The jobs of big-company bosses have become more difficult and less glamorous, and their image has taken a terrible pasting

CORPORATE leaders are having a rotten time. Accounting scandals, lavish pay increases and collapsing stockmarkets have conspired to turn the world against them. They are regarded with cynicism and mistrust everywhere. In America, the bosses of big companies command only slightly more respect in public-opinion polls than used-car salesmen. Rebuilding lost trust will be slow work.

At the same time, leaders of large companies are increasingly in the public gaze. A company's boss is now expected to take personal responsibility for its fortunes as never before. This is reflected not just in new corporate-governance rules, but also in the way that financial markets scrutinise the appointment of a new corporate boss and that companies feel they have to defend executive pay packages.

Yet the task of a corporate leader has never been more demanding. This is partly because of changing corporate structures. Big companies often operate in many countries or product markets, and joint ventures, outsourcing and alliances add further complexity. Layers of middle management have gone, so that more divisions report directly to the person at the top. The pace of innovation is quicker, new technologies have to be applied faster and product life-cycles have become shorter.

Corporate leaders are struggling to keep up momentum in their businesses when economic activity is sluggish. They also need time to spend with the people they lead: for more and more businesses, the abilities of a relatively small number of people are thought to be the key to success, and retaining and developing their talents is vital. Swamped with e-mails (which some of them answer themselves), voicemails and demands for appearances on breakfast television and at grand dinners, many corporate leaders find it harder and harder to make time to think.

In addition, for anyone in charge of a large quoted company, the level of outside scrutiny—whether by government, consumer groups, the press or the financial markets—is far beyond anything a corporate leader would have been subjected to in the past. For many bosses, this sense of managing in a goldfish bowl has become particularly onerous. The chairman of two large publicly traded British companies says in exasperation: “I spend my life advising friends of mine not to become chief executives of quoted companies, and by and large they take my advice.” Many look longingly at the more secluded world of private equity.

Whatever the reason, people have come to expect more from corporate leaders. Profiles and interviews published in the business press ensure that the more telegenic or talkative business folk are as well known as minor Hollywood celebrities. In the heady stockmarkets of the late 1990s, some chief executives acquired heroic status, and not always reluctantly. As Rakesh Khurana at Harvard Business School points out in a book debunking the cult of the charismatic boss, in 1981 only one cover of Business Week featured a chief executive from a Fortune 1,000 firm, but in 2000, when the markets peaked, the number rose to 18. These days, a company's performance and, more alarmingly, its share price, are often seen as largely determined by its CEO.

Financial markets continue to harbour exaggerated expectations. “The pressure people are feeling at the top of organisations is unbelievable,” says John Kotter, also at Harvard Business School. If earnings growth drops 3%, he says, the share price may fall by 30%. Yet earnings are unlikely to grow faster than GDP for more than short periods, and GDP is likely to remain sluggish in most countries for several years to come. Moreover, most companies jog along at much the same pace as the rest of their industry most of the time. A recent study by Nitin Nohria of Harvard Business School and a group of colleagues found that fewer than 5% of publicly traded companies maintained a total return to shareholders greater than did their industry peers for more than ten years. To expect bosses consistently to deliver double-digit growth is to ask the impossible.

This gap between expectations and reality has helped to sweep corporate heroes from their pedestals, especially in America, where the cult of the business leader went to the most ludicrous lengths. A poll in July last year found that only 23% of Americans thought the bosses of large corporations could be trusted, even fewer than the 38% who (unwisely) trusted journalists. The same poll found, though, that 51% of respondents trusted accountants (whose failings contributed to several corporate scandals), and a remarkable 75% trusted people who run small businesses.

In response, a raft of new measures has been launched to improve corporate governance. Many governments, and some international bodies such as the Paris-based OECD, have been drawing up new codes of conduct. Most of these aim to ensure that boards of directors keep a closer eye on the behaviour and competence of corporate leaders. The effect has generally been to increase the professionalism of corporate boards, and to make them take their duties more seriously. Companies now pay more attention to internal controls and guard their reputation more jealously. The number of ethics courses taught in business schools has increased markedly. But few people believe that this will bring a big reduction in fraud, the cause of the worst recent scandals; and hardly anyone thinks that it will make companies expand faster or invest more wisely.

