_l aw;
c) consumer protection law or consumer law,
4. In what country a large part of Consumer protection law has been enacted —: pursuant to European Union?
a) the Republic of China;
b) the Federal Republic of Germany;
c) the United Kingdom.
5. Consumer Protection Law in the Republic of China protects the interests and safety first of all of:
a) end-user;
b) government;
c) ombudsman.
5b – 2 DEFINITION OF MANAGEMENT. ITS NATURE AND PURPOSE.
We define management as the process of designing and maintaining an environment in which individuals working together in groups, accomplish efficiency selected aims. This basic definitions needs to be expanded.
1. As managers, people carry out the managerial functions of planning, organizing, staffing, leading and controlling.
2. Management applies to any kind of organization.
3. It applies to managers at all organizational levels.
Management applies to small and large organizations, to profit and not-for-profit enterprises, to manufacturing as well as service industries. The term "enterprise" refers to business, government agencies, hospitals, universities, and other organizations.
Effective managing is the concern of the corporation president, the hospital administrator, the government first line supervisor and the like. Managers are charged with responsibility of taking actions that will make it possible for individuals to make their best contributions to group objectives. The scope of authority held may vary the types of problems dealt with may be considerably different. But all managers obtain results by establishing an environment for effective group endeavour. Top-level managers spend more time on planning and organizing than lower-level managers. Leading takes a great deal of time for first-line supervisors.
The aim of all managers.
In a very real sense, in all kinds of organizations, whether business or nonbusiness, the logical and most desirable aim of all managers should be a surplus-managers must establish an environment in which people can accomplish group goals with the least amount of time, money, materials and personal dissatisfaction, or where they can achive as much as possible of a desired goal with available resourses. In a non-business enterprise, such as a police department or hospital, that are not responsible for total business profits, managers still have goals and should strive to accomplish as much as possible with available resourses.
Definition of Management. Its Nature and Purpose
Choose the Proper Answer
1. The process of designing and maintaining an environment in which individuals working together in groups, accomplish efficiency selected aims:
a) management;
b) marketing;
c) auditing.
2. Management applies to:
a) small organizations;
b) large organizations;
c) small and large organizations.
3. Effective managing is the concern of:
a) the corporation president;
b) the government first line supervisor;
c) the corporation president, the government first line supervisor and the like.
4. The logical and most desirable aim of all managers is:
a) accomplishing group goals with the least amount of time, money, materials;
b) having more time to rest;
c) satisfying own problems.
5. The main goal of business is:
a) to get a profit;
b) to use available resources;
c) to have a good time.
Monopolistic competition
Monopolistic competition is a common market structure where many competing producers sell products that are differentiated from one another (ie. the products are substitutes, but are not exactly alike). Many markets are monopolistically competitive, common examples'include the markets for restaurants, cereal, clothing, shoes and service industries in large cities. The "founding father" of the theory of monopolistic competition was Edward Hastings Chamberlin, in his pioneering book on the subject, Theory of Monopolistic Competition (1933). Monopolistically competitive markets'have the following characteristics:
There are many producers and many consumers in a given market, and no business has total control over the market price.
Consumers perceive that there are non-price differences among the competitors' products.
There are few barriers to entry and exit. Producers have a degree of control over price.
The characteristics of a monopolistically competitive market are almost the same as in perfect competition, with the exception of monopolistic competition having heterogeneous products, and that monopolistic competition involves a great deal of non-price competition (based on subtle product differentiation). A firm making profits in the short run will break even, in the long run because demand will decrease and average total cost will increase. This means in the long run, a monopolistically competitive firm will make zero economic profit. This gives the amount of influence over the market; because of brand loyalty, it can raise its prices without losing all of its customers. This means that an individual firm's demand curve is downward sloping, in contrast to perfect competition, which has a perfectly elastic demand schedule.
Monopolistic Competition
Choose the Proper Answer
1. Who was the "founding father" of monopolistic competition?
a) Edward Hasting Chamberlin;
b) Edward Hobs;
c) Walter Catch.
