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HOW
BUSINESS
WORKS
 About this eBook
Due to the complex integration of images
and text, this DK eBook has been formatted
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$ $

$
$
 HOW
BUSINESS
$ WORKS
The FACTS visually explained

$
 Contents
Produced for DK by Dynamo Limited
1 Cathedral Court, Southernhay East, Exeter, EX1 1AF
Senior editor Georgina Palffy
Project art editor Saffron Stocker
Editors Anna Fischel, Alison Sturgeon,
Suhel Ahmed, Hannah Bowen,
Joanna Edwards, Alex Beeden
Designers Natalie Clay, Stephen Bere,
Introduction 8
Phil Gamble, Vanessa
Hamilton, Jemma Westing
US executive editor
US editor
Lori Hand
Heather Wilcox
HOW COMPANIES WORK 10
Managing editors Stephanie Farrow, Gareth Jones
Senior managing Lee Griffiths
art editor
Publisher Liz Wheeler
Deputy art director Karen Self Business ownership 12
Publishing director Jonathan Metcalf Sole proprietorships and partnerships 14
Art director Phil Ormerod Limiting liability 16
Senior jacket designer Mark Cavanagh Private and public companies 18
Jacket assistant Claire Gell Multinationals 20
Jacket design manager Sophia MTT Franchises 22
Pre-production producers Ben Marcus, Nikoleta Parasaki
Not-for-profit 24
Producer Christine Ni
This American Edition, 2022
First American Edition, 2015
Start-ups 26
Published in the United States by DK Publishing Start-ups from concept to launch 28
1450 Broadway, Suite 801, New York, NY 10018
Types of start-up 30
Copyright © 2015, 2022 Dorling Kindersley Limited
DK, a Division of Penguin Random House LLC Business plans 32
22 23 24 25 26 10 9 8 7 6 5 4 3 2 1 Raising money 34
001– 325014–Mar/2022
Business accelerators and incubators 38
All rights reserved.
Without limiting the rights under copyright reserved above,
no part of this publication may be reproduced, stored in or introduced Buying & selling businesses 40
into a retrieval system, or transmitted, in any form, or by any means
(electronic, mechanical, photocopying, recording, or otherwise), without Mergers and acquisitions 42
the prior written permission of the copyright owner. Divestitures 44
Published in Great Britain by Dorling Kindersley Limited
A catalog record for this book is available from the Library of Congress
Vertical vs. horizontal integration 46
ISBN 978-0-7440-4216-0 Management buy-ins and buyouts 48
DK books are available at special discounts when purchased in
bulk for sales promotions, premiums, fund-raising, or educational use.
For details, contact: DK Publishing Special Markets, 1450 Broadway, Who’s who 50
Suite 801, New York, New York 10018 or SpecialSales@dk.com. Board of directors 52
Printed and bound in China Company hierarchy 56
Stakeholders 60
www.dk.com Business cultures 64

This book was made with Forest

Stewardship Council™ certified
paper—one small step in DK’s
commitment to a sustainable future.
For more information, go to
www.dk.com/our-green-pledge.
 HOW FINANCE WORKS 100

Financial reporting 102

The accounting cycle 104
Financial statements 106

Financial accounting 112

Profit and loss statement 114
Corporate structure 66 Balance sheet 116
Functional structure 68 Cash-flow statement 120
Divisional structure 70 Environmental accounting 122
Matrix structure 72 Depreciation 124
Network structure 74 Amortization and depletion 128
Team-based structure 76
Management accounting 130
Human resources 78 Cash flow 132
The human resources cycle 80 Budgets 136
Recruitment and selection 82 Assets and inventory 138
Evaluating staff 84 Costs 140
Motivation and rewards 86 Product costing and pricing 142
Leadership strategy and styles 88
Leadership for team building 90 Measuring performance 144
Employee relations and Key performance indicators (KPIs) 146
communications 92 Financial ratios 148
Project management 94 Forecasting 150
Negotiating strategy 96 Tracking fraud 152
Flexible working 98
Raising financing 154
Internal financing 156
External financing 158
Going public 160
Shares and dividends 164
The capital market 170
Gearing ratio and financial risk 174
HOW SALES AND
MARKETING WORKS 176

Marketing mix 178 Inbound marketing 220

Product 180 Outbound vs. inbound marketing 222
Product positioning 182 Blogging 224
Product life cycle 184 Social media marketing 228
Price 186 Search engine optimization (SEO) 230
Place 188
Promotion 190 Business development 232
Market research 192 Branding and rebranding 234
Market segmentation 194 Lead generation 236
Lead conversion 238
Marketing approaches 196 Customer retention 240
Niche vs. mass marketing 198 Return on marketing
Traditional marketing 200 investment (ROMI) 242
Digital marketing 202 Intellectual capital 244
Engagement marketing 204
Sensory marketing 206 Information management 246
Relationship marketing 208 Business intelligence 248
Business analytics 250
Outbound marketing 210 Marketing and IT 252
Traditional offline advertising 212 Collecting consumer data 254
Online advertising 214 Data warehousing 256
Direct mail 216 Customer profiling 258
Telemarketing 218 Big data 262
Customer relationship
management (CRM) 264
Compliance 266
HOW OPERATIONS Resources 336
AND PRODUCTION WORK 268 Index 344
Acknowledgments 351

