Professional Documents
Culture Documents
Engleza Comerciala Si de Afaceri
Engleza Comerciala Si de Afaceri
Socialising
1. The Impact of Culture on Business
Telephoning
2. Telephoning across cultures
Presentations
3. Planning and preparation
4. Image, impact and making impression
5. The presentation
6. The end of the presentation
2. Meetings
7. Preparation for meetings
8. Participating in meetings
9. Ending the meeting
3. Negotiations
10. Know what you want
11. Getting what you can
12. Not getting what you dont want
Management
13. What is management?
14. Types of managers
15. The management process
16. Management level and skills
4. Companies and organisations
17. Company structure
18. The external environment of organisations
Production and products
19. Just-in-time production
20. Products and brands
Marketing, advertising, promotion
21. The centrality of marketing
22. How companies advertise
23. The four major promotional tool
5. Market structure and competition
24. Market leaders, challengers and followers
25.Takeovers, mergers and buyouts
26. Profits and social responsibility
1.
Bibliografie
1. Socialising
Reading
The following text is about cultural diversity. Read it through once
and decide which of the three statements (A, B or C) given below the
extract offers the most accurate summary.
1. The Impact of Culture on Business
Take a look at the new breed of international managers,
educated according to the most modern management philosophies.
They all know that in the SBU, TQM should reign, with products
delivered JIT, where CFTs distribute products while subject to MBO.
(SBU = strategic business unit, TQM = total quality management, JIT
= just-in-time, CFT = customer first team, MBO = management by
objectives.)
But just how universal are these management solutions? Are
these truths about what effective management really is, truths that
can be applied anywhere, under any circumstances?
Even with experienced international companies, many wellintended universal applications of management theory have turned
out badly. For example, pay-for-performance has in many instances
been a failure on the African continent because there are particular,
though unspoken, rules about the sequence and timing of reward and
promotions. Similarly, management by objectives schemes have
generally failed within subsidiaries of multinationals in southern
Europe, because managers have not wanted to conform to the abstract
nature of preconceived policy guidelines.
Even the notion of human-resource management is difficult to
translate to other cultures, coming as it does from a typically AngloSaxon doctrine. It borrows from economics the idea that human
beings are resources like physical and monetary resources. It tends
to assume almost unlimited capacities for individual development. In
countries without these beliefs, this concept is hard to grasp and
unpopular once it is understood. International managers have it tough.
They must operate on a number of different premises at any one time.
6
These premises arise from their culture of origin, the culture in which
they are working, and the culture of the organization which employs
them.
In every culture in the world such phenomena as authority,
bureaucracy, creativity, good fellowship, verification and
accountability are experienced in different ways. That we use the
same words to describe them tends to make us unaware that our
cultural biases and our accustomed conduct may not be appropriate, or
shared.
SBU = strategic business unit = unitate comercial, economic
strategic
TQM = total quality management = managementul total al calitii
JIT = just-in-time = livrare exact la momentul potrivit
CFT = customer first team =
MBO = management by objectives = managementul pe obiective
pay-for-performance = plat pentru munca depus
human-resource management = managementul resurselor umane
at any one time = n fiecare moment
premises = premise, locaii
grasp = a pricepe, a nelege (n text)
accountability = rspundere
bias = tendin, orientare
A. There are certain popular universal truths about management
which can successfully be applied in various cultural contexts.
B. Cultures are so varied and so different throughout the world that
management has to take account of differences rather than simply
assume similarities.
C. Effective management of human resources is the key to everyone
achieving their full potential.
Language Checklist
Cultural diversity and socializing
Welcoming visitors
Welcome to
My names
7
Arriving
Hello. My names from
Ive an appointment to see
Sorry Im a little late / early.
My plane was delayed
Introducing someone
This is He/shes my Personal Assistant.
Can I introduce you to He/shes our (Project Manager).
Id like to introduce you to
Meeting someone and small talk
Pleased to meet you.
Its a pleasure.
How was your trip? Did you have a good flight / trip / journey?
How are things in (London)?
How long are you staying in (New York)?
I hope you like it.
Is your hotel comfortable/
Is this your first visit to (the Big Apple)?
Offering assistance
Can I get you anything?
Do you need anything?
Would you like a drink?
If you need to use a phone or fax, please say.
Can we do anything for you?
Do you need a hotel / a taxi / any travel information / etc.?
Asking for assistance
There is one thing I need
Could you get me
Could you book me a car / taxi / hotel / ?
Could you help me arrange a flight to?
Can you recommend a good restaurant?
Id like to book a room for tomorrow night.
Can you recommend a hotel?
Skills Checklist
Cultural diversity and socializing
Before meeting business partners and fellow professionals from other
countries, you could find out about their country:
The actual political situation
Cultural and regional differences
Religion(s)
The role of women in business and in society as a whole
Transport and telecommunications systems
The economy
The main companies
The main exports and imports
The market for the industrial sector which interests you
Competitors
You might also want to find out:
Which topics are safe for small talk
Which topics are best avoided
If you are going to visit another country, find out about:
The conversations regarding socializing
Attitudes towards foreigners
Attitudes towards gifts
The extent to which public, business and private lives are mixed
or kept separate
Conventions regarding food and drink.
You might also like to find out about:
The weather at the relevant time of the year
Public holidays
The conventions regarding working hours
Leisure interests
Tourism
Dress
Body language
Language.
9
Practice 1
Make a dialogue based on the following flow chart. If you need
help, look at the Language Checklist
Visitor
Receptionist
Introduce yourself
Say you have an appointment
with Sandra Bates.
Welcome visitor.
Explain that SB will be
along shortly.
Offer a drink / refreshments.
11
2. Telephoning
Reading
pleasantries, Nice talking to you, Say hello to the family (if you have
met them) and Looking forward to seeing you again soon. A sharp,
brief style of talking on the phone may appear unfriendly to a British
partner. Not all nationalities are as keen on small talk as the British!
Being aware of these differences can help in understanding
people with different cultural traditions. The difficulty on the
telephone is that you cannot see the body language to help you.
Choose the closest definition of the following words from the text.
1. literal
a. direct and clear b. full of literary style c. abstract and
complicated
2. understatement
a. kind words
b. less strong way of talking
c. clever
speech
3. deduce
a. reduce b. work out
c. disagree
4. vague
a. unclear b. unfriendly c. insincere
5. devious
a. rude
b. dishonest
c. clever
6. pleasantries
a. question b. request
c. polite remarks
Language Checklist
Telephoning (1)
Introducing yourself
Good morning, Aristo.
Hello, this is from
Hello, my names calling from
Saying who you want
Id like to speak to please.
Could I have the Department, please?
Is there, please?
13
You
Could I ------ ------- Mr. Pardee, please?
Switchboard Putting you ------ .
Secretary
Hello, Mr. Pardees ------ . -------- I help you?
You ------, can you hear me? Its a ------ line. Could you --- ---up, please?
Secretary
IS THAT BETTER? Whos --------, please?
You
(your name) from (your company).
Secretary
Oh, hello. How nice to hear from you again. We
havent seen you for ages. How are you?
You Fine thanks. Could you ------- me -------- to Mr. Pardee,
please?
Secretary
-------- the line a moment. Ill see if hes in. Im sorry,
Im afraid hes not in the ------- at the ------ . Could
you give me your ----------, and Ill ask him to ------you ---------- ?
You Im ----- 347 8621. Thats London.
Secretary
Would you like to leave any -------- for him?
You No thanks. Just tell him I --------- .
Secretary
Certainly. Nice to hear from you again.
You Ill expect him to ------- me this afternoon, then. Thanks.
Secretary
Youre welcome. Goodbye.
On
speak to
Secretary
Rang
back message
number
call
through
office
can
hello
hold
moment
bad
put
ring
speak speaking
through
16
This datafile gives you many of the terms and phrases commonly used
in making telephone calls.
The directory
Look up their number in the directory. (UK).
Ill look up the number in the telephone book. (US).
The number is ex-directory. (UK).
The number is unlisted. (US).
Ill ring Directory Enquiries. (UK).
Ill ring information. (US).
The receiver
Can I help you?
Putting you through.
Im afraid hes not available at the moment. (UK).
Im afraid hes tided up at the moment.
Youre welcome. Goodbye.
The line
Hes on the other line.
Would you like to hold the line?
The line is engaged. (UK).
The line is busy. (US).
The operator (in the public telephone system)
Dial 100 for the operator. (UK).
Dial 0 (zero) for the operator. (US).
Id like to make a reverse charge call. (UK).
Id like to make a collect call. (US).
Id like to make a transfer charge call. (UK).
The dial
Dial 123 for the correct time. (UK).
Listen for the dialling tone.
All lines to the country you have dialled are engaged.
Please try later. (UK).
The codebook
Im on a long distance (or international) call.
The STD code is (UK).
The area code is (US).
A message pad
Can I tell him who called?
Can I give her a message?
Let me take down your number.
17
Remember
If you do not understand, say Sorry, I didnt quite catch that.
Practice 1
Use the following flow chart to make a complete telephone
conversation. If you need to, refer to the Language Checklist.
Caller
Receptionist
Good morning, Gorliz and
Zimmerman.
Introduce yourself.
Ask to speak to Mr. Conrad Bird.
Mr. Bird is not in.
Ask when you can contact him.
Explain that he is away
offer to take a message.
You want Mr. Bird to call you.
Repeat your name.
Give your number.
Confirm the information.
End call.
End call.
Practice 2
In the following conversation, a Singaporean exporter plans to
send goods from Singapore to Greece. He wants to have a meeting
with a Greek shipping company, Intership.
Suggest suitable phrases for each step in the conversation, then
practice the dialogue with a colleague.
Caller (Computech)
Greeting.
Introduce yourself.
Check name.
Confirm / correct.
Offer to help.
Ask for appointment
with Mr. Dionis.
Ask what its about.
Explain that you want
to discuss transport of goods
from Singapore to Athens.
Acknowledge ask when
would be a good time.
Suggest next week.
Reject Mr. Dionis is away.
Suggest beginning of next
month.
Agree.
Suggest Monday 3rd.
Reject On Monday Mr.
Dionis is busy all day.
Suggest Tuesday.
Agree. Suggest 10.00 a.m.
Agree ask for fax to
confirm.
Offer to book hotel.
Agree to fax hotel booking
is not necessary.
Signal end of call.
End call / thanks / refer to
fax, etc.
End call.
Language Checklist
Telephoning (2)
Stating reason for a call
19
Im ringing to
Id like to
I need some information about
Making arrangements
Could we meet some time next month?
When would be a good time?
Would Thursday at 5 oclock suit you?
What about July 21st?
That would be fine.
No, sorry, I cant make it then.
Sorry Im too busy next week.
Changing arrangements
Weve an appointment for next month, but
Im afraid I cant come on that day.
Could we fix an alternative?
Confirming information
So
Can I check that? You said
To confirm that
Can you / can I confirm that by fax?
Ending a call
Right. I think that all.
Thanks very much for your help.
Do call if you need anything else.
I look forward to seeing you / your call / your letter / your fax / our
meeting.
Goodbye and thanks.
Bye for now.
Skills Checklist
Telephoning (2)
Voice
Speed
20
Clarity
Volume
Structure
Background information
Key information
Repetition, emphasis and confirmation
Possible confirmation by fax
Style
Formal / informal
Cold call / new contact / established contact
In-company vs. Customer / Supplier / Outside agent
Colleague / friend / business associate / public
Company image
Structure of a call
Beginning
Introduce yourself
Get who you want
Small talk
State problem / reason for call
Middle
Ask questions
Get / give information
Confirm information
End
Signal end
Thank other person
Small talk
Refer to next contact
Close call
Check that theres nothing else to say
21
Hello again, Tim Brown here again. I forgot; I have some other
customers visiting on Friday morning. How about a meeting on
Thursday sometime, if thats all right with you?
Right. Sorry to be difficult. Thanks a lot, Mr. Rossi. Bye now.
Mr. Rossi? Good morning. Im ringing for Mr. Lund of Lund and
Lund Associates. Hes very sorry, but he wont be able to manage
Wednesday afternoon. Could I suggest Friday afternoon instead?
Well, I think that should be all right. Ill give you a cal this afternoon
to confirm. Thank you. Goodbye.
Monday, 12 November
Morning
Arrive Sydney airport 8.30 a.m.
Afternoon
3 p.m. Tim Brown (agent) at hotel
Tuesday, 13 November
Morning
10 a.m. Mr. Whitley, Australian Chemical Bank
Afternoon
Wednesday, 14 November
Morning
Afternoon
2 p.m. Lund & Lund Associates (Mr. William Lund)
Thursday, 15 November
Morning
Afternoon
3 p.m.
Distribution)
Jenny
Kinsella
Friday, 16 November
Morning
11 a.m. Tim Brown
Afternoon
flight 390, Depart Sydney 6 p.m.
23
colleagues
(B.I.G.
Practice 3
Use the flow chart below as the basis for a telephone conversation
involving a complaint. Refer to the Language Checklist if you
need to.
Berraondo S.A.
Greeting.
Introduce yourself.
Offer to help.
Explain problem.
Order HF5618 for 20 printers.
Only 17 have arrived.
Express surprise.
This is second time you have
received an incomplete delivery.
Suggest possible error in
order administration.
Agree say you need the
other three printers urgently.
Delays are costing you goodwill
unhappy customers.
Explain stock problems.
Ask for a promise of delivery
date ASAP.
Promise next Monday.
Complain you want despatch now.
Express regret not possible.
Ask for fax to confirm despatch.
Agree apologize.
End call.
24
Language Checklist
Telephoning (3)
Stating reason for the call
Im calling about
Unfortunately, theres a problem with
Im ringing to complain about
Explaining the problem
There seems to be
We havent received
The doesnt work.
The quality of the work is below standard.
The specifications are not in accordance with our order.
Referring to previous problems
Its not the first time weve had this problem.
This is the (third) time this has happened.
Three months ago
We had a meeting about this and you assured us that
Threatening
If the problem is not resolved
Well have to reconsider our position.
Well have to renegotiate the contract.
Well contact other suppliers.
The consequences could be very serious.
Handling complaints and other problems
Asking for details
Could you tell me exactly what ?
Can you tell me ?
Whats the ?
25
Apologizing
Im sorry to hear that.
Im sorry about the problem / delay / mistake
Denying an accusation
No, I dont think that can be right.
Im sorry but I think youre mistaken.
Im afraid thats not quite right.
Im afraid that cant be true.
Skills Checklist
Telephoning (3)
If you receive a complaint:
Consider your companys reputation
Express surprise
Ask for details
Suggest action
Promise to investigate
Make reasonable suggestions, offers to help.
Consider your customer and:
Show polite understanding
Use active listening
Reassure customer.
If you make a complaint:
Prepare for the call
Be sure of the facts
Have documentation available
Decide what you require to resolve the problem at least partially
or completely.
Who is to blame?
Who is responsible?
Are you talking to the right person?
Was your order or your specifications correct?
26
Were you partly responsible for arrangements which went wrong, e.g.
transport?
Does responsibility actually lie elsewhere, i.e. with a third party?
If you do not get what you want:
Keep control state what you need calmly
Do you need to continue to do business with the other side?
If you do, keep a good relationship
Express disappointment not anger
Dont use threats unless you have to!
Read the text, then mark the sentences that follow as True (T)
or False (F).
3. Presentations
3. Planning and preparation
Language Checklist
Structure (1) The introduction to a presentation
Greeting
Good morning / afternoon ladies and gentlemen.
(Ladies and) Gentlemen
Subject
I plan to say a few words about
Im going to talk about
The subject of my talk is
The theme of my presentation is
Id like to give you an overview of
Structure
Ive divided my talk into (three) parts.
28
Delivery
Style
Formal / informal
Enthusiasm / confidence
Voice
Variety / speed
Pauses
Body language
Eye contact
Gesture / movement
Posture
Visual aids
Type / design / clarity
Relevance
Practice
Tape recorder
Script or notes
Room
Size / seating
Equipment (does it work?)
Sound quality
Language
Simple / clear
Spelling
Sentence length
Structure signals
30
Practice 1
Look at the following situations.
A medical congress in Tokyo with papers
on new techniques in open heart surgery.
The Purchasing and Product Manager of
a Taiwanese company interested in buying
some production equipment from your company.
An internal meeting of administrative
staff to discuss a new accounting procedure.
A staff meeting to discuss a charity event for
earthquake victims.
Imagine you have to give a brief presentation in two of the above
situations. Make brief notes on the following:
a. Will your talk be formal or informal?
b. What are the audiences expectations in terms of technical detail,
expertise, etc.?
c. What is the audiences probable level of specialist knowledge?
Are they experts or non-experts?
d. How long will your talk be: five minutes, twenty minutes, half an
hour, or longer?
e. What is your policy on questions? Will the audience interrupt or
will they ask questions afterwards? Will there be any discussion?
f. How will you help the audience to remember what you tell them?
31
Practice 2
In any presentation the beginning is crucial. Certainly some things
are essential in an introduction and others are useful. Here is a list
of what could be included in an introduction. Mark them
according to how necessary they are using the following scale:
Essential
1
Useful
3
Not necessary
5
Reading
Read the text below and find:
a. eight advantages of using visual aids
b. three warnings about using visual aids
4. Image, impact and making an impression
Dinckel and Parnham (1985) say that The great danger (in
using visual aids) is that presenters place the major emphasis on visual
aids and relegate themselves to the minor role of narrator or
technician. You are central to the presentation. The visual aid needs
you, your interpretation, your explanation, your conviction and your
justification.