2. How was pioneering book on the subject of monopolistic competition by Edward Hasting Chamberlin called?
a) "Theory of Monopolistic Competition";
b) "Monopolistic Competition";
c) "My attitude to monopoly".
3. Common market under monopolistic competition has:
a) many barriers to entry and exit;
b) few barriers to entry and exit;
c) one barrier to entry and exit.
4. Do the producers have a degree of control over price?
a) yes;
b) no;
c) yes, if the government permits.
5. The characteristics of a monopolistically competitive market are almost the same as in:
a) a perfect competition;
b) a pure competition;
c) in all types of competition.
8b MONOPOLY
In economics, a monopoly exists when a specific individual or an enterprise has sufficient control over a particular product or service to determine significantly the terms on which other individuals shall have access to it.
Monopolies are thus characterized by a lack of economic competition for the good or service that they provide and a lack of viable substitute goods. The verb "monopolize" refers to the process by which a firm gains persistently greater market share than what is expected under perfect competition.
A monopoly must be distinguished from monopsony, in which there is only one buyer of a product or service; a monopoly may also have monopsony control of a sector of a market. Likewise, a monopoly should be distinguished from a cartel (a form of oligopoly), in which several providers act together to coordinate services, prices or sale of goods. Monopolies can form naturally or through vertical or horizontal mergers. A monopoly is said to be coercive when the monopoly firm actively prohibits competitors from entering the field.
In many jurisdictions, competition laws place specific restrictions on monopolies. Holding a dominant position or a monopoly in the market is not illegal in itself, however certain categories of behaviour can, when a business is dominant, be considered abusive and therefore be met with legal sanctions. A government- granted monopoly or legal monopoly, by contrast, is sanctioned by the state, often to provide an incentive to invest in a risky venture or enrich a domestic constituency. The government may also reserve the venture for itself, thus forming a government monopoly.
Monopoly
Choose the Proper Answer:
1. Monopoly exists when a specific individual or an enterprise has sufficient control over:
a) a sector of a market;
b) a particular product or a service;
c) a buyer of a product or a service.
2. Cartel is a form of:
a) monopoly;
b) monopsony;
c) oligopoly.
3. How can the monopolies form?
a) only naturally;
b) only artificially;
c) naturally or through vertical or horizontal merges.
4. A monopsony exists when:
a) there is only one buyer of a product or a service;
b) several providers act together to coordinate services;
c) a specific individual or an enterprise has sufficient control over a particular product or a service.
5. What does the verb „monopolize" mean?
a) to gain the greatest market share;
b) to gain greater market share than what is expected under perfect competition;
c) to reserve the venture for itself .
9b Perfect competition
In neoclassical economics and microeconomics, perfect competition describes the perfect being a market in which there are many small firms, all producing homogeneous goods. In the short term, such markets are productively inefficient as output will not occur where marginal cost is equal to average cost, but allocatively efficient, as output under perfect competition will always occur where marginal cost is equal to marginal revenue, and therefore where marginal cost equals average revenue. However, in the long term, such markets are both allocatively and productively efficient. In general a perfectly competitive market is characterized by the fact that no single firm has influence over the price of the product it sells. Because the conditions for perfect competition are very strict, there are few perfectly competitive markets.
A perfectly competitive market may have several distinguishing characteristics, including:
• Many buyers/Many Sellers - Many consumers with the willingness and ability to buy the product at a certain price, Many producers with the willingness and ability to supply the product at a certain price.
• Low-Entry/Exit Barriers - It is relatively easy to enter or exit as a business in a perfectly competitive market.
• Perfect Information - Prices and quality of products are assumed to be known to all consumers and producers.
• Transactions are Costless - Buyers and sellers incur no costs in making an exchange.
• Firms Aim to Maximize Profits - Firms aim to sell where marginal costs meet marginal revenue, where they generate the most profit.
• Homogeneous Products - The characteristics of any given market good or service do not vary across suppliers.
