The Osuji Lectures #19: Nigeria and the Business World Print E-mail
Monday, 24 October 2005




 In this lecture, we shall, in a rudimentary manner, summarize the nature of capitalist economics and business organizations.  This chapter is not meant to replace studying economics and business, but to give the reader a bird's eye view of the real world, that he must deal with, in his efforts to earn a living for himself and his family.




  THE CAPITALIST ECONOMY





 There are primarily three types of economic systems: capitalism, socialism and a mixture of capitalism and socialism.  We should very easily dispose of socialism because it is idealistic and not realistic.  It is predicated on pure cognitive processes, not rooted in the realities of man, as we know him to be.  Socialism wants the individual to work for the public, to serve common interests.  It generally believes that it is possible to serve other persons more than the individual can serve himself. As it sees it, man is a social animal, and ought to devote his existence to serving other persons' needs at the expense of his own needs. Obviously this is idealistic and negating of the individual, for if he cannot serve himself, how is he going to be able to serve other persons?

       The originators of socialism appreciated the exploitation of workers, by the owners of capital, during the period of primitive capitalist states (during capital accumulation period), and decried the capitalist system of production.  They were, of course, right in calling attention to the exploitation of labor by factory owners.  However, they sought to throw the baby away with the bathwater.  They sought to take away the ownership of private property from individual hands and give it to the state.  They wanted the public to run factories and become the owners of the means of production. This is in the face of the obvious fact that, what is publicly owned is owned by no one, and is generally poorly managed.

       What one owner would take an hour to do, would take ten bureaucrats ten hours to accomplish. Socialism wanted public ownership of the means of production. As it sees it, this is the only way to prevent exploitation of man by man.

       In the Communist Manifesto, and later, Das Kapital, Karl Marx waxed strong and wrote idealistic nonsense that has no bearing on the real world we know of.  Simply stated, Communism is rubbish for it has no capacity for producing wealth.  Wealth is produced by individuals pursuing their private interests, working hard, working ten or more hour per day, rather than the average of two-hour days worked by bureaucrats in their public works. A gaggle of bureaucrats merely make noise, whereas productive individuals commit themselves to doing work that interests them, that they have aptitude in, and do it for profit.

       We are not naïve about human nature.  We know that human beings do exploit one another, and will continue to do so if they can get away with it.  Therefore, some role for government in the economy is inevitable.  Hence, the mixed economic system is probably the most workable economic system, given the realities of the world.  In a mixed economy, the government plays some role in making sure that capitalists do not exploit the workers; it does so primarily through regulations of what capitalists can and cannot do, passing laws to protect labor and working conditions; and it intervenes to prevent and or remedy inflation and depression. By and large, a mixed economy is a regulated capitalist system, it is less productive than a pure capitalist system, but seems the best we can do given the nature of man.

        The most productive economic system is the capitalist economy, so we shall devote the rest of this chapter to its workings. Many books have been written on this economic system, yet the reader should peruse the granddaddy of them all, Adam Smith's Wealth of Nations.  The premise of this economic system is that man is a rational creature, and that his rationality disposes him to pursue what optimizes his survival, his self-interests.  He is motivated by self-interest and only secondarily thinks about social interests. But since he lives in society, the satisfaction of his self-interests is generally attained when he also does what satisfies other persons' self interests.  In effect, he exchanges goods and serves with others, and this way each person satisfies his self-interests.

         The basic axiom of this economic system is the laws of supply and demand. Individuals need certain goods and services to sustain their lives. They demand those goods and services and are willing to pay certain prices to obtain them. Businesses supply the goods and services demanded by the people.  A successful business is one that understands what the people want to buy, produces it or gets it, and sells it to them at a price they are willing to pay.  In the market economy, the producer supplies certain goods or services, and people offer to pay him a certain price for his goods or services.  Complex mechanisms affect the interaction of supply and demand; the result is a price for the goods that the supplier is willing to sell his goods at, to a buyer who is willing to pay a certain price for these goods or services.  This is the equilibrium price.

       Given the desire by the buyers to pay the least price for goods, they would always be on the look out for sellers whose prices are cheaper for similar goods. Therefore, other sellers attempt to produce the same goods and/or sell them cheaper to buyers, and in the process make profits.  To be in the market, to sell, all producers of goods and services must be attempting to produce their goods and services in the most efficient manner, and to a specific sector, niche, in the market.  Competition for survival in the market place, therefore, compels producers to be efficient, to utilize the factors of production (labor, capital, technology, entrepreneurship, land, raw materials, etc), in the most efficient manner possible.

       The capitalist economy, therefore, is characterized by competition for consumers, for the sale of goods and services, and in the process discovering the best way to produce and market them, so as to make a profit.

       There are different types of competition.  Briefly, there is pure or perfect competition, also called laissez-faire; here the forces of the market, that is, supply and demand, strictly determine the production and distribution of goods and services, with no interference of government.  In this type of market, the best seller of goods and services survive, and the weak disappear.  This is akin to Herbert Spencer's Social Darwinism, where the fittest survive and the weak die. This is an unsentimental approach to the economy.

       In the real world, people do take care of their old parents and children, and never permit pure competition to determine their approaches to them. People have always intervened to help the least competitive person, the underdog so to speak, for he could be them, tomorrow. The best student may obtain scholarships to go to school but if you ignore the needs of the mediocre student, should something happen to the best student you are stuck with no one to produce knowledge.  Therefore, to guarantee the presence of knowledge, you must provide education to as many students as possible, even those that may not appear to aspire in it, for educational provides knowledge on some level to all.

        In monopolistic competition, a few relatively large businesses monopolize the production and sales of certain goods and/or services, and exert influence on the prices they charge for their goods and/or services.  This is a very inefficient economy, for if there is less competition, there is less incentive to improve the means of production or to improve the quality of goods and services. A monopoly tends to make businesses complacent in their quality of products and services, and not keep up with increasing needs.  An economy stagnates, becomes outmoded, if monopoly is permitted.

       In oligopoly economy, there are few suppliers of a specific product or service, so that one's actions can have a significant impact on prices and its competitors; often a small number of businesses produce similar products, agree amongst themselves on the prices to charge the buyers of their goods, thus disproportionately affect a large population, much like we see with gas prices due to OPEC.  This is an inefficient economy.

       In a monopsony, a single customer market, where a specific type of product or service is only being used by one customer, the buyers dictate prices paid to producers of goods and services.

      There are many variations of these basic types of competition sketched above.  For our present purpose, what is salient is that in a capitalist economy, competition is encouraged as the best way to produce and distribute wealth.  It is assumed that businesses are motivated by the profit motive, and the bottom line is: 'what is in it for me? How do I benefit from what I am doing? If I am not going to benefit from it, why should I do it?"  Profit is the incentive for economic activity. Where there is profit to be made, resources are channeled to it, and in the process the consumers are best served.

       Capital goes to where profit is to be made. This way the forces of the market allocate capital in the economy and allocate it most efficiently.  No one central committee sits around in an unventilated room in the States, Moscow, Peking, Havana, etc and pools their collective ignorance, to tell the people where to spend their money, and to decide where capital is allocated in the economy.

       The capitalist economy is the most efficient means of producing and distributing resources in an economy. No one has yet discovered a better alternative to it.  But like everything else that is part of human behavior, it is flawed.  Man is an imperfect creature and his actions must be imperfect.  Capitalism has built-in problems. It tends to have cycles of inflation, depression and recession.

       In inflation, there is too much money chasing too few goods and services, therefore, prices rise.

       In depression, there is too little demand for goods and services, therefore, prices fall. Recession is a minor form of depression.

      In a hyper inflationary economy, it may take a bucket full of currency to buy a packet of cigarettes.  This happened in Germany after the First World War.

       In depression, too many people do not have money, are out of work and cannot buy goods and services, hence, businesses cannot sell their goods and services, do not make profits and may have to close down, laying off many persons. As a result of the stock market crash of 1929, the United States economy and its collateral, the rest of the world's economy went into deep recession.  At a point during the depression, over twenty five percent of the adult population were unemployed, hence, had no money to buy goods and services; as a result, many businesses could not sell their goods and services, and had to close down.  The world went into a funk, as hordes of unemployed men sloshed about looking for work.

       John Maynard Keynes published his 'The General Theory of Employment, Interest and Money" in 1936, and in it, proposed new economic behaviors that would prevent the known business cycles of capitalist economies. His ideas were translated into new economic practices, the so-called Keynesian Revolution, that in the United States is commonly referred to as the New Deal or government intervention in an otherwise capitalist economy.

       Briefly, Keynes proposed that societies lay to death the idea that governments should have no role in the economy. He suggested what governments could do during inflationary and depressionary periods, to help the economy. Lawrence Klein writings on Keynes shows that the government economic planners would have to have "complete control over the government fiscal policy so that they can spend when and where spending is needed to stimulate employment and tax when and where taxation is needed to halt upward price movements."

       Many folks have since added to Keynesian economics, but the basic tenets of this economics remain the same. Keynesian economy, like pure capitalism, accepts that private ownership of property is the best economy, but suggests ways to manage the economy to avert excessive disruptions in economic activities.

       Taxation policy.  Here the government taxes people, raises or lowers taxes according to how the economy is doing.  If the economy is in an inflationary period, that is, too much money is chasing too few goods, governments should raise taxes and that way take away some of that money from the people, leaving them with less money to spend.

        With less money available to them to purchase goods and services, people would want to buy goods and services cheaper, hence, suppliers are inclined to reduce the price of their goods and services in order to sell and make profits. Prices fall and inflation is reduced, as money regains some value.