32
increase / fall
To increase / fall
dramatically
markedly
significantly
slightly
Describing trends
To go up
To increase
To rise
To go down
To decrease
To fall
an increase
a rise
34
a decrease
a fall
To climb
a climb
To improve
an improvement
To recover
a recovery
To get better
an upturn
To level out
a leveling out
To stabilize
To stay the same
To reach a peak
a peak
To reach a maximum
To peak
To undulate
an undulation
To fluctuate
a fluctuation
To decline
To deteriorate
To get worse
a decline
a deterioration
a downturn
Skills Checklist
Using visual supports
Visual must be:
well prepared
well chosen
clear
Available media
Use media which suit the room and audience size.
Overhead projector (OHP)
- Transparencies / OHTs / slides (Am.E.)
Slide projector
- Slides / diapositives (Am.E.)
Video / computer graphics / flip chart / whiteboard
Use of visual aids
Combination of OHP and flip chart with pens often good.
First visual should give the title of talk.
Second show structure of talk main headings.
Keep text to minimum never just read text from visuals.
Do not use too many visuals guide is one per minute.
Use pauses give audience time to comprehend picture.
Never show a visual until you want to talk about it.
35
Second part
38
Third part
Practice 4
The information below is part of a Product Managers notes for a
presentation on an advertising mix for a new range of beauty
products, with the brand name Cheri. He is talking to a marketing
team set up to promote the new range. Use the notes to give a
presentation of about 5 minutes using listing, linking and
sequencing where necessary.
Advertising mix for Cheri beauty products
Above-the-line advertising
television commercials
newspaper advertising
magazines
youth magazines
womens magazines
Below-the-line advertising
in-store
e.g.
displays,
merchandising
free samples
on-pack
targeted
e.g.
mailing
coupons,
competitions,
joint promotions
Begin as follow:
Good morning, everyone. Id like to talk about the advertising mix
for the new Cheri range of beauty products. We are planning two
categories of advertising, above-the-line and below-the-line. Ill talk
first about
Vocabulary
Merchandising: Any direct efforts to encourage sales of a product,
increase consumer awareness, etc.
Above-the-line advertising: Mass media advertising, such as
television, radio and newspaper.
Below-the-line advertising: Forms of advertising at the point of sale or
directly on the product, such as packaging, shop displays, etc.
39
Language Checklist
Structure (2) The main body
Signaling different parts in a presentation:
Ending the introduction
So that concludes the introduction.
Thats all for the introduction.
Beginning the main body
Now lets move to the first part of my talk, which is about
So, first To begin with
Listing
There are three things to consider. First Second Third
There are two kinds of The first is The second is
We can see four advantages and two disadvantages. First, advantages.
One is Another is A third advantage is Finally
On the other hand, the two disadvantages.
First Second
Linking: Beginning a new part
Lets move to (the next part which is)
So now we come to
Now I want to describe
Sequencing
There are (seven) different stages to the process
First / then / next / after that / then (x) / after x theres y, last
There are two steps involved.
The first step is The second step is
There are four stages to project.
At the beginning, later, then, finally
Ill describe the development of the idea.
First the background, then the present situation, and then the prospects
for the future.
Skills Checklist
Structure (2) The main body
40
Organization of presentation
Logical progression of ideas and/or parts of presentation.
Clear development.
Sequential description of processes.
Chronological order of events, i.e. background -- present -- future
Topic
Main parts
Sections
Subsections
a.
b.
ii.
i.
a.
b.
ii.
iii.
C
a.
b.
c.
a.
b.
i.
ii.
Internal structure of the main body of a complex presentation
Signaling the structure
Use listing techniques.
Link different parts.
Use sequencing language.
Signaling the structure
Makes the organization of the talk clear
Helps the audience to follow
Helps you to follow the development of your talk.
6.The end of the presentation
Reading
Read the following text and identify:
a. a potential problem at the end of a presentation.
b. three ways to avoid the problem.
41
Be polite.
Check understanding if necessary by paraphrasing.
Listen very carefully.
Dont say anything youll regret later.
Ask for repetition or clarification.
Agree partially before giving own opinions: Yes, but
Keep calm.
Tell the truth (most of the time!)
Practice 5
Imagine that you have given a talk on Marketing in Japan at a
conference on business trends. What would you say in these
situations? If you need to, refer to the Language Checklist.
1. At the end of your presentation, move to comments / discussion /
questions.
2. A member of the audience suggests that you said that many small
retail outlets, small shops, had actually closed down in recent
years. In fact, you said this process has been going on for a long
time. Politely correct the other person.
3. Ask the audience for comments on why this has happened.
4. Agree with someones suggestions, but suggest other factors. One
is the increasing number of take-overs of smaller companies.
5. A member of the audience says the following: I understand
that a report showed that 700 new drinks came out in Japan in
1990 and one year later 90 % had failed. Thats a pretty amazing
figure Paraphrasing this, ask if in the USA or Europe that
could not happen.
43
44
Handling Questions
Understood but difficult or impossible to answer
Thats a difficult question to answer in a few words.
it could be
in my experience
I would say
I dont think Im the right person to answer that. Perhaps (Mr.
Holmes) can help
I dont have much experience in that field
Understood but irrelevant or impossible to answer in the time
available
Im afraid thats outside the scope of my talk / this session. If I were
you Id discuss that with
Ill have to come to that later, perhaps during the break as were short
of time.
Not understood
Sorry, Im not sure Ive understood. Could you repeat?
Are you asking if ?
Do you mean ?
I didnt catch (the last part of) your question.
If I understood you correctly, you mean ? Is that right?
Checking that your answer is sufficient
Does that answer your question?
Is that okay?
Skills Checklist
Structure (3) Ending the presentation
A summary
Restates main point(s).
Restates what the audience must understand and remember.
Contains no new information.
45
Is short.
A conclusion
States the logical consequences of what has been said.
Often contains recommendations.
May contain new and important information.
Is short.
Questions
Inviting questions implies that the audience is less expert than the
speaker.
Beware of the nightmare scenario total silence! Have one or
two prepared questions to ask the audience.
Keep control of the meeting.
Discussion
Inviting discussion gives the impression that the audience have
useful experience, so is often more diplomatic.
You still need to control the discussion.
Inviting discussion and questions
Offer the best solution.
Keep control, limit long contributions, watch the time.
Handling questions
Listen very carefully.
Ask for repetition or clarification if necessary.
Paraphrase the question to check you understand it.
Give yourself time to think perhaps by paraphrasing the
question.
Check that the question is relevant. If not, dont answer if you
dont want to.
Refer questioner to another person if you cant answer.
Suggest youll answer a question later if you prefer.
Check that the questioner is happy with your answer: eye contact
and a pause is often sufficient.
Keep control.
Dont allow one or two people to dominate.
46
Be polite.
Signal when time is running out Time for one last question.
At the end, thank the audience.
l.
m.
n.
o.
p.
q.
4. Meetings
Preparation for the meeting
Language Checklist
Chairing and leading discussion
Opening the meeting
Thank you for coming
(Its ten oclock). Lets start
Weve received apologies from
Any comments on our previous meeting?
50
51
Skills Checklist
Preparation for meetings
Chair
Decide objectives.
What type of meeting (formal or informal, short or long, regular
or a one off, internal / external information giving / discussion /
decision making)?
Is a social element required?
Prepare an agenda.
Decide time / place / participants / who must attend and who can
be notified of decisions.
Study subjects for discussion.
Anticipate different opinions.
Speak to participants.
Secretary
Obtain agenda and list of participants.
Inform participants and check:
Room, equipment, paper, materials.
Refreshments, meals, accommodation, travel.
Participants
Study subjects on agenda, work out preliminary options.
If necessary, find out team or department views.
Prepare own contribution, ideas, visual supports, etc.
The role of the Chair
Start and end on time.
Introduce objectives, agenda.
Introduce speakers.
Define time limits for contributions.
Control discussion, hear all views.
Summarise discussion at key points.
Ensure that key decisions are written down by the secretary.
Ensure that conclusions and decisions are clear and understood.
Define actions to be taken and individual responsibilities.
52
Practice 1
Suggest phrases which could be used by a chairperson in the
following situations in a meeting.
a. To welcome the participants to a meeting.
b. To state the objectives of the meeting.
c. To introduce the agenda.
d. To introduce the first speaker.
e. To prevent an interruption.
f. To thank a speaker for his/her contribution.
g. To introduce another speaker.
h. To keep discussion to the relevant issues.
i. To summarise discussion.
j. To ask if anyone has anything to add.
k. To suggest moving to the next topic on the agenda.
l. To summarise certain actions that must be done following the
meeting (for example, do research, write a report, meet again,
write a letter, etc.).
m. To close the meeting.
Practice 2
1. In groups, work out a brief agenda, with an appropriate order,
for a meeting of the marketing department of Axis Finance Ltd., a
medium-size financial services company. Your agenda should
include the points listed here:
Any other business
New products
Minutes of previous meeting
Marketing plans for next year
Date of next meeting
Review of marketing performance in the current year
Personnel changes
Chairs opening address
Apologies for absence.
53
8. Participating in meetings
Language Checklist
Discussion in meetings
Stating opinion
It seems to me
I tend to think
In my view
We think / feel / believe
Theres no alternative to
Its obvious that
Clearly / obviously
Asking for opinion
Id like to hear from
Could we hear from ?
Whats your view?
What do you think about ?
Do you have any strong views on ?
Any comments?
Interrupting
Excuse me, may I ask for clarification on this?
If I may interrupt, could you say ?
Sorry to interrupt, but
Do you think so? My impression is
What? Thats impossible. We / I think
54
Handling interruptions
Yes, go ahead.
Sorry, please let me finish
If I may finish this point
Can I come to that later?
Thats not really relevant at this stage
Can we leave that to another discussion?
Skills Checklist
Participating in meetings
Types of meeting
Decision making meeting
Information giving meeting
Spontaneous / emergency meeting
Routine meeting
Internal meeting
Customer / client / supplier - first meeting / established
relationship
Structure of decision making meetings
Study / discuss / analyse the situation
Define the problem
Set an objective
State imperatives and desirables
Generate alternatives
Establish evaluation criteria
Evaluate alternatives
Choose among alternatives
The DESC stage of meeting
D
Describe situation
E
Express feelings
S
Suggest solutions
C
Conclude with decision
Goal of decision making meetings
Objective: to get a consensus in a time-efficient and cost effective
manner
55
Importance of communication
Two-way process
Participants must be aware of others needs
Full communication and understanding is essential
Four elements in communication: awareness understanding
empathy perception
Reaching a consensus
Discussion leads to consensus
Consensus is recognised and verbalised by leader
Decisions checked and confirmed
Practice 3
Use the skeleton outline below to recreate the entire dialogue with
a partner. Choose alternative interruptions and ways of handling
interruptions.
The fall in sales is mainly due to
the recession affecting world markets.
Interrupt: ask for clarification.
Polite response.
(general fall of 5 % / most product areas
/ especially oil processing sector
/ also due to sale of Anglo, UK subsidiary)
Interrupt: ask why Anglo was sold.
Reject interruption:
No time / discussed before.
Try to move on to future prospects.
(the outlook is just good now)
Interrupt: disagree.
Respond: you disagree.
Forecast are much better.
Interrupt: you want to talk about
new markets.
56
Reading
Practice 4
You are at an internal meeting to discuss increases in the price of
your products. With a partner, use these prompts to make a
dialogue. Try to use new language from this unit.
Participant A
Participant B
61
Practice 5
In pairs use the outline below to create a chairs closing remarks
for a meeting. To make this more realistic, add names and other
details as required. Practice your closing remarks together.
Indicate that the meeting is almost over.
Check that no one has anything else to say.
Restate the purpose of the meeting.
Introduce a summary of the decisions taken.
Ask if everyone is happy with your summary.
Indicate that a colleague will organise a presentation next week.
Fix a date for a new meeting.
Thank people for coming.
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5. Negotiations
10. Know what you want
Language Checklist
Negotiations (1)
Making an opening statement
Welcoming
Welcome to
Im sure we will have a useful and productive meeting
First meeting
We see this as a preparatory meeting
We would like to reach agreement on
One of a series of meetings
Following previous meetings we have agreed on some important
issues. Today we have to think about
We have reached an important stage
Stating your aims and objectives
Id like to begin with a few words about our general expectations
May I outline our principle aims and objectives today
We want to clarify our positions
We have a formal agenda
We dont have a formal agenda, but we hope to reach agreement on
There are three specific areas we would like to discuss. These are
We have to decide
Stating shared aims and objectives
Together we want to develop a good relationship
We agree that
It is important for both of us that we agree on
Handing over
Id like to finish there and give you the opportunity to reply to this.
Id like to hand over to my colleague , who has something to say
about
63
Skills Checklist
Negotiations (1)
Planning and preparation
Type of negotiation
Towards agreement
Both teams try to suit joint interests
Independent advantage
Each team aims to get best deal
Conflict
A team aims to win and make the other team lose
Purpose of negotiation
Exploratory (possible areas of interest)
Conciliatory (resolving differences)
Targets
Scale (e.g. 1-10)
Decide realistic maximum and minimum acceptable scores
Facts and figures
Prepare statistical data
Know facts
Prepare visuals
Strengths and weaknesses
List your bargaining strengths
Know your possible weaknesses
Calculate your bargaining position
Possible concessions
Plan your bargaining strategy
List essential conditions
Impossible to concede
List possible concessions
64
Opening statements
State general objectives
State priorities
State independent (not joint) objectives
Be brief
Practice 1
1. Suggest phrases for each of the following at the start of a
negotiation.
Welcome the other side.
Develop small talk (trip, weather).
Mention plans for lunch make your visitors feel welcome (see
city centre / local restaurant).
Suggest you start talking about the main subject of your meeting.
Introduce a colleague.
Explain general aim or purpose of the meeting. (preliminary /
exploratory)
Say what your side wants from the meeting. (Establish beginnings
of a partnership / learn about supply systems / price variations and
supply costs.)
2. Try to bring all the phrases above together in a single opening
statement.
Types of negotiation:
If there are big differences between the two parties, you have a
choice of these options: to accept, to reject, or to carry on negotiating.
If you decide to carry on, then the options in the next round are:
To make a new offer
To seek a new offer from the other party
67
To change the shape of the deal (vary the quantity or the quality,
or bring in third parties)
Begin bargaining.
Without
Making concessions
It you could we could consider
So long as we could agree to
On condition that we agree on then we could
Lets think about the issue of
We could offer you
Would you be interested in ?
Could we tie this agreement to ?
Accepting
We agree.
That seems acceptable.
Thats probably all right.
Confirming
Can we run through what weve agreed?
Id like to check what weve said / confirm
I think this is a good moment to repeat what weve agreed so far.
Summarising
Id like to run through the main points that weve talked about.
So. Ill summarise the important points of our offer.
Can we summarise the proposal in a few words?
Looking ahead
So, the next step is
We need to meet again soon.
In our next meeting we need to
So, can we ask you to ?
Before the next meeting well
We need to draw up a formal contract.
Skills Checklist
Negotiations (2) Bargaining in negotiations
Concessions rules
A key principle in negotiation is to give a little and get a little at the
same time.
69
b.
c.
d.
e.
f.
g.
Practice 4
You and a partner are representatives of Beck Instruments and
Ojanpera Inc., a machine tool maker. Ojanpera is in discussion with
Beck Instruments to buy a machine, the BI 25. Use the flow chart
below to negotiate some aspects of an agreement for the sale of the
BI 25.
Ojanpera
Offer to buy the machine if BI
can give a good price.
Beck Instruments
Say that your prices are very
competitive.
e.
f.
g.
h.
a.
b.
c.
d.
e.
Practice 7
Below are four offers or request. Reject each one, using the
information in the prompts.
Situation 1
Let me make a suggestion. If you agree to buy 100 units every month
for the next twelve months, well agree a 10 % discount.
You dont know how many units you will need in six and twelve
months. It might be more or less.
Situation 2
76
The price we are offering excludes installation costs but does include
a twelve months guarantee.
Other suppliers offer free installation and a two year parts and labour
warranty.
Situation 3
I think the absolute minimum investment in advertising must be
$40,000, otherwise we cannot reach enough of our market. Its not
much to ask for.
You cannot spend more than your budget.
Situation 4
Now, some excellent news: wed like to increase our order. Right now
you are sending us 350 boxes a month. We need at least 500, demand
is very high
Your order books are full, the plant is working at capacity.
Practice 8
Suggest what you could say in the following situations.
Situation 1
After a long negotiation, you have reached agreement and now plan a
meal in a local restaurant with the other party in the negotiation.
Situation 2
Your efforts to reach agreement have been unsuccessful. It is late. End
the negotiation but offer some hope that in the future you might
manage some cooperation with the other side.
Situation 3
A colleague has asked you to cooperate on a project, but after long
discussion you feel you cannot participate because of fundamental
disagreement. It is important that you continue to work together in the
other areas.
Situation 4
You want to repeat an order with a supplier but they are trying to
increase prices by 20 %. You cannot agree to this. End your
discussion.