Manufacturing and production 270

Job production 272
Batch production 274
Flow production 276
Mass customization 278
Continuous production 280
Hybrid processes 282

Management 284
Economies and diseconomies of scale 286 Contributors
Lean production 288
Just-in-time 290 Dr. Julian Sims (consultant editor) entered academia
Total quality management 292 after a successful career in industry in the U.S. and the U.K. He
is a lecturer in the Department of Management at Birkbeck,
Time-based management 294
University of London, U.K.; a Chartered Accountant (CPA Aus);
Agile production 296 and a Chartered Information Technology Practitioner (CITP). His
Kaizen 298 work is widely published in academic journals.

Philippa Anderson is a business writer and communications

Product 300 consultant who has advised multinationals, including 3M, Anglo
New product development 302 American, and Coca-Cola. She collaborated with
Innovation and invention 304 Lord Browne, former CEO of BP, on his memoir, Beyond
Design 306 Business, and was a contributor to DK´s The Business Book.
Quality management 308
Alexandra Black studied business communications before
Product-process matrix 310 writing for financial newspaper group Nikkei Inc. in Japan. While
in Tokyo, she was an editor at the Risk Analysis division of
Control 312 investment bank JP Morgan. Now based in Cambridge,
U.K., she covers subjects as varied as business, technology,
Managing capacity 314
and fashion. She was a contributor to DK’s The Business Book.
Inventory 316
Quality control 318 Joe Stanley-Smith is a reporter at the International Tax
Six Sigma 320 Review in London, U.K., where he specializes in indirect tax
and tax disputes. He graduated in journalism with a business
specialty from Kingston University, U.K., and has previously
Supply chain 322 worked in social media and local news.
Value chain 324
Outsourcing 326 Paul McDougall (U.S./Canada writer) is Deputy Technology
Editor for the International Business Times. He has written
Offshoring 328
for Scientific American, InformationWeek, SHAPE magazine, and
Reverse supply chain 330 others. A native of Toronto, Canada, he currently resides
Benchmarking 332 in New York City.
Corporate social responsibility 334
 $

$
$
$
 HOW BUSINESS WORKS
Introduction 8 9

Introduction
The term “business” refers to an organization or commercial
enterprise engaged in producing and trading goods and services for
money. We can trace the origins of business to the very foundations
of human society. When Homo sapiens evolved, humankind left behind
the nomadic hunter-gatherer lifestyle to become farmers. This allowed
for specialization of work, where individuals would become skilled
at specific tasks to serve a particular community need. Over time, this
enabled more complex goods and services to be produced and traded
in order to provide for all members of society. Thus, human society has
been engaging in “business” for thousands of years.

Today, the world of business is inescapable—businesses no

longer are just local providers of goods and services but extend
to vast corporate enterprises operating on a global scale. At the
same time, technological advances have made it easier than ever
for entrepreneurs to start their own companies and propelled
Internet-based businesses to the heart of the global economy.
But whether businesses are small or large, public or private, for
profit or nonprofit, they each play a key role in allowing governments
to function and economies to flourish, and together they form the
backbone of the modern world. Business underpins every aspect of
the world we live in today, and understanding how it works is the
key to understanding society.

This book explains the complex world of business in a simple and

graphic way. It examines every aspect of how a business works,
including forming a company, raising capital, product development
and marketing, management strategies, tracking revenue, financial
reporting, and legal, social, and environmental responsibilities.
Through visual explanations as well as real-life examples to make even
the most complex concept immediately accessible, How Business
Works offers a clear understanding of what business is all about and
how business, in its many forms, shapes modern society.
HOW
COMPANIES
WORK
Business ownership ❯ Start-ups
Buying & selling businesses ❯ Who’s who
Corporate structure ❯ Human resources
 Business
ownership
Every type of business has to choose an ownership structure. Although there
are global variations, most countries offer analogous legal entities, from a single-
person private enterprise to a large organization trading on a stock exchange.
There are three key considerations: how big the venture is expected to grow; the
complexity of financial recording, management, and reporting that the owner is
willing to take on; and the amount of liability that the owner is willing to accept.

