Restriction on Authority of the Managers

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Restriction on Authority of the Managers

Without the written consent of Members holding a Majority in Interest, the Managers shall not have the authority to do any of the following:

· change the business purpose of the Company; or

· materially amend or modify this Agreement.

6. Liabilities and Indemnification of Members and Managers.

6.1. In carrying out their powers and duties hereunder, the Managers shall exercise their best efforts and shall not be liable to the Company or to any Member for any actions taken or omitted to be taken in good faith and reasonably believed to be in the best interest of the Company or for errors of judgment made in good faith.

6.2. A Member who ceases to be a Member or a Manager who ceases to be a Manager, as applicable, shall not be liable for, or on account of, obligations or liabilities of the Company incurred subsequent to his ceasing to be a Member or a Manager, as the case may be.

6.3. The Company shall indemnify any Member or Manager performing management, accounting, tax matters, or other duties or obligations of the Company (whether pursuant to this Agreement or a management agreement) and save it and each of its officers, directors, managers, members, partners and principals harmless from and against any and all loss, cost, liability or expense (including reasonable attorneys' fees) in performing any services for the Company; provided, however, that no Member shall be required to contribute any additional capital to the Company in respect of such indemnity. Such indemnity shall not be available with respect to fraud, gross negligence, or willful misconduct.


5. Usually managers are not involved directly in production; that is, they do not produce a finish product. What do they do within a company’s structure? Is it necessary for a company to have highly experienced managers? Why?

6. The great corporation has a chairman of the board, board of the directors, four executive senior directors, ten managing directors and five auditors? Are all of these people managers?

7. Why do you think that the first-line manager is often as much a teacher, expediter, and assistant as a supervisor? Describe the main job descriptions of your immediate supervisor?

8. Must effective communication links exist between all levels of management? Why do you think so? Prove your point of view.

9. What are the main abilities and professional skills of each modern manager? Why does the lack of some of these abilities often prevent people from moving up the managerial ladder?

10. What does making the decision mean within a process of managerial work? Which types of managerial decisions do you know? Describe them briefly. Hope the following text will help you to answer these questions. Read and translate the text and be ready to discuss it from the positions of a company structure and linguistics:



A manager systematically progresses through each step in the decision-making process to reach the decision untimely aimed at solving a specific problem or taking advantage of a particular business opportunity.

Decision making process (5 steps):

The most important task of a leader is decision making. Managers earn their salaries by making decisions that enable their firms to solve problems as they arise. In addition, managers continually are involved with anticipating and preventing problems. The decision making process can be described in five steps. In a narrow sense, it can be thought of as simply choosing among two or more alternatives – the chosen alternative being the decision. But in a broader sense, decision makinginvolves recognizing that the problem exists, identifying it, evaluating alternatives, selecting and implementing the alternative, and following up (by getting feedback) on the effectiveness of the decision. Whether the decision to be made in routine or unique (such as a decision to construct a major new manufacturing facility), the systematic step-by-step approach with the effective.

Types of Decisions

We can classify decisions by their relative uniqueness.

A programmed decision involves simple, common, frequently occurring problems for which solutions already have been determined. Examples of programmed decisions include choosing the starting salary for a computer programmer, determining recorder points for raw materials used in production, and selecting price discounts offered to customers who make large-quantity purchases. Organizations develop rules, policies, and detailed procedures for making such decisions consistently, quickly, and inexpensively. Since such solutions eliminate the time-consuming process of identifying and evaluating alternatives and making new decisions each time the situation occurs, they free managers to devote time to more complex problems.

A non-programmed decisioninvolves complex, important, and non-routine problems or opportunities. Because non-programmed decisions typically are made in situations that have not occurred before, identifying alternatives, evaluating them, and implementing the best ones become critical tasks. In fact, managers often are evaluated on their ability to make non-programmed decisions.

Companies can help employees develop their decision making skills by rewarding those who are willing to deal with non-programmed situations. Consider Sysco, the largest company in the food-service industry, where employees are encouraged to try out new ideas. Pervice Chance, head of Sysco Memphis unit, noticed that their salespeople spent a great deal of their time driving from client to client. After considering the several ways to boost their productivity, he made a non-programmed decision to limit sales territories geographically. Chance knew this decision involved risk. “I’d go home at night and think, “My God, we’re going to lose all our customers and all our salespeople.” But the new strategy paid off. In six years, his unit’s market share grew from 12 percent to 20 percent, and pretax profit margins doubled to 6 percent. “Today about half of operating companies have geographic sales territories, and more are moving that direction,” says Chance, who has since been promoted to executive vice president – a signal to other employees that risk-taking is rewarded.