77
Situation 5
A customer is asking you to supply goods in a month. This is
physically impossible. End the discussion.
Language Checklist
Negotiations (3)
Dealing with conflict
I think we should look at the points we agree on
We should focus on the positive aspects
We should look at the benefits for both sides
It is in your interests to resolve the issue
What do you think is a fair way to resolve this problem?
We hope you can see our point of view
Let us explain our position
Could you tell us why you feel like that?
I think we should look at the whole package, not so much at individual
areas of difficulty.
Perhaps we could adjourn for a little while.
I think we need to consider some fresh ideas
Rejecting
Im afraid we cant
Before agreeing to that we would need
Unfortunately
I dont think it would be sensible for us to
I think if you consider our position, youll see that
Ending negotiations
So, can we summarise the progress weve made?
Can we go through the points weve agreed?
Perhaps if I can check the main points
So, the next step is
What we need to do now is
Its been a very useful and productive meeting.
We look forward to a successful partnership.
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Do
ask questions
listen
summarise
build on common ground
explain your feelings
Types of negotiators
Hard
Negotiates to win
Makes demands
Principled
Looks for common benefits
Makes offers
Soft
Looks for agreement
Accepts whats on offer
Fighter
Win-lose
Independent advantage
win-win
Rejecting
79
Creative negotiator
looks for agreement
Negotiating Conditions
Conditions
Unit price
Minimum quantity
Credit period
Delivery date
Bulk discount
Penalty clause
Cancellation clause
Examples
$8.50 per unit
at least 10,000 units
30 days after invoice
20 June 2003
-2 % if over 10,000 units
5 % for each month of delay
50 % charge if cancelled less
than six weeks beforehand
sole rights over all East Coast
states
3 % of turnover on licensed
goods
5 % on sales in the territory
-2 % if paid within 20 days
first option for 12 months
after contract
Exclusivity
Royalty on sales under licence
Commission
Early settlement discount
Option period
80
Method of payment
Warranty period
DATAFILE: Negotiation
Below are the stages of negotiation and some expressions which you
may find useful at each stage:
Conversation (1)
Im sure/confident we can reach agreement. (optimistic)
Im sure theres room for negotiation.
We have a lot to discuss.
Lets see how we get on. (cautious)
Presenting your position (2)
This is our position.
This is how we see it.
We think the following is reasonable/appropriate.
Our approach is this.
Questioning the others position (3)
How do you/ explain your attitude?
/ justify ? Account for? Arrive at?
Why do you want?
Why such a / high charge?
/ long delivery period?
/ low discount?
Refusing to accept (4)
Im sorry, I cant accept 2 %.
Youll have to do better than that, Im afraid.
Im afraid its not enough.
Other firms offer more than 2 %.
Refusing to move (5)
Im afraid I cant agree to / that.
/ increase the rate.
/ lower the price.
/ shorten delivery.
81
said that you couldnt take it any later, but couldnt your engineers
find a way to re-schedule just a little, say another week?
You (5: refuse)
Supplier Well, you really are asking us for something that is very
difficult. Ive already offered you seven weeks. Ill have to consult
with my colleagues and come back to you, but I cant see what we can
do.
You (6: if deliver in 6 weeks perhaps talk about further order)
Supplier Well, on that basis I suppose we might be able to look at
some kind of arrangement. In fact, if you can promise another order I
think we could accept your terms.
You (7: 6 weeks delivery; 4 weeks installation; decision on next
order by 26th of this month)
Supplier Exactly. If you could confirm this in writing I
Exercise 2 Ten rules for negotiating
Dr Ed Zap is holding a two-day seminar on negotiating techniques. At
the end of the first morning he gives the group his ten rules for
negotiating. Here they are.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Read Dr Zaps rules and then look at the remarks in list A. These
remarks are not good for negotiating. Instead, use phrases from list B.
which one would you use in each case?
A.
a. You see? I knew Id win!
B.
83
1. If you increase the order, then we may be able to reduce the price.
b. I know what you want to discuss, so lets start.
2. Very well, but if you cant give discounts Im sure you can
extend
c. I can reduce the price. Does that help?
3. If you cant accept this, I may have to reconsider my position.
d. Delivery? Thats no problem; no extra charge.
4. I think we can agree on these terms.
f. Its against your policy to give discounts? OK.
5. Im afraid that will not be possible.
g. What a ridiculous idea! Dont be stupid!
6. May we go through the points to be discussed before we begin?
h. Another half per cent? Yes, thats very generous offer youre
making.
7. Half per cent is very small amount
i. This is my final offer. If you refuse, Ill cancel everything.
8. Delivery? Well it may be possible but only if
Exercise 3 When things get difficult
In their negotiation exercises the managers on Dr Zaps seminar
sometimes find themselves in difficult situations. As they are all from
English-speaking countries they know what to say.
Could you give me a moment to do some calculations?
Certainly! Would you excuse me a minute?
Would you like me to go through that again?
Im sorry, could you go through that again?
I dont think were talking about the same thing.
Thats right! Were talking at cross-purposes.
Can we say its agreed, here and now?
Ill have to come back to you on this.
Where does the January figure come from?
Im just looking. Could you bear with me a moment?
So what is the basis of calculation?
Im sorry, I dont have the figures to hand.
84
Understanding contracts
clause
draw up
condition
binding
Section
party
provide for
compromise
comply with/abide by
Litigation
out of court
breach
court
term
void
agreement
arbitration
valid
--------- without going to --------- , and the dispute is settled ------------- ---------- .
d. Some contracts are for a fixed period, or --------- ; also, there are
ways in which the parties can end, or ---------, the contract.
Exercise 5 Licensing terms
You have asked a US firm if you could make one of its products under
licence, in your own country. Here is part of their answer. But what do
the legal terms really mean? Replace the underlined terms with the
phrases listed below.
Weve checked with our legal department. Yes, we are the patent
holders for the XT7. We are prepared, in fact, to grant you a licence
to make it in your own territory on these conditions: there would be a
fee on agreement and then a royalty of 5 % with a minimum annual
royalty of $50,000. The term would be four years, with the possibility
of renewal on expiry. And, of course, in the event of any infringement,
as our licensee you would have to apply for an injunction on the
infringers production.
Let you have
yearly bottom limit
illegal copying
Official manufacturer
have the legal rights over
copiers
Further years
period
country
Ask for a ban
when it ended
permission
An immediate payment
5 % to pay
6. Management
13. What is management?
Discussion
86
who are responsible for performing individual jobs form teams. They
make decisions about pay and promotion. As well as organizing and
supervising the work of their subordinates, they have to work with
people in other areas and functions.
Fourthly, managers have to measure the performance of
their staff, to see whether the objectives set for the organization as a
whole and for each individual member of it are being achieved.
Lastly, managers develop people both their subordinates and
themselves.
Obviously, objectives occasionally have to be modified or
changed. It is generally the job of a companys top managers to
consider the needs of the future, and to take responsibility for
innovation, without which any organization can only expect a limited
life. Top managers also have to manage a businesss relations with
customers, suppliers, distributors, bankers, investors, neighbouring
communities, public authorities, and so on, as well as deal with any
major crises which arise. Top managers are appointed and supervised
and advised (and dismissed) by a companys board of directors.
Although the tasks of a manager can be analyzed and
classified in this fashion, management is not entirely scientific. It is
human skill. Business professors obviously believe that intuition and
instinct are not enough; there are management skills that have to be
learnt. Drucker, for example, wrote over 20 years ago that Altogether
this entire book is based on the proposition that the days of the
intuitive manager are numbered, meaning that they were coming to
an end. But some people are clearly good at management, and others
are not. Some people will be unable to put management techniques
into practice. Others will have lots of technique, but few good ideas.
Outstanding managers are rather rare.
Vocabulary
a. Complete the following sentences with these words.
Achieved
Resources
board of directors
communicate
manageable
performance
setting
supervise
88
innovations
Kats, a teacher and business executive, has identified three basic kinds
of skills: technical, human, and conceptual. Every manager needs all
three. Technical skill is the ability to use the procedures, techniques,
and knowledge of a specialized field. Surgeons, engineers, musicians,
and accountants all have technical skills in their respective fields.
Human skill is the ability to work with, understand, and motivate other
people, as individuals or in groups. Conceptual skill is the ability to
coordinate and integrate all of an organizations interests and
activities. It involves the managers ability to see the organization as a
whole, to understand how its parts depend on one another, and to
anticipate how a change in any of its parts will affect the whole.
Kats suggests that although all three of these skills are
essential to a manager, their relative importance depends mainly on
the managers rank in the organization. Technical skill is most
important in the lower levels. Human skill, by contrast, is important
for managers at every level: because they must get their work done
primarily through others, their ability to tap (a capta, a aborda) the
technical skills of their subordinates is more important than their own
technical skills. Finally, the importance of conceptual skill increases
as one rises through the ranks of a management system based on
hierarchical principles of authority and responsibility. It depends
mainly on the managers rank in the organization.
4 hierarchy
5 line authority
6 report to
7 subordinates
Reading
Read the text below, about different ways of organizing
companies, and then label the diagrams, according to which of
these they illustrate:
Line structure / functional structure / matrix structure / staff
structure
A.
C..
B..
D..
97
Board of Directors
with a Chairman (GB)
or President (US)
Managing Director (GB)
or
Chief Executive Officer (US)
Production
Marketing
Market
Sales
Research
Northern
Region
Finance
Advertising
Promotions
Research &
Development
Personnel
Financial
Management
Accounting
Southern
Region
99
component
inventory
lead time
plant
subcontractor outsourcing or contracting out
Read the text below, and insert the eight words defined in
vocabulary a) in the spaces.
Capacity
Location
component
outsourcing
inventory
plants
lead time
subcontractor
2 to launch a product
3 market opportunities
4 market research
5 market segmentation
6 packaging
7 points of sale
8 product concept
105
9 product features
10 sales representative
Comprehension
107
Focus
Means
Ends
Products
Vocabulary
Find the terms in the text which mean the following.
1 free advertising, when satisfied customers recommend products to
their friends.
2 advertising that mentions a companys name but not specific
products
3 companies that handle advertising for clients
4 a contract with a company to produce its advertising
5 the amount of money a company plans to spend in developing its
advertising and buying media time or space
6 the statement of objectives of an advertising campaign that a client
works out with an advertising agency
7 the advertising of a particular product or service during a particular
period of time
8 a defined set of customers whose needs a company plans to satisfy
9 the people who choose where to advertise, in order to reach the right
customers
10 the fact that a certain amount of advertising is necessary to attract a
prospective customers attention
11 choosing to spend the same amount on advertising as ones
competitors
12 advertising during periods or seasons when sales are normally
relatively poor
Discussion
Which of the following claims do you agree with?
1. Advertising is essential for business, especially for launching new
consumer products.
2. A large reduction of advertising would decrease sales.
3. Advertising often persuades people to buy things they dont need.
4. Advertising often persuades people to buy things they dont want.
5. Advertising lowers the publics taste.
6. Advertising raises prices.
110
85%
90%
aimed awareness
channel
loyalty
medium
tactics
target
trial
115
Reading
Leveraged buyouts
One indication that the people who warn against takeovers
might be right is the existence of leveraged buyouts.
In the 1960s, a big wave of takeovers in the US created
conglomerates collections of unrelated businesses combined into a
single corporate structure. It later became clear that many of these
conglomerates consisted of too many companies and not enough
synergy. After the recession of the early 1980s, there were many large
companies on the US stock market with good earnings but low stock
prices. Their assets were worth more than the companies market
value.
Such conglomerates were clearly not maximizing stockholder
value. The individual companies might have been more efficient if
liberated from central management. Consequently, raiders (persoan
agresiv, acaparatoare) were able to borrow money, buy badly116
firm which is managed for the benefit of all its stakeholders, will not,
for example, pollute the area around its factories, or close down a
factory employing several hundred people in a small town with no
other significant employers, and relocate production elsewhere in
order to make small financial savings. Proponents of the stakeholder
approach suggest that suppliers, customers, employees, and members
of the local community should be strongly represented on a
companys board of directors.
Vocabulary
Find words or expressions in the text which mean the following.
1 institutions or organizations that provide help for people in need
2 acceptability, according to law or public opinion
3 the situation when there are a large number of sellers and buyers,
freedom to enter and leave markets, a complete flow of information,
and so on
4 a condition of general well-being (and government spending
designed to achieve this)
5 menacing, endangering
6 liveliness, health, energy, strength
7 an economic system in which anyone can attempt to raise capital,
form a business, and offer goods or services
8 complying with or following (rules, etc.)
9 expressed, given a material form
10 supporters, people who argue in favour of something
services. This is a wide definition and, over the centuries, money has
appeared in all shapes and sizes; cowrie shells in ancient China, huge
stone discs on a South Pacific Island or beads (Wampum) for the
North American Indians.
Jingle = a zorni
Rustle = a foni
Clink = a zngni
Piggy-bank = puculi
Cowrie = scoic, ghioc
Beads = mrgele, mtnii
Wampum = colier de scoici
From Chickens to Plastic
At the end of the day, of course, it doesnt really matter what
shape or size the money takes, as long as everyone recognises it and
accepts it in payment. But, over the course of history, money has
predominantly been associated with metals, in particular gold, silver
and copper.
Bartering (troc)
Before metal money become the usual means of exchange,
people would swap (schimba) goods and services in a process known
as bartering Ill swap you ten chickens for your goat. This kind of
exchange does not really encourage trade, as all sorts of problems
arise; are all the chickens of the same size? If Ive only got five
chickens, can I buy half a cow? Obviously, precious metals are a
practical alternative to payment in kind (n natur).
Four Essential Qualities
For money to be practical and efficient it should possess these
qualities:
Durability in prison, cigarettes may become a medium of exchange
but theyre easy to break and quickly dry up; in other words, they
dont last.
121
123
124
3. Liabilities
C all the money that a company will have to pay to someone else in
the future, including taxes, debt, and interest and mortgage payments
4. Turnover
D the amount of business done by a company over a year
5. Creditors (GB) accounts payable (US)
E anything owned by a business (cash investments, buildings,
machines, and so on) that can be used to produce goods or pay
liabilities
6. Debtors (GB) accounts receivable (US)
F the reduction in value of a fixed asset during the years it is in use
(charged against profits)
7. Overheads (GB) overhead (US)
G sums of money owed by customers for goods or services purchased
on credit
8. Revenue or earnings or income
H sums of money owed to suppliers for purchases made on credit
9. Shareholders (GB) stockholders (US)
I (the value of) raw materials, work in progress, and finished products
stored ready for sale
10. Stock (GB) inventory (US)
J the various expenses of operating a business that cannot be charged
to any one product, process or department
Reading
Insert the words in vocabulary b) in the gaps in the text below.
Accounting and financial statements
In accounting it is always assumed that a business is a going
concern, i.e. that it will continue indefinitely into the future, which
means that the current market value of its assets is irrelevant, as they
are not for sale. Consequently, the most common accounting system is
historical cost accounting, which records (1) at their
original purchase price, minus accumulated depreciation charges. In
times of inflation, this understates the value of appreciating assets
such as land, but overstates profits as it does not record the
129
[1 .]
(income from football and related
21,471,680
131
1993
15,341,689
(14,951,737)
(12,804,538)
6,519,943
2,537,151
(889,588)
(54,259)
5,630,355
2,482,892
Taxation
(1,596,226)
(750,000)
4,034,129
1,732,892
28,478,922
1993
18,982,931
Current Assets
Stocks; (including [6 .],
Instalments on executive boxes);
and [7 .]
9,607,592
7,991,088
Creditors
Amounts falling due within one
year (including [8 .]
and social security)
(9,863,457)
(8,755,491)
Fixed Assets
(including [4 .],
leasehold properties, plant and
equipment, and motor vehicles;
all recorded at [5 ]
minus depreciation)
132
28,223,057
18,218,528
(17,893,500) (11,923,100)
[9 ..]
10,329,557
56,000
237,201
846,000
9,190,356
56,000
237,201
846,000
5,156,227
10,329,557
6,295,428
Shareholders Funds
6,295,428
135
Comprehension
Are the following statements True or False?
1 Gold convertibility was abandoned because there was too much
gold.
2 It is now impossible to exchange dollars for gold.
3 Only a pegged currency can be devalued or revalued.
4 A floating currency can either appreciate or be devalued.
5 Central banks sometimes attempt to decrease the value of their
currency.
6 The EMS was designed to stabilize exchange rates.
7 To speculate is to take risks; to hedge is to try to avoid risks.
8 Under the system of floating exchange rates, currencies can
depreciate 100% in a short time.
Vocabulary
Abolish
Establish
adjust appreciate
fluctuate
peg
convert
suspend
diverge
revalue
cash dispenser
credit card
home
banking
Loan mortgage
overdraft
standing order
Current account (GB) or checking account (US)
Deposit account (GB) or time or notice account (US)
1 an arrangement by which a customer can withdraw more from a
bank account than has been deposited in it, up to an agreed limit;
interest on the debt is calculated daily
2 a card which guarantees payment for goods and services purchased
by the cardholder, who pays back the bank or finance company at a
later date
3 a computerized machine that allows bank customers to withdraw
money, check their balance, and so on
4 a fixed sum of money on which interest is paid, lent for a fixed
period, and usually for a specific purpose
137
..