       On the other hand, if the people are paying higher taxes, and have less money to purchase goods and services, sellers are unable to sell their goods and services; the economy heads towards recession and/or depression, taxes could be lowered so that the people would have money to spend. With more discretionary income to spend, they buy goods and services, thereby stimulating more production of goods and services.  The economy picks itself out of depression and becomes buoyant. Taxation policy, therefore, is an ongoing process, with government raising or lowering taxes to regulate the economy.

      Government spending (fiscal policy) is used to stimulate the economy.  When the economy is in the doldrums the government can consciously spend money to stimulate it.   It could pump money into the economy by building roads, bridges, airports, railway lines and other public infrastructure. In doing so, work is created and workers spend their money buying goods and services that stimulate the production of those goods and services. Sometimes, governments do not have the money to spend to stimulate depressed economies. In such instances, they many have to borrow that money from those who have it, through selling bonds. This is called deficit spending. The government borrows and spends money that it does not collect in revenue, so as to improve the economy, hoping to then collect more taxes to pay off what it owes. Many a government owes so much money through deficit spending, that interest payments on their debts consume much of their current revenues.  That is, they pay out large chunks of the money they currently collect in taxes as interests on the money they have borrowed to finance public projects.  Ronald Reagan, for example, borrowed extensively to finance his military build up. He saddled future generation of Americans with trillions of dollars of debt to be paid off.  In the meantime, the government pays several billions of dollars in annual interests on the trillions it owes.

       In Monetary Policy, governments, through their central banks, regulate the behavior of the economy through raising or lowering the interest they charge borrowers of funds from the government banks.  Commercial banks borrow money from the central banks.  They are charged certain interests for the money they borrow.  They, in turn, charge their customers, those they lend to, interest on the loans. The interest the central bank charges determine the interest commercial banks charge, and indirectly affect the performance of the economy.  If the prime rate charged by the central bank is low, commercial banks borrow more and lend more money to their customers, who are more likely to borrow because of the lowered interest rates.  People borrow money to buy houses and cars. Businesses borrow money to invest in capital goods.  This way economic activity is stimulated.

       Lowering interest rates can be used to stimulate an economy out of recession or depression.  Raising interest rates, on the other hand, lowers borrowing and spending, hence, reduces inflation.

        Keynesian economics has ushered in an era of government intervention in the capitalist economy. This serves some good. The problem is that some idle, unproductive bureaucrat may be tempted to over do it, and in the process destroys the goose that lays the golden egg. If the government over regulates the economy, say has too high taxes, people may refuse to work hard; people see no reason why they should work eight or more hours per day to make money, so that some bureaucrat can take much of that money from them, to fatten government coffers and support the malingerers on the public dole.

       Clearly, this problem does not have a simple solution, certainly not an either or one.  There must be some role for the government in modern economies.  The question is how much. How much should be the role of government in the economy is the subject addressed by public policy and public choice. As long as, the national policy enables the capitalist economy to grow jobs and produce wealth for the people, it seems tolerable.

      As long as, the people's standard of living is rising, the Gross National Product (GNP) and Gross Domestic Product (GDP) are rising, there is little to complain about the economy. (GNP is the gross value of the goods and services produced in a country during a period of time, usually a year; GDP is the GNP plus the income paid to non-residents, minus income received from non-residents. Gross national income, GNI is the sum of the various economic sectors in a country. Per capital income is the gross income divided by the population, to figure out what each individual would make if wealth were shared equitably.  Unfortunately, many make incomes below poverty level wages.living wages is that wage deemed necessary to sustain an individual in an economy. Goods are generally divided into two main classes, capital goods and consumer goods.  Capital goods are those devoted to producing more wealth, such as factories, whereas consumer goods are finished products bought and consumed by people.)

       As we see it, governments must play some roles in the economy.  It is simply nostalgic to yearn for past eras that probably never existed, when governments were supposedly hands off the economy. (In the past, we had mercantilism, trade from commodities, where governments actively tried to preserve certain trading for their citizens and prevented other countries from doing so.) As long as, governments understand that human nature dictates that people work hardest when they are working for their interests, they pretty much leave them alone to pursue their interests, so the economy grows.

       Private enterprise, where most of the factors of production (land, labor, capital, technology, entrepreneurship) are left in private hands, is the most productive economic system. Until any one shows an alternative to it, that is equally productive, or better, it should be titrated and improved, but essentially left alone.  We should not make the mistake naïve Russians made of adopting an untested economic system, communism, only to give the people poverty, and brutal authoritarian and totalitarian dictatorship. For all his murderous activities, Stalin did not improve the standards of living of the Russian people. So what was the point of that entire killing?  Not any that pure reason can discern.

       The profit motive, which drives business activities, is still the best way to generate wealth in an economy.  Of course, we need to tax those with money, and give some money to non-profit organizations to use in serving the poor, those who cannot participate or benefit from competitive business. This is the way it should be, wisdom lies in knowing how not to over play our hands and allow our sentiments to over rule our reason.

       We need bureaucrats to perform critical governmental functions that must be performed for the survival of the polity.  But we also know that bureaucrats are inefficient, so we must keep them to the absolute minimum.  As it were, they are necessary but should not be permitted to mushroom all over the place.  If allowed, they expand their jobs but not their productivity.  So we must keep watchful eyes on the detritus of mankind, and reward our most productive persons, entrepreneurs, those who generate wealth and employment in the economy.





  SMALL BUSINESSES





 Most people who have jobs are employed by small businesses. For our present purpose, we define a small business as any work organization employing less than twenty-five persons. It is, therefore, critical that we understand the nature and operation of small business ventures.

       A small business comes into being when an individual has an idea that he thinks would make him money. An entrepreneur has an idea (product or service) that he thinks there is a market for, that is, he thinks that people would buy, that there is demand for). He attempts to produce and market his idea.

      Unless one is trained in business, either formally (a MBA) or through work-experience, as a beginning entrepreneur one often does not possess management skills.  Management is the ability to gather human beings and other resources, and coordinate them in pursuit of stated organizational goals.  Human beings are complex and it is difficult to tell them what to do, and get them to do it.  There is, however, a psychology to managing people that needs to be learned (human resource management).

       Small businesses are often handicapped by lack of adequate financing. One may have good ideas, but not have the money to finance them. Moreover, given one's lack of track record, financial institutions like banks hesitate lending one the money to start one's business. Thus entrepreneurs are often forced to rely on their own savings, and borrowing from family members and friends to start their business.

        We live in an era where government involves itself in practically every aspect of our lives. As noted above, if bureaucrats are permitted, they would over regulate the economy, including making it difficult for persons with good ideas to start and operate their own business. The hoops entrepreneurs have to go through to obtain all the licenses they need to operate their businesses is amazing.  One would think that since they are the ones who provide most of us jobs, that idle bureaucrats who do not generate jobs for any one else, but themselves, would cheerfully do everything in their powers to make sure that entrepreneurs succeed. (It is estimated that over ninety percent of all business that start fail before the end of two years.)  Often those businesses that manage to survive are burdened with high taxes, actual disincentives to their working hard to stay in operation.

       Be this as it may, small businesses are the bedrock of capitalist economies, and people must be encouraged to start their own businesses, rather than aim at working for other persons.

       If you intend to start your own business, you should think about it; it is desirable that you provide yourself with some business education, formally or informally, by reading books on business (and that is why we are adding this chapter to this book), studying the market, understand the structure of demand, that is, do a survey to find out whether there are people who want to buy what you want to produce or not. If there is a demand for it, then plan your production carefully to make sure that you avoid cost overruns. Chances are that you do not have training in finance and accounting, and may need to secure the skills of those trained in that field, particularly the services of a good bookkeeper. You must budget and keep good records of your revenues and expenditures, so as to avoid running into major financial problems or having to declare bankruptcy.

       You must draw up an effective marketing plan, a strategy on how to sell your goods and/or services to the target market you are aiming at to buy your goods and/or services.

       You must manage your time well and acquire the type of labor you need to aid you in the production of what you want to produce, and compensate them adequately.. people are motivated by self interests; if you do not reward them as they think that they deserve, they would leave, you do not want a high labor turnover rate, for if those who understand your business leave, you may have difficulty finding and training replacements.

       One should go into business that enables one to do what truly interests one. Even if one is buying an existing business (business opportunity) or acquiring a franchise (a unit of a chain, like McDonald's), one must follow a line of business that interests one.

       Once the individual decides to go into business for himself, it helps if he creates a Business Plan.  A business plan provides a detailed plan of the business goals and objects, and how one intends to accomplish these goals, including how the finances are to be obtained, who the market for the product of the business is, and how the revenue of the business is to be managed.

       The mechanics of beginning and running a business, such as acquiring a location and facility for the business (could be out of one's home), equipment, insurance, means of communication.such as computers and phone systems.obtaining and motivating staff to work hard, meeting the legal requirements for that type of business, going after sources of financing, and so on, can be studied in most books on how to start and run small businesses or books on entrepreneurship.   Networking and talking to already successful entrepreneurs is one of the best ways to learn, gain contacts and support to bounce ideas and issues off of someone in the know.



  FORMS OF BUSINESS OWNERSHIP





 Businesses can be organized in several forms. The primary forms of business organization, in most capitalist economies, are sole proprietorship, partnership and corporation.

       The sole proprietor is exactly what the name says, a business owned by one individual. The owner is solely responsible for the firm's operation, and assumes all the risks involved.  If he makes profit it is all his (minus taxes, of course) and if he incurs losses, he is solely responsible for them.  From a legal entity the sole proprietor and individual are the same entity.

