Introduction

a) Read Text 1 and state its topic.

b) Entitle the text to reveal the topic.

c) Find and put down the key words and word-combinations to help define the topic.

d). Translate the text and state its general idea.

The basic unit of planning and control over production is the enterprise. All modern economic societies have such control units, but there are wide differences in the ways they are organized. Indeed, the organization of enterprise is one of the characteristics distinguishing different types of economic systems. In a socialist economy like the former USSR, most production used to be centrally planned, controlled, and financed. Thus the Soviet economic system was characterized by centralized enterprise and actually functioned much like a single giant consolidated firm. Although socialist production was subdivided into managerial units that were frequently referred to as enterprises, these smaller units had minimum responsibility for planning and control. They functioned more like branches or divisions of an enterprise than like individual business farms.

In contrast, an economic system like that of the United States is characterized by private enterprise. That means that control and financing of most productions are vested in independent, privately organized enterprises.

We are mainly going to discuss the institutional organization of private enterprises as business firms. You’ll come to know different types of firms. You’ll see (1) how the modern corporation has emerged to meet the needs of mass-production techniques for which huge amounts of capital must be privately assembled under central control, and (2) how the increasing complexity of corporate organization has required government regulation.

We will not go deep into the problems of accounting, but examine the statements that summarize the financial position and operations of a business firm, and examine the giant corporation.

Exercises

1. Find the English equivalents in the text:

основное подразделение, организация предприятия, экономическая система, социалистическая экономика, финансировать производство, централизованное предприятие, единая фирма, социалистическое производство, управленческое подразделение, частное предприятие, учрежденческая организация, торговая фирма, отвечать требованиям, методы массового производства, бухгалтерский учет, отчет, подводить итог, финансовое положение.

2. Match the words from list A with their synonyms from list B:

A. way, production, to function, to consolidate, management, division, modern, to emerge, technique, to assemble, to increase, statement, operation.

B. to appear, current, unit, control, to integrate, to work, manufacture, means, action, to raise, account, to collect, method.

3. Give derivatives of the following verbs and translate them:

to differ, to organize, to characterize, to produce, to manage.

4. Give possible translations of the words:

unit, control, production, enterprise, way, like, consolidate, branch, division, type, technique, capital, government, regulation, operation, problem, examine, statement.

5. Combine the verbs from list A with the nouns from list B and translate the combinations:

A. to control, to organize, to plan, to finance, to meet, to increase, to examine, to require, to consolidate;

B. production, organization, firm, enterprise, needs, branch, complexity, regulation, statement.

6. Write definitions for the following notions:

control unit, socialist economy, capitalist economy, consolidated firm, managerial unit, private enterprise, modern corporation, mass-production, corporate organization, government regulation.

7. Answer the questions:

1. What is the enterprise?

2. What are different types of economic systems characterized by?

3. What is the characteristic of socialist economy?

4. How is socialist production organized?

5. How do small managerial units function?

6. What is the characteristic of capitalist economy?

7. How are control and financing of capitalist production organized?

8. What are some problems of business firms?