Public companies

❯ Companies that go public

Small and simple
❯ Basic structures, such as a
sole trader or partnership,
are simple to set up and
require little capital.
❯ One or more people own
the business—usually a
small enterprise—and
trade as a legal entity.
❯ Owners are personally
liable for business debts.
See pp.14–15.
Private are large businesses, and they
companies have many legal and financial
reporting obligations.
❯ More complex to set
up and run, private ❯ The general public and other
companies are legal institutions can buy shares in
entities that are separate public companies.
from their owners. They ❯ The public company structure is
may have some financial good for a major capital injection,
reporting obligations. allowing the business to expand.
❯ Owners are not usually See pp.16–19.
personally liable for
business debts.
❯ Shareholders, who are
often the companies’
managers, own them.
See pp.16–19.

7%
of global economic
activity is accounted
for by the world’s
100 largest companies.
Multinationals
❯ Multinationals have operations
in various countries, enabling
growth and flexibility.
❯ Multinationals can save money by
setting up operations in countries
where costs are cheaper.
❯ Foreign branches can adapt to
the local market and also find
new markets. See pp.20–21.
HOW COMPANIES WORK
Business ownership
NAMING A COMPANY
Do
❯ Use a domain suggestion
tool to search for available
internet domain names and
work backward from there.
❯ Be descriptive so potential
customers instantly grasp the
nature of the business.
❯ Say the name out loud,
as it may sound different than
intended. The goal is for
people to find it just from
hearing it.
❯ Check what the name
means in other languages.
❯ Keep it short and simple and
avoid puns.
Franchises
❯ In this model, a business
(the franchisor) authorizes an
individual (the franchisee) to set
up a branch, in return for a fee.
❯ The franchisor needs less capital
than it otherwise would to develop
the business.
❯ The franchisee takes on a known,
successful business model and
name, minimizing the risk.
See pp.22–23.
12 13
Don’t
❯ Include your name, so if
the venture fails, your name
will be associated with it.
❯ Copy competition, because
if your name is unique, you
have a much better chance of
topping search-engine results.
If your name is similar to that
of competitors, customers
can’t tell you apart from them.
❯ Spend time thinking of a
name until your product and
brand are finalized. Get the
product right first, and the
name will naturally follow.
Not-for-profit
sector
❯ Common not-for-profit
organizations include
charities, mutuals, and
cooperatives.
❯ Their organizational
structure is similar to
that of a company.
❯ NPOs may generate
substantial sums of
money but reinvest it in
beneficial causes rather
than distribute profits.
See pp.24–25.
 Sole proprietorships
and partnerships
The simplest business structures are those formed by one person as a
sole proprietorship or by two or more people as a partnership for
commercial activity. Many cost little to set up, and some are easy to run.

How it works
Many businesses start out as the most NEED TO KNOW
basic unit—either a sole proprietorship
❯ Firm Collective term for
or a partnership. A sole proprietor is an individuals in a partnership
individual who is the only owner of
❯ Limited liability partnership
the business. This structure is easy to Unlimited liability: (LLP) Partners not personally
set up, and there are no extra taxes to business debts accountable for business debts
paid personally
pay, unlike with a company. Instead,
the sole proprietor files a personal tax
return. There is risk attached, though.
A sole proprietor has unlimited liability,
so if the business fails, the owner must
personally pay debts. Partnerships have
more than one owner, and each can be
held liable for the whole debt of the
business in case of failure. Tax-efficient Simple
way to be registration process
self-employed

Pros and cons $ $

Both sole proprietorships and partnership
Little Easy to move from
structures are excellent for anyone starting capital sole proprietor to
out or running a small business—as long as needed company status
partners have a good working relationship
and the business stays out of debt: owners
are personally liable for business debts. $

Schedule C Trade under own Keep all business

filed with IRS name or chosen profits after paying
Form 1040 business name tax on them

Sole proprietorship
Working alone requires only
simple administration and
relatively few start-up costs.
 HOW COMPANIES WORK
Business ownership 14 15

FROM INDIVIDUAL
TO MULTINATIONAL
Sole proprietorships and partnerships
may grow into global names.
66%
of E.U. private- WHEN TO MO
❯ Richard Branson Sole proprietor- COMPANY STVE TO
ship that expanded into Virgin empire sector jobs are in ATUS
❯ Steve Jobs and Steve Wozniak
Partnership that created Apple brand small or medium-
❯ Bill Hewlett and David Packard
Partners who founded HP technology size enterprises.
❯ Fusajiro Yamauchi Sole trader
whose playing card shop became
the Nintendo video-game company

If the need fo
r ca
increases (and pital
potential
debts grow),
forming
a company m
Profit and control ay be
beneficial. Se
of the business e pp.16–17.
shared

Allows for Option to set up a

specialization by limited liability
each partner partnership

If partner leaves, Each partner pays

$
new partnership tax on own
needed portion of profit $

Furnish Schedule More partners New partners

K-1 (IRS Form mean more capital bring new
1065) to partners and expansion business skills

Partnership
Like sole proprietors, partners
file only personal tax returns and
are liable for business debts.
 Limiting liability
By setting up an organization that is legally and financially
independent business owners can limit their level of risk,
as personal assets are largely protected.