       This type of business organization has some advantages, including ease of formation and dissolution, management freedom and right to do as the owner wants without interference from bosses, and, of course, the keeping of all profits by the owner without sharing it with other persons. Like everything else that has pluses, this type of business organization has disadvantages, including: unlimited financial liability, limited financial resources, perhaps limited managerial skills in the owner, and tendency for the firm to terminate with the demise/death of the owner.

       Many businesses start as sole proprietors and in time change forms, perhaps become partnerships or eventually corporations. The need for capital to expand businesses often compels sole proprietors to seek partners, and eventually incorporate and possibly even to go public, financing their business activities through selling of stocks.

       A partnership exists where two or more persons pull their resources to start a business and agree to share responsibility for running the business; they take equal risks in doing so. The formation of a partnership often requires following some legal procedures that delineate who the partners are, their individual investments in the business, the salary of each partner, the duties to be performed by each partner, the name of their business, how profits are to be shared, the location of the business and the conditions for dissolving the business.

       Partnerships have three forms; general partners, limited partners and silent partners. In general partnership, all the partners are involved in the running of the business and share in the total liability; in limited partnerships, partners are only liable to the extent of their investment in the business, and may not take an active role in the day-to-day operations of the business; silent partners are not involved in the management of the business, but often provide financial support.

       Partnerships have certain advantages, including ease of establishment, pooling of management skills, ability to pool funds from many persons and more stability than sole proprietors.  Its major disadvantages are that partners have unlimited financial liability, may disagree amongst themselves as to how to run the business, inability to raise larger funds, possible dissolution of the business due to disagreement of the partners.

       Corporations are legal entities; they are considered artificial persons in the eyes of the law. This is so because the law considers the corporation like it was a person, and taxes it, as it taxes individuals. The corporation is usually owned by shareholders who are liable to their investments in the corporation.

       Corporations tend to have certain advantages, including: limited financial liability for shareholders, greater ability to raise money, greater longevity, greater capacity to expand, greater ability to attract top quality managers, and ease of transferring ownership. The disadvantages include lack of personal interest in the management of the business by employees, greater cost of production, government regulations, and lack of secrecy of operations.

       Essentially, corporations are the most effective way to run large business concerns. Money is difficult to come by, and one of the best ways to come by it, is to borrow it from many persons. Public corporations acquire funds by selling shares in their business.  Shareholders own stocks in corporation type businesses.

       There are many types of stocks: preferred stocks, common stocks, and so on. (If you are planning to become an investor, you are advised to take a course on investments, so that you would understand the various types of stocks and their advantages and disadvantages.)

       A board of directors usually runs a corporation.  The shareholders elect the board of directors.  The board of directors is usually elected from those with the most stocks in a corporation.

       The board of directors hires a chief executive officer (CEO or president) to run the business on a day-to-day basis, and is responsible for reporting and keeping the board informed.

       A group of individuals can form a corporation by filling out the required forms by the government, and paying the fee for starting their business.  Once in business, corporations tend to expand through many ways, including mergers, acquisitions of other businesses, and sometimes through hostile takeovers of other businesses.

       There are other forms of business organizations, such as cooperatives, usually a non-profit corporation organized on a voluntary basis, for the benefit of members. An example is credit unions, which is usually a financial cooperative to lend money to members, who pool their money to lend to each other, and that way counter the disadvantages of commercial banks.



  MANAGEMENT





 Now that a business has been started, it has to be managed on an ongoing basis. Management is the process of planning, organizing, leading and controlling the activities of work members, in order to achieve the business' goals.  Management is the utilization of men and material to achieve organizational goals and to make a profit.

        Many writers have delineated the specific functions of management, including planning (setting the goals and objectives of the work team, how best to attain those objectives, the resources necessary for achieving them, and where those resources would be obtained), organizing (establishing a formal organizational structure, delineation of tasks to be performed by members of the organization, lines of reporting authority), staffing (the recruitment of people to perform specified tasks necessary for the organization's goal attainment), leading (guiding the workers so that their activities are conduce to the organization's goal attainment), controlling (making sure that the performance of the staff is what is expected and making sure that resources are utilized, as expected, taking corrective actions where necessary.

       There are levels of management, a hierarchy of the distribution of authority in an organization. The hierarchy usually looks like a pyramid, with more people at the bottom, and less at the top.  Generally, there is top management (president, CEO, Vice presidents), middle management (division managers, department managers), and supervisory management (lead workers).

       Managers generally are expected to possess technical skills (the mechanics of the jobs in their organization) and social skills (how to relate to people and use them to achieve organizational goals).

       Managers make decisions as to what goals and objectives are to be pursued, and how to pursue them.  Therefore, managers must understand how to make decisions, positing possible solutions, costing the solutions, studying the consequences of each solution in terms of benefits and social good, and choosing the alternative solution to the problem that seems to optimize benefits and reduce costs, implementing it, and eventually evaluating whether it works, and if not, refining it or throwing it out for other solutions.

       The major function of management is planning what goals to pursue and ascertaining strategies to attain them. Gathering of information and analysis of this information is crucial in making future plans as to the business' direction.

       Nowadays there are computer software programs that can aid in planning and decision-making.  The manager must be familiar with computers, and respective business software; he must understand the role of computers in his particular industry. Education in computers is now a necessary part of management training.  E-commerce is in the future of most business. Knowledge of computer applications, such as word-processing, data processing and management, statistical analysis, excel, and Power Point, is useful for managers.

       Managers must be effective communicators.  They achieve goals and objectives through people. As such, they must know how to relate to people. Communication is an effective way of relating to people.  Indeed, managers are best served if they take courses in communication and human relations. They communicate up and down the organization's hierarchy, send memos to those above them and to those under them, write business letters and reports for presentations to other managers (management meeting) and other business, etc.

       Although managers do not have to become accountants, they must understand money and record keeping. They must be able to prepare budgets and read financial statements, giving the performance.revenues and expenditures.of their units, produced by the accounting department, monthly. Management decisions are based on knowledge of the state of the organization's finances.

       Managers engage in business with other business that requires having formal contracts written, regarding their relationships and obligations. Contract management is one of the required skills of professional managers, in today's business climate.

       Managers involved in production must understand inventory management, the record keeping of raw materials coming into the factory, how they are processed into finished goods and sold (department stores have to keep records on the inventory of merchandise they order and sell).

       Project management is now a general skill required of most managers (how specific projects are managed, what it takes to accomplish them, when to start and complete them, costs, technical requirements for accomplishing them, the labor required to accomplish them, and the management of these resources).

       Management boils down to the courage to take risks. Academic professors of business talk shop on planning, but are not known to actually set business goals and do what it takes to achieve them. Often business goals are set on a hunch, by pure intuition of what the manager thinks will work. Managers are persons who take calculated and studied risks, and are prepared to take the consequences of their actions. Those who take profitable risks make profits, whereas bureaucrats, who study a problem to death and write tons of literature on it, do nothing to take risks, make no profit.



  ORGANIZING WORK ORGANIZATIONS





 Work organizations tend to be organized hierarchically, with the majority of employees at the bottom and the minority at the top.  This is the so-called organizational pyramid, with top management (usually the chief executive officer, and president and his functional vice presidents, who reports to the Board of Directors, usually seven to twenty members who are elected by shareholders), middle managers (division managers), supervisory or first line managers and finally the workers at the bottom of the totem pole.

       The typical corporation usually has a formal organization chart that plots each employee's position, and what it does within the organization.  The formal organization delineates power relationships between employees, and suggests that those at the top tend to have more power than those at the bottom.  But this could be deceiving as most organizations' have an informal organization that indicates that, persons who are not expected to have much formal power and authority actually possesses power. The secretary to the CEO, for example, may wield actual power behind the throne of the organization.  The janitor may have more say so in the organization than persons who supervise him formally.

        One of the key functions of management is organizing people, to use them to accomplish organizational goals.  Organizational structures, learned from the military and the Catholic Church, seem to be an efficient way of organizing people.  Communists contended that hierarchical work organizations were anti-democratic, that they indicate master-servant relationships and talk nonsense about the equality of comrades at work.  However, examination of communist work organizations revealed a more feudal organization with those at the top presuming to know what is good for those at the bottom while not even bother listening to them, as capitalist organizations, at least, try to do.  Communist leaders presume to have all the knowledge there is to have, hence, when in office stay forever, usually until they die or until someone kills them in a coup. At least capitalists make a show of listening to the people, and theoretically, information flows both downwards and upwards, from the workers to the top management, and from management to the workers.

        Usually work organizations are departmentalized by function. The work that must be done to accomplish organizational goals are divided and grouped into functional areas, and each is called a department; such as production, accounting, finance, marketing and sells, human resources, etc.

       A designated person such as the vice president, finance etc, heads each functional department.  The vice presidents report to the president, who reports to the Board of Directors.

       Departmentalization can also be made geographically: a large corporation with operations in many geographic areas, in the same country, or even in many different countries, may organize itself by regions so that in each region a manager runs its affairs there. Some organizations have product departmentalization, that is, a unit producing a given product is a department. Some organize through project management, whereby folks from different units come together to pursue a special project within the overall organization.

       Whichever way an organization is organized, the goal is to delineate the lines of authority, power and influence.

       Power is the ability of one individual to tell another what to do, and he does it, even if he did not want to do it. Power generally implies an ability to punish the person it is exercised over, if he did not do as he is told to do.  The boss can punish the employee by sacking him from his job, just as political authorities can put the citizen in jail if he disobeys the laws of the land.