The importance of perfect competition derives from the fact that price taking by the firm guarantees that when firms maximize profits (by choosing quantity they wish to produce, and the combination of Factors of production to produce it with) the market price will be equal to marginal cost. An implication of this is that a factor's price (wage, rent, etc.) equals the factor's marginal revenue product. This allows for derivation of the supply curve on which the neoclassical approach is based (note that this is also the reason why "a monopoly does not have a supply curve"). The abandonment of price taking creates considerable difficulties to the demonstration of existence of a general equilibrium (Roberts and Sonnenschein 1977) except under other, very specific conditions such as that of monopolistic competition .
Perfect Competition
Choose the Proper answer
1. Perfect competition describes:
a) market in which there are many small firms, all producing homogeneous goods;
b) market in which firms sell different goods;
c) market which has a firm - monopolist.
2. A perfectly competitive market is characterized by the fact that:
a) no single firm has influence over the price;
b) the biggest firm has influence over the price;
c) each firm has influence over the price.
3. Distinguishing characteristics of a perfectly competitive market are:
a) many consumers with the willingness and ability to buy the product at a certain price;
b) buyers and sellers incur no costs in making an exchange;
c) all the answers are correct.
4. It is relatively easy to enter or exit as a business in a perfectly competitive market.
a) yes, it is;
b) no, it is not.
5. In the perfect competitive market the firm's aim is:
a) to maximize profit;
b) to minimize expenditures;
c) to involve more customers.
10 b United States Antitrust Law
Today
Modem competition law begins with the United States legislation of the Sherman Act of 1890 and the Clayton Act of 1914. While other, particularly European, countries also had some form of regulation on monopolies and cartels, the US codification of the common law position on restraint of trade had a widespread effect on subsequent competition law development. Both after World War II and after the fall of the Berlin wall competition law has gone through phases of renewed attention and legislative updates around the world. United States antitrust Main article: United States antitrust law
The American term antitrust arose not because the US statutes had anything to do with ordinary trust law, but because the large American corporations used trust to Conceal the nature of their business arrangements. Big trusts became synonymous with big monopolies, the perceived threat to democracy and the free market these trusts represented led to the Sherman and Clayton Acts. These laws, in part, codified past American and English common law of restraints of trade. Senator Hoar, an author of the Sherman Act said in a debate, "We have affirmed the old doctrine of the common law in regard to all inter-state and international commercial transactions and have clothed the United States courts with authority to enforce that doctrine by injunction. " Evidence of the common law basis of the Sherman and Clayton acts is found in the Standard Oil case, where Chief Justice White explicitly linked the Sherman Act with the common law and sixteenth century English statutes on engrossing. The Act's wording also reflects common law. The first two sections read as follows,
Section 1. Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal. Every person who shall make any contract or engage in any combination or conspiracy hereby declared to be illegal shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine…
The Antitrust of the USA
Choose the Proper Answer:
1. Modern competition law begins with:
a) the UK legislation;
b) the Ukrainian legislation;
c) the United States legislation.
2. After what has competition law gone through phases of renewed attention?
a) after World War I;
b) after World War II;
c) after Civil War.
3. Why did the American term antitrust arise?
a) because the US statutes had anything to do with ordinary trust law;
b) because the large American corporations used trusts to conceal the nature of their business arrangements;
c) both answers are correct.
4. What did big trust become synonymous with?
a) oligopolies;
b) big monopolies;
c) big corporations.
5. Who was one of the authors of Sherman act?
a) Chief Justice White;
b) Senator Haor;
c) Senator Whatson.
11 b Anticompetitive Activities of the Public Authorities
In accordance with art. 15 of the Law of Ukraine "On protection of economic competition" anticompetitive actions of the public authorities, organs of local self-government, organs of administrative-economic direction and control include taking of any acts (decisions, orders, resolutions, instructions etc.), presentation of written or oral orders, conclusion of agreements or any other kinds of actions or inaction of the public authorities, organs of local self-government, organs of administrative-economic direction and control (collegiate organ or official person), which led or may lead to non-admission, withdrawal, limitation or distortion of competition.
