Text 7 - globalization of world economy

Globalization is understood as increasing internationa­lization of ideas, science, communication and technology, and it must be distinguished from economic globalization. The latter means the process of integration of markets, great changes in trade and finance and the establishment of the global eco­nomy. The main aim of economic globalization is to change the world into one dynamic market, which has uniform characteristics in different countries. Globalization should lead to a free mobility of capital, as well as to privatization of the economy and a sharp reduction in government budgets. Besides, globalization means wide advertising of new consumer products all over the world, low taxes for producers - both domestic and foreign - and similar life-styles for people of different nationalities.

First steps towards globalization in Europe were made by the establishment of the Common Market in 1993, and the introduction of the "euro" as the new single currency for Europe on January 1, 1999. Since that time, the euro has been used in foreign trade transactions by the countries that joined the euro-zone. Euro banknotes were introduced in circulation in twelve member-countries of the European Union on January 1, 2002.

Some countries of Central and Eastern Europe have recently joined the European Union, such as Lithuania and Poland, while others are planning to do it in the near future. However, in order to transform the former planned economies into really mixed economies, countries of Eastern Europe must increase sharply the levels of productivity and competitiveness of their economies. Special adjustments should be made in agriculture, tax system and in the system of social security.

Economists think that the single currency will increase trade integration, as well as labour mobility in the euro-zone. The introduction of the new currency and participation of different countries in integrated European financial markets should reduce any risks in business transactions and lead to more efficient European finance, promote both European political and economic integration.

Globalization at a business level means that a company has decided to participate in the global economy and it is going to establish its subsidiaries in foreign markets. However, a company will have to adjust its products or services to the consumers' requirements in a foreign country. Nowadays any company may do e-business using the Internet services in order to attract wider clientele.

Text 8 - modern management structure

A company, whether private or public, is governed by a Board of Directors, which comprises between two and a dozen top-managers. The directors are generally elected or appointed by the shareholders to run the business on their behalf with the objective to achieve satisfactory profits, for a large enterprise may have hundreds or thousand of shareholders and it would therefore be impracticable, if not impossible, to consult each one every time that a decision has to be taken. In a way, the Board is the ‘watch-dog’ of the shareholders’ interests; it is trustee of the funds invested by them in the company and it is responsible for ensuring the proper application of those funds. The Board is also answerable for formulating the policy, which will best enable the company to achieve its objectives, for ensuring that the laid down policy is implemented and adhered to, and for making any amendment to the policy, which may be necessary from time to time. The Board must be kept informed of all financial matters related to the business, it must ensure that sufficient finance - working capital - is available, and must sanction capital expenditure. In addition, the Board is responsible for ensuring that the enterprise operates in accordance with the legal and statutory requirements of the country where it works.

The Chairman of the Board (or the President) is a director elected to the post, in theory by other directors and sometimes by the shareholders. In practice the Chairman may be a principle shareholder or have strong political and financial connections, or be elected because of his knowledge, experience, natural leadership abilities, entrepreneurship, popularity, seniority or for some other special qualities. The Chairman also represents the company in the bodies of the government, press conferences, etc., and he is unlikely to hold an executive position, enabling him to devote his time and energies to matters, which concern top management.

Executive Directors work full-time for the company, and are therefore in constant touch with the activities of their respective department in addition to being involved with the affairs of the board. Nevertheless, as heads of a department an executive director assumes personal responsibility for running his branch of the business and for implementing the policy and decisions of the board relating to it. The advantage of having ‘specialist’ executive directors readily available for discussion and consultation can be offset by the fact that they may be limited in their overall view or knowledge of the company.

Executive officers (colloquially called ‘executives’) are classed into chief and senior executives, middle managers and supervisors. Senior Executive Officers, or Chief Executive Officers (typically abbreviated to CEO), are most of the time divisional or departmental managers. Middle managers are subordinates and assistants to senior managers in charge of certain specific activities, and they execute control over supervisors (foremen and junior managers) who in turn direct the actually working lower staff members.