How it works reporting and structural requirements, but it also

Business owners can structure their business so provides more protection from liability for the owners.
that it is legally the same entity as the owner (sole There are several different types of corporations that
proprietorship), or they can choose a structure that is a an owner can register as, but all issue shares of the
separate legal entity (limited partnership, corporation, corporation and the owners become shareholders, with
or limited liability company [LLC]). Choosing one of the profits of the corporation distributed as dividends.
these limits the owner’s personal liability for debts and
protects them from the risks of running a business.
LLCs and corporations are by far the most common
for small businesses and entrepreneurs because of
the tax implications. An LLC is less structured and has
fewer reporting requirements than a corporation, so
many entrepreneurs choose it. A corporation has more

Corporation
US business structures A corporation is a business
entity that is completely
The four main business structures in the US are: sole proprietorship, limited separate from its owner. The
partnership, corporation, and limited liability company (LLC). A sole owner are issued shares that
proprietorship treats the business as the same as the person who owns it, and they may sell to end their
does not protect the owner from any debts or liabilities. A limited partnership, ownership of the corporation.
corporation, and LLC protect the owners from debt and liability, to different
degrees depending on the form. The four forms file taxes differently, and have
different reporting requirements.

NEED TO KNOW
❯ Members People or institutions Types of corporations
(such as pension funds and insurance ❯ C corp is most commonly referred to as a
firms) that own shares in a company; “corporation.” It taxes profits of the company.
directors may own shares but are
❯ S corp allows some profits to pass through to the
not required to do so; also known
owners without being double-taxed at corporate rates.
as subscribers
❯ B corp is treated the same as a C corp for taxation, but
❯ Doing business as (DBA) Operational has to produce “a public benefit” along with any profits.
rather than registered company name
❯ Close corporation is less structured version of a
❯ Professional corporation (PC) B corp that may not have a board of directors.
Corporate form used in the US and
suitable for doctors, lawyers, and
similar professional service providers
 HOW COMPANIES WORK
Business ownership 16 17

Limiting liability
Companies structured to limit
liability come in various forms,
but all operate as entities that are
legally and financially independent
from their owners.
NAMING CONVENTIONS
The names given to different types of business entities differ from
country to country. In the US, a corporation ends with Corp. or Inc.
(short for Corporation or Incorporated) and an LLC ends with LLC.
In the UK, a corporation ends with Ltd or Plc. In Canada, a corporation
ends with Inc, Corp, or Ltd.

LLC
An LLC is a hybrid format
that protects the owner from
personal liability and from
debts, but allows profits and
losses to be passed through
directly to the owners without

35%
being taxed at a corporate rate.

of small
businesses in the Quirks of LLCs

US are LLCs. 52% ❯ No shares issued, so owners are not shareholders

❯ Profits are taxed at a lower rate than corporations

are some type ❯ Rules may vary by state, unlike corporations

❯ When an owner leaves, the entire LLC may be
of corporation. dissolved and have to be redrawn
 Private and public
companies
While the owner-shareholders of a private company may buy and sell
their shares privately (usually with director approval), any investor in
the financial market can trade the shares of a public company.

How it works
Although most of the world’s companies are set up as
private, public companies are seen as more prestigious
Differences between private
and profitable. For business ventures requiring large and public companies
amounts of capital, a public company offers greater Private company directors have to consider the potential
opportunity for raising funds because shares can be capital increase of joining the stock exchange against the
sold to public investors to generate cash. Private legal red tape aimed at protecting public shareholders.
companies must rely on private investors or use the
capital investment of their owners. Public companies
are subject to more stringent legal controls than private
ones and are expected to disclose financial details. Private

27 million
the number of companies
Directors
Usually control all the shares.
Reporting
in the US, fewer than In the UK, it is mandatory to file accounts at

1% of which are public Companies House; no disclosure is required

outside the company in the US.
Shareholders and management
FAMOUS PRIVATE COMPANIES Shareholders are often actively involved in
management, so decisions can be made quickly.
❯ Mars Confectionery and pet food; Financing
third-largest private US company Company must rely on private investment, which
❯ Aldi German supermarket chain is often harder to attract because there are fewer
comprising two private firms, Aldi Süd financial details available.
and Aldi Nord, trading under one name Valuation
❯ The LEGO Group Danish company Value of the company is more likely to fluctuate; it
producing household-name toy bricks is more difficult to assess because there are fewer
❯ Hearst Corporation Mass-media available financial details.
multinational based in New York City Size
❯ IKEA Swedish retailer registered in
Number of shareholders is limited, usually to
Netherlands selling flatpack furniture
fewer than 2,000.
❯ PwC Professional services network