VOCABULARY:

corporate governance - корпоративное управление: распределение властных полномочий в корпорации, прежде всего — между менеджерами и акционерами

demanding (task) – высокие требования; большая ответственность

product life cycle - жизненный цикл товара (продукта): определенный период, отражающий основные этапы развития товара с момента его разработки до ухода с рынка

private equity - частные акции: акции, не обращающиеся на фондовом рынке т. е. акции закрытых акционерных компаний

 

 

69. Fit for Hiring? It’s Mind Over Matter

NEW YORK - Members of America's professional and managerial classes have always left college confident of at least one thing: they had taken their last test. From here on, they could rely on charm, cunning and/or a record of accomplishment to propel them up the corporate ladder.

But that's not necessarily true any longer. A growing number of companies, from General Motors Corp to American Express Co., are no longer satisfied with traditional job interviews. Instead, they are requiring applicants for many white-collar jobs - from top executives down - to submit to a series of paper-and-pencil tests, role-playing exercises, simulated decision-making exercises and brainteasers. Others put candidates through a long series of interviews by psychologists or trained interviewers.

The tests are not about mathematics or grammar, nor about any of the basic technical skills for which many production, sales and clerical workers have long been tested. Rather, employers want to evaluate candidates on intangible qualities: Is she creative and entrepreneurial? Can he lead and coach? Is he flexible and capable of learning? Does she have passion and a sense of urgency? How will he function under pressure? Most important, will the potential recruit fit the corporate culture?

These tests, which can take from an hourto two days, are all part of a broader trend. 'Companies are getting much more careful about hiring,' said Paul R. Ray Jr., chairman of the Association of Executive Search Consultants.

Ten years ago, candidates could win a top job with the right look and the right answers to questions such as 'Why do you want this job?'. Now, many are having to face questions and exercises intended to learn how they get things done.

They may, for example, have to describe in great detail not one career accomplishment but many - so that patterns 35 of behavior emerge. They may face questions such as 'Who is the best manager you ever worked for and why?' or 'What is your best friend like?'. The answers, psychologists say, reveal much about a candidate's management style and about himself or herself.

The reason for the interrogations is clear: many hires work out badly. About 35 percent of recently hired senior executives are judged failures, according to the Center for Creative Leadership in Greensboro, North Carolina, which surveyed nearly 500 chief executives.

The cost of bringing the wrong person on board is sometimes huge. Searching and training can cost from $5000 for a lower-level manager to $250,000 for a top executive. Years of corporate downsizing, a trend that has slashed layers of management, has also increased the 50 potential damage that one bad executive can do. With the pace of change accelerating in markets and technology, companies want to know how an executive will perform, not just how he or she has performed.

'Years ago, employers looked for experience - has a candidate done this before?' said Harold P. Weinstein, executive vice-president of Caliper, a personnel testing and consulting firm in Princeton, New Jersey. 'But having experience in a job does not guarantee that you can do it in a different environment.'

At this point, most companies have not shifted to this practice. Some do not see the need or remain unconvinced that such testing is worth the cost. But human-resource specialists say anecdotal evidence suggests that white-collar testing is growing in popularity. What has brought so many employers around to testing is a sense of the limitations in the usual job interview. With so little information on which to base a decision, 'most people hire people they like, rather than the most competent person,' said Orv Owens, a psychologist in Snohomish, Washington, who sizes up executive candidates. Research has shown, he said, that 'most decision makers make their hiring decisions in the first five minutes of an interview and spend the rest of the time rationalizing their choice.'

Besides, with advice on how to land a better job about as common as a ten-dollar bill, many people are learning to play the interview game.

Even companies that have not started extensive testing have toughened their hiring practices. Many now do background checks, for example, looking for signs of drug use, violence or sexual harassment. But the more comprehensive testing aims to measure skills in communications, analysis and organization, attention to detail and management style; personality traits and motivations that behavioral scientists say predict performance.

VOCABULARY:

corporate ladder - карьерная (служебная) лестница

corporate culture - корпоративная культура: свод наиболее важных положений деятельности организации, определяемых ее стратегией развития; социальные нормы и ценности, разделяемые большинством работников

 

 

VOCABULARY CHECK

1) Большинство организаций имеют иерархическую структуру. Возглавляет компанию, как правило, человек или группа лиц, которым подчиняется увеличивающееся на каждом последующем уровне пирамиды количество служащих.

2) Президент компании стоит во главе Совета Директоров.

3) Главный операционный директор - руководитель корпорации, отвечающий за повседневные операции.

4) Главный исполнительный директор - руководитель корпорации, отвечающий за основную часть ее текущей деятельности.

5) Старшие менеджеры возглавляют различные отделы внутри компании.

6) Платежная ведомость представляет собой список всех работников компании с указанием заработной платы.

SECTION 2 HUMAN RESOURCES,

HEADHUNTING AND DOWNSIZING

LEAD-IN

A company’s activities may be spread over different sites.