Commercial or retail banks are businesses that trade in
money. They receive and hold deposits, pay money according to
customers instructions, lend money, offer investment advice,
exchange foreign currencies, and so on. They make a profit from the
difference (known as a spread or a margin) between the interest rates
they pay to lenders or depositors and those they charge to borrowers.
Banks also create credit, because the money they lend, from their
deposits, is generally spent (either on goods or services, or to settle
debts), and in this way transferred to another bank account often by
way of a bank transfer or a cheque (check) rather than the use of notes
or coins from where it can be lent to another borrower, and so on.
When lending money, bankers have to find a balance between yield
and risk, and between liquidity and different maturities.
5
Merchant bank in Britain raise funds for industry on the
various financial markets, finance international trade, issue and
underwrite securities, deal with takeovers and mergers, and issue
government bonds. They also generally offer stockbroking and
portfolio management services to rich corporate and individual clients.
Investment banks in the USA are similar, but they can only act as
138
advice
bonds
business
currencies
deposits
funds
interest
loans
profits
140
Underwrite
security issues
General Information:
When do/are you open?
How late do you stay open?
When do you close?
What are your opening hours?
In the US: Does this bank have an ATM (Automatic Teller Machine
bancomat)
In the UK: Do you have a cash point/dispenser?
The ATM ate/kept my card.
The cash dispenser wont give me my card back.
If you want to use bank services you may have to queue (UK) or stand
in line (US) and wait for the next available teller (US) or clerk (UK):
When their desk is free, a light will come on:
Next, please.
Please step down (US).
Im open over/down here.
Queue / stand in line = a sta la coad
Teller / clerk = funcionar la ghieu
You can then tell him or her what you want:
I want/need/would like to cash a check.
Id like to cash these travelers checks, please.
Can you change a ten-pound note, please?
Id like ten dollars worth of quarters, please.
I need a roll of quarters.
If you have an account there:
Id like to make a deposit.
Id like to withdraw some money from my account.
Id like to make a withdrawal.
If you want to withdraw some money from abroad:
Id like to transfer some money from an overseas bank account.
Before the clerk gives you any money, she/he will ask:
How would you like that?
Any preference?
Large or small bills (US) notes (UK)?
142
Your reply:
It doesnt matter (which denomination)
All twenties, please.
Just tens and twenties, please.
Five, tens and three fives, please.
No small bills/notes, please.
If you want to transfer some money, the clerk will say:
Are you a customer here?
First of all, I need some ID, please.
May I see some identification?
Do you have a bank card with you?
Id like the name and address of your bank, your account number and
your sorting code, please.
Please fill in this form.
Im afraid youll have to go to the enquiries desk (biroul de
informaii).
Or, if youre cashing a check:
Could you endorse this (sign it on the back), please.
Perhaps youre withdrawing money with a credit card:
Enter your PIN number, please (PIN: Personal Identification Number).
If you have foreign currency:
Do you handle foreign exchange here?
Is there a foreign exchange desk?
Id like to change/buy some foreign currency.
Whats the current exchange rate, please?
How many marks to the dollar, please?
And the reply:
The exchange rate is 1,5 marks to the dollar.
Im afraid the rate has gone up today.
You might want to know:
Do I have to pay bank charges (comision) on top of that?
Is that inclusive of commission?
143
Definition
A cheque is signed by the payer and payable to the payee or to his
order. A draft (or bill of exchange) is drawn by the creditor on the
debtor and payable to the drawer or to a third party after acceptance
by the drawee.
Un cec este semnat de pltitor i se pltete beneficiarului sau la
ordinul su. O trat este tras de creditor asupra debitorului i se
pltete trgtorului sau unei tere pri dup acceptare de ctre tras.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
Added-value tax
sales tax
value-added tax
6. Profits made by selling assets are generally liable to a
Capital gains tax
capital transfer tax
wealth tax
7. Gifts and inheritances over a certain value are often liable to a
Capital gains tax
capital transfer tax
wealth tax
8. The annual tax imposed on peoples fortunes (in some countries)
is a/an
Added-value tax
capital gains tax
wealth tax
9. Making false declarations to the tax authorities is called
Fiscal policy
tax avoidance
tax evasion
10. Reducing the amount of tax you pay to a legal minimum is called
Creative accounting
tax avoidance
tax evasion
Income tax impozit pe venit
Wealth tax impozit pe avere
Direct tax impozit direct
Indirect tax impozit indirect
Progressive tax impozit progresiv
Regressive tax impozit regresiv
Value-added tax TVA
Sales tax impozit pe vnzri
Capital gains tax impozit pe plusul de capital
Capital transfer tax impozit pe transferul de capital
Fiscal policy politic fiscal
Tax avoidance evitare fiscal
Tax evasion evaziune fiscal
Tax tax, impozit
Taxation impozit, impozitare
Tax shelter protecie fiscal
Tax haven paradis fiscal
Tax-deductible deductibil fiscal
Excise duties accize, impozit de fabricare
Reading
Comprehension
According to the text, are the following statements True or False?
1 Taxes can be designed both to discourage and to encourage
spending.
2 The same amount of money can be taxed more than once.
3 Progressive taxes may discourage people from working extra hours.
4 Sales taxes are unfair because poor people spend more than the rich
do.
5 The Italian government knows that about one seventh of national
income escapes taxation.
1. Loopholes are a common form of tax evasion.
153
Vocabulary
Find words in the text that mean the following.
1 reducing the value of a fixed asset, by charging it against profits
2 something which discourages an action
3 an adjective describing a tax that is proportionally higher for people
with less money
4 spending money to buy things, rather than saving it
5 working for yourself, being your own boss
3. a tax on incomes that pays for sickness benefit, unemployment
benefit, and old-age pensions
4. non-financial benefits or advantages of a job
8 a way to delay the payment of tax to a later time
9 an adjective describing expenditure that can be taken away from
taxable income or profits
10 a country offering very low tax rates to foreign businesses
Alternative terminology
156
36. Bonds
Companies finance most of their activities by way of
internally generated cash flows. If they need more money they can
either sell shares or borrow, usually by issuing bonds. More and more
companies now issue their own bonds rather than borrow from banks,
because this is often cheaper: the market may be a better judge of the
firms creditworthiness than a bank, i.e. it may lend money at a lower
interest rate. This is evidently not a good thing for the banks, which
now have to lend large amounts of money to borrowers that are much
less secure than blue chip companies.
Bond-issuing companies are rated by private rating companies
such as Moodys and Standard & Poors, and given an investment
grade according to their financial situation and performance, Aaa
being the best, and C the worst, i.e. nearly bankrupt. Obviously, the
higher the rating, the lower the interest rate at which a company can
borrow.
Most bonds are bearer certificates, so after being issued (on
the primary market), they can be traded on the secondary bond market
until they mature. Bonds are therefore liquid, although of course their
price on the secondary market fluctuates according to the changes in
interest rates. Consequently, the majority of bonds on the secondary
market are traded either above or below par. A bonds yield at any
particular time is thus its coupon (the amount of interest it pays)
expressed as a percentage of its price on the secondary market.
For companies, the advantage of debt financing over equity
financing is that bond interest is tax deductible. In other words, a
company deducts its interest payments from its profits before paying
tax, whereas dividends are paid out of already-taxed profits. Apart
from this tax shield, it is generally considered to be a sign of good
health and anticipated higher future profits if a company borrows. On
the other hand, increasing debt increases financial risk: bond interest
has to be paid, even in a year without any profits from which to deduct
it, and the principal has to be repaid when the debt matures, whereas
companies are not obliged to pay dividends or repay share capital.
Thus companies have a debt-equity ratio that is determined by
158
10 capital gains
Vocabulary
Match up the expressions on the left with the definitions on the
right.
1 equity financing
160
Reading
Select ten or eleven of the following words that you would expect
to find in an introductory text about futures and options.
Assets beer
bush call
commodities contracts
Copper currencies
discount store foodstuffs
hedge
Liabilities
plastic
phone
raw
materials
shout
Spot market
supermarket tea
Now read the text, and see if you find the words you selected.
Futures
Every weekday, enormous amounts of commodities,
currencies and financial securities are traded for immediate delivery at
their current price on spot markets. Yet there are also futures markets
on which contracts can be made to buy and sell commodities,
currencies, and various financial assets, at a future date (e.g. three, six
or nine months adead), but with the price fixed at the time of the deal.
Standardized deals for fixed quantities and time periods (e.g. 25 tons
of copper to be delivered next June 30) are called futures; individual,
non-standard, over-thecounter deals between two parties (e.g. 1.7
161
100: if the market price remains above 100, no one will exercise the
option, so you earn the premium.
On the contrary, if you expect the value of a share that you
own to fall below its current price of 100, you can buy a put option at
100 (or higher): if the price falls, you can still sell your shares at this
price. Alternatively, you could write a call option giving someone else
the right to buy the share at 100: if the market price of the underlying
security remains below the options exercise price or strike price, noone will take up the option, and you earn the premium.
Swaps
Options are merely one type of derivative instrument, based
on another underlying price. Many companies nowadays also arrange
currency swaps and interest rate swaps with other companies or
financial institutions. For example, a French company that can borrow
francs at a preferential rate, but which also needs yen, can arrange a
swap with a Japanese company in the opposite position. Such
currency swaps, designed to achieve interest rate savings, are of
course open to the risk of exchange rate fluctuations. A company with
a lot of fixed interest debt might choose to exchange some of it for
another companys floating rate loans. Whether they save or lose
money will depend on the movement of interest rates.
Call option opiune de achiziie
Put option opiune de vnzare
Exercise price / strike price pre de exerciiu
Swap schimb
Summarizing
Complete the following sentences
1 The difference between futures and forward contracts is .
2 Producers and buyers often choose to hedge because .
3 Speculators can make money on currency futures if
4 If you believe that a share price will rise, possible option strategies
include
5 On the contrary, if you think a share price will fall, possible option
strategies include
163
call discount
drought
spot market
strike price
Glossary
floating
Deregulation dereglementare
Devaluate a devaloriza
Devalue a devaloriza
Dip a scdea, a descrete
Direct debit debitare direct
Directive o directiv
Discontinue a nceta (de a mai face ceva), a ntrerupe
Discount a sconta (o poli)
Discount a draft a sconta o trat
Discount bank banc de scont
Dividends dividente
Downturn, a downswing un regres
Draw on an account a scoate dintr-un cont, a retrage dintr-un cont
Draw on sight a trage la vedere
Draw on someone a trage (o trat) asupra cuiva
Drawee tras
Drawer trgtor
Drop, to fall, to come down a scdea, a se micora
Dull inactiv
Duty o tax
Earn an interest a produce o dobnd
Earnings ctiguri, venituri (salariale)
Ease a se relaxa
Encash a ncasa un cec (la banc)
Endorse a andosa
Endorse a cheque a andosa un cec
Endorsement andosare
Enquiry, inquiry cerere de informaii
Equities aciuni ordinare
Erasure tergere, terstur
Exceed a depi
Exchange schimb
Exchange broker agent de schimb
Exchange bureau birou de schimb
Exchange rate rat de schimb
Executive administrator
Expenses cheltuieli, pli
Face value valoarea nominal
Fall back a se replia
Fall due a sosi la scaden
168
Cheia exerciiilor
Module 1
175
(in order): speak to; through; office; can; hello; bad; speak; speaking;
put; through; hold; office; moment; number; ring; back; on; message;
rang; call
Practice 1 a model answer
Reception: Good morning, Gorliz and Zimmerman.
Lara Camden: Hello, my names Lara Camden from Bulmer Cables
Ltd. Please could I speak to Mr. Conrad Bird?
Reception: Im sorry, but Mr. Bird is not in at the moment.
Lara Camden: I see. Er when do you think I could contact him?
Reception: Well, at the moment hes away. Would you like to leave
a message?
Lara Camden: Yes, perhaps you would ask Mr. Bird to call me? My
names Camden, Lara Camden, on 0181 299 462.
Reception: Right, thats Lara Canden on 0181 299 462. Okay?
Lara Camden: Yes, er Camden. CAMDEN.
Reception: Oh yes, sorry! Ive got that now.
Lara Camden: Thank you. I look forward to hearing from Mr. Bird.
Reception: Its a pleasure. Thanks for calling. Bye for now.
Practice 2 a model example of the conversation
Intership: Intership, good morning.
Computech: Hello, my names Alex Hall from Computech Arcos in
Singapore.
Intership: Sorry, did you say Alex Hall from Computech Arcos?
Computech: Yes, thats right.
Intership: Okay, how can I help you, Mr. Hall?
Computech: Well, Id like an appointment with Mr. Dionis.
Intership: Can you tell me whats about?
Computech: Certainly. Id like to discuss the transporting of goods
from Singapore to Athens.
Intership: I see. When would be a good time for you to come here?
Computech: May I suggest next week?
Intership: Im sorry, next weeks not possible Mr. Dionis is away
next week. How about the beginning of the next month?
Computech: Yes, that would be okay. Could we say Monday 3 rd of
May?
Intership:
Er, unfortunately Mr. Dionis is busy all day on that
Monday. He could make it Tuesday 4th.
Computech: Thats fine. Shall we say ten a.m.?
Intership: Yes, thats a good time for us. Erm can I ask you to
confirm by fax? And would you like us to book you a hotel?
177
Computech: Ill fax and thank you but no, the hotel booking isnt
necessary. I think thats everything, for now
Intership:
Right, many thanks, we look forward to your fax to
confirm the meeting. Goodbye, Mr. Hall.
Computech: Bye for now.
A model of a fax message of confirmation:
Computech Arcos
Lorong One Toa Payoh
Singapore 1253
Telephone: ++65 350 574
Fax: ++65 250 552
Fax to: Mr. Dionis (Intership S.A.)
Fax Number: 30 1 657677
From:
Page 1 of 1
Date: 19 April 19
178
Luisa: The problem concerns a printer order. Let me give you the
order number its HF5618. Its its for twenty printers. The
problem is that only seventeen have arrived.
Tao Loon: Really? Im surprised to hear that.
Luisa: Well, Im afraid its the second time we have received and
incomplete delivery and nobody told us there would only be
seventeen.
Tao Loon: Well, no, I think it was probably an administration
mistake.
Luisa:
Yes, Im sure. Now, we need the other three printers
urgently. Delays are causing us problem with our customers. They are
rather unhappy.
Tao Loon: Okay, er, at the moment we have some stock problems.
Luisa: Well, can you give me a delivery date its very urgent.
Tao Loon: Right let me see. We can promise you a despatch next
Monday.
Luisa: No, Im sorry, thats not good enough. We need despatch
now.
Tao Loon: Im sorry thats not possible. But well despatch on
Monday, I assure you.
Luisa: Well, will you please send a fax to confirm that.
Tao Loon: Of course. And I do apologize for the problem.
Luisa: Right, goodbye for now.
Tao Loon: Goodbye.
Reading
a. True; b. True; c. False; d. False; e. True; f. False
Module 3
Practice 1
Tokyo medical congress
a. Probably very formal.
b. High expectations in terms of technical support, a fair amount of
detail and clearly a lot of expertise.
c. High level of specialist knowledge audience are experts.
d. Depends on congress organization probably less then an hour.
e. Depends on congress organization probably questions follow.
f. Use of visual supports with key information, plus later publication
of Congress Proceedings
179
Note: There are no hard rules about what should be included. Most
suggestions here are open to discussion and
variation, depending on circumstances.
Reading
a.
Visuals make information more memorable
Help the speaker
Show information which is not easily expressed in words
Highlight information
Cause audience to employ another sense to receive information
Bring variety and therefore increase audiences attention
Save time
Clarify complex information
b.
Presenters sometimes place the major emphasis on visual aids and
relegate themselves to the minor role of narrator or technician
Visuals must support what the speaker says
It is not enough just to read what the visual says
Reading
Find out about the audience.
Find out what they need to know.
Plan what youre going to say.
Say it clearly and concisely.
Introduce information using lists.
Give a link between parts of the presentation.
Provide a logical sequencing of information.
Use careful repetition of key information.
Dont give too much information or too many fact.
Reading
a. The main body of the presentation contains the details of what
was introduced in the introduction.
b. See figure included in the text.
Practice 4 a model of presentation
Good morning, everyone. Id like to talk about the advertising mix for
the new Cheri range of beauty products. We are planing two
categories of advertising, above-the-line and below-the-line. Ill talk
first about above-the-line advertising. There are three kinds: these are
television commercials, secondly, newspapers newspaper
181
advertising. The third kind is magazines. There are two basic types we
aim at: youth magazines and those aimed specifically at the womens
market. Now, below-the-line advertising: there are three methods here
also: the first is in-store advertising, then theres on-pack promotions
and finally targeted mailing. So, in-store advertising: what does it
mean? Basically, displays in the shop, merchandising, and that sort of
thing. The second below-the-line advertising is on-pack promotions
there are many kinds, most obviously things like coupons,
competitions, joint promotions and free samples. The last kind of
below-the-line advertising is targeted mailing, using a mailing list.
That completes the overview of what we can do to launch the product,
so
Reading
a. No response from the audience.
b.
A truly successful and interesting talk will avoid the problem.
The speaker can give an instruction to the audience especially in
sales presentations.