3,800
companies are listed on
the Tokyo Stock Exchange.
Public
Directors
Not necessarily shareholders.
Reporting
Company has legal obligation to disclose accounts
and submit regular financial reports.
Shareholders and management
Clear boundary is drawn between the role
of shareholders and management; there may
be conflicts of interest between them. Freely
transferable shares mean that original owners
could lose control if major shareholders
launch a hostile takeover bid.
Financing
Company can tap financial markets to raise capital
by selling stock or bonds.
Valuation
Value of the company is easier to assess, from the
trading price of shares and financial statements.
Size
Number of shareholders is unlimited.
HOW COMPANIES WORK
Business ownership 18 19
GOING PUBLIC
There are legal requirements at each stage of converting
a company from private to public, including voting in the
board of directors and deciding on a new name.
Choose board members
Usually at least three directors to
allow future board decisions to
be made with only two members
present (representing a majority)
Inform staff
Must notify in writing anyone with
an interest (including employees
and proposed board members)
that company intends to go public
Vote for conversion
Board meeting held to vote in
favor of changing company’s
Articles of Association (specifying
private or public company)
Register company
Documents setting out board
resolutions sent to company
registry, which issues certificate
declaring the company is public
Make public announcement
Press releases issued, events for
business held, and emails sent to
inform contacts of change
NEED TO KNOW
❯ Unquoted/unlisted company Another term for
a private company
❯ Initial public offering (IPO) Stock-market launch
❯ Secondary stock offering Second-round sale of shares
to raise more capital
❯ Ticker symbols Unique codes assigned to publicly
traded companies and used by stock exchanges
 Multinationals
A multinational corporation has business operations in more than
one country. It usually starts as a national company and sets up
subsidiary (branch) companies abroad for production and sales.

How it works to local cultural/market differences.

Multinationals have several goals:
to increase revenue by finding new
markets, to streamline operations
and production by taking advantage
of global locations with lower labor
and/or transport costs, and to adapt
A company may achieve such goals United Kingdom
by outsourcing (using external London
suppliers) or offshoring (relocating One of many country HQs in major
functions). Companies may also European cities, the London office
insource (move operations in-house) serves the U.K. market.
to rightsource (find a good balance).
Regional HQ Management
and core admin functions

Case study: mapping a multinational Marketing U.K. campaigns

Sportswear company Nike has successfully spread around the globe from and merchandising
its corporate base in the U.S. It has manufacturing functions where technical
expertise maximizes efficiency and keeps costs down, distribution hubs in
strategic locations, and marketing and retail departments in countries where
it is establishing local markets.

GLOBAL VS. MULTINATIONAL United States

Beaverton, Oregon
A global company has facilities in different countries
Senior management are located at the company’s corporate
but operates as a single corporate culture with
base, or “campus,” its center for decision making on global
common processes. A multinational has facilities in
strategy, design, marketing, and core functions. Facilities of
different countries, but each functions as its own
Nike subsidiary Air Manufacturing Innovation (AMI), which
entity, adapting locally, with little communication
develops and supplies materials, are here as well as in
between geographic divisions.
St. Charles, Missouri.
Global
Regional HQ
Operations for Americas,
Apple is an example of hello hola!
Asia-Pacific, and U.S.
a global company—the
product is essentially World HQ Global marketing
the same except for a Management, finance, Branding and
language change. legal, IT, and admin marketing
Multinational R and D Sports Supplier Subsidiary
research lab and AMI develops and
McDonald’s is a design facilities supplies materials
multinational—the
product changes to suit Memphis, Tennessee
the market. For example,
it serves a shrimp burger Distribution Four high-tech centers in location
in Japan and chicken rice with good links. Other centers in Indianapolis,
porridge in Malaysia. Indiana, and Dayton, Tennessee
 HOW COMPANIES WORK
Business ownership 20 21

The Netherlands NEED TO KNOW

Hilversum
Based in a central location, a European
headquarters supports operations
across Europe, the Middle East, and
Africa and is close to the company’s
European distribution hub in Belgium.
❯ Transnational corporation ❯ Platform corporation
Similar to a multinational but Multinationals that do not
does not identify itself with manufacture but outsource
any particular parent nation products they have designed

European HQ Management, China

finance, legal, IT, and admin
Shanghai
Distribution European logistics The company’s fastest-growing market, China is also a manufacturing and
center based in Laakdal, Belgium distribution base due to local expertise and low production costs.

Chinese HQ Operations Manufacturing Sportswear

and core support functions factories and innovation hubs

Marketing Campaigns for Distribution Centers in

the Chinese market Taicang and Suzhou

Japan & South Korea

Tomisato & Incheon
Major company-owned
distribution centers

Distribution Hubs for

retail stores across Asia

Vietnam
Dong Nai province
Home to facilities of Nike’s AMI
subsidiary, which supplies
materials. Most manufacturing is
carried out by contract factories
in Vietnam and Cambodia,
benefiting from expertise and
Rest of the world lower wages.
Multiple locations
Supplier Subsidiary
Nike runs international branch offices and subsidiaries in around 50 countries as AMI supplies materials
well as 1,000 retail stores and 45 digital commerce platforms across the globe. to factories

Regional HQ Core operations Retail Online sales and stores Manufacturing Sites
and marketing around the world in several countries
 Franchises
A franchise is a business model in which an independent
entity—the franchisee—is entitled to set up a branch of an
established brand. There are advantages for both parties.