       Authority is the reposition of certain powers in positions in an organization. One may have formal organizational authority, but lack power and influence in the organization.

       Influence is the ability to influence persons with or without formal authority to do so.  Persons, who have the power of speech, may not have a formal authoritative position in society, yet exercise the ability to get people to do certain things.

       In formal organizations, there are different types of authority, such as, line and staff.  Line authority is the authority in a position within the organization chart.  Staff authority is the authority exercised by those not holding formal positions in the organization's chart.

      Theoretically all the power in the organization is in the hands of the chief executive officer.  He then delegates some of his power to his subordinates, who in turn may delegate some power to lower subordinates. For delegation to be meaningful, the person doing the delegating must really permit the person he gave power and authority to, the freedom to act within his given power.  However, he must be expected to be accountable for his behavior; if he does not do what is expected of him, and if he does not improve as needed to work within the organizational structure, may be let go.  Delegation of power must be real for folks to truly feel empowered by the work organization.

       It is generally believed that each supervisor is only able to supervise so many persons, if he is to do an effective job.  Some believe that six to twelve persons are the best span of control. There is no hard and fast rule about this matter, for it may depend on individual managers.  Some managers are only able to keep an eye on a few subordinates, whereas others can keep an eye on a large number of subordinates. Each organization must know its people, in designing its chain of command.

       There is a debate going on whether large organizations should centralize authority or decentralize it. Either end of this argument has its merits. In the nature of things, a bit of both is probably inevitable. Management must be centralized to have effective control, but it must also be decentralized to give subordinates a sense of empowerment to do their jobs. If folks feel told what to do, by people external to them, they tend not to work very hard.  Yet workers must be told what to do by their bosses, while being given the impression that they are in charge of their work lives.

       Large organizations often form a committee to perform a certain task and then disperse. A committee is a group of persons, usually selected from different parts of the organization, to perform a particular task or a particular project, while still performing their usual line work. Committees are useful ways of pooling expertise from many parts of the organization to solve problems.

       There is an academic debate going on as to whether organizations should be flat or hierarchical, vertical or horizontal.  This is an idle debate by idle academics. In the real world, persons performing different tasks tend to have different skills. Moreover, persons in an organization tend to possess different levels of information.  The vice president of finance is probably more knowledgeable, or should be so, about finance than the janitor.  It would, therefore, be silly to expect the janitor to have the same input as the financial manager in making decisions on where to invest the organization's money or where to borrow money from.  The point is that, whereas, democracy seems an ideal social organization, we are not going to have participative democracy in the work place; perhaps we can have an enlightened commitment to the workers' interests by bosses, and that is the best we can hope for.



  HUMAN RELATIONS





 The key function of management is to get people to perform tasks, performance of which leads to the accomplishment of organizational goals. Organizational goals are attained through human beings.  Therefore, to achieve these goals, human beings must be understood and motivated to do their jobs.  Management theories are, in effect, ideas as to how to get people to produce at their best.

       Frederick Taylor performed Time and Motion studies, and figured out how best to perform each task needed to be done in a work process, and how quickly it could be done; he then hired those who are best able to perform such tasks within the most efficient time parameters to perform them. If it takes a teller at a bank, approximately five minutes to complete each customers transaction: of depositing or withdrawing money from his checking and/or saving accounts, then test potential tellers and select those who have the capability to perform this task within the expected time parameters.  This is what time and motion studies amount to. Clearly, it has some merits, and as such, is still used in hiring and training employees.

        Human beings are flesh and blood creatures, not robots.  Even if you hire them based on their efficiency, you still have to treat them in a certain manner, for them to perform at their best. George Elton Mayo and the Hawthorne experiment, found that the ambience of the work environment plays a role in workers' productivity.  Such a seeming minor issue, as the lighting in the room and color of the paint on the walls, affects how happy and productive workers are. Thus, the human relations school of management stressed paying attention to human psychological needs, if productivity is to be raised.

      Abraham Maslow talked about the hierarchy of needs: physiological, security, social, esteem and self-actualization. Frederick Herzberg posited a hypothesis that says, jobs that offer challenge and opportunity for advancement, tend to motivate people to work harder than jobs that offer their opposite. He suggested combining good wages, security of employment with challenge, if the worker is to be motivated to work hard.

       Douglas McGregor postulated that there are two basic types of managers, what he called Theory X and Theory Y.  Theory X managers make assumptions that workers are lazy and need to be closely supervised if they are to work hard; whereas, Theory Y managers assume that with trust people can do what they are hired to do on the job.

       Clearly this bifurcation of attitudes towards management is unrealistic, for in the real world people need to be trusted, as well as monitored, if they are to do what they are hired to do, and do it well. It is not an either or case, for men are complex creatures and no one approach to them serves them well.  Theory X managers may alienate workers but then if workers are not monitored the business may not be there for the employees to be monitored.

        More behavioral psychologists divided management into what they called task-oriented managers and people oriented managers.  Supposedly the former is interested in the task of the organization and seldom interested in the emotional well-being of the managers. Thus he asks: what can I do to produce good computers, and does not worry about the feelings of his workers.  On the other hand, people oriented managers are too preoccupied with the personal needs of the workers, to pay close attention to the technical aspect of management.

       Again, this bifurcation of management into two grids is self-defeating, for in the real world, managers must be concerned with both technical and social aspects of management.  The jobs needed to done to produce goods and services have technical and engineering aspects to them, and since they are done through people, the psychological needs of people must be paid attention to, also.  It is not an either or question. However, it is clear that some managers tend to lean in one direction or the other, whereas excellent managers combine both traits. Morton's managerial grid is obviously useful in talking about leadership styles.

       Fred Fiedler's contingency Theory suggests that not one-leadership hat fits all; that leadership and working conditions determine what leadership style is called for.  In effect, different situations require different leadership styles, and good leaders adjust their style to suit the condition they find themselves in. In the political arena, for example, during emergency times, such as wartime, it is probably that strong-willed leaders are called for.  Churchill was probable the best leader for Britain during World War II. It takes a mad dog to check another mad dog. Hitler was a mad dog and required a man unafraid of blood and dying to checkmate him.  The softhearted, democratic Neville Chamberlain, was probably more suited for peacetime parliamentary talk-fests, than wartime leadership that required brutality and non-squeamishness in the face of blood, death and dying.  Notice that the Great War leader, Churchill, did not make good leader material after the war, and was thrown out of office, as if the people knew that he was not suited for democratic leadership.  For one thing, he was an outdated jingoist, who did not read the winds of change blowing through the world, asking for an end to colonialism. In a similar vein, the war loving George Bush did not seem to be an effective economic manager.

       In the 1970s, it became clear that the Japanese were onto something that was not happening in the West; after all, the Japanese were outselling the West in such consumer goods as cars and electronics. To understand how they did it, scholars studied the Japanese management style.  William Ouchi came up with what he called Theory Z management style. Essentially, he advocated doing what the Japanese were supposed to be doing: transform the work place into a family-like organization, with the leaders acting as surrogate parents, protecting the workers.  The fact that there was no real democracy here was overlooked. The benign dictatorship of the Samurai system of social organization, residual in the Japanese social organization, obviously would not work in the West. For now let it be said that fascination with all things Japanese is now passé particularly since the free fall of the Japanese economy in the 1990s.

       Whatever mode of management is adopted, the aim is to motivate workers to do their best at doing what they are hired to do. Management tries to improve workers' morale, to make them identify with their work, and do their best while at it. Obviously not one approach is required to skin a cat. Whatever is necessary to make workers to like their jobs must be done, including such concepts as job enrichment, empowerment, flextime, socio-technical systems, redesigning jobs, management by objectives (MBOs), participatory management, Total Quality Management, and so on. Every decade sees its own management fad; these must be evaluated and some paid attention to, provided the bottom line is there and profit made.



  FUNCTIONAL AREAS OF MANAGEMENT





 Managers must understand the key functional areas of management: production, accounting and finance, marketing, and human resources.

       Production entails the process of converting resources.raw material, capital and human labor. into goods and services.

       In those businesses producing goods, production usually means the manufacturing aspect of their business. This area of management is often the domain of engineers and others trained in the world of machines and men.

       Managers make decisions about the level of machinery and labor they need to produce their particular goods.  They may need to cover some of the following aspects: decide on standardization.the production of uniform products. determine the question of automation or labor intensiveness, purchase of raw material for conversion into finished products, how much inventory of these materials is to be bought, and held in stock etc.

       The organization of the production's department is generally a technical matter, that is, it is determined by the state of the technology in the industry. This involves an idea of the products to be produced, what type of machinery is needed to produce it, and where to obtain them or how to design them, the production process itself (assembly line), plant layout, capacity planning, maintenance of equipment in good shape, planning where to locate plants, where to obtain raw materials, location of markets, work design, work measurement, forecasting of demand for the products produced, inventory management and costs of carrying large inventory versus just in time inventory, scheduling of work to appropriate work centers, purchasing and relationships with suppliers, quality controls, the role of robots in manufacturing,  the role of computers in manufacturing, distribution planning, and so on.

       Marketing management entails the activities that get the products and/or services of a business organization to the end user. The marketing function involves performing marketing research to ascertain whether there is demand for the goods and/or services to be produced by the business organization.  And if there is market for it, what is the nature of that market? What is the target market.. their demographic, lifestyle characteristics, purchasing characteristics, motivation for purchasing the goods and/or services and their available money to do so.markets are further segmented, that is, divided into sub-markets, based on the specific needs of each segment. Marketers develop the marketing mix: the combination of products, prices, promotions, and place in order to satisfy a particular segment of the market.

