8.Why is the term business cycle misleading?

9.Why do some economists prefer to use the term economic

fluctuation?

10.What are the reasons for the business cycles to occur?

11.What can generate economic booms?

12.What can cause economic depressions?

13.How can monetary policy cause recessions and booms?

14.How does the New Classical school explain economic business cycles?

Unit 7. MANAGEMENT

Text A. Management

The word management comes from Old French menagement which means "the art of conducting, directing" (from Latin manu agere "to lead by the hand"). Management is the process of leading and directing all or part of an organization, often a business, through the deployment of resources (human, financial, material, intellectual or intangible).

Some writers trace the development of management thought back to Shumerian traders and ancient Egyptian pyramid builders. Slave-owners through the centuries faced the problems of exploiting and motivating dependent but sometimes resistant workforce. However, many preindustrial enterprises, taking into account their small size, did not have to think about management systematically. But innovations such as the spread of Arabic numerals (5th to 15th centuries) and the codification of double-entry book-keeping (1494) provided tools for management accountancy, planning and control.

Modern management as a discipline began as an offshoot of economics in the 19th century. Classical economists, such as Adam Smith and John Stuart Mill, provided a theoretical background to resource allocation, production, and pricing issues. At the same time, such innovators as James Watt and Matthew Boulton developed technical

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production elements such as standardization, quality control procedures, cost accounting, interchangeability of parts, and work planning.

By the middle of the 19th century, Robert Owen, Henry Poor, and M. Laughlin introduced the human element with theories of worker training, motivation, and organizational structure.

By the late 19th century, marginal economists Alfred Marshall and Leon Walras introduced a new layer of complexity to the theory of management. Joseph Wharton offered the first course in management in 1881. By 1900 there were managers trying to place their theories on a scientific basis. J. Duncan wrote the first college management Text book in 1911.

The first comprehensive theories of management appeared around 1920. Henri Fayol and Alexander Church described various branches of management and their interrelationships. In the early 20th century, Walter Scott applied the principles of psychology to management, while other writers, such as Elton Mayo, Max Weber, approached the phenomenon of management from a sociological perspective.

Ronald Fisher, and Thorton C. Fry introduced statistical techniques into management. In the 1940s, Patrick Blackett combined these statistical theories with microeconomic theory and developed the science of operations research. Operations research, sometimes known as "management science", attempts to take a scientific approach to solving management problems, particularly in the areas of logistics, and operations.

Modern management consists of a number of separate branches, including human resource management, operations or production management, strategic management, marketing management, financial management, and information technology management.

Strategic management is the process of specifying an organization's objectives, developing policies and plans to achieve these objectives, and allocating resources so as to implement the plans. It is the highest level of managerial activity, usually performed by the company's

Chief Executive Officer (CEO) and executive team. It provides overall

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direction to the whole enterprise. An organization's strategy must be appropriate for its resources, circumstances, and objectives. The process involves matching the companies" strategic advantages to the business environment the organization faces. One objective of an overall corporate strategy is to put the organization into a position to carry out its mission effectively and efficiently. A good corporate strategy should integrate an organization's goals, policies, and tactics into a whole.

Marketing management is the practical application of marketing techniques. It is the analysis, planning, implementation, and control of programs designed to create, build, and maintain mutually beneficial exchanges with target markets. The marketing manager has the task of influencing the level and composition of demand in way that will achieve organizational objectives.

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Questions to the Text

1.What is the origin of the term management?

2.What is the definition of management?

3.Where do some writers trace the development of management

thought to?

4.What innovations influenced the development of management?

5.When did management as a discipline begin?

6.When was the first college Textbook of management written?

7.Who introduced statistical techniques into management?

8.What are the branches of the modern management?

9.What is the role of the CEO in a corporation?

10.What is strategic management?

11.What is marketing management?

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