Anticompetitive actions of the public authorities, organs of local self- government, organs of administrative-economic direction and control, particularly comprise:
- prohibition or impediment for creation of new enterprises or accomplishment of business activity in other organizational forms in any sphere of activity and also establishment of limitations for accomplishment of certain kinds of activity, for production, acquisition or realization of the determined kinds of commodities;
- direct or indirect obligation of the subjects of management to priority- driven conclusion of the agreements, most important supply of the commodities to a certain circle of consumers or most important acquisition of the commodities from certain sellers;
- any action, which is directed to centralized distribution of the commodities and distribution of the markets between the subjects of management by territorial principle, assortment of the commodities, volume of their realization or buying; or by a circle of consumers or sellers;
- establishment of prohibition for realization of certain commodities from one region of the country in other region or submission of the permit to realize the commodities from one region in other region in the determined volume or for accomplishment of certain conditions;
- submission to certain subjects of management or groups of subjects of management privileges or other preferences, which guarantee them privileged position towards their competitors, that leads or may lead to non-admission, withdrawal, restriction or distorsion of competition;
- action, which consequences create unfavourable or discrimination conditions to certain subjects of management or groups of subjects of management for their activity in comparison with their competitors.
Anticompetitive Activities of the Public Authorities
Choose the Proper Answer:
1. What law prohibits anticompetitive actions of the public authorities?
a) " On protection against unfair competition";
b) " On the Antimonopoly committee of Ukraine";
c) " On protection of economic competition".
2. What organs can be involved in anticompetitive activities?
a) public authorities;
b) organs of local self-government;
c) organs of administrative-economic direction and control, organs of local self-government and public authorities.
3. Anticompetitive actions of the public authorities may lead to:
a) withdrawal competition;
b) firing workers;
c) perfect competition.
4. The anticompetitive activities of the public authorities include:
a) the permission for entering the association;
b) any action, which is directed to centralized distribution of the commodities and distribution of the markets;
c) not submitting different privileges to subjects of management.
5. Action, which consequences create discrimination conditions to certain subjects of management for their activity may be:
a) favourable;
b) undiscriminated;
c) unfavourable.
12 b THE COMPETITION IN THE ACTIVITY OF ENTERPRISES
The connection between competition and marketing is more than obvious. It confirms that marketing is a result of competition and an instrument for competitive struggle at the same time. On the surface, various goods compete among each other, but in reality the good is a visible part of competition iceberg. Under the invisible and much bigger part of competition are the enterprises which carry out the production and sale of these goods. The goods' competitiveness is sometimes mistakenly identified with the level of marketing. The logic shows that: absence of appropriate technical level of quality can not be compensated by the high level of marketing. Also, as experience shows, a lot of technically strong firms were on the edge of commercial catastrophe, because marketing was ignored.
Knowledge of subject, object and of the topic of the competition lets the specialists reach the competitiveness of the firms' goods more effectively.
The subject, object and the topic of competition are the subjects of management performed by enterprises. The object of competition is a buyer (potential buyer) or consumer of goods. The subject of -competition can be considered in a narrow and wide sense. The subject of competition in a narrow sense is the product, with the help of which, companies try to obtain recognition of buyers. In a wide sense, the subject of competition is satisfaction of buyer's needs. There is vertical and horizontal competition, among enterprises belonging4o one or to different organizations, as well as among goods which satisfy buyer's needs.
The Competition in the Activity of Enterprises Choose the Proper Answer:
1. What does the connection between competition and marketing confirm?
a) that marketing is a result of competition and an instrument for competitive struggle at the same time;
b) that a marketing campaign must be based on a product's stage in the product life cycle;
c) that the costs of producing and marketing the product are important considerations.
2. What enterprises are under the invisible and much bigger part of competition?
a) which belong to one or two different organizations;
b) which are competitive;
c) which carry out the production and sale of these goods.