       Markets are divided into capital and consumer goods markets. Capital or industrial goods markets entail the demand of industry, usually businesses, whereas, consumer goods markets entail, those who buy goods that they consume, as individuals. Clearly the two markets have different needs.

       Marketing managers usually work very closely with production managers in creating products to be manufactured. This is done for obvious reasons: marketers give realistic feedback as to what type of goods buyers want. Both plan products and the lifecycles of products (product life cycles include: product introduction, market growth, market maturity, and sales decline).

       Production mangers and marketing managers work closely to brand, package and label their products. (Brand is the effort to identify the business products by name, packaging is the manner the product is packaged; labeling provides information on the products and its manufacturer).  These two managers also work closely in pricing the product.

       Pricing entails consideration of many factors, such as the cost of manufacturing the product, break even analysis, demand for the product, markup prices, skimming the market, and so on.  Essentially the manufacturer strives to sell his products so that he covers his cost of production and makes profits, but do so in such a manner that buyers are willing to pay the price he is demanding.

       Once goods are produced, they have to be promoted, made known to the buying public. This is usually done through promotion mix: mass advertising, personal selling, sales promotions and publicity. Each of these activities has costs attached to it and the marketer chooses what option optimizes benefits for his business.

       Once goods are manufactured, they have to be gotten into the hands of their consumers. Distribution channels have to be established.  These include: retailers, wholesalers, agents, etc. The idea is to get the product to the consumer in the most cost effective manner. Clearly, the nature of the product affects how it is distributed; some products can be sold directly by the manufacturer, whereas others need agents to do so, and still others need retailers to do so. Whichever mix of distribution channels are deemed optimal, arrangements must be made for the flow of goods from the producer to the consumer.

       The most common form of distribution is through the chain retail stores. We go into food stores and buy manufactured and fresh food from all over the world. The manufacturers of these products have arrangements, agreements, with these stores to sell their goods and how these goods are brought into their stores.  In typical department stores, like Wal-Mart, products from all over the world are sold. Arrangements are made to bring those products demanded by consumers into the store, on an on-going basis, and to stop carrying those that are no longer demanded by consumers.

       Today, selling of goods and services is increasingly done through the Internet, E-commerce. This is a new form of the old practice, of ordering and selling goods through the catalogue and mail. Suppliers, through marketing, advertise their goods on their web pages; buyers order through the internet from these websites, pay with their credit cards, and have the goods shipped to their homes.

       Financial and accounting management involves determining the level of funds necessary for operating the business, and ascertaining where those funds are to be obtained.

       Manufacturing businesses invest a lot of money on buying equipment (fixed capital-buildings, machines, equipment, furniture, etc). Working capital (the cash used in the daily operation of the business) must be obtained.





 Cash flow is the movement of money into and out of your business; it's the cycle of cash inflows and cash outflows that determines the business' solvency.  Net or free cash flow is the difference between cash inflows and cash outflows. Accounts receivables provide cash inflows and form revenues, while accounts payables use cash outflows and form operating expenses.  The difference between them becomes profit.

      Businesses sometimes have to borrow money in order to operate.  There is short term financing and long term financing.

      Short term financing is borrowing that must be paid off in a few months to a year, such as from banks credit lines for the business. (Bank loans are usually secured with collaterals such as the business' accounts receivables, inventories.)  Long-term financing is borrowing that takes several years to pay off in full, such as a mortgage on a building.

       Factoring.here businesses borrow money from lenders by selling their accounts receivable to a factor company at a discount; the factor company then collects the money from the businesses' customers.

       Businesses also obtain funds from finance companies and from venture capitalists that take risks in funding business ventures with the hope of making profits in the future.

       But by far, the way public corporations obtain most of their financing for long term projects, is through selling stocks to those interested in becoming shareholders in their company. As noted elsewhere corporations are often authorized to sell stocks through the stock market. Loans are also obtained from governments.

       All monies coming into a business must be kept track of and how they are spent accounted for. Financial accounting keeps tracks of business revenues and expenditures, and profit or lack of it.  This is generally done through bookkeeping (a clerical function that record's a company's daily financial transactions, accounts received and accounts paid out).

       Management accounting provides managers financial information, usually on a monthly basis, with which they make managerial decisions. This information includes how each unit of the organization is doing, how much money comes in to it, how much flows out of it, and whether it is in the red or in the black. A unit that is in the red, for example, may lead the manager to lay off some workers in order to cut costs.

      The accounting process is a critical part necessary for the business's survival. The balance sheet (which shows the income and expenditure of the business at a particular point in time, usually monthly) is critical in making management decisions, for example, to continue a line of product or to stop producing it, if it is not bringing in sufficient income to cover costs of producing it. Income statements show the net profit or loss from the firm's operations over a period of time usually a month or year. Budgets state how a business plans to spend its money during a period, usually a year, and how they intend to obtain their income.

       Much of budgets are based on forecasting of future revenue streams, hence, have to be adjusted with the reality of actual cash flow during the year. A business forecasts how much in sales it hopes to make, but reality determines its actual sales, which may be more or less, hence, profit or loss.

       There are different types of budgets but the two main ones are capital budgets and operating budgets.

       Capital budgets cover the cost of capital goods and equipment, and their depreciation and replacement time and cost, and where revenue for such replacement would be obtained.

       Operating budgets cover current operating costs: labor costs, manufacturing costs, selling costs, administrative costs and expected sells revenues.

       Financial budgeting shows how the business intends to raise funds for planned business expansion, from internal savings or from borrowings?

       Corporate borrowings are usually in the nature of stocks and bonds. Stockholders lend money to businesses, on a gamble that companies would make profits in the future and share these profits with the stockholders, investors, by paying dividends.

       Quarterly, although it may be less frequently, many large corporations declare their profits or losses, and on that basis elect to pay out dividends or not.

       When companies are performing optimally, their stocks go up in value, hence, can be resold at profit by their holders; conversely when they are doing poorly, their stocks go down in value, and may indeed become valueless.  Clearly, the buying and selling of stocks is a gamble that requires the buyer and/or his stockbroker to do background research on companies before their stock offerings are bought.

       Whereas, bonds are usually the means governments raise money to finance projects they do not have money to finance, larger corporations are these days permitted to also raise money in this manner.  Bonds are different from stocks in that the buyer gives the seller a certain amount of money, and the seller promises to pay him a certain annual interest on his money, and to return the entire amount during a specified period of time, when the bond matures.

       The securities market (on stocks and bonds, for example, the New York Stock Exchange) provides a daily barometer on how stocks are doing. Some of the major stocks indexes such as the Dow Jones and NASDAQ provide daily feedback on how the stocks registered with them are doing.





 Human resources management deals with securing the right personnel a business needs to have in order to produce its product or services effectively and efficiently, compensating them appropriately, training and motivating them to do their jobs well.  Human resources is a staffing department, for it is not directly involved in the production of what the business exists to produce.  For many years this department performed mostly clerical functions, handling the paperwork for hiring and paying employees.  Over time it has evolved into much more, with needs to keep track of the various labor laws that govern management-labor relationship making it more of a managerial function. For our present purposes, personnel managers hire workers for large business outfits. Small businesses do not have the luxury of personnel departments, the overall owner of the business hires whomever he judges able to help him produce the goods he is there to produce, compensates them when they do good jobs and sacks them when they are inefficient.

      Human resource planning entails making plans on what personnel the business requires in the future, where to obtain them, how much they will cost and whether the business can afford such costs.

       Personnel departments perform job analysis, job specification and job description. They study what functions need be performed by each position in the organization, specify and describe them in specific position descriptions. New employees are given their job descriptions and are evaluated on this basis.

       The on-going function of personnel mangers involves recruiting applicants for vacant positions (from either inside the organization or from outside it), and with line managers, interviewing and selecting some of these, and training them. Generally, line supervisors perform actual job evaluations on employees, but the personnel department keeps records of such evaluations on employees.

       The personnel office, with the accounting office, manages the business's benefits plans, such as health and dental insurance, disability insurance, life insurance, and retirement plans.

      In the past, the business owner simply hired whomever he liked and fired whomever he did not like.  Whereas this may still be much of what happens in the real world, large businesses now have to grapple with the slew of government regulations regarding proper personnel practices, including laws against discrimination. In the USA, infinite laws have been passed to discourage discrimination based on race and gender, and personnel departments are supposed to make sure that these laws are enforced. But the reality of the land is that whoever wants to discriminate does so and uses these laws to cover their tracks.

       Consider affirmative action laws and American universities. From the outset, they decide to hire a white candidate. They would then go through a charade of inviting minority candidates for interviews.  After this silliness, they decide that these minority candidates are not qualified, and hire the white candidate they always wanted to hire.  They would provide tons of paperwork to the federal government, showing how they made efforts to recruit minorities but could not find qualified ones, hence, justifying the white person they hired. Then they pretend to sleep well, assured that their tracks are covered. They get on soapboxes and talk about how they are doing their best to end racial discrimination. These fools are so self-deceived that, they do not know that they do not deceive other persons. When the house of cards they have built collapses, they would be surprised that it did so. Any way, the point is that personnel offices are supposed to make sure that labor laws are implemented in businesses.

        Personnel departments orient new employees to what is expected of them, train and develop them to do their jobs well, manage wages and compensation (including bonuses, profit sharing, merit plans, seniority plans, employee stock ownership plans), employee benefits, insurance plans, pension plans, implement guidelines to follow laws regarding worker safety and health on the job, promotion and separation from employment, etc.