How it works business with modest capital

Rather than developing an original
business idea, the franchisee
pays for the right to represent
an existing, successful brand
in a particular location. The size
of a franchise can vary from a
single unit—one outlet only—
to an area development in which
the franchisee takes on the option
to represent the brand through
several branches in a city or region.
outlay, while the franchisee takes NEED TO KNOW
on a proven business model and
brand name, so everyone reaps ❯ Franchise disclosure documents
(FDD) Pre-agreement
the benefits.
information
❯ Microfranchising Support and
“I put the training for small-scale businesses
in the developing world
hamburger on ❯ International Franchise
Association (IFA) Oldest
the assembly line.” and largest franchise organization

The franchisor can develop the Ray Kroc, founder of McDonald’s

Three types of franchise

The franchisor’s level of control varies from managing the contracts for the entire supply chain
to input on every detail down to the last French fry. In a product franchise, the franchisor lends
its trademark and brand but not an entire business system.

Manufacturing franchise Product franchise

This is a supplier-dealer relationship in which
the franchisee sells the franchisor’s products.
Examples include tires, cars, and gas.

A company that manufactures a specific range

of products grants retailers, or franchisees, the right to
distribute its products and use its brand name and
trademark. For example, beverage-makers sell syrups
to the franchisee, who then bottles the drink.
 HOW COMPANIES WORK
Business ownership 22 23

TOP 10 CASE STUDY

Fastest-growing franchises
worldwide
1. Century 21 Real Estate
property
2. KFC fast-food outlets
3. Circle K convenience stores
4. Jan-Pro commercial cleaning
5. McDonald’s fast-food outlets
6. Taco Bell fast-food outlets
7. 7-Eleven convenience stores
8. F45 Training fitness
9. Stratus Building Solutions
commercial cleaning
10. Anytime Fitness gyms
Business-format franchise: fast-food outlets
The business-format franchise, in
which a franchisee takes on a whole
blueprint for running the business
as well as the product itself, was
pioneered in the US in the 1940s.
Fast-food outlets were a new
concept at the time and were
generating great demand. To increase
the rate of expansion, these original
fast-food entrepreneurs developed
a franchise system under which
the franchisee was contractually
required to run the outlet according
to strict guidelines.
A limited and uniform menu was
the key to the success of these
franchises. The consistency of the
menu, service, and surroundings
helped establish a strong brand
identity because customers were
assured that the product and
experience would be the same
anywhere in the country.
McDonald’s is one of the most
successful examples, collecting
a 4 percent service fee and rent
from its 36,000 franchises worldwide.

Business-format franchise

The most common type, this has high input from

the franchisor, including brand name and trademark,
training, store identity, marketing plan, and company
culture. The franchisee buys supplies from the franchisor
and pays fees and royalties. Fast-food outlets are
typical business-format franchises.
 Not-for-profits
Some organizations are run not for the benefit of shareholders but
for the benefit of their members or an external community or charity.
Unlike conventional businesses, profit is not the goal.

8.6%
How it works
Organizations that do not intend to generate profit
for their shareholders, are self-governing, and are
committed to a common cause are categorized as
not-primarily-for-profit, not-for-profit, and nonprofit
entities. On this spectrum, cooperatives may disburse
of all wages and salaries
profits to members, but charities are strictly nonprofit.
Although their goals differ, not-for-profits have a similar
paid in the US come from
type of company status and structure as businesses. the not-for-profit sector.

The not-for-profit universe Cooperative

There are many forms of not-for-profit Owned by members;
organization (NPO). Joel L. Fleishman, can benefit from profit;
professor of public policy and law at clear ethos of pursuing
common economic, social,
Duke University, has characterized
or cultural goals; one
the not-for-profit sector as a
member, one vote
universe that embraces
all NPOs, whatever
their mission.
Social
Private foundation organization
Similar to a charity but Based on common
funded by one source, as interests or beliefs, such as
opposed to the general public; social or academic interest
generates revenue from or a benevolent cause; civic
investments; makes grants to clubs and college
other charitable bodies fraternities/sororities
are examples

THRIVING SECTOR
Despite being NPOs, many cooperatives ❯ Japan Zen-Noh cooperative: $56 billion
and mutuals have a sizeable annual turnover ❯ US State Farm mutual: $43 billion
(gross revenue transacted).
❯ Korea Nonghyup (NACF): $41 billion
❯ France Crédit Agricole Group of cooperatives
❯ UK Co-operative Group: $14 billion
and mutuals: $89 billion
❯ Spain Mondragón cooperative: $14 billion
❯ Germany REWE Group: $63 billion