3. The competitiveness of the goods is sometimes mistakenly identified with:
a) the level of marketing;
b) the marketing strategy of distribution;
c) the number of retail and wholesale sellers.
4. Who is the object of competition?
a) a producer of consumer goods;
b) a buyer (potential buyer) or consumer of goods;
c) a wholesaler of goods.
5. What types of competitions are among enterprises belonging to one or two different organizations?
a) monopolistic competition;
b) pure competition;
c) vertical and horizontal competition.
13 b THE MANAGERIAL JOB
There are many aspects to the job of a manager and there is no complete agreement as to what exactly constitutes the job of manager.
Some focus on the entrepreneurial aspects of managing and their main concen is innovation, risk taking and similar activities.
Others emphasize decision making, especially the kind of decisions that cannot be easily programmed.
An additional view of the managerial job draws attention to the leadership with an emphasis on particular traits and managerial stiles.
Closely related to this approach is the discussion about power and influence, that is, the leader's control of the environment and subordinates.
Other focus their attention on the behaviour of leaders by examining the content of the manager's job.
But despite different approach to the nature of managerial task, the key tasks of managers can be organized into the five functions of planning, organizing, staffing, leading and controlling which constitute the framework of managerial activities. Managers are different; they have different needs, desires and motives. Managing offers rewards but also involves stress.
An individual aspiring to the managerial position should evaluate both the advantages and the disadvantages of managing before pursuing this career.
How many managers do we need? Factors affecting the number and kinds of managers required. The number of managers needed in an enterprise depends not only upon its size but also upon the complexity of the organization structure, the plans for expansion and the rate of turnover of managerial personnel.
The ratio between the number of managers and the number of employees does not follow any law.
It is possible, by enlarging or contracting the delegation of authority, to modi fy a structure so that the number of managers will increase or decrease regardless of the size of an operation.
The annual rate of appointments to managerial positions can be determined by a review of past experience and future expectations.
Analysis will also reveal the importance of age for retirement, vacancies created by ill health, and steady demand of other enterprises for able young subordinates whom the firm has trained but is unable to holdw'
The qualifications for individual positions must be defined so that the best-suited managers can be chosen.
On the basis of this analysis, external and internal sources are used in the processes of recruitment, selection, placement and promotion.
Other essential aspects of staffing managerial positions are appraisal, career strategy and training and development of managers.
The managerial job
Choose the Proper Answer:
1. What are the basic functions of managerial job?
a) planning, organizing, staffing, leading and controlling;
b) only managing a firm;
c) controlling the personnel.
2. What should people do if they want to work as managers?
a) they should evaluate both the advantages and the disadvantages of managing before pursuing this career;
b) they must know the size of payment and amount of workings days for a week;
c) they should know only the key tasks of a manager.
3. The number of managers needed in an enterprise depends upon:
a) the organization structure, the plans for expansion and the rate of turnover of managerial personnel;
b) the type of an organization;
c) the size of an enterprise;
4. How can annual rate of appointments to managerial positions be determined?
a) It can be determined by research and analysis of the market;
b) It can be determined by a review of past experience and future expectations;
c) It can't be determined.
5. The analysis of number of managers needed for the organization will show us:
a) how many people we need to release from work;
b) what wages we must pay our staff;
c) the importance of age for retirement, vacancies created by ill health and steady demand of young and clever subordinates.
14b The Nature of Leadership
What is leadership? Leadership is an influence process directed at shaping the behavior of others.
When Don Shula exhorts the members of the Miami Dolphins to play harder, he is leading. When Jack Welch, CEO of General Electric, encourages his managers to work harder, he is leading. And when your friend convinces you to try a new restaurant you have been avoiding, he is also leading. Leadership occurs in a variety of settings and in a variety of ways. Let's make a clearer distinction between leadership and management and then discuss some of its challenges.