  MANAGEMENT AND LABOR RELATIONS





 Until the twentieth century, capitalist economic theory assumed that it was up to the business to treat labor as it wished, pay whatever it wanted, and sack those who did not prove amenable to control.  Most businesses did not pay attention to working conditions.  Utopian socialists like Robert Owen, Charles Fourier, Joseph Proudhon, Karl Marx and Frederick Engel pointed out the exploitative relationship between business and labor during the primitive phase of the industrial revolution.

       It was not unusual to work people for sixteen hours and pay them a pittance.  Indeed, children as young as twelve years old were worked in factories and mines, until they dropped dead from exhaustion. It was not considered society's function to protect these children and their equally poor parents, laboring like wage slaves in the factories of Manchester and Birmingham, England.

       Human beings are predatory animals and given the opportunity, would enslave their fellow human beings and/or exploit them for their own benefits.  It is simply naïve and utopian to assume that man is naturally good.  In his ego state man is evil. His history is a record of exploiting and killing his own kind.

       Socialists did an excellent job pointing out man's exploitation of man. Where they made a mistake is in thinking that a socialist utopia would end such exploitation. Their communist's heavens turned out the worst type of hell on earth.  Russia and China were not much better than slave societies, with communist leaders the new slave masters, the emperors using the masses as their slaves to accomplish their self-serving goals.

       The more realistic Anglo-Saxon specie of human beings discarded the rubbish of communism, and did what they could to ameliorate man's inhumanity to man, through labor laws, without the illusion that all exploitation could be eradicated. (As we write, Western businesses are exploiting third world workers.the peons of South America pick coffee seeds from coffee plants but earn so miserable an income that they can not even afford to buy coffee.)

      We have no illusions about man: he is a criminal by nature; he violated the law of union to be in separation, and has to be closely monitored lest his lack of social conscience comes to the fore. (Imagine the rich in New York living in mansions bought with several million dollars, while some of their fellow human beings live like rats on the streets of New York.) Now do not get sentimental on us, for if you aim at redressing the situation with governmental laws, you give bureaucrats a lot of power to decide what businesses do; bureaucrats are the worst type of oppressors, they are cowardly by nature and like cowards derive a childish sense of power from implementing senseless laws.. they are generally sadists and ought not be permitted to govern society. We can tolerate the narcissism of the courageous politician, but the fear-driven bureaucrat is a miserable vermin that ought to be treated as such.

       Laws have been passed to govern business-labor relationships. These laws have not made the work place a heaven, but generally have improved working conditions.  It is doubtful that working conditions would be ideal, whatever that is. This is so because management and labor have conflicting aims.

       Management (the paid foremen of the owners of big business, if you like, the working rich, used to control the working poor) aims at making profit for their employers, the stockowners.  If management does not make profits, return reasonable dividends to shareholders, they are out of jobs. Therefore they must seek ways to cut costs, including exploiting labor and material. If they could get away with it, some would rather not pay workers any wages at all or pay them the lowest wages possible, and just use employees to make money for their bosses.

       Labor, on the other hand, would rather not work but be given the means of their daily bread.  McGregor may say whatever he wants about Theory Y, the fact is that if the average worker could help it, he would rather not get up in the morning and go slave for eight or more hours for his daily bread.  The exception here would be the person doing the work they love and are passionate about, especially if they can express themselves being creative.

       Man must work for his daily bread, so the adult person reconciles himself to the inevitability of work, but many want to work as little as they can get away with. Would it not be nice to work for only four hours during the day and during the rest of the time read poetry and soak in the sun at tropical beaches? (This is the vision of Karl Marx for workers, and only God knows who would produce what those aristocrats would be expending, slaves in third world countries? Marx was a racist and did not even think that non-Europeans were human beings. It baffles the mind why Africans and Asians call themselves Marx's followers, when clearly he had no respect for them. Indeed, he had no respect for Russians and did not expect them to lead the communist revolution; he centered his hope on Britain, his idea of a civilized land.)

       The labor, that we as managers have managed, is composed of people wanting to work as little as is possible and be paid as much as is possible. This is not an academic write up but derived from actual observation of people at work.  Because of the difference between management and labor, there must be conflict between them. It is therefore necessary to have labor laws to guide the relationship of the two.

       Given the exploitative nature of man, in general, and in particular business owners and their lackeys, management, (the writer has been in top management, chief executive officer, hence, a lackey of the owners of wealth), laborers formed labor unions to protect themselves, and this is as it should be. The abused have a right to seek ways to prevent people from abusing them.

       There are several types of labor unions, including industrial unions, craftsmen unions, professional unions and public employee unions.

       Industrial unions tend to include all workers in a particular industry, like railways; whereas craftsmen unions tend to include only those possessing certain trades, such as electricians, plumbers, bricklayers; and professional unions, such as healthcare providers.

       The function of unions is twofold: one, to lobby legislatures to pass laws that protect workers, and two, to negotiate with management to have rules specified in contracts governing the relationships between management and labor. These contracts specify working conditions, wages, conditions of hiring and firing workers, etc.

       Where labor unions exist, it is generally difficult to fire workers, as they run to their union representative to protect them. This way inefficient labor is kept. Try to sack one government lazy bum, and it would take twenty years to do so.  Clearly we need unions, but sometimes their power gets distorted out of portion.  It is also obvious that where they are too powerful, productivity takes a back seat.  Unions have evolved extensively from their original intent of fair wages for fair work, and themselves have created big businesses, with divisions and problem within their own ranks.  Balancing the need for productivity and employee benefits is an on-going struggle.

       The process of forming unions is that a group of employees desire a union, and contacts the Labor Relations Board to come and conduct an election within their work place, to see whether enough workers support unionization. If a substantial number of the employees vote for union, a union is certified for them. This certification by the labor relations board makes sure that labor is legally recognized to form a collective bargaining union, to bargain with management for their rights concerning working conditions, wages and benefits, and that management does not prevent the union from existing.

       The union elects its officers and the officers form a bargaining unit to negotiate with management, the result is a contract that both agree on. (Workers generally vote on the contract negotiated for them by their union leaders before accepting them.) The bargaining must be done in good faith. If there is a deadlock and both parties cannot agree on a contract, often they agree to seek a mediator. The mediator is given the power to conciliate the differences between the two positions and both accept his recommendation.  When that fails, they may seek a government arbitrator; the arbitrator's recommendation is usually binding and final. There is voluntary arbitration and compulsory arbitration.  Where management and labor fails, the government may step in and both parties must accept the government's arbitration recommendations.

       Collective agreements aim at providing workers employment security, to prevent arbitrary firing by requiring that certain procedures be followed before letting go of a worker, who must be represented by his union representative; setting down wages and benefit packets, hours of work (usually eight hours a day or forty hours a week, with anything above that considered overtime to be paid at rate and half), and promotion procedures. These contracts also lay down grievance procedures, ways workers go about seeking redress of whatever grievance they have against their bosses.

      When all else fails, workers can always go on strike.  Here workers walk off their jobs and picket the premises of their employer, and attempt to prevent him from hiring replacement workers (scabs).

       Employers can play their own last card, seek a legal injunction to prevent striking, or work with other employers to lobby government to prevent strikes and/or negotiate industry wide working conditions, conditions that may not be good for specific situations.



  INTERNATIONAL TRADE





 No country is able to produce everything its peoples need to sustain themselves.  And even if it were possible for a country to produce everything it needs for its survival, in the nature of economics, some other countries are able to produce certain things more efficiently and cost effectively.  The same as it is able to do certain things better than other countries.

       Given the realities of scarce resources and other economic factors, countries engage in international trade, selling goods and services to other countries and buying from them. Each country exports its goods and services to other countries, and imports other goods and services from them.

       Each country has its principal trading partners, those countries from whom it imports most of its goods and services, and to whom it sells its goods and services.  Oil producing countries like the Middle Eastern countries, for example, sell most of their oil to Western Europe and North America, and with the money they make from so doing, buy manufactured goods from them.

       In an ideal situation, each country ought to be selling those goods it produces more efficiently to others, and buying from them, those goods they produce more efficiently. This way each country does best what it is able to do best, and buys from others what they do best; the result would be efficient utilization of the world's resources. Goods and services would be sold cheaply.

       Unfortunately, there are political realities that interfere with the free flow of goods and services across borders. Politics and the pursuit of national interests dispose countries to produce goods they deem in their national interest, even if allowing other countries to do so would have been more efficient and cost effective, thereby being able to buy and have them at a lower price.  Consider iron and steel, for example. Iron is critical for most countries armament industries. In times of war, a country that cannot produce iron and steel is at a disadvantage, since its enemies would be able to out produce weapons and defeat it at war. Thus, whereas it might be cheaper to permit other countries to produce iron and steel, and sell it to them, many countries feel very vulnerable doing so. Therefore, they ignore the high cost of producing and selling iron and steel, and do so any way, so as to augment their countries strength.

       Countries restrict the flow of goods and services into them and going outside them.  They do so through laws that create barriers to international trade. For example, a country that wants to develop certain industries might discourage the importation of the goods produced by such industries, in other parts of the world.  By discouraging them from selling their goods in it, it is able to encourage its own infant industry to produce those goods and sell them without the stifling competition of perhaps better-made goods from other countries.

       Countries use high tariffs and other import and export taxes, to restrict the flow of goods and services into them.  Some of them impose strict quotas on how much of certain goods can be imported into them, others embargo the export of certain goods to some countries (usually as a means of political punishment for a regime ruling a country).