NEED TO KNOW
❯ Philanthropic sector Alternative
umbrella term for the not-for-profit
sector or universe
❯ Charity Navigator An
organization that monitors and
publishes information about
charities to help consumers decide
which charities to support
Mutual
Raises funds from
its members (usually
customers); often takes the
form of financial institutions;
profits reinvested in the
mutual or to sustain or
grow the organization
Social enterprise
May sell goods or
services to fund community
projects; any surplus revenue
is reinvested in the enterprise
for the community
HOW COMPANIES WORK
Business ownership 24 25
NOT-FOR-PROFIT
STRUCTURE
❯ 501 c3 Tax code designation that
indicates that an organization is Chair coordinates the
legally a tax-exempt charity work of the directors.
❯ Associated charity Organization
related to a main charity that
takes on a particular aspect of Board of directors
the charity’s work is usually unpaid;
may also be called
the board of trustees.
Committees formed
by board members
carry out specific tasks,
Nongovernmental such as fundraising.
organization (NGO)
Funded by government Administration
or by international donor staff often includes
agencies, such as the World a proportion of
Health Organization (WHO); volunteers.
operates independently
Chamber of commerce
Group of business people
that gathers to promote trade,
investment, and cooperation;
usually funded by subscriptions
from local businesses
Charity
Must be registered as
charity status; tax exempt;
all resources must be devoted
to the charity’s stated charitable
activities; may be organized
as a trust, corporation,
or association
 Start-ups
A start-up is a new business in the early stages of development and operation,
during which an entrepreneur or founding group comes up with an idea for
a product or service, researches it, develops a business plan, raises funds,
and launches. Registering intellectual property (IP)—a unique creation, not
just an idea—in order to protect it is an important stage of the start-up
process. Protection includes trademarks, patents, and copyright.

The early days

Before a company is fully developed
with a working business model, it
is known as a start-up. The start-up
evolves from an entrepreneur, or
4.35 million
new business applications were
group of entrepreneurs, with an idea
or invention. It can take a few years to
turn the initial concept or prototype
submitted in 2020 in the US.
into a viable, profitable venture, so the
start-up founder tries to attract
support and financial backing to
achieve rapid growth. During this
phase, which can take anywhere from INTELLECTUAL PROPERTY (IP) VALUE
a few months to several years, the
business changes quickly. The term ”start-up” became
commonplace during the dot.com
boom of the late 1990s, when

NEED TO KNOW
❯ Internal start-ups Start-ups
that originate from inside a
large organization
❯ Patent trolls Individuals or
companies who buy the patents of
failed start-ups and attempt to
collect licensing fees from potential
infringers of the patents
thousands of entrepreneurs with
web-based products and services ™®
©
found funding, many on the
strength of their intellectual
property alone. Giants Google
and Amazon both started up at
this time. Since then, technology
businesses have become one of the
most talked-about start-up types.
Their value is often based 100
percent on intellectual property.
 HOW COMPANIES WORK
Start-ups 26 27

he big idea
T

Consider Launch
the IP ❯ Win? Lose?
❯ Register IP. ❯ Research indicates
❯ Find a name. that, in most Western
❯ Buy a domain. countries, 80–90 percent
of start-ups fail.
❯ Research market.

Choose a Prepare to launch

start-up type ❯ Plan a marketing campaign.
❯ With a social conscience? ❯ Run a test launch and refine
❯ Primed to grow big? message and offer.
❯ To fit lifestyle? See pp.196–197.
See pp.30–31.

Make a Find funding

business plan
❯ Explain how the
business will make money.
❯ Describe the unique
aspects of the business.
❯ Determine how much
❯ Invest savings.
❯ Ask friends
and family. € €
❯ Take out a bank loan.
❯ Seek venture capital.
❯ Try crowdfunding.

49.6%
money the business will
need and will make. See pp.34–37.
See pp.32–33.

Seek help ❯ Enter a business

incubator.
of adults in Angola
❯ Join a business
accelerator. ❯ Go it alone. are starting or
❯ Find an investor.
See pp.38–39. running a new
business.
 Start-ups, from
concept to launch
A new business can be described as a start-up in the early phases of
its launch, when an entrepreneur comes up with the idea for a
product or service and develops it into something that will sell.

How it works start-up, so it is worth spending

The idea is just the start. Next
comes the process of expanding
the concept into a viable business.
Specialized help may be needed in
some areas—a digital marketing
advisor or an accountant to advise
on the best structure and financial
set-up, for example. What the
business and product or service
are called can make or break the
some time doing online research
to check that no one else is using
a desired name, especially in a
negative context. Location is
another consideration—it may
be possible to create a virtual
office and work from home.
Finding offices is an extra
stage, but the aim at start-up
is to keep costs low.
NEED TO KNOW
❯ Lean start-up Method of
learning fast and discarding what
does not work to keep start-up
costs down
❯ Start-up pivot Quickly changing
direction or correcting mistakes
based on customer feedback or
technology changes

Come up with a Register IP

good idea For an invention or
innovation, register
START Develop a product or
an idea for a product intellectual property
or service. (IP) with copyright,
trademark, or patent.