LEADERSHIP VERSUS MANAGEMENT
Leadership and management are in some ways similar but in more ways different. The relationship between the two roles is represented in Exhibit 12.1. Note in particular that people can be leaders without being managers, managers without being leaders, or both managers and leaders at the same time. A manager can direct the efforts of others because of formal organizational power. If a boss tells her subordinate to do three things and the person does exactly what she dictated but nothing else, the boss is probably being a manager but not a leader. On the other hand, a leader doesn't have to rely on her formal position to influence someone. If a secretary organizes a group effort to help a coworker who has personal problems, she is acting as a leader but not as a manager. Of course, people can be both. When Lee Iacocca took over the reins at Chrysler, he made formal decisions and issued commands and directives in his position as manager. He also inspired loyalty, dedication, and commitment from others in the organization-the actions of a leader. From the standpoint of organizational effectiveness, people who are both leaders and managers are a valuable resource. They are also scarce, so they should be nurtured and rewarded.
The Nature of Leadership
Choose the Proper Answer:
1. What is leadership?
a) leadership is an influence process directed at shaping the behavior of others;
b) leadership is an influence process directed at shaping your own behavior;
c) leadership is an influence process directed at getting the promotion.
2. Leadership and management are
a) in some ways different but in more ways similar;
b) in some ways similar but in more ways different;
c) similar.
3. Can people be both leaders and managers at the same time?
a) yes, they can;
b) no, they can't;
c) this phenomenon has not been proved yet.
4. If a secretary organizes a group effort to help a coworker who has personal problem, she is acting.
a) as a manager;
b) as a boss;
c) as a leader.
5. Wbo is a valuable resource?
a) people who are leaders;
b) people who are managers;
c) people who are both leaders and managers.
15b
In new businesses, "management" is often considered "whatever needs to be done just to keep things afloat". However, for your business to grow and remain healthy, you must master certain basic skills in management and leadership ~ skills that will help you avoid the crisis situations where you have to do "whatever it takes to stay afloat". The basic skills include problem solving and decision making, planning, meeting management, delegation, communications and managing yourself.
Those basics are also the foundation from which to develop more advanced practices in management and leadership. When organizational personnel struggle, it's often because they've forgotten the basics - not because they aren't implementing state-of-the-art techniques in management and leadership.
What Do Managers Do?
Both of the above interpretations acknowledge the major functions of planning, organizing, leading and coordinating activities - they put different emphasis and suggest different natures of activities in the following four major functions. They still agree that what managers do is the following:
Planning
including identifying goals, objectives, methods, resources needed to carry out methods, responsibilities and dates for completion of tasks.
Organizing resources
to achieve the goals in an optimum fashion. Examples are organizing new departments, human resources, office and file systems, re-organizing businesses, etc.
Leading
Including to set direction for the organization, groups and individuals and also influence people to follow that direction.
Controlling, or Coordinating
This occurs with the organization's systems, processes and structures to effectively and efficiently reach goals and objectives. This includes ongoing collection of feedback, and monitoring and adjustment of systems, processes and structures accordingly.
What is "Supervision"?
There are several interpretations of the term "supervision", but typically supervision is the activity carried out by supervisors to oversee the productivity and progress of employees who report directly to the supervisors. For example, first-level supervisors supervise entry-level employees. Depending on the size of the organization, middle-managers supervise first-level supervisors, chief executives supervise middle-managers, etc. Supervision is a management activity and supervisors have a management role in the organization.
Another common view is that "management" is getting things done through others. Yet another view, quite apart from the traditional view, asserts that the job of management is to support employee's efforts to be fully productive members of the organizations and citizens of the community.
What Do Managers Do?
Choose the Proper Answer:
1. Planning is:
a) organizing new departments, human resources, office and file system, etc;
b) identifying goals, objectives, methods, resources needed to carry out methods;
c) running the organization's systems, processes and structures in order to reach effectively goals and objectives.
2. Leading means:
a) setting direction for the organization, groups and individuals;
b) ongoing collection of feedback, and monitoring and adjustment of systems;
c) including, identifying goals, objectives, methods, resources needed to carry out methods.