      Some countries encourage their producers to dump their goods in others .sell them at prices below production costs so as to gain market advantage in them and destroy their competitors, hence, dominate that market.

       Those countries that have a sort of monopoly over the production of certain goods, often band to form a cartel, and through it, control the production of the goods and control the forces of supply, creating a guarantee of higher prices for their goods. The oil producing and exporting countries, OPEC, for example, regularly fix the quantity of oil they produce, and that way influence the supply of oil and its price in the world market.

       Clearly, in pursuit of national advantages, countries try to interfere with the free flow of goods and services across their borders.  These interferences to trade often lead to difficulties in international politics.  Indeed they have been known to lead to war, as manufacturers in one country, who cannot sell their goods to other counties, where doing so they would make profit, encourage their nations to go to war with those countries banning the free flow of goods and services, so as to defeat them and open up their markets to their goods and services, hence, make profits. Therefore, to avert trade wars the international community formed the General Agreement on Tariffs and Trade (GATT). The World Trade Organization was recently set up to monitor compliance with GATT agreements.

       Essentially, GATT attempts to get countries to not discourage trading between them due to imposing unreasonably high tariffs (taxes on goods coming into them). WTO not only monitors tariffs but discourages countries from subsidizing their industries; subsidies that enable them to produce certain goods cheaply, hence, have lower prices in the international market place, and thereby gain an unfair advantage over their rival producers in other countries.  The organization also monitors such illegal economic activities as dumping, the protection of intellectual properties (that is, getting countries to respect copyright and patent laws, hence, not produce and sell goods and services copyrighted and/or patented by others, without paying them money).  The organization generally acts as a mechanism for dispute resolution between countries.  If country 'A' believes that country 'B' is doing something to gain unfair economic advantage in trade, it takes its case to the world trading body asking that it rule against the culprit, fine it and discourage it from doing whatever it was doing; And failing to desist from such practices, the country would risk trade embargos and other punitive actions taken by the United Nation's Security Council.

        The various regions of the world have formed their own trading organizations to encourage free flow of trade in them.  The European Union, for example, has all sorts of laws governing trading among member nations, including those that encourage free flow of goods and services among them, without tariffs and other custom duties.  In North America, the North American Free Trade Agreement (NAFTA) seeks to open the borders between Canada, USA and Mexico to trading without undue taxes at the borders. In Asia, the Asia Pacific Economic Cooperation (APEC) seeks to do the same for its members. In Africa such organizations as ECOWA seek to accomplish similar goals for its members.

       Countries, like individuals, would like to make profits from their economic activities.  They would like to sell more goods and services to others, than they buy from them, so as to have favorable balance of trades.

       A country has a favorable balance of trade when its businesses sell more goods to other countries, than they import from them. If a country imports more goods and services from others, it is sending more money to them than it is receiving from them, hence, has a disadvantage in trade.

       Balance of trade issues affect countries' rates of currencies.  A country with an unfavorable trade balance tends to find its currency trading, at lower exchange rates than others, in the international market for currency exchange. (Currency exchange is the value of each currency vis-a-vis others, how much other countries are willing to pay for it in their own currencies).

       The world's economic health largely depends on the free flow of goods and services across borders. Therefore, the various countries constituting the world trade organization seek to encourage the free flow of goods and services into them.  Some countries clearly have a disadvantage in this regard, and find themselves unable to compete with those who can produce and market goods and services more efficiently.  Thus, we have countries that are chronically poor.

       Certain organizations, like the World Bank and the International Monetary Fund (IMF) play ameliorative roles here.  The World Bank lends long-term loans to struggling countries; the IMF lends short-term loans to struggling countries to meet their obligations.

       Both the World Bank and IMF are head quartered at Washington DC, USA.  They have been accused of being the instrument for economic control of third world countries by the economic giant of our time, the USA.

       Many third world countries are owing these organizations so much money that practically all their current revenues go into paying interests on their debt, leaving them little or nothing else to finance current expenditures. Many of these countries are so poor and broke, that it is doubtful that they would be able to pay off the capital sums they borrowed.

       Many people are calling for these loans to third world countries to be forgiven, if we are to extricate them from their vicious cycle of poverty.

       The World Bank and IMF were originally formed to help prevent the capitalist economic and business cycles, the tendency for economies to go through periods of economic boom followed by periods of depression.  The idea was to make money available to countries undergoing recessions and depressions, to stimulate their economies so as to prevent world wide economic downturns.

       In 1944, delegates from forty-four countries met at a town in New Hampshire called Bretton Woods, to form both the World Bank and the IMF. Member nations were to contribute funds to these organizations, with which they were to lend to those countries experiencing economic difficulties (and wanting to engage in certain capital developments that they do not have the funds to pay for) and pay interests on their borrowings.

       The International Bank for Reconstruction and Development (IBRD) is primarily responsible for financing development projects.

       Clearly these organizations play key roles in the world of international finance and economic development. They not only stabilize the world's economy but also affect whether third world countries are able to develop or not develop.  They are thus not only economic institutions but political ones, hence, to be monitored carefully least they become instruments of control of the weaker countries by the more powerful ones.

       The other key actors in international trade are multinational corporations (MNC).  These are businesses that operate across national borders. They may have manufacturing concerns in different countries and/or sell their goods and services in different countries. IBM (International Business Machines), for example, is an American business that produces computers and other business machines. It sells these machines in practically every country in the world. Its revenues thus come from its worldwide operations. It is therefore a very powerful economic player in world business. Its annual revenue is in fact larger than the revenue of many African countries, and in the nature of things, it has clout over them.

        Multinational corporations obviously bring needed goods and services to third world countries; they also provide missing technical expertise in developing countries. General Motors selling its cars in Africa, for example, is helping to provide the means of transportation that enables that continent to develop itself.  On the other hand, some of these MNCs are so powerful that they have been accused of undermining economic development in third world countries. Those Latin American countries that got it into their heads to go socialistic have been known to be perceived as threats by American businesses, and that the latter worked with their country's Central Intelligence Agency (CIA) to remove them from office.

       America apparently believes that it has a right to engage in regime change in weak countries. Might, it believes, makes right, and such is the nature of international politics. The so-called international laws do not prevent the powerful riding roughshod over weaker countries.



  BUSINESS AND SOCIAL RESPONSIBILITY





 Clearly many multinational corporations are so powerful that they can and do exploit third world countries.  Indeed, they also exploit people in the so-called developed countries. Therefore, there is a movement afoot to make business more socially responsible, to get it to engage in proactive socially serving behaviors. This is as it should be, but we must make sure that some unproductive but power hungry bureaucrat is not allowed to define what constitutes responsible behavior, and impose his madness on the activities of businesses responsible for producing wealth for society.

       It is right that business' decisions take into consideration the consequences of its actions on society, but it is not the role of business to engage in social and political engineering; a practice that decides what is appropriate social behavior and then enforces it on society. The primary function of business is to seek out business opportunities, produce goods and services it thinks there is a market for, sell them and make profits.

       It is for the people to choose what they buy with their money, and in so doing, decide what businesses they permit to survive.  That is to say that it is the forces of the market, supply and demand, that ought to decide what businesses thrive not some government committee making decisions on which business is responsible and which is not. Given the opportunity, the little fellows in government offices would over regulate business and kill the golden goose that lays the eggs, that produces the wealth that pays for their existence.

       Nevertheless, businesses, like individuals, ought to have clarity as to what is moral and ethical behavior and seek to engage in them. Morality is accepted social behavior in society, and ethics is the behavior deemed right or wrong by individuals.  Business ethics ought to reflect what society, in general, deems right or wrong. For example, should businesses build their manufacturing plants in India where they exploit lack of child labor laws, and employ children as young as twelve in manufacturing, paying them stipends, that is barely enough to feed them? Obviously it makes economic sense to locate factories where labor is cheaper, thereby reducing production costs, and then sending the manufactured goods to markets where profits are made. Still, employing children to do work that adults ought to be doing is reprehensible.

       All children ought to be at school until at least age twenty-one (until they complete elementary, secondary, technical and/or university education) before they enter the labor market. Having said this, it would be idiotic to expect manufacturers not to take advantage of the low labor costs in developing countries, and set their factories there. They at least provide jobs for the starving masses of third world countries and also help produce persons with needed technical expertise in them.  But this practice needs to have some consideration for humanity, that is, a conscience.

        The bleeding hearted liberal must be checked least his sometimes irrational desire for utopia leads to passing laws that adversely affect businesses.  It is true that we must make sure that manufacturers do not exploit labor or pollute the environment, but insistence on purity in everything leads to closing manufacturing plants and throwing people out of work. We certainly do not need these plants contributing to global warming and acid rain that destroys forests, but at the same time, we need these plants to produce needed goods for our survival.  Modifications and changes are necessary.

        The most rational thing to do is to research, and come up with environmentally friendly ways of manufacturing goods we need for survival; in the meantime keep our older manufacturing plants, but adjust and modify them until we find their replacements. But to shut down a plant because some misguided environmentalists' demand it, is uneconomic decision. The Kyoto Protocol, for example, is a good idea but if it leads to lack of economic activities we ought to revise it and make its implementation contingent on finding replacements for our current plants.

       There are areas where business' social responsibility is not a question but a must.  Discrimination is one such area.  Traditionally, American businesses discriminated against non-Caucasian persons. Obviously this practice must stop.  The only criterion for hiring some one for a job must be: can he or she perform that job satisfactorily, not race and/or gender issues.