A company’s most senior managers usually work in its head office or headquarters (HQ).

In larger organizations there is a human resources department (HRD) that deals with pay, recruitment, finding and training job applicants, as well as administering employee-benefit programs. This area is called human resources (HR) or human resource management (HRM). Another name for this department is the personnel department.

As companies reorganize to gain competitive edge, human resources plays a key role in helping companies deal with a fast-changing competitive environment and the greater demand for quality employees.

Personnel departments are usually involved in finding new staff and recruiting them, hiring them, or taking them on, in a process of recruitment. Someone recruited is a recruit, or a hire (Am.E). The company employs or hires them; they join the company. A company may recruit employees directly or use outside recruiters, recruitment agencies or employment agencies. Outside specialists called headhunters may be called on to headhunt people for very important jobs, persuading them to leave the organizations they already work for. This process is called headhunting.

Many people work for the same organization until they reach retirement: the age at which people retire, or end their working life. Career paths are thus clear: you can work your way upthe career ladder, getting promotion to jobs that are more senior, with greater responsibility. You are unlikely to be demoted: moved to a less senior job.

To leave the company, you may resign or hand in your notice.

However, over the past years the changing business environment, not least highly competitive global product markets, an increasingly rapid pace of technological change, a changing social environment are driving the demand for a flexible labour market. People are forced to move to different jobs when necessary which means job insecurity for many employees, the feeling that they may not be in their job for long.

In order to make an organization more efficient companies have to cut costs. They downsize, or reduce the numbers of people they employ. Businesses use several techniques in downsizing, including providing incentives to take early retirement and transfer to subsidiary companies, but the most common technique is to simply terminate the employment of a certain number of people.

Rightsizing is downsizing in the belief that an enterprise really should operate with fewer people. Dumbsizing is downsizing that, in retrospect, failed to achieve the desired effect.

Delayering is the process of eliminating layers of middle management

 

Organizations say that they are eliminating middle levels of their hierarchies so as to empower ordinary workers and employees. This process of empowerment is designed to give them the authority to make decisions that were previously taken by middle managers.

 

As a result of this restructuring the company becomes flatter (with fewer layers of management) and leaner (with fewer, more productive employees).

 

If you leave a job voluntarily, you quit.

If you do something wrong, you are fired, dismissed, sacked or terminated.

If you’ve done nothing wrong, you are laid off, made redundant, offered early retirement.

 

Employees who are made redundant may get advice about finding another job, retraining, etc. This is called outplacement advice.

 

VOCABULARY

site	- местоположение, местонахождение
head office headquarters (HQ)	- штаб-квартира; главный офис; главное управление, центр (какой-л организации)
human resources department (HRD) personnel department	- отдел кадров
human resources (HR)	- персонал; трудовые ресурсы
human resource management (HRM)	- управление трудовыми ресурсами: направление менеджмента, базовой идеей которого является повышение производительности посредством создания благоприятных условий для деятельности сотрудников организации
recruit hire take on	- нанимать (людей на работу)
recruitment	- набор, подбор, наем персонала; рекрутмент
recruit hire	- новичок, новый работник (сотрудник)
recruiters, recruitment agency employment agency	- специалист по подбору персонала, рекрутер - фирма, осуществляющие подбор специалистов по заданным работодателем критериям
headhunter	- "охотник за головами": специалист или фирма, занимающиеся поиском работников на руководящие должности неформальными методами; рекрутская фирма
headhunting.	- охота за “головами”, за “мозгами”, переманивание высококлассных специалистов при помощи тщательно разработанной системы льгот
retirement	- выход в отставку; уход на пенсию
career ladder	- карьерная (служебная) лестница; лестница продвижения по службе
promotion	- продвижение по службе
demote	- понижать в должности, в звании
resign quit	- уходить [подавать] в отставку, оставлять пост
notice	- предупреждение [уведомление] о расторжении контракта
flexible labour market	- гибкий рынок труда
job insecurity	- неуверенность в завтрашнем дне
downsize	- сокращать (штат), уменьшать (размеры компании)
downsizing delayering	- уменьшение числа сотрудников предприятия с целью повышения результативности деятельности
incentive	- поощрение, стимул, побуждение, побудительный мотив
rightsizing	- оптимизация размера (организации)
dumbsizing	- необдуманное сокращение штата; ‘сокрушение штата’
empower	- доверять, уполномочивать, давать права и возможности
empowerment	- “делегирование” полномочий, передача обязанностей менеджеров среднего звена рабочим и служащим
restructuring	- реструктуризация, перестройка структуры
lean and flat organization	- эффективно функционирующая организация с упрощенной (“плоской”) структурой управления
fire, dismiss, sack, terminate	- увольнять
lay off make smb redundant	увольнять (как правило, временно); сокращать
outplacement	- увольнение по сокращению штатов (предполагает также попытку фирмы трудоустроить увольняемого на новом месте)

COMPREHENSION QUESTIONS:

1) What is the role of the HRD?