11. Classify each of the following as either a programmed or nonprogrammed decision. Defend your answers:

a) Determining registrar’s office system for processing student request for dropping g and adding courses.

b) Making a retail store-manager’s decision about the number of men’s dress shirts to order.

c) Creating a hospital’s procedure for admitting new patients.

d) Pondering management’s decision to relocate corporate headquarters from Yuzhno-Sakhalinsk to Moscow.

12. What does the term risk management mean? Which types of risks do you know? Describe them briefly. Explain the major risk dealing processes within company activities. Hope the following text will help you to answer these questions. Read and translate the text and be ready to discuss it from the positions of business conduct and linguistics:



Riskis the uncertainly about loss or injury. The business firm’s list of risk-filled decision is long. The factory of warehouse faces the risk of fire, burglary, water damage, and physical deterioration. Accidents, judgments due to lawsuits, and nonpayment of bills by customers are other risks. Two major types of risks exist: speculative risk and pure risk.

In the case of speculative risk,the firm or individual has the chance of making either a profit or a loss. Purchasing shares of stock on the basis of the latest hot tip can result in profits or losses. Expansion of operations in a new market may mean higher profits or the loss of invested funds. Pure risk,on the other hand, involves only the chance of loss. Automobile drivers, for example, always face the risk accidents. Should they occur the drivers (and others) may suffer financial and physical loss? If accidents do not occur, however, there is no gain. Insurance often is used to protect against the financial loss resulting from pure risk.

Dealing with Risk

Because risk is an unavoidable part of business, management must find ways of dealing with it. Recognition of its presence is an important first step. Once this occurs, the manager has four methods available for dealing with risk: avoiding it, reducing its frequency and/or severity, self-insuring against it, or shifting the risk to insurance companies.

Avoiding Risk.Some firms are willing to take high risks for potentially high rewards, while others are unwilling to risk the costs involved in developing new and untried products. Although avoiding risk may ensure profitability, it stifles innovation and, as a result, the risk-averse companies are rarely leaders in the industry.

Reducing Risk. Many types of risk can be reduced or even eliminated by removing hazards or taking preventive measures. Many companies develop safety programs to educate employees about potential hazards and the proper methods of performing certain dangerous tasks. All these actions can reduce the risk involved in business operations, but they can not eliminate risk entirely. Most major business insurers assist their clients in avoiding or minimizing risk by offering them a thorough review prepared by their loss-prevention experts. These safety and health professionals evaluate the customers’ work environments and recommend procedures and equipment to help firms minimize worker injuries and property losses.

Self-Insurance against Risk. Instead of purchasing insurance against certain kinds of pure risk, some multiplans, geographically scattered firms accumulate funds to cover possible losses. A self-insurance fundis a special fund created by setting aside cash reserves on a periodic basis to be drawn upon only in the event of a financial loss resulting from the assumption of a pure risk. The regular payments to the fund are invested in interest-bearing securities, and losses are charged to it. These funds typically are accompanied by risk-reducing programs aimed at minimizing losses.

Shifting Risk to Insurance Company. Also steps can be taken to avoid or reduce risk, the most common method of dealing with it is to shift it to others in the form of insurancethe process by which a firm, for a fee, agrees to pay another firm or individual a sum of money stated in a written contract when a loss occurs. The fee the insured party pays the insurance company for coverage against losses is called a premium. Thus, insurance is the substitution of a small known loss – the insurance premium – for a larger unknown loss that may or may not occur. In the case of life insurance, the loss – death – is a certain; the uncertainty is the date of occurrence.

13. Are there any differences between terms management and leadership? What does the real leader mean for the company’s personnel? Which basic styles of leadership do you know? Describe them briefly? Which style of leadership is more available to you? Defend your answers.

14. Prepare oral composition: “My job description” at the position of the company’s first-line manager. Choose any company’s activity you like. Let’s discuss your composition within our classes.*

*С дополнительными материалами для изучения и закрепления пройденной темы Вы можете ознакомиться в разделе Приложения (Chapter VIII “REFERENCE SOURCES”; APPENDIX XIV).






I. Listening



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