Break-even analysis, or cost-volume-profit analysis, can be carried out algebraically or graphically. Either way, it helps planners gauge the potential impact of price changes and profit objectives on sales volume. A major limitation of break-even analysis is that specialized accounting knowledge is required to identify relevant fixed and variable costs.
I. Reading Exercises:
Exercise 1. Read and memorize using a dictionary:
objective, target, measuring sticks, resource allocation, trend, teamwork, conceptual reasons, environmental, defender, respectively, priority, appraisal, gauge, profit
Exercise 2. Answer the questions:
1) Why has planning been labeled the primary management function?
2) What are two conceptual reasons for planning?
3) Who formulates intermediate plans?
4) What is management by objectives based on?
Exercise 3. Match the left part with the right:
1. A properly written plan tells what, when, and how
a) flows from top to bottom.
2. Objective setting in MBO
b) organizations can respond as defenders.
3. Objectives have been called
c) something is to be accomplished.
4. To cope with environmental uncertainty,
d) the single most important feature of the planning process.
Exercise 4. Open brackets choosing the right words:
Good objectives (hamper/help) managers by serving as targets, act ing as measuring sticks, (encouraging/discouraging) commitment, and strengthening motivation.
The speaking module
II. Speaking Exercises:
Exercise 1. Describe planning, objectives, MBO, cost-volume-profit analysis using the suggested words and expressions as in example:
planning
experience, recent, teamwork, how-to-do-it plans, stage, flexibility, corporate
example:
Planning has been labeled the primary management function because it sets the stage for all other aspects of management. Recent researches has uncovered the following trends in corporate planning: more planners with actual management experience; greater teamwork, customizing, and flexibility; and more translation of broad strategies into how-to-do-it plans
objectives
measurable, accomplish, when, terms, targets, commitment, spell out, motivation
MBO
objective, set, measurable, approach, controlling, planning, based
cost-volume-profit analysis
gauge, sales, carried out, planners, impact, volume, price, objectives
Exercise 2. Ask questions to the given answers:
1) Question: ___________________________________________ ?
Answer: Two conceptual reasons for planning are limited resources and an uncertain environment.
2) Question: ___________________________________________ ?
Answer: Priorities affect resource allocation by assigning relative importance to objectives.
3) Question: ___________________________________________ ?
Answer: Good objectives help managers by serving as targets, act ing as measuring sticks, encouraging commitment, and strengthening motivation.
THE WRITING MODULE
III. Writing exercises:
Exercise 1. Complete the sentences with the suggested words:
assigning, executed, top, to, more.
Objective setting begins at the _____of the organization and filters down, thus forming a means-ends chain. Priorities affect resource allocation by ______relative importance _____ objectives. Plans are formu lated and ______as part of a ______encompassing planning/control cycle.
Exercise 2. Compose a story on one of the topics (up to 100 words):
“Management by objectives”
“Trends in corporate planning”
“Objectives and the planning process”
Lesson 4. THE READING MODULE
Read the text: Organizing
Organizing is an important managerial function that translates strategy into a systematic structure of authority relationships and task responsibilities. Contingency organization design has grown in popularity as environmental complexity has increased. Organization charts are helpful visual aids for organizers. Representing the organization's structural skeleton, organization charts delineate vertical hierarchy and horizontal specialization.
The idea behind contingency design is to structure the organization to fit situational demands. Consequently, contingency advocates contend that there is no one best organizational setup for all situations. Diagnosing the degree of environmental uncertainty is an important first step in contingency design. Field studies have validated the assumption that organiza tion structure should vary according to the situation. Burns and Stalker discovered that mechanistic (rigid) organizations are effective when the environment is relatively stable and that organic (flexible) organizations are best when unstable conditions prevail. Lawrence and Lorsch found that differentiation (division of labor) and integration (cooperation among specialists) increased in successful organizations as environmental complexity increased.
There are four basic departmentalization formats, each with its own combination of advantages and disadvantages. Functional departmentalization is the most common approach. The others are product-service, geographic location, and customer departmentalization. In actual practice, these pure types of departmentalization usually are combined.
Design variables available to organizers are span of control (the number of people who report directly to a manager), decentralization, line and staff, and matrix. As organizers have come to realize that situational factors dictate how many people a manager can directly supervise, the notion of ideal span of control has become obsolete. Decentralization, the delegation of decision authority to lower-level managers, has been praised as being democratic and criticized for reducing top management's control. Strategic business foster a high degree of decentralization. Line and staff organization helps balance specialization and unity of command. Functional authority serves to make staff organization more organic by giving staff specialists temporary and limited line authority. Matrix organizations are highly organic because they combine vertical and horizontal lines of authority to achieve coordinated control over complex projects.
Delegation of authority, although generally resisted for a variety of reasons, is crucial to decentralization. Effective delegation permit managers to tackle higher-priority duties while helping train and develop lower-level managers. Although delegation varies in degree, it never means abdicating primary responsibility.
environmental complexity, contingency, relationships, responsibilities, advantage, differentiation, temporary, staff, rigid, flexible, authority, stable
1) Why is organizing an important managerial function?
2) What is the idea behind contingency design?
3) What did Burns and Stalker discover?
4) What are design variables available to organizers?
1. Decentralization, the delegation of decision authority to lower-level managers, has been praised
a) as environmental complexity has increased.
2. Contingency organization design has grown in popularity
b) by giving staff specialists temporary and limited line authority
3. Functional authority serves to make staff organization more organic
c) each with its own combination of advantages and disadvantages.
4. There are four basic departmentalization formats,
d) as being democratic and criticized for reducing top management's control.
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