Set up an online Decide on a name

presence Check to determine whether your

@ Register the domain

name and set up
web hosting.
proposed name is available; check
that the domain name is available;
search online for competitors with
similar names.

Create a look Make a website

Design a logo and
visual brand for the
business.
Build a website.
Research search engine
optimization (SEO)
words to include (see
pp.230–231).
 HOW COMPANIES WORK
Start-ups 28 29

CASE STUDY
Om Engineering Works
Om Engineering Works was started
in 1987 by Om Prakash Jaiswal.
Operating from a shop in Uttar
Pradesh, in northern India, he used
to sell rubber containers and plates
to battery companies, but in 2000,
he came up with the idea of
producing the batteries himself,
and later, with the idea of smelting
and recycling them.
Since then, the market for
these batteries has grown, and
breakthroughs in manufacturing
technology have allowed the firm
to go from making 20 to 300
batteries a day.
Now known as Highflow Industries
and run by Om Prakash Jaiswal’s
8%
of start-ups
son, Sumit Jaiswal, the company
makes batteries for e-rickshaws, go on to
solar panels, inverters, cars,
tractors, two-wheeled vehicles, become
and more.
“There is a huge market potential successful
with the advent of solar and
e-rickshaw segments,” says Sumit businesses.
Jaiswal. “This is because they help
cut down air pollution and reduce
overall carbon emissions. The
batteries have always played a vital
role in this.”

Research market Decide structure

Study your proposed Choose a business
target market and structure that suits
potential competitors your initial needs but
and evaluate the also allows flexibility
viability of the idea. for growth.

Obtain backing Devise a plan

$ funds Draw up a plan (see pp.32–33),
Consider a business including your goals, mission
incubator (pp.38–39) if statement, and key financial
the business requires information.
large-scale support.

Set up finances Start marketing

Include an accounting Plan a marketing
and cash-flow system, campaign. Run a
LAUNCH
$ sales tax if applicable,
and bank account.
test and make any
refinements to the
message or strategy.
 Types of start-up
Entrepreneurs go into business for many reasons: some start-up
decisions are based on personal convictions; some are founded
on the desire to make money, and others are a mix of the two.

How it works those that are intended from the

Not all start-ups fit the same mold.
Although they often follow a similar
process in their initial evolution,
they are as varied in type as the
personalities behind them. Start-
ups can broadly be divided into
outset to be large ventures within
a corporate environment and
those intended to work on a more
personal scale to suit the lives
and passions of individuals.
Lifestyle
Motivation
Working is a passion
NEED TO KNOW
❯ Enterprise portal Dedicated
website providing content
for staff, usually intended for
larger companies
❯ Micropreneur Entrepreneur
who keeps their business small
so they can control and manage
it alone
❯ Burn rate How fast the start-up’s
initial cash balance is going down,
month by month

o cial start-ups
S
Motivation
Making a difference

Example
Ex-athlete starts
fitness-consulting
business

72%
growth in
Type of funding
Self, friends,
peers, bank loan
Example
Malaria blood-test kit
for smartphone

the number of
fintech start-ups
between 2018 Type of funding
Community, charity,
and 2020 government, donation,
crowdfunding
 HOW COMPANIES WORK
Start-ups 30 31
a large
ithin co le start-
ve
w Motivation r p c alab up
Innovating S Motivation

or
i
iat
Readiness to grow

a ti
Init

on
0101010011
0100010101

Example
PC manufacturer starts
a separate business
Example
all business providing cloud
Phone app
Sm data storage
developer
Motivation
Feeding the family

Type of funding Type of funding

Internal company Crowdfunding,
funding angel funding
on
quisiti target
Ac Motivation s
Example Looking to sell the business
Neighborhood grocery from the beginning
shop

Type of funding
Self, family,
bank loan
Example
Biotech
laboratory

Type of funding
Outside
investment
 Business plans
Writing a business plan is one of the most important steps in
developing a start-up. The plan provides the new business’s
goals, market analysis, and projected income and profit.

How it works new business will be uniquely positioned to capture

Before a start-up entrepreneur can write a business that market, given the services or product being offered.
plan, they need to have done enough research to An outline of existing finances and an accurate
identify a clear opportunity in the market for the projection of sales and profit are essential components,
product or service and to define how the proposed especially if the owner is seeking external funding.

Key elements
Preparing a business plan can take
several weeks, and it is worth doing
thoroughly. It is a vital document
for securing funding, so the financial
forecast must be both realistic and
accurate. If it is being shown to others,
pare the executive summary down to
two A4 pages, write it in plain
language, and explain any technical
terms.
Executive summary
Complete