To have question prepared to ask the audience, or identify
someone whom you know will have something to say.
Handling questions
Difficulties may arise because:
5 questions / discussion is relatively unstructured
5 the speaker has less control
5 speaker has to switch into listen and answer mode
5 it may be difficult to hear, to understand, to answer or to
distinguish between an opinion and a question.
Practice 5 model answers
1. So, that concludes what I want to say, so now Id like to ask you
for your comments, opening up discussion, or perhaps you have a
question or two?
2. Er, in fact what I said was this process has been going on for a
very long time. Im sorry if I was not clear on this point.
3. I wonder if anyone can suggest why this has happened or if
anzone has any comments on it?
4. Yes, youre right, but can I suggest one or two other factors? One
is the increasing number of take-overs of smaller companies
5. So are you saying that in the USA or Europe that could not
happen?
182
Incorporated are concerned; as you see we are using both the new-size
glass bottle and the miniature metal cans.
Finally, lets look at the major attractions of the product. In spite of
the higher price it will compete well with existing brands; the design
is more modern than any of the current rival products, and incidentally
the flavour is more realistic and natural its low calorie, too.
Winding-up
O.K., so just before closing, Id like to summarize my main points
again We have KOOL-OUT, a new design concept, aimed at a
relatively new age and income group; its designed to be consumed on
its own, as a soft drink, or to be used as a mixer in alcohol-based
drinks and cocktails. It comes in both bottle and can and this will
mean a slightly higher price than we are used to; but the improved
flavour and the package design should give us a real advantage in
todays market well, thats all I have today for the moment, thank
you for listening, now if there are any questions, Ill be happy to
answer them
Exercise 2 The product presentation
See the model presentation and use the words in italics.
Exercise 3 Can I interrupt here?
A 2; b 3; c 4; d 5; e 1
Exercise 4 Anticipating questions
(suggestions) a. I can hear you say b. Now you may well ask, what
does he mean by c. An obvious problem is the cost of the
accessories. d. You will have noticed that e. Now you may well
ask
Module 4
a.
b.
c.
Practice 1
Welcome, everybody. Thank you for coming.
We are here today to talk about (and to decide ; to look at)
We have an agenda with three points. (Youve all seen the agenda.
Id like to ask if anyone has any comments on it.)
d. I think Mr. Kano is ready to tell us something about (Can I ask
to open with his remarks.)
e. If you dont mind, can we let Mr. Kano finish? (Sorry, , I cant
allow us to consider that question just yet)
184
1.
2.
3.
4.
5.
6.
7.
8.
9.
Finish:
Agenda
Apologizes for absence
Minutes of previous meeting
Chairs opening address
Personnel changes
Review of marketing performance in the current year
New products
Marketing plans for next year
Any other business
Date of next meeting
Bob I dont know why you dont ask me. Ive been to Italy so many
times recently.
Chairman Could you let Walter finish? Id like to have his view on
this .
Walter Well, Id like to say that for the last two years we havent had
a stand at the Milan Trade Fair. I understand that the Fair has
produced lots of contracts in the past.
Chairman Thats an interesting point, Walter . Lets summarize what
weve said so far. Bob thinks we depend on the agents too much, and
Walter suggests that the Trade Fair is important.
Exercise 2 Formal meetings
a. address; approve; move; second; carried; casting; on
b. true: 1, 2, 6, 7
false: 3, 4, to second means to give formal support to the motion
for presentation to the board, 5 to abstain means to decide no to
vote
Exercise 3 Could I ask you a question?
You: Im afraid I cant comment at the moment.
You: A statement will be issued shortly.
You: Im sorry, but I cant comment at this stage.
You: Yes, Im pleased to be in your country.
You: I cant tell you anything before the statement is issued.
You: I would rather not answer that question at present.
You: I did not say that at all.
Module 5
Practice 1 a model
a. Well, welcome to Its very good that you could come to see us
here.
b. I hope you had a good trip? Not too long ? Did you get a taxi
when you arrives here?
c. At lunchtime well be able to show you a little bit of the city
have something to eat in a local restaurant.
d. Well, shall we make a start?
e. Okay, well, can I ask Luke Fox, from our Marketing Department,
to begin our discussion with some opening remarks. I think
youve met James already this morning, and a little while ago too?
189
f.
Neil Finch
Ministry of Urban Development
140- 144 Whitehall
London WCI 4RF
191
May 2 200
Dear Neil,
Re: Meeting in Bristol, April 30 --- Railway Land Sale
I am writing to (a) confirm points (b)agreed in the above meeting,
held to discuss the sale of government owned railway land to Gibson
Trust Limited.
We would like to confirm through this letter and the (c) enclosed
drawings that the property (d) included in the above sale consists of
the land presently occupied by the station buildings and also the
former car parks to the east of the station, the offices to the west and
the warehouse alongside the tracks. The government-owned housing
on the north side of the railway lines is (e) excluded .
We also agree that the station will be renovated by the Transport
Department and that the government will be responsible for running
an eventual museum and paying a rent of 100,000 per year to
Gibson Trust. The remaining land will be (f) developed by Gibson
Trust and later sold off separately. The development is intended to be
for commercial and residential use. The eventual use of the land
should be (g) specified in the contract.
Our next meeting will be on May 15 at 10 a.m., at which development
plans will be (h) examined. Soon after this, contracts will be (i) drawn
up. Then we will need time to consider the contracts but hopefully
they will be (j) signed by the end of September.
Do contact us if you have any comments or alterations you would like
to make to this summary. Thank you once again for a very
constructive meeting and we look forward to seeing you again on May
15.
Your sincerely,
192
Jill Kearne
Chief Negotiator
Encs. (I)
Reading
a. emphasize the benefits available to both sides
b. invent new options for mutual gain
c. change the package
d. adjourn to think and reflect
e. change location
f. change negotiator (personal chemistry?)
g. bring in a third party (mediator?)
h. fix an off-the-record meeting
Practice 6
Situation 1
The problem is that we have never offered the kind of warranty you
are looking for.
Since we have a difficulty here, may I suggest we leave the problem of
the warranty and come back to it later? Perhaps we could talk about
training for our technical staff?
Situation 2
Theres a number of issues on the table. We seem to be a long way
from an agreement.
Can I suggest a lower price, but link this with us paying the shipment
costs or agreeing to different payment terms?
Situation 3
The price you are asking is rather high, quite a lot higher than we were
expecting.
Well, if it would help, we could agree to longer payment terms
Situation 4
There are several problems. We think there is quite a lot of negotiation
ahead before we can agree on a common strategy.
The benefits of reaching agreement are considerable. We will have
more global influence and better prospects for the future.
Strategies in dealing with conflict
Strategy 1
I think were not really making much progress. Perhaps it would be
better to leave this point for a while and come back to it later. Could
we talk about a different aspect to the deal, perhaps the question of
delivery?
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Strategy 2
I think it is important to think about what could happen if we do not
reach agreement. The most obvious consequence will be that we will
both lose market share. The only winners will be our competitors. It
could be serious for both of us.
Strategy 3
There seem to be a number of problems, but Id like to summarize the
positive elements issues where we have made progress. First, we
agree that we have to settle the dispute between us, we understand
how important this is. Second, we agree that the terms of our original
agreement need to be changed. Third, we also agree that the change
will depend on the different market conditions which affect our
products These are important points of progress.
Strategy 4
Can I suggest we take a short break? I think it will help if we look at
some of the issues that are dividing us. Perhaps we will see areas
where we can make a fresh offer.
Strategy 5
The point at issue, Mr. Cinis, is quite simple. We can offer you an
extra 5 % discount, but only if the order is increased by 20 % over the
next three years.
Practice 7
Situation 1
Let me make a suggestion. If you agree to buy 100 units every month
for the next twelve months, well agree a 10 % discount.
Unfortunately, I cant say how many well need in six months and
certainly not in twelve. I cant take the risk on such a large order at
this stage.
Situation 2
The price we are offering excludes installation costs but does include
a twelve months guarantee.
Im afraid thats not really acceptable. You know that other suppliers
offer free installation and two year parts and labour warranty?
Situation 3
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Module 6
Discussion
A personal choice of qualities: D, F, H, and J.
Vocabulary
a. 1 resources 2 manageable 3 setting, communicate
4 supervise, performance
5 achieved
6 board of directors
7. innovations
5 Common collocations include: allocate resources (or people);
communicate information or decisions; develop strategies (or
people or subordinates); make decisions; measure performance;
motivate people; perform jobs; set objectives; and supervise
subordinates.
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Module 7
Vocabulary
1 C; 2 E; 3 B; 4 A; 5 F; 6 G; 7 D
Reading
A functional structure
B matrix structure
C line structure
D staff position
Describing company structure
Here is a short description of the organization chart illustrated.
The chief Executive Officer reports to the President and the Board of
Directors. The company is divided into five major departments:
Production, Marketing, Finance, Research & Development, and
Human Resources. The Marketing Department is subdivided into
Market Research, Sales and Advertising & Promotions. The Finance
Department contains both Financial Management and Accounting.
Sales consists of two sections, the Northern and Southern Regions,
whose heads report to the Sales Manager, who is accountable to the
Marketing Manager.
Module 8
Vocabulary
a. 1 subcontractor
2 component
3 outsourcing or contracting out
4 capacity
5 plant
6 location
7 inventory
8 lead time
b. 1 A and E 2 C
3D
4 A and E
5 A and E
6D
7F
8E
9F
10 E 11 B 12 E 13 B 14 C and E
15 B and F
Reading
1 component 2 subcontractor 3 inventory
4 outsourcing
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5 location
6 plants
7 capacity
8 lead times
Reading
1. What is a product? / The definition of a product.
2. Brand names.
3. Product lines and product mixes.
4. Line-stretching and line-filling.
Vocabulary
1 credit facilities
2 warranty or guarantee
3 shelf
4 brand-switchers
5 (product) life cycle 6 profitability
7 opportunities
8 market share 9 image
10 niche
Module 9
Vocabulary
1A
2I
3F
4H
5D
6J
7E
8B
9C
10 G
Reading
Paragraph 1 the selling and marketing concepts
Paragraph 2 identifying market opportunities
Paragraph 3 the importance of market research
Paragraph 4 the marketing mix
Paragraph 5 company-to-company marketing
Comprehension
8. Customer needs; 2. Market; 3. Coordinated marketing; 4. Profits
through customer satisfaction
Vocabulary
1 word-of-mouth advertising
2 institutional or prestige advertising
3 advertising agencies 4 an account 5 an advertising budget
6 a brief
7 advertising campaign
8 target customers or target market
9 media planners
10 the threshold effect 11 the comparative-parity method
12 counter-cyclical advertising
Discussion
The numbers of respodents who agreed with the statements were as
follows:
1. 90% 2. 72% 3. 85% 4. 51% 5. 41% 6. 49% 7. 60% 8. 57%
Reading
1 target
2 awareness
3 medium
4 tactics
5 trial 6 maturity
7 aimed
8 loyalty
9 advertising
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10 channel
Summarizing
1 When a new product is launched, the producer has to inform
customers about its existence and develop brand awareness.
2 Promotion is one of the four elements of the marketing mix; sales
promotions are one of the four different promotional tools.
3 The advantages of publicity include the fact that it is much cheaper
than advertising, and can have a better impact, because it seems that
people are more likely to read and believe publicity than advertising.
4 The four stages of the standard product life cycle (excluding the prelaunched development stage) are introduction, growth, maturity and
decline.
5 Reasons to offer temporary price reductions include attracting priceconscious brand-switchers, offsetting a promotion by a competitor,
and, for stores, attracting customers by way of loss leaders.
9. Sales promotions need not only be aimed at customers; they can
also be used with distributors, dealers and retailers, and with a
companys sales force.
10. Apart from selling a companys products, sales representatives
bring information back to a company from its customers,
including ideas for new products.
Vocabulary
1. competitors 2 word-of-mouth advertising
3 brand-switchers
4 points of sale 5 brand name 6 line-stretching
7 packaging
8 product improvement
9 media plan 10 packaging
Module 10
Reading
1 Market leaders
2 Expanding markets
3 Market challengers
4 Market followers
5 Establishing a niche / Dangers faced by market followers
Vocabulary
1 market share
2 promotions 3 monopoly
4 competitors 5 slogan
6 market segmentation 7 niche
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8 differential advantage
9 turnover
10 recession
Vocabulary
1 to innovate (innovation)
2 to diversify (diversification)
3 to merge (a merger) 4 a raid
5 a takeover bid
6 horizontal integration
7 vertical integration 8 backward
integration
9 forward integration 10 synergy
Summarizing
1 The fact that many large conglomerates assets were worth more
than their stock market valuation demonstrated that they were clearly
not maximizing stockholder value, i.e. giving their stockholders the
maximum possible return on their investment.
2 Raiders bought conglomerates in order to strip them of their assets,
i.e. to restructure them, split them up, and resell the pieces at a profit.
3 Raiders showed that the stock market did not necessarily value
companies assets correctly, especially land, buildings and pension
funds.
4 Raiders were particularly interested in companies with large cash
reserves, companies with successful subsidiaries that could be sold,
and companies in fields that are not sensitive to a recession.
5 Investors were prepared to lend money to finance LBOs because
they received a high rate of interest which more than compensated for
the risk that the bonds would not be repaid.
11. Raiders argue that the possibility of a buyout forces company
managers and directors to do their jobs well, and to use their
capital productively.
Vocabulary
1 charities
2 legitimacy
3 perfect competition 4 welfare
5 threatening 6 vitality
7 free enterprise
8 conforming
9 embodied
10 proponents
Module 11
Vocabulary
1B
2C
3D
4G
5A
6E
7F
Vocabulary
1 shareholders or stockholders 2 earnings or income 3 liabilities
4 turnover
5 assets
6 depreciation or amortization
7 debtors or accounts receivable
8 creditors or accounts
payable
9 stock or inventory
10 overheads or overhead
200
Reading
1 assets
2 stock or inventory
3
depreciation
or
amortization 4 shareholders or stockholders 5 earnings or income
6 turnover
7 overheads or overhead
8 liabilities
9 debtors or accounts receivable
10 creditors or accounts
payable
Vocabulary Financial statements
1 turnover
2 overheads
3 depreciation 4 freehold properties
5 historical cost
6 debtors
7 cash in hand and at bank
8 corporation tax
9 net assets
10 called-up share capital
Reading
A The period of gold convertibility.
B Floating exchanges rates.
C The abolition of exchange controls.
D Intervention and managed floating exchange rates.
E The power of speculators and the collapse of the EMS.
F Why many business people would prefer a single currency.
G The introduction of the single European currency.
Comprehension
1 False
2 False
3 True
4 False
5 True
6 True
7 True
8 False
Vocabulary
1.
1B
2D
3A
4C
5F
6E
2.
1 adjust
2 convert
3 abolish
4 suspend
5 fluctuate
6 diverge
Module 12
Vocabulary
1 overdraft
2 credit card
3 cash dispenser or ATM
4 loan 5 standing order or direct debit 6 mortgage
7 cash card
8 home banking
9 current or checking account 10 deposit or
time or notice account
Reading
1 Commercial banking
2 Investment banking
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3 Universal banking
4 Interest rates
5 Eurocurrencies
Vocabulary
1.
1 deposit
2 foreign currencies
3 yield 4 liquidity
5 maturity
6 underwrite 7 takeover
8 merger
9 stockbroking 10 portfolio management
11 deregulation
12 conglomerate
13 blue chip
14 solvency
15 collateral
12. Common collocation include: charge interest; do business;
exchange currencies; issue bonds; make loans; make profits; offer
advice; offer loans; pay interest; raise funds; receive deposits;
underwrite security issues
Vocabulary
1B
2A
3A
4B
5C
6A
7B
8C
9C
10 B
Reading
A The functions of taxation.
B Advantages and disadvantages of different tax systems.
C Tax evasion.
D Avoiding tax on salaries.
E Avoiding tax on profits.
Comprehension
1True
2True
3True
4False
5False
6 False
7True
Vocabulary
1 depreciation 2 disincentive 3 regressive
4 consumption
5 self-employed
6 national insurance
7 perks
8 tax shelters 9 tax-deductible
10 tax havens
Module 13
Vocabulary
1 liability
2 creditor
5 to liquidate 6 liabilities
3 bankrupt
4 assets
7 to put up capital
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8 venture capital
9 founders
10 premises
11 underwrite 12 dividend
Vocabulary
1 mutual fund 2 portfolio
3 stockbroker 4 blue chip
5 defensive stock
6 growth stock
7 market-maker
8 institutional investors
9 inside share-dealing
Vocabulary
1H
2B
3A
4C
5I
6E
7F
8D
9J
10 G
Vocabulary
1F
2E
3A
4B
5G
6C
7D
Vocabulary
1B
2A
3F
4C
5E
6D
Summarizing
1 The difference between futures and forward contracts is that futures
are standardized deals and forwards are individual over-the-counter
agreements between two parties.
2 Producers and buyers often choose to hedge because this allows
them to guarantee prices for several months.
3 Speculators can make money on currency futures if they correctly
anticipate exchange rate appreciations or depreciations or interest rate
changes.
4 If you believe that a share price will rise, possible option strategies
include buying a call, which you will be able to sell at a profit, and
writing (selling) a put, which will never be exercised, so you earn the
premium.