2) What are the ways of recruiting employees?

3) Why are outside recruiters called headhunters?

4) Why is a labour market much more demanding now than it used to be?

5) Why do organizations eliminate middle levels of their hierarchies?

6) When do employees get outplacement advice?

 

VOCABULARY PRACTICE

Contrary to popular myths, downsizing does not necessarily make companies more profitable, more productive, or even smaller.

A flat organisation, with a small number of management levels, should give more opportunity for decision-making at all levels.

Empower your people. Don't command and control. Let them use their own initiative and entrepreneurial spirit.

Downsizing, when done improperly, is appropriately called dumbsizing.

The majority of organisations contemplating delayering anticipate cost savings via a reduction in overheads. For some, the achievement of such savings is the primary objective of their restructuring initiative. For others, a flatter structure is the route to freedom from bureaucracy, speedier communication and the development of a customer focused culture in which team working and high involvement working practices will thrive.

Flat organization (also known as horizontal organization) refers to a organizational structure with few or no levels of intervening management between staff and managers. The idea is that well-trained workers will be more productive when they are more directly involved in the decision making process, rather than closely supervised by many layers of management

 

 

TEXTS TO TRANSLATE:

70. The Truth About Work

The gap between rhetoric and reality never seems to grow any narrower when it comes to the public discussion of employment. Politicians and journalists, recruit­ment agencies and management consultants continue to make the flesh creep with talk of the end of the permanent job for life, the arrival of flexible labour markets and the emphasis on employability in a world of regular job changes.

An impression is given of a rapid, irreversible transformation of the supposed world of stable, long-tenured employment that dominated the industrialized economies for the first three decades after the second world war. However, much of this received wisdom is wrong. A research paper from the International Labour Organization provides evidence to demonstrate this.

The research shows that the average length of job tenure hardly changed during the 1990s. In fact it rose slightly to 10,5 years. As the ILO report states: 'In contradiction to an assumed radical change in the labour markets towards less stability and more numerical flexibility, the investigation of job tenure does not, in fact, show any universal trend towards increased labour market instability among the major industrialized countries.... While certain sub-groups of the population, such as those with less education, experienced less job security than in the past, for the most part these analyses indicate there was no systematic change in the duration of jobs over time,' concludes the ILO.

What differences exist in job tenure between countries seems to have less to do with technological change or globalization and more to do with the ups and downs of the business cycle. 'Research shows that flows both in and out of employment tend to be counter­cyclical, so average job tenure is declining in upswings and increasing in downturns,' notes the ILO. 'The decline in job tenure observed, in recent years may mainly reflect the economic recovery that has taken place in some countries, rather than a structural shift towards increased job instability.'

Shorter job tenures can be found among university graduates, while those with the longest time in a job have a medium level of educational qualifications. People working in larger companies are more likely to stay with their employer for a long time. Downsizing tends to hit junior workers most, not the ageing core.

The report found that job retention rates stayed remarkably stable, at least after the early 1980s. But the figures mask a tendency for younger and older workers to have lower retention rates compared with those of prime age.

But this is not the end of the matter. The report tries to find out why so many people believe they are living through a period of exceptional job instability. The ILO acknowledges that between 1985 and 1998 we experienced a significant net increase in the amount of temporary work (fixed-term contracts and temporary agency employment). But the existence of a temporary work contract is not necessarily a sign of instability. Fixed-term contracts are an important gateway into long-term employment.

So what explains the view that we think we are living in an uncertain world of work? It may be that an involuntary loss of work now covers the articulate, skilled white-collar elites - not just blue-collar workers - and they make a bigger fuss about being made redundant.

VOCABULARY:

make the flesh creep – пугать; наводить ужас

employability – возможность устроиться на работу; востребованность

International Labour Organization - Международная организация труда, МОТ (ООН)

 

job tenure - срок пребывания в должности

job retention rates – процент остающихся на своих рабочих местах (по сравнению с количеством увольнений)

temporary work - временная работа

 

TRANSLATION NOTES:

The gap between rhetoric and reality never seems to grow any narrower… – Похоже, всегда остаются существенные различия между риторикой и реальным положением дел в обществе…(См. часть Ш, раздел 3, §4)

 

71. The new global shift