      It is no longer economic to practice racial discrimination. In a world with a substantial part of it composed of non-Caucasians, continuing discrimination against them will cause unaccepted consequences for Caucasians. Race war is always a possibility and its consequences would be devastating for all mankind.

       Management philosophy ought to accept the idea of treating every person equally. Failure to do so, politicians and their lackeys, bureaucrats, are always hovering in the corner, ready to pass laws that restrain business activities. Businesses must therefore voluntarily audit themselves, so as to avoid government audits of their behaviors, to make sure that they are not discriminatory and/or lacking in other ethical and moral behaviors.



  CUSTOMER CARE





 Businesses exist to produce and sell goods and/or services. Those goods and services, in a capitalist economy, the best type of economy we know of, must be bought by customers for the business to make profit, hence, stay in business. No sales, no existence for businesses.

       The customer is the god of businesses for they sustain businesses, and without them businesses would not exist.  If realistically, customers foster businesses, and businesses want to survive, it follows that they must study what customers want and then strive to meet these wants.  They should strive to maintain the loyalty of customers, who would then repeat buying their goods. Satisfied customers are more likely to recommend a business' products to others who become potential customers, hence, generate business and profitability. Losing customers therefore, is expensive to businesses.  Businesses that want to be afloat must cultivate excellent service skills to satisfy their customers.  It costs approximately seven to ten times more to attract new customers, than it costs to satisfy, service and keep existing ones.

       A business must recognize that its customers are its partners, and treat them as such with the respect they deserve. They have to get customers to trust their products as good and worthwhile, and their customer service as second to none. When customers believe that businesses look after their interests and talk to them with compassion and respect, they are likely to go to bat for them.  But treat customers as if they do not matter and you alienate them, and they take their business, their buying power to other businesses.

       Getting and keeping customers is an art in itself. It is not just the product that plays a role here, but also how customers perceive the personnel of the business.

       The loss of one customer alone may cost the business a lot of sales' revenue and affect its bottom line. Therefore, businesses must strive to keep their customers for life.  This entails always striving to study what they consider satisfactory service, at any point in time, and doing what can be done to meet their needs.

       Only customer satisfaction creates customer loyalty, which the business needs to be in business. In a capitalist business world, where many producers can enter the production market, at any point in time, and produce the goods and services a particular business is producing and perhaps do so more efficiently, hence, lower the price of the goods, the quality of customer service makes all the difference as to sales, hence, who stays in the business.

        Businesses must study what brings the customer to buy their goods and services, as well as, what turns them off. Customers are human beings and have their ideas of what they do not like in those selling the goods and services they want to buy, so listen to them. Do not assume that you know what customers do not like, go find out, ask them through interviews and opinion surveys.

       Generally, customers detest rude and indifferent sellers of the goods and services they are buying.  They do not like to be kept waiting too long before they are served.  They do not like poor quality work. They do not like shoddy products that they have to return, even if it means getting their money back. They do not like to be kept on hold when they call. They do not like dealing with service employees who do not seem to know what they are doing, they admire knowledgeable persons. They do not like employees talking to them as if they are not important, and do not like high-pressure sales personnel.

        Customers, as a general rule, want to be made welcomed by the companies they are doing business with.  They want to be greeted and smiled at; they do not want to be ignored when they are waiting to be served, they do not like employees who seem dirty and unprofessional in appearance.

       Customers are likely to become loyal to a business, when they believe that the business makes quality of service to them, its number one priority. Essentially, human beings want to feel important and special; and when they feel like they are treated as if they are nobodies, they do not like it and if they can help it, will take their business elsewhere. Interestingly, this is more so when businesses are dealing with poor customers.

       The poor already feel like they have no worth in society and detest it when they are reminded of their social insignificance by the businesses they patronize. The poor like to be treated as if they are princes. The poor are not so much impressed by the quality of the products they are buying, as the upper middle class is, but by how important they are made to feel.

       Businesses can find out how customers want to be served by conducting focus groups where customers are invited, even paid, and asked to participate in discussions on how they would like to be served, then training their employees to serve them in that manner. They can also listen to customer feelings by including feedback cards with their purchases, requesting comments on how they would were treated and how they like to be served.

       In the nature of things, most people suffer in silence.  Many customers feel it not worth their while to complain about the poor treatment they received from a business; if they can help it, they vote with their feet and their mouths.  But occasionally a few customers come forward and complain, some rather vociferously. These vocal complainers are barometers of the silent majority that do not complain, and must therefore, be listened to carefully.  Instead of being put off by their sometimes rude and accusatory statements, they should be looked at as a godsend, telling the business how the public perceives it. This becomes an opportunity to know what the problem is and address it. Responding to the customers' complaints becomes an opportunity to win their loyalty.

       The customer must be made to feel like he is understood and that his problem or displeasure is appreciated by the business, rather than be cavalierly dismissed as the voice of a disgruntled customer. Even if the specific customer is a chronic complainer, as some of them are, and complains to just about any one who would listen to them, in business or in their private lives, there is always a reason for his complaining. Perhaps no one has ever genuinely paid attention or made him feel important in his life?  If so, making him feel important and calmed down, becomes a means of training staff to respect customers, even the irritable and demanding ones who are seeking attention for their egos.

        'I don't get no respect and dignified treatment" is the typical complainer's view of those who serve him, so give him what he craves, respect and dignity, and gain his loyalty.

       Where possible, chronic complainers ought to be written to and thanked for bringing problems to the attention of management, and told how those problems are being dealt with. Written feedbacks as to how their issues are handled, makes them feel important and appreciated.

        The customer must be given the feedback that the business is doing all it can to address and resolve his problem, or else he feels discounted and rebels. Where necessary, apologize to him and atone for the staffs' sin of not treating him as the very important person he wants to be.

       After resolving a particular customer's complain, it should be processed, to see whether it could have been handled differently, better. If it was well done, it could become a model way for treating irate customers and used to train employees.

       We admire assertive persons in social life, and there is no reason why assertive customers should be treated any differently.  Even if they are aggressive, they still need to be responded to.  Aggressive and passive persons are often acting out of fear.  Fear makes some cower in dependent passivity, and makes others act out in pretentious bravados.

       Love and respect is always the opposite of fear.  Love is the cure for fear.  Love the fearful person and you reduce his fearfulness and defensiveness.

        The angry, hence, fearful customer is calmed down with a few kind words that really make him feel loved and respected. This is not manipulation, but being realistic to human nature.

       The best customer service policy is always to exceed customers' expectations.  Find out what the customer wants and exceed it, and you obtain his repeat business. Customer expectations, like everything else in life, are dynamic and always changing.  Businesses must continually seek ways to understand them and respond to them. Stay close to your customers and you would learn what they want from you, and meet and/or exceed their expectation.  An aloof business is soon not in business. Nothing irritates people more than workers that seem aloof in relating to them. Every customer wants personalized treatment and resents been treated as if he is a number, a machine.

       Do not assume that customers understand and appreciate your good intentions towards them; show them behaviorally so they can see that you value their business. Action speaks louder than words, so telling customers how well you care for them would not help you much; what matters is your actual behavior towards them.  Did you listen to them, did you do so respectfully, and did you provide the answers they were asking for? Maintain a positive attitude to customers and they sense it, present a negative attitude to customers and they also notice it and resent it.

       Good customer service is not to be left only to front line staff that deal with customers, but must be practiced by every one in the business, from the lowest employee on the totem pole to the supervisors and top management.

       Good customer service must become a philosophy that permeates the entire business and become its culture so that customers stepping into the premise of the business, or listening to its employees on the phone, feel a sense of quality service everywhere. Nothing pleases the complaining customer more than to go get the boss to listen to him and address his problem. He feels special, if the chief executive officer listens to him, indeed one of the reasons why he is complaining in the first place, is that none of the big cheese listens to him, hence, makes him feel like he is a somebody. Being talked to by the boss makes him feel that he is a somebody, so make him feel like a somebody and gain his loyalty and money. You have nothing to lose by serving him right, and everything to lose by not serving him right, his money.

       Praise but do not ever criticize the customer.  People do not like to be criticized, it makes them feel belittled which nobody likes; so listen to them and hear them out, praise them for speaking out for their interests, and promise to do your best by looking into their complaints and addressing them, if necessary, in writing, with a promise not to permit it to fester and repeat itself.  That way the complainer feels like he protected other customers and his ego is stroked.

       Apply the insights of total quality management.  TQM teaches the importance of customers and finding out what they want on an on-going basis, gearing one's services to meet them if one wants to be in business. TQM wants customers to be involved in making every aspect of the business' decisions, even top management decisions.  This does not necessarily mean having the physical presence of customers in the boardroom, but that adequate effort is made to understand their desires and to incorporate them in making decisions, regarding the business' behavior, certainly with regards to product design and service delivery.

      TQM not only recognizes customer input in decision-making, but employees input.  Essentially, every part of the business is to treat other employees as their customers, and take their input into consideration in its decisions and activities. In sum, TQM is a useful tool for good business-customer relations, employee-employee relations, gathering statistics and data to continually improve the quality of the business' products and services.

       Management is filled with fads and there is no doubt that aspects of TQM are faddish. Nevertheless, it is a win-win situation (for business and customers) if the philosophy of total quality service is adopted by every business organization.

       Much of the relationship between customers and businesses is conducted over the phone, and increasingly through the electronic media, like email and e-commerce. It is therefore critical that those who pick up the phone when customers call, be trained in good telephone manners. The voice at the business end of the phone call, may determine whether the customer buys from it or takes his busine