5 On the contrary, if you think a share price will fall, possible option
strategies include buying a put, so you will be able to sell your shares
at above the market price, and writing a call, which will never be
exercised, so you earn the premium.
6 The risk with currency and interest rate swaps is that the exchange
and interest rates may change unfavourably.
Vocabulary
Appreciate depreciate
Call put
Discount premium
Drought flood
Floating fixed
Hedging speculation
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Extra Readings
(Industry Profile and Career Overview from WetFeet.com)
The Internet is not the only new medium when it comes to advertising.
It seems that people are jaded by the overload of ads in traditional
media, like television or newspapers, and often wont even pay
attention to ads. As a result, advertisers are now trying to get your
attention through nontraditional advertising media like the movies,
where product placement has become a permanent part of business.
Other nifty places where you can now see ads: on bus rooftops (ads
atop buses reach the professional market that works in office towers,
apparently) and at the bottom of golf holes. Beer ads have even begun
to show up on disinfectant cakes in mens room urinals, of all places.
Targeted Marketing
Computer databases let advertisers store detailed information about
each of their customers. On-demand printing lets advertisers
customize brochures to individual customers. E-mail and automated
direct mailing let advertisers reach individual customers
economically. So, for the first time, the advertising industry is
learning how to create ads like smart bombs, capable of delivering a
customized message to a precise target. That means that technological
expertise is increasingly important within advertising agencies and, to
a lesser extent, PR firms.
How It Breaks Down
Though boutique agencies are growing in number and revenue, the big
names continue to handle most of the accountsand earn most of the
dollars. They also are the primary source of employment
opportunities. In addition to the size of the firm, you'll need to think
about its location, its client list, and the kind of advertising it does:
branding vs. promotional, general vs. specific industries, all media
versus specific media.
Big Global Networks
In the past decade, global has become the way to go. Several huge
global marketing and media conglomerates now dominate the
advertising industry. These include Omnicom, the WPP Group, the
Interpublic Group, Cordiant, Havas, and Publicis Groupe. They are
joined by advertising agencies that have expanded their operations by
opening offices around the world and by acquiring other marketing
and media companies. These include the Grey Global Group.
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Together, these firms own many of the major players in traditional and
interactive advertising. Omnicom, for example, owns BBDO
Worldwide, DDB Worldwide, and TBWA Worldwide. Cordiant owns
Bates Worldwide. Havas Advertising owns Euro RSCG Worldwide
and Arnold Worldwide Partners. The WPP Group owns Ogilvy &
Mather and J. Walter Thompson. Interpublic owns McCann-Erickson
Worldwide, Lowe (The Partnership), FCB Group, Deutsch, and
Campbell-Ewald. And Publicis Groupe owns Publicis Worldwide and
Saatchi & Saatchi Worldwide, and recently acquired Bcom3 Group,
which owns Leo Burnett Worldwide and DArcy Masius Benton &
Bowles (the latter no longer exists under this name, but has been
folded into Publicis).
In the old days, being big meant being corporate and account-driven.
Though thats still often the case, its not the rule it once was. One
reason is that advertising has changed, with many advertisers now
recognizing the value of catchy creative work. Another is that big
companies now own what were until recently independent shops
known for strong creative. Omnicom, for instance, owns Goodby
Silverstein, and Interpublic owns the Lowe Group.
Smaller Shops
While a lot of hot shops have been snatched up by the big global
holding companies, there are still plenty of smaller shopssome with
as few as five employees. Often these are creative boutiques
agencies started by people from bigger agencies who have hung out
their own shingle in order to follow their vision of what makes good
advertising.
At smaller agencies, the boundaries between different departments are
often not as pronounced as at larger agencies. While the staff at bigger
agencies is divided by client, in a smaller agency people will often be
working on several accounts at once. Mad Dogs & Englishmen in
New York and Butler, Shine & Stern in Sausalito, California, are two
of the hundreds of smaller shops.
Interactive Agencies
Interactive agencies specialize in online marketing and advertising.
This includes everything from concepting, designing, and placing
banner ads to designing corporate websites to developing e-commerce
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storyboardscartoon-style
214
Lucrative = profitabil
Suntan lotion = loiune pentru bronzat
Extol = a preui foarte mult
Juggle = a jongla
Devise = a inventa a plnui / to plan or invent a way of doing
something, especially something complicated and clever
Pitches = to try to make a business agreement, or to sell something by
saying how good it is
Sales pitch = what a person says about a product to persuade people to
buy it
Resilient = rezistent
Public Relations
"Some are born great, some achieve greatness, and some hire public
relations officers," said the historian, Daniel J. Boorstin. His point? In
public relations, your job is to make your client seem great without
anybody knowing you were trying.
Of course, those in PR do more than make their clients seem great.
They speak on behalf of client organizations; help mitigate harmful
publicity when, for instance, the federal government sues a client for,
say, antitrust violations; and generally represent a client to the media
in order to get the most favorable publicity possible. You might think
of PR as a specialized area of marketing and akin to advertising,
which incorporates a similar client-oriented structure. And in many
sectors it's a fast-growing field.
PR, which is also known as communications, is all about relating (or
communicating) to the publica relationship generally mediated by
the press. Unlike an advertising agency, a PR agency communicates a
company's message to the press, rather than directly to the client's
target market. The objective in PR is to use the press to reach the
target market because, when mediated by a supposedly objective third
party, the message will become more powerful.
Because of their role in generating media coverage, PR professionals
are sometimes thought of as disingenuous, deceitful, hucksterish
flacks trying simultaneously to pull the wool over the eyes of their
215
clients and the public at large. That's inaccurate. The fact is, in today's
business world, every company, CEO, celebrity, and association wants
to show the best possible face to the public, and all of them are using
public relations to do so.
PR serves those fighting to legalize medical marijuana, as well as the
Internet start-up seeking funding from investors. Michael Jordan
consults with PR pros to figure out how he can best maintain his
image; so does Intel, seeking to maintain its image. When you read
something in the newspaper about the phone company, it's likely that a
PR pro was behind the scenes, either pitching the story or furnishing
the reporter with statistics to write it.
Day to day, PR pros "pitch" story ideas to reporters, trying to elicit
coverage of subjects important to their clients. They also serve as
company spokespeople, plan and hold events intended to generate
publicity, and develop strategies that will spark media interest. An
actress's appearance at an awards ceremony wearing nothing but a
potholder, for instance, could be a PR ploy to get her in the papersa
well-considered one, perhaps, if the woman happens to be Madonna,
but less effective if the woman is Nancy Reagan.
Usually, you'll spend much of your day working with the media.
You'll make phone calls, issue press releases, and plan events.
Reporters will complain, perhaps, but in a world glutted with
information, they rely on public-relations practitioners for information
they don't have the time or budget to gather themselves.
Those with more experience in PR will write speeches, strategize the
best time to announce a new product, work alongside an advertising
agency to position products in the mind of the public, develop and
publish newsletters, and manage crises, endeavoring to put a positive
spin on events for a client organization. And along with representing
the client to the public, PR practitioners will represent the public to
the client, helping the client understand what the public wants, needs,
and is concerned about.
Those who do well in PR have strong communication skills, are
articulate both with the written and spoken word, are able to
understand a variety of people, are confident, and quick studies
216
217
Account Management
Account management combines sales with customer service. Account
management professionals work with clients to ensure theyre getting
the most out of the products and services their employers selland to
persuade clients to continue to do business (preferably more and more
business) with their employers over time. In high tech as well as in
more traditional manufacturing industries, this means making sure that
clients are happy with your companys products. And many serviceoriented businesses such as advertising and public relations agencies
provide similar support to their customers.
What You'll Do
Account management acts as a liaison between a company and its
clients. Account managers work closely with customers to determine
the customers' needs. Then they make sure their company develops
products or services to meet those requirements.
You can think of account managers as corporate jugglers. They create
budgets and schedules, enforce deadlines, and explain clients' agendas
to their staffs and management. They also identify and solicit new
customers.
Account managers coordinate everything and everyone. They make
sure no details fall through the cracks. Clients can depend on them to
protect their interests.
Account managers keep a careful eye on projects in development.
They let customers know how their accounts are progressing and are
the first to hear about problems. When something blows upsuch as
when deadlines arent met or, in the advertising industry, when a
client hates what the agencys creatives have put togetherthey do
their best to smooth things over and maintain a good working
relationship.
Account managers work in many different industries. Examples
include employment agencies, consultant firms, Web-design
companies, and advertising and public relations firms. Any company
that serves other businesses hires account managers tonesses hires
account managers to needs are being met.
218
General Management
Do you have a corporate vision? Understand how an industry operates
and how to improve it? Know how to manage and motivate
employees? If so, consider a career in general management.
What General Management Is
General managers (GMs), also known as executives, or the executive
team, run a company's business. They include the chief executive
officer (CEO), chief operating officer (COO), president, and others.
Their knowledge about an industry and their ability to provide
direction can mean the difference between an organization's success
and failure. They are involved in planning and policy making at
almost every level, including both the long-term strategy and its dayto-day execution.
A GM decides what products to produce, which markets to go after,
and the company's general philosophy. GMs are also expected to raise
money, keep a company profitable, and answer to shareholders.
What You'll Do
For the most part, general managers control how an organization
operates. They develop corporate structures and policies, direct and
coordinate employee activities, find and develop alliances with
suitable business partners, raise money to grow their organizations,
and make systematic changes, as needed, to keep their businesses
profitable.
GMs are expected to see and understand the big picture. The health of
a company rests firmly on their shoulders. They develop strategies
that will make their organizations successful, year after year.
GMs also need to be their companies' biggest advocates. They
communicate the value of their organizations to the outside world.
Employees, strategic partners, shareholders, and even a company's
chairperson rely on the general management team to promote the
company's interests at every turn. GMs give their subordinates a
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all aspects of the business. However, the CEO still has to answer to
the board of directors.
In publicly held corporations, the board is ultimately responsible for
the success of an organization. Members of the board have a fiduciary
responsibility to look after the stockholders' (owners') interests first
and foremost. If the company begins to falter, they have the right and
the duty to correct the situation using any means possible, up to and
including firing the CEO or any other top executive. In some cases,
the board takes control of all managerial functions until a business has
stabilized.
Who Does Well
GMs can be found in every industry and organization, from publicly
held companies to non-profits and governmental agencies. Before
entering management, GMs should have first proven themselves in
their core industries. Usually they work for a while as operations
managers, then slowly work their way up the corporate ladder.
GMs can expect to be in the spotlight most of the time. Every decision
they make and every policy they set is subject to scrutiny by those
around them. There will be no place to hide. CEOs and presidents of
large organizations are the stars of the corporate world. They are given
as little privacy as their Hollywood movie-star counterparts.
The trade press follows a GM's every move closely. Employees and
shareholders want to know what makes GMs tick, what they do in
their spare time, and how much money they made last year. As long as
profits are up, they can do no wrong. But even a slight blip in the
markets can change public perception. They are often the first to be let
go. However, the public dismissal of a GM will be padded by a large
settlement offer and the GM's equity in the companythe so-called
"golden parachute."
Marketing
When you think about cola, what do you think? Coke? Pepsi? That's
due to marketing. What comes to mind when you think of computers?
Dell? Apple? IBM? That's no coincidence. Those companies have
spent a lot of money so that you'll associate a generic product such as
a computer with a brand name.
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What You'll Do
Broadly speaking, marketing is the intermediary function between
product development and sales. In a nutshell, it's the marketer's job to
ensure that consumers look beyond price and functionality when
they're weighing consumption options.
Marketers create, manage, and enhance brands. (A brand can be
thought of as the way consumers perceive a particular company or its
products and how a company reinforces or enhances those perceptions
through its overall communicationsits logo, advertising, packaging,
and so on.) Marketers want the consumer to ask: "Which brand helps
me look and feel my best? Which brand can I trust?" Their goal is to
make the brand they represent the obvious and uncontested answer to
those questions in the consumer's mind. In marketing terms, this is
called owning share of mind.
Of course, a brand can't be all things to all people. A key part of a
marketer's job is to understand the needs, preferences, and constraints
that define the target group of consumers (who may be from the same
geographic region, income level, age range, lifestyle, or interest
group) or the market niche corresponding to the brand. How can a
company aggressively expand its market share and keep customers
satisfied? That question is central to everything a marketer does.
Marketing is a function at every company in every industry. In the
consumer products industry, marketing (called brand management) is
the lead function. In other industries marketing may play a supporting
role to another function. At a high-tech company, for instance,
marketing may play a supporting role to research and development.
And in advertising, market research, and public relations, a specialized
marketing function is the industry.
Who Does Well
Marketing appeals to creative thinkers as well as numbers-minded
statisticians. Engineers, for example, work with customers to help
define new products (a marketing function); psychologists analyze
consumer behaviour so that marketers can better target their
promotions. A single purpose underlies the diversity of opportunity
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loyalty will result in a stronger brand identity that will in turn boost
the companys public and financial standing.
Growing Reliance on Technology
HR departments are increasingly relying on software applications and
Internet access for two main reasons: to streamline administrative
tasks (reduce clerical tasks or paperwork) and gain access to more
information key to recruiting and setting employee policy. Many
companies now rely on public websites as an important recruiting tool
for collecting resumes and disseminating information to potential hires
about the companys management, history, and culture. Company
networks and e-mail also make it simpler and faster for HR to
communicate with and distribute information to employees.
Automating systems that were once clunky and slow paper processes
has freed up HR administrators to focus on tasks more directly tied to
the companys business goals.
Weathering the Storm
Because of the recession, recruiters are in low demand. However, in
high demand are outsourcing firms that place workers who have lost
their jobs due to layoffs or closures. Two years ago, when companies
were in what the staffing industry calls a war for talent, everybody
was hiring recruiting firms. Now that the bubble has burst,
outsourcing firms are the hotter commodity. Its always a buyers
market, says one out-of-work recruiter. Before, the buyers were
companies looking for workers. Now, its workers looking for jobs.
Outsourcing has grown by 12 to 14 percent in 2001 and 2002 and not
just because of the recession. Recalling the tight talent market of two
years ago, many employers are using outsourcing as a way to stay in
the good graces of some of their more qualified laid-off employees in
case they cut back too deeply and have to rehire them as contractors.
How It Breaks Down
We divided the opportunities in HR into in-house staff and service
organizations that include staffing firms, consultants, and HR
information systems. Within each of these segments, you'll want to
think about the specific functional areas you'd like to pursue.
In-House HR Staff
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with recruiting new employees who will both fit in well and help the
company achieve its goal of profitability. They also represent
management when negotiating for benefits with companies
administering these benefits and when implementing companywide
policies that will ultimately bring down costs or boost profits. The
needs of HR cover a wide range of tasks, and therefore, require
someone who is not only good with people, but also organized,
analytical, business-minded, and able to juggle many projects at once.
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advertising. That means that their content and their production are
both influenced by the interests of big advertisers, though editorial
staffs wage a ceaseless war for independence from the dictates of
advertising sales departments, with publishers playing arbiter. Book
publishing is a little different. Sales does not mean bringing in
advertisers; it means securing deals with distributors like Ingram, with
huge chains like Barnes and Noble or Borders, and Web
merchandisers like Amazon.com.
Trends
Pop Journalism
As circulation numbers become increasingly important in today's tight
market, even the most prestigious news publications are being accused
of pandering to popular taste. Breaking from the legendary editorial
tradition of choosing worthwhile topics in spite of general appeal,
online journals and print publications alike are deferring to the
numbers in setting layout, content, and tone standards. USA Today
was a pioneer in the easy-to-swallow strategy: Peppered with brightly
colored photos and accessible information in graph form and sold in
coinboxes designed to look like television sets, the daily newspaper
achieved immediate success (and disdain) as a prototype of the
TV/newspaper/comic book hybrid.
Weblogs and Journalism
The promise of one-to-many connections is being fulfilled these days
by the weblog phenomenon. Weblogsblogs, for shortare a kind
of online diary, in which the author, or blogger, writes regular
postings about whatever interests him or her, often including
hyperlinks to other Web pages containing information about the topic
at hand. Now Web pundits are making the claim that blogs are going
to change the face of journalism; again, well have to wait and see on
that claim. But theres no doubt blogs get the news in front of reader
in a hurry, or that they are proliferatingand that even journalists and
newspapers are getting in on the act.
Consolidation
At the same time as the Web is making it easier for unique journalistic
voices to be heard, the companies at the top of the heap in the industry
are getting ever-larger. In recent years, AOL swallowed Time Warner,
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Once you enter the field, there are myriad possibilities due to the
diverse interests of corporate employers.
The diversification of the media giants has had interesting
repercussions on the job market. As recently as 15 years ago, if you
began life as a print reporter, you did not generally end up in
television or book publishing. If you covered hard news stories, you
did not moonlight in PR and other promotional copy. The mix is much
more fluid now. And although a few old-school journalists decry these
developments, they make your job prospects more interesting than
they once would have been.
Broadcasting
Peter Jennings. Barbara Walters. Rush Limbaugh. Oprah Winfrey.
Howard Stern. What do they all have in common? Besides being
extremely rich and famous, these on-air personalities all started their
broadcasting careers as unknown announcers at local radio and
television stations.