3. Controlling includes:
a) ongoing collection of feedback and monitoring and adjustment of systems, processes and structures accordingly;
b) identifying goals, objectives, methods, resources needed to carry out methods;
c) setting direction for the organization, groups and individuals.
4. Supervision is the activity:
a) that helps you to avoid the crisis situations;
b) that is carried out by supervisors to oversee the productivity and progress of employees;
c) that includes ongoing collection of feedback and monitoring and adjustment of systems.
5. Supervisors have a management role in the organization, haven't they?
a) yes, they have;
b) no, they have not;
c) it was not mentioned in the text.
16 bMonopolistic competition
Problems
While monopolistically competitive firms are inefficient, it is usually the case that the costs of regulating prices for every product that is sold in monopolistic competition by far exceed the benefits; the government would have to regulate all firms that sold heterogeneous products—an impossible proposition in a market economy. A monopolistically competitive firm might be said to be marginally inefficient because the firm produces at an output where average total cost is not a minimum. A monopolistically competitive market might be said to be a marginally inefficient market structure because marginal cost is less than price in the long run.
Another concern of critics of monopolistic competition is that it fosters advertising and the creation of brand names. Critics argue that advertising induces customers into spending more on products because of the name associated with them rather than because of rational factors. This is disputed by defenders of advertising who argue that (1) brand names can represent a guarantee of quality, and (2) advertising helps reduce the cost to consumers of weighing the tradeoffs of numerous competing brands. There are unique information and information processing costs associated with selecting a brand in a monopolistically competitive environment. In a monopoly industry, the consumer is faced with a single brand and so information gathering is relatively inexpensive. In a perfectly competitive industry, the consumer is faced with many brands. However, because the brands are virtually identical, again information gathering is relatively inexpensive. Faced with a monopolistically competitive industry, to select the best out of many brands the consumer must collect and process information on a large number of different brands. In many cases, the cost of gathering information necessary to selecting the best brand can exceed the benefit of consuming the best brand (versus a randomly selected brand).
Evidence suggests that consumers use information obtained from advertising not only to assess the single brand advertised, but also to infer the possible existence of brands that the consumer has, heretofore, not observed, as well as to infer consumer satisfaction with brands similar to the advertised brand.
MONOPOLISTIC COMPETITION Choose the Proper Answer:
1. Another concern of critics of monopolistic competition is that it:
a) fosters advertising and the creation of brand names
b) fosters inefficient competition
c) fosters existing unique information
2. In a monopoly industry the consumer is faced with:
a) many brands
b) single brand
c) many problems
3. Evidence suggests that consumers use information:
a) to infer the possible existence of brands
b) only to assess the single brand
c) to assess the single brand; to infer the possible existence of brands and to infer consumer satisfaction with advertised brand
4. In perfectly competitive industry information gathering is inexpensive because:
a) the brands are virtually identical
b) the brands are different
c) the brands are changed permanently
5. In a perfectly competitive industry the consumer is faced with:
a) single brand
b) many brands
c) many problems
Ключі до Завдання Б
І
1 c 2a 3b 4a 5b
II
1-c 2-a 3-a 4-c 5-c
III
1-b 2-c 3-a 4-a 5- b
IV
1-a 2-b 3-b 4-a 5-a
V
1-c 2-a 3-c 4-b 5-a
VI
1-a 2-c 3-a 4-a 5-a
VII
1- a 2-a 3-b 4-a 5-a
VIII
1-b 2-c 3-c 4-c(a) 5-b
IX
1- a 2- a 3-c 4-a 5-a
X
1-c 2-b 3-b 4-b 5-b
XI
1-c 2-c 3-a 4-b 5-c
XII
1-c 2-c 3-a 4-b 5-c
XIII
1-a 2-a 3-a 4-b 5-c
XIV
1-a 2-b 3-a 4-c 5-c
XV
1-b 2-a 3-a 4-b 5-a
XVI
1-a 2-b 3-c 4-a 5-b