While such dramatic rises to superstardom attract many young
hopefuls to broadcasting, there are many more professionals working
behind the scenes. For every well-known newscaster or talk-show
host, there's a score of people hired to create a program and keep it
running. In addition to on-air announcers, broadcasting stations hire
writers, program directors, and producers who manage the overall
creation and delivery of station content.
What Broadcasting Is
From world news to local weather and the Top 40 countdown,
broadcasting generally encompasses any audio or visual programming
that is disseminated to a large number of radio or television receivers.
Although that definition could be expanded to include Web-based
media outlets, this career profile focuses on opportunities in radio and
television news production and station management.
What You'll Do
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What You'll Do
Editors and writers tell stories. Business writers tell stories about
companies and their management teams, organizational structures, and
economic successes and failures. Feature writers tell stories about
celebrities, movies, and people doing different, sometimes unusual
things. Copywriters use language to convey a story about the benefits
of a brand or product.
Writing almost always requires research or knowledge about a
particular subject. While many writers start out as generalists, in the
course of reporting or writing a story, they must become experts. An
investigative story in a magazine into the causes of drug abuse, for
instance, might include conversations with doctors, drug abusers,
sociologists, legislators, drug-policy-reform groups and experts on
organized crime, as well as research into public documents about
government policy and the causes of drug abuse. The reporter then
analyzes and synthesizes interviews and research, and organizes it into
a storyhoping, perhaps, to win a Pulitzer Prize.
Editors often start out as writers, and in many cases their role involves
substantial writing. However, their role also bridges the space between
writer and publication. They help writers craft stories, make sure
writers adhere to style guidelines and rules of grammar, and ensure
that every article is suitable for a particular publication. In their role,
they straddle management and production, managing writers and
budgets, setting deadlines, scheduling what will run and when, and
enforcing general editorial standards of quality.
Writing and editing careers vary widely. The subject, length, and style
of what one writes or edits are variables that depend on where one
works and what one has chosen to do.
Varieties of Opportunity
Editorial and writing careers span industries. Advertising agencies
hire copywriters to create compelling copy that will sell readers on a
brand. PR agencies use writers to create press releases, write annual
reports, draft speeches, and create op-eds (opinion pieces that PR
firms try to "place" in newspapers to reach target groups). Computer
software and hardware companies use technical writing and editors to
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Job Prospects
Keep in mind that this could be the most competitive industry out
there. Getting a job in sports or entertainment is a difficult undertaking
that requires persistence, intense networking, and good luck. Unless
your dad knows Ted Turner, don't count on landing even an entrylevel slot easily. Every year, hundreds upon thousands of job seekers
flood New York and Los Angeles hoping to become celebrities, and
the majority of them wind up waiting tables to make ends meet And, if
they decide to stay in show biz, they eventually end up taking jobs in
production or administration. Take heart in the fact, though, that
companies can't ignore talent. If you prove that you've got the skills to
thrive in a challenging and nontraditional work environment, then
you're in for a thrilling ride.
Careers in this industry usually start at the entry level; agents, personal
managers, and studio executives usually got their start as lowly
assistants. Once launched on their careers, people in the entertainment
industry tend to change jobs frequently, and contacts in the industry
are crucial.
For those of you with a business or technical background, work is
more readily available. The big corporations that dominate the
industry always need people in the standard management functions
such as finance, HR, IT, marketing, and communications. Technicians
are needed in traditional fields such as sound engineering and
photography, and in the rapidly expanding fields of digital special
effects: Dozens or perhaps hundreds of companies in Southern
California and the San Francisco Bay Area employ software engineers
and other specialists to create digital special effects, which are at the
center of films like The Matrix, Monsters Inc., Lord of the Rings, and
Spider-Man, and contribute unobtrusively to scores of other films,
removing unwanted telephone cables from outdoor scenes and
wrinkles from stars' faces. Leading companies in this field include
Pixar, PDI, Sony Pictures Imageworks, and Industrial Light and
Magic.
The difficulty of getting a job in the movie biz is legendarymaking
a feature-length film can take years and a cast of thousands, yet you
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will be competing with hundreds for even the most menial short-term
contracts and per diem arrangements. When you finally land a job,
your initial contributions are generally limited to contracts,
spreadsheets, gophering, and creating dazzling promotional copy. But
over time you often actually come to know the stars and other industry
bigwigs you serve, and these relationships evolve into the everimportant industry contacts that will make or break your career.
To get a job in the music industry, you'll have to follow a path almost
as long and complex as that from the first stirrings of a tune in a
musician's head to the final song you hear every time you turn on the
radio. The important support jobs in the music industry are cover-art
production, promotional video production, publishing rights,
marketing and sales, and publicityand then more publicity, and then
different publicity for radio, clubs, and both the mall stores and antimall stores such as Tower Records and Virgin Records. If you're
interested in marketing to an online audience or the challenge of
developing better online audio, these are also job areas to explore. So
are MP3 players and DVDs, which are growing apace and are
gradually replacing CDs and videocassettes.
As the sports industry expands to include lucrative ancillary
employment in marketing, promotion, sports medicine, and agency
representation, your options extend well beyond one team or sport.
You can earn almost as much as a good left-handed pitcher if your
legal skills include licensing and contract negotiation.
Manufacturing and Production
Without manufacturing and production, there'd be no products to
market or sell. Accountants wouldn't have anything to account for.
The retail trade would collapse. Programmers would be without
computers to program on.
In short, there'd by very little need for any other career.
In this career profile, WetFeet focuses on outlining the technical jobs
in manufacturing and production, with an emphasis on high-tech
industries. See our career profile on operations management for
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responsibilities
outside
of
What It Is
Manufacturing and production are relatively interchangeable terms for
making a product, including all of the processes involved in making it.
All products are manufactured and produced. The clothes you wear,
books you read, and computers you use were manufactured. So were
the textiles for the clothes, the paper for the books, and the
components of the computers.
People who work in manufacturing and production don't just create
products; they create them as quickly as possible, as inexpensively as
possible, and in the necessary quantities. Those working in
manufacturing and production know that time is money: The faster
and better that they and the machines around them work, the better
their companies perform.
It doesn't matter if you're producing silicon chips or Pokemon toys.
The manufacturing challenge is to develop better production
processes, secure the right material and component supplies at the
least cost, reduce production time, eliminate waste, and ensure quality
in the final product.
What You'll Do
While the introduction of industrial automation technology has
reduced the number of blue collar and semiskilled positions in
manufacturing, the evolution of the manufacturing process itself has
opened up a wide range of opportunities for technicians, mechanical
and electrical engineers, industrial designers and managers.
As production lines become less labor intensive, they depend more on
computers, sensors, and robotics. Programmable logic controllers
(PLCs) handle what human hands used to do in the past, and step-bystep production control is left to sequencing equipment that controls
the production flow.
But PLCs are just the beginning: Sophisticated robots and "intelligent"
computer software programs can now run entire factories, and skilled
programmers and software engineers are required to develop human252
What You'll Do
Quality assurance professionals work with business managers and
clients to develop policies, procedures, and programs to ensure the
quality of manufactured products. QC specialists are responsible for
employees' day-to-day adherence to quality programs. In Web
companies and software firms, quality assurance specialists diagnose
problems, recommend solutions, and determine if program
requirements have been met.
In manufacturing companies, QC workers are usually engineers who
work closely with manufacturing technicians and engineers on the
factory floor to ensure products and processes conform to quality
standards and procedures. QC engineers often act as in-house
independent inspectors, and must approve production lots based on
their assessment of the products' level of quality.
Within information technology, QC technicians test software before it
is released to market. Their challenge is to try to crash the software,
review and criticize the user interface or operability, and generally be
the developing engineer's worst nightmare. In today's fast-paced
marketplace, any product that's glitchy will die a quick deathand a
website with bugs or dead links can kill customer enthusiasm.
Quality assurance professionals often seem to have a more glamorous
life than their colleagues in quality control. QA specialists often
accompany salespeople and business development managers to client
sites to make presentations, and QA managers and directors often
have a seat at even the most top-level staff meetings. While many
people progress from QC to QA, the nature of QA work, particularly
in manufacturing, usually requires an MBA or an advanced
engineering degree.
The ISO 9000 Program
Very often, the sole reason for the existence of a QA/QC department
is to develop, implement, and maintain an ISO 9000 certification
program.
In manufacturing businesses, the ISO 9000 program inculcates a "total
quality philosophy" throughout an organization, from senior managers
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down through the janitorial staff. The ISO program establishes quality
management policies and procedures for all aspects of manufacturing,
from supply management and vendor qualification and product
inspection and testing, all the way through to packaging and shipping.
The initials ISO stand for the International Organization for
Standardization, which was established by U.N. charter in 1947 as a
means of facilitating international cooperation and trade in the wake
of World War II. Based in Geneva, Switzerland, the ISO is a
nongovernmental organization (NGO) that has established worldwide
standards for quality management through its certification programs.
The ISO 9000 program is actually a series of specific standards,
namely ISO 9001, ISO 9002, ISO 9003, and ISO 9004. These are all
quality-standards programs that pertain to different types of
manufacturing and/or product supply.
Asset Management
If money makes the world go round, the Earth would grind to a
screeching halt without the asset management industry. Asset
management is the business of making money with moneyor at least
trying to. By money, were not talking about salaries and bonuses
(which can indeed be significant), but the gains you endeavor to make
for investors who have forked over their cash in hopes that you,
through your market savvy and keen instincts, can turn their nest egg
into a fancy omelet with toast and hash browns on the side.
What You'll Do
Asset managers manage moneyother people's money, and gobs of
it. Generally, they convert that money into assetsstocks, bonds,
derivatives, and other types of investmentsand try to make that
money make more money as fast as possible. Mutual funds, for
instance, hire asset managers; so do corporations with lots of money
sitting around, banks, and high net-worth individuals.
Asset managers have one simple goal: to invest other people's money
wisely and profitably. Asset managers use a combination of
investment theory, quantitative tools, market experience, research, and
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plain dumb luck to pick investments for their portfolios, ranging from
high-risk stocks to commercial real estate to cash accounts.
As soon as they've picked their basket of investments, they've stuck
their necks out on the block. And the ax will fall if the portfolio
doesn't beat its benchmarka peer group (competitor funds with the
same investment objective), or a market index (such as the S&P 500).
Who Does Well
As an asset manager, you can't just bet your hunches. The profession
requires excellent quantitative and analytical skillsif you hated
statistics, you may want to look elsewhere.
But asset management isn't just a matter of adding up the numbers. It
requires the organizational skillsand nerveto make split-second
decisions with millions of dollars riding on the line. And though the
profession has seen tremendous growth in the last decade, it's still
tough to break into, especially for those who only have an
undergraduate degree. Sometimes MBAs work as fund managers right
out of school, though more often they start as analysts in order to
prove they have the right combination of caution and chutzpah to
make a great asset manager.
Competition for jobs is fierce at all levels, but if you have strong
quantitative and analytical skills, good nerves, and can consistently
beat the market, then there's probably a place for you. Networking and
a single-minded pursuit of your goal are big helps, too.
Recommended Reading
The Mutual Fund Business, by Robert C. Pozen and Sandra D. Crane,
MIT Press (1998) is the first textbook devoted to the mutual fund
industry. It includes articles by various industry experts as well as case
studies and other exercises for the student. Coauthored by Fidelity
CEO Robert C. Pozen, the book includes an introduction to funds, a
history of funds and the laws that regulate them, a look into how fund
managers make and execute investment decisions, an explanation of
the marketing and back-office servicing of funds, and a series of
specialized topics, including fund globalization, technology issues,
and institutional investing. It makes an excellent introduction to the
industry as a whole.
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steeply during the 1990s. Brokerages and mutual funds are the two
primary means by which all these investments are made.
Trends
The Financial Supermarket
Brokerage firms (such as Merrill Lynch, Citigroup/Salomon Smith
Barney, and discounters Charles Schwab and E-Trade) and mutual
funds (like Fidelity, Vanguard, and Dreyfus) have invaded each
other's turf in an ever-escalating financial-services war. Fidelity was
the first fund to offer a large discount-brokerage operation. Virtually
every national and regional brokerage firm now offers its own family
of mutual funds, in addition to traditional offerings of funds run by
other firms like Fidelity, Eaton Vance, Nuveen, Putnam, and MFS.
But all that was merely prelude.
In late 1999, Congress repealed the 1933 Glass-Steagall Act, opening
the door for banks, securities brokers, and insurance companies to
engage in each other's formerly exclusive businesses, without
restrictions. More consolidation of financial companies and of
services within individual companies has followed. The aisles of
financial supermarkets of the future will be lined with not just mutual
funds, but every other kind of brokered investmenteven credit
transactions. In one account you might combine mutual funds;
individual stocks, bonds, and options; credit products such as credit
cards, credit lines, and home mortgages; and even a money market
checking account.
Fearful Investors
The struggling economy, an increasing number of examples of
corporate financial shenanigans, and a plummeting stock market have
combined to give investors cold feetquite a change from the late
1990s, when everyone from the guy behind the counter at the corner
deli to your neighborhood pedicurist was talking about corporate
earnings and upcoming stock splits and looking forward to tearing
open the envelope containing their next brokerage-account statement.
Nowadays, individual investors are staying away from the market.
Which means fewer trades and fewer commission dollars for brokers,
and less money going into mutual funds, and thus lower commission
revenues for them as well. Unless the market turns around, the
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while that number has diminished somewhat over the past few years
as portfolio values have declined and investors have pulled out,
theres still a pile of cash invested in funds.
Whether you choose a brokerage firm or mutual fund, career growth
and income can be excellent after your first three to five years. But
those first few years of building a client base and learning the markets
are difficult. There's little patience in this industry for either mediocre
or incompetent performance resulting in slow or zero growth in client
assets (and correspondingly in firm income from those assets). Also,
hiring numbers are way down due to the current bear market, but
expect the situation to change as the market regains ground.
Corporate Finance
If you work in private enterprise, your company measures its success
at the end of the year by comparing how much money it made to how
much it spent. If it has made more than it has spent, it was a good
year. If it has made less than it has spent, it was a bad yearor the
company is in an investment phase. (In other words, like
Amazon.com, it spent more than it made because the company and its
investors believed it would realize a profit in the near future.)
People who work in corporate finance and accounting are responsible
for managing the moneyforecasting where it will come from,
knowing where it is, and helping managers decide how to spend it in
ways that will ensure the greatest return.
This career profile focuses on opportunities in corporate finance and
accounting in private industry. To learn about other areas in financial
services, read our industry profiles for investment banking, mutual
funds and brokerage firms, commercial banking, insurance, and
accounting. These profiles detail a variety of specialized financial
functions beyond those in private enterprise.
Every company has a corporate-finance function. The responsibilities
that fall under finance and accounting range from basic activities such
as bill paying to very sophisticated ones such as forecasting the value
of a potential acquisition. The stakes can amount to hundreds of
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Retail Industry
Consumer money drives the economy, and retail is where consumers
spend that money. Boutiques and department stores, mail-order
companies and discount outletsthese are the establishments where
consumers spend their hard-earned dollars. When goods are put in the
hands, or shopping bags, of consumers, retailers realize revenues
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Insurance Industry
If you want to impress your friends and family with a job full of
glamour, sizzle, and prestige, insurance is the wrong game for you.
But while no industry offers genuine job security these days,
insurance comes closer than most.
About 1,800 U.S. insurance companies offer personal and commercial
product lines including basic health/life and property/casualty
protection as well as a long list of other coverages ranging from
automobiles to mortgages to insurance for insurance companies
(known as reinsurance). These products protect customers from losses
resulting from illegal actions, medical needs, theft, earthquakes and
hurricanes, and a variety of other causes.
Insurance companies calculate the likely cost of a given loss, divide it
by the number of people who want protection against it, add
something for profit, and reach an amount that they charge each
customer for a policy guaranteeing compensation should the loss
occur. But that's only the beginning. Insurance companies also mount
huge marketing campaigns to convince customers that they need
protection in general and the company's products in particular.
They also function as financiers, deriving a large part of their revenues
from investments. Insurance companies must maintain enormous
reserves of capital to back up potential claims obligations. They invest
those reserves in stocks, bonds, and real estate, within the U.S. and
overseas, providing an enormous amount of liquidity to financial
markets and giving the industry an influence on the national economy
far out of proportion to its size. That can be a risk, as when
industrywide over-investment in Latin America during the 1970s led
to huge losses for the entire industry and repercussions far beyond the
insurance industry itself.
Despite the fact that it is regularly accused of deceptive sales practices
and even consumer fraud, Americas security blanket also protects the
economy against losses of all kinds. U.S. companies are currently
playing catch-up to worldwide players in the global marketplace and
absorbing mammoth deregulation legislation.
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Trends
Terrorism and Insurance
In the wake of September 11, 2001, insurance companies were faced
with tremendous claims; estimates range from $30 to $70 billion. As a
result, reinsurers stopped writing terrorism policies in the U.S.
Primary insurers, as a result, started stripping terrorism coverage out
of policy renewals, in states where that was legal, and stopped
offering and/or renewing policies that included terrorism insurance in
states where it was not. In response, the Bush administration stepped
into the picture with the Terrorism Risk Insurance Act of 2002, which
acts as a kind of safety net for writers of commercial insurance. The
Act requires insurers to pay terrorism-related claims up to a ceiling;
beyond that ceiling, the government will pay the bulk of claims, thus
limiting the insurance industrys risk exposure.
Deregulation
Deregulation is redefining who can offer insurance. Repeal, in late
1999, of the 1933 Glass-Steagall Act (which formerly separated all
arenas of financial services) promised a major facelift for the
insurance industry. Insurers, banks, and securities brokers are now
free to merge and cross-sell each others' products. This clears the way
for financial service superstores that will offer insurance as well as
investment and savings options. Commercial banks have been making
modest inroads on traditional insurance markets for several years, but
repeal of Glass-Steagall could lead to much greater and quicker
changes in the role of traditional insurance agents.
Shift in Demand
The shape of the life insurance sector has morphed over the past
generation. Nowadays, demand goes beyond straightforward life
insurance. Rather, the market is looking to the insurance industry to
provide investment products, such as annuities, which provide the
consumer with regular payments for life or for a fixed period. What
this means in macro terms is that the life insurance sector has had to
shift its primary capability from analyzing and predicting mortality
rates to a more investment-management capability. The recent
collapse of the stock market has made annuities relatively even more
attractive. And in a creative move insurers are building a market for
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weaker companies continue to tank and even more secure ones sell off
this line.
Insurance Brokers
Brokers act as go-betweens, uniting buyers and sellers of insurance
and creating the contracts that bind them. Furthermore, they play the
role of risk consultants for large clients, researching industry
information to advise companies how to manage risk exposure. Major
players include Aon and Marsh & McLennan Companies.
Reinsurance
In the most simple terms, reinsurance is the insurance of insurance
companies. Insurance companies pay reinsurers to assume some or all
of the risk the insurers have taken on in writing policies for their
clients. Insurers use reinsurance to protect against the risk of unusual
losses. Reinsurers write reinsurance because their business allows
them to pool enormous numbers of individual insurance risks, making
their risks even more predictable than the risks faced by primary
insurers.
Job Prospects
Due to the replacement of agents by Internet sales, job opportunities in
this industry are increasing at a below-average pace. But the entrance
of insurance companies into the grand arena of financial services
marks a new era: Agents will be called upon to provide a full range of
servicesincluding insurance, investment banking, and savingsin
multidisciplinary teams, on a global scale. Companies are looking to
hire college grads with proven ability in sales and information
analysis. Growing occupations include systems analysts, adjusters,
and examiners: These positions require fewer hands-on skills and
more interaction with information, especially the ability to gather and
manipulate information strategically. Furthermore, the insurance
industry will become more hungry for techies as computers play an
ever more integral part in business processes.
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Accounting Industry
Bean counters. Ebenezer Scrooge. Mention accounting, and until
recently these would be the images people typically conjured. Who
knew that the accounting industry could be the source of so much
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intrigue, that the public would open the newspaper each morning to
eagerly read about the inner workings of accounting firms?
Of course, were referring to the scandals that have rocked the
accounting world and contributed to the greatest undermining of trust
in corporations and the markets in recent memory. Because of the
misdeeds of Arthur Andersen accountants working on Enrons books,
Andersen, once considered the gold standard of the accounting
industry, is now for all practical purposes out of business. Before
Andersens collapse, the top tier of the public accounting industry was
known as the Big Five; now, its the Big Four (Deloitte Touche
Tohmatsu, Ernst & Young, KPMG, and PricewaterhouseCoopers).
But Andersen isnt the only firm implicated in accounting scandals.
Ernst & Young, KPMG, and PricewaterhouseCoopers (PwC) have all
faced scrutiny in recent times. In 2002, KPMG was censured by the
SEC for auditing a money-market fund it was invested in; in 2001,
PwC paid the SEC $5 million to settle allegations of auditindependence violations of its own, the largest fine ever for such
violations; and Ernst & Young is being investigated by the SEC for
alleged violations of audit independence for teaming up with an audit
client to sell software. Clearly, theres a problem with how the
accounting industry has operated of late.
Critics of the industry think they know what that problem is. In the
1990s, they say, accounting firms became overly reliant on revenue
generated by their consulting arms. Indeed, in 2000, KPMG, General
Electrics auditor, was paid $23.9 million to audit GEs booksa
fraction of the $79.7 million GE paid KPMG for IT and other
consulting work in that same year. How, critics ask, can auditors
maintain their objectivity if their firms are so beholden to clients for
consulting revenue? Because IT consulting has recently become less
lucrative (since companies cutting costs often cut back on tech
consulting purchases), accounting firms have already been moving
away from their reliance on consulting revenue; indeed, Ernst &
Young, KPMG, and PwC have all sold off their IT consulting arms.
But due to the crisis in accounting and the markets, the clamor to split
accounting and consulting is louder than ever. A number of states are
going so far as to consider legislation barring accounting firms from
doing consulting work for audit clients.
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As you step into the wonderful world of accounting, you have three
obvious career options: 1) work for a Big Four public accounting firm;
2) work for a smaller national or regional public accounting firm; or 3)
work in the accounting department of a private or government
organization.
If you go the public accounting route (options 1 and 2), you'll
typically start by studying for and taking the CPA exam and then
working for several years on a variety of tax or audit assignments. At
that point, assuming you want to remain in accounting, you'll either
leave to join a client or stay and try for the partner track. If you start in
the private sector (option 3), you may or may not be able to get your
CPA (some states require experience working for a public accounting
firm to do this), but you will learn about one business in far greater
depth than your public accounting pals will in their short-term
auditing assignments.
are those who are cynical about this new focus on ethics. One insider
says that the accounting industry put a similar focus on ethics
following the Savings & Loan crisis, only to have ethics become a
secondary consideration during the 1990s.)
Cutting-Edge Technology
As recently as 1990, you'd go into an audit with nothing but a legal
pad and a couple of sharp pencils, according to one senior accounting
recruiter. Now, auditors arrive with far more serious electronic
artillery in tow, in some cases boasting expertise in various
specialized software applications that automate accounting tasks, from
spreadsheets to ledger packages. To do well in this field, you'll still
need to have your journal entries down pat, but increasingly you'll
need to be able to use computers. Big Four firms are renowned for
their technology. These firms have been among the most savvy and
aggressive users of intranets, extranets, and e-commerce technologies.
One insider says, I take a lot of it for granted, but we really have an
unreal amount of information at our fingertips. The intranet, external
Web, the research capabilitiesits almost information overload at
times.
Globalization
Like so many other facets of economic life, accounting is increasingly
immune to international borders. As corporations become
multinational, so do their accounting firms. While each country still
has its own canon of standard accounting practices, there is a
gathering movement toward international accounting rules. Numerous
issues have been raised by globalization, but few if any have been
resolved. One thing is sure, however; international accounting bodies,
such as the International Federation of Accountants (IFAC), the
International Accounting Standards Committee (IASC), and perhaps
the Institute of Social and Ethical Accountability (ISEA), will have
more influence than in the past.
How It Breaks Down
The obvious breakdown in accounting is the one we made above: Big
Four, smaller public-accounting firms, and private and government
accounting. In public accounting, most people will go into either audit
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agencies such as TRW. Although people at these firms are still in the
money business, the specific jobs vary greatly, perhaps more widely
than jobs at the traditional banks do. In particular, given the volume of
transactions that many of these organizations handle, there are
excellent opportunities for people with strong technical skills.
Job Prospects
Banks remain in the business of profiting from other people's money,
but now they need to do it in as many markets at home and abroad as
possible, as aggressively as possible. Competition has forced banks to
move quickly and more creatively into mortgage lending, securities
and derivatives trading, and transactions processing.
Throughout banking there are positions for people who understand
technology, the full gamut of financial services, and how to market to
new customers. Banks also employ sales and marketing staffs,
developers of new products, mortgage and securities experts, and
credit analysts. At the same time, though, banks have taken a hit
during the current down cycle of the economy, so the opportunities to
get into banking are fewer and farther between than they have been in
some time.
Banking and bank-related work are a good fit if you know something
about finance and you like software development; if you're interested
in marketing and sales; if you're a business school grad and you want
a solid career start; if you're not a B-school grad but you're looking for
work experience the equivalent of an MBA; if you're fluent in
Spanish, Japanese, or another language and you want to live overseas
for a few years; or if you just want the know-how to eventually start
your own business. One thing about banking skills: They are
extremely useful and portable. So even if you join a bank that gets
gobbled up by a competitor and you end up a merger casualty, you can
usually transfer your expertise somewhere else with relative ease.
Commercial Banking
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Banks used to be the dorky cousins of the hot and flashy investment
banks and brokerages. No longer. The legislation that kept banks and
investment banks separateGlass Steagallwas struck down by
Congress in 1999. So banks are now moving into highly visible
spheres of activity, such as investment banking, mutual funds, and
brokerage.
What It Is
Commercial banks hold customers money and supply loans, in
exchange for check-writing fees and interest collected from loans. The
work of commercial bankers is criticalretail consumers get their
credit lines extended, their checking accounts upgraded, their
mortgages, cars, and home improvement loans approved.
Small businesses are also highly dependent on the goodwill of
commercial bankers. Even as dot coms, angel investors, and VCs
monopolize the news, most small businesses continue to fund their
growth with commercial loans. Such loans allow them to secure new
inventory, cover payroll, remodel their stores, buy registers, and
manage their overseas accounts receivables.
What They Do
Commercial bankers perform core financial analysis to assess risk,
creditworthiness, and the likelihood a business will succeed. They
play a key part in deciding the best business initiatives, expanding
existing businesses, developing new markets and clients, and creating
new products for e-commerce, the Internet, international markets, and
consumers.
Commercial bankers have to combine business acumen with strong
accounting and interpersonal skills. After all, commercial bankers are
at the front lines of the banking business. Ideally, they know their
clients' lives intimately and can recommend additional products and
services. Commercial bankers are a key distribution point and referral
source for the rest of a bank's financial services activities.
Trends
Many commercial banks are consolidating in order to branch out and
provide other services such as mortgage, mutual funds, investment
banking, and insurance. As other financial firms expand their services,
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commercial banks are diversifying to keep up, and often a merger with
a peer company is the best way to do this. Since 1995, more than 200
large and small banks have merged. Consolidation usually results in
layoffs and fewer job opportunities, but jobs in banks that are more
diversified offer more opportunities for career development. And a
growing number of non-banks are pioneering new ways of delivering
financial services, providing more jobs in the finance industry.
Technology is changing the job requirements for bankers. There are
fewer junior staffers, and the ability to manipulate data intelligently
and discover trends is key to long-term success. Banks want to
maintain their record levels of profitability by reducing defaults and
increasing efficiency, resulting in an increasing reliance on technology
and more finance jobs available to job seekers with technical
backgrounds.
Many banks have lost profits trying to recoup loans. The recent spate
of corporate accounting misdeeds has resulted in seriously diminished
funds for some corporations and bankruptcy for others, leaving banks
holding an empty bag. On the consumer side of the business, in
January 2002, 4.9 percent of all home loans were past due, a full point
higher than the year earlier. Profits for deposit-taking banks declined 5
percent in 2001, and in the current economic environment, banks
performance could get even worse.
Who Does Well
If you like intense project work, with a good deal of financial analysis
and customer contactif you like helping new families and new
businesses create brilliant futurescommercial banking might be for
you. You'll just have to function in a larger organization, trying to
build synergies with other product groups across different customer
and product platforms.
Trends
Cooldown
As the global economic climate cools down, so has investment
banking. In 2001 and 2002, I-banking heavyweights Credit Suisse
First Boston, Merrill Lynch, JPMorgan Chase, and Goldman Sachs all
laid off a significant chunk of their employees. But the bulge-bracket
firms were not the only ones to feel the pinch of thinner profitsor to
react by cutting costs via layoffs. In 2001 alone, approximately 30,000
Wall Street workers were laid off. Also, I-banking bonuses, which can
comprise half or more of some employees total annual compensation,
fell by some 30 percent in 2001. I-banks have also pulled back on
college and MBA recruitingbut, because its cheaper to employ a
recent grad than someone with more experience, there are still jobs to
be had for the cream of the crop from the best schools. More than
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ever, though, those who do I-banking internships will have the best
shot at full-time openings.
Deregulation and Financial-Services Consolidation
Investment banking has witnessed a rash of cross-industry mergers
and acquisitions in recent times, largely due to the late-1999 repeal of
the Depression-era Glass-Steagall Act. The repeal, which marked the
deregulation of the financial services industry, now allows
commercial banks, investment banks, insurers, and securities
brokerages to offer one another's services. As I-banks add retail
brokerage and lending to their offerings and commercial banks try to
build up their investment banking services, the industry is undergoing
some serious global consolidation, allowing clients to invest, save, and
protect their money all under one roof. Coupled with a slowing
economy, these mergers have also triggered layoffs, as I-banks make
an effort to cut spending and reduce overlap. Among the recent M&A
activity: Donaldson, Lufkin & Jenrette was acquired by Credit Suisse
First Boston; J.P. Morgan and Hambrecht & Quist were swallowed by
Chase; Robertson Stephens was acquired (and then dumped) by
FleetBoston; and Alex. Brown was acquired by Deutsche Bank.
PR NightmareOr Something Worse?
The swing in the markets from up, up, up to down, down, down
focused a lot of scrutiny on firms on the Street. The biggest issue so
far has been whether banks overrated the investment potential of client
companies stocks intentionally, deceiving investors in the pursuit of
favorable relationships and ongoing banking revenue opportunities
with those companies. The outcome: a regulatory settlement released
Dec. 20, 2002, directs the nations largest securities firms to pony up
$450 million over five years to buy stock reports from independentresearch firms, ones not involved in I-banking. This means investors
will be able to view at least one research report that was developed
outside of the brokerage firm with which they have dealings. As well,
I-banking firms have been mandated to put stock ratings from various
sources on brokerage statements sent to investors after they buy a
stock. Citigroup/Salomon Smith Barney, Credit Suisse First Boston,
Goldman Sachs, and Morgan Stanley will also have to pay fines of
$50 million on up. And a restitution fund will be put into place for
investors burned in such dealings.
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Of course, a lot of the details still need to be worked out, such as when
this regulatory settlement is to take effect and what makes a research
firm truly independent. These types of issues and other potential
quagmires put into question how effective this settlement will be.
According to the New York Attorney General Eliot Spitzer, all
changes will take place before the end of 2003.
How It Breaks Down
The Bulge Bracket
There's no clear and uniformly accepted definition of this group, but it
basically includes the biggest of the full-service investment banks.
This is the group that matters most in investment banking, and their
names confer distinction, whether you're a start-up with an IPO to sell,
a Fortune 500 company planning an acquisition, or a job seeker
sending out rsums. Merrill Lynch, Morgan Stanley, Goldman Sachs,
Citigroup/Salomon Smith Barney, Lehman Brothers, Credit Suisse
First Boston, and JPMorgan Chase hold top spots in this bracket, at
least for the moment. A whole host of others fall into the second tier
of major players, including Bear Stearns and UBS Warburg, the
investment-banking division of the giant Swiss bank, UBS.
Boutiques and Regional Firms
Obviously, the investment banking world extends beyond New York
and the bulge bracket, but the list of small firms is getting smaller as
the market consolidates. The strongest boutique firmsHambrecht &
Quist, Montgomery Securities, and Alex. Brownhave all been
acquired by commercial banks. But that's not to say independent firms
are nearing extinction. The equity markets are strong, and that means
big business for niche firms focusing on technology, biotechnology,
and other high-growth industries. In New York, Allen & Co. and
Lazard Frres still do big business in specialized fields. Volpe Brown
Whelan and Thomas Weisel are Silicon Valley firms capitalizing on
their technology connections and expertise.
Job Prospects
Investment banking is one of the best ways a young person can learn
about finance and make a lot of money right out of school. Even if
you ultimately decide to reclaim your personal life by pursuing other
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options, the skills you learn on Wall Street will be valuable in most
business careers.
But before you can cash in on those potential returns, youll have to
put up with some very substantial hardships, including high pressure,
long days and nights of hard work, a few difficult personalities, and
the expectationno, the requirementthat all personal plans are
subject to the demands of work.
In addition, youll find that life on the Street is very much at the
mercy of the markets. Bull markets bring more work to do than is
humanly possible, but youll be rewarded with a paycheck that can
sometimes double year-to-year. Bear markets can leave you sitting at
your desk with a pile of deals on hold, hoping that the rumored layoffs
and smaller-than-usual bonuses dont come to pass. Despite this
inherent uncertainty, the field remains a popular destination for
undergraduates and MBAs. And, because of the current difficult
economic environment, count on competition for open spots in
investment banking to be especially stiff.
Still, firms are always looking for new (read: cheaper) bodies; even
though they certainly arent hiring to the extent they did a couple of
years back, banks are still bringing on best-and-brightest hires for
analyst and associate programs by way of summer internships for the
most part. As one recruiter puts it, Well never not hire new talent,
even during a merger, even during a downturn.
Investment Banking
Youve heard about the long hours, the big bonuses, and the
megabillion-dollar deals. You can recite the names of the big firms by
heart. You can even write a good enough cover letter or bid enough
points to land a coveted first-round interview slot with one or more of
these firms. But suddenly it dawns on you. What the heck is
investment banking? You panic. What do investment bankers do?
Whats the difference between sales and trading and corporate
finance? More to the point, why do you want to be a banker?
What I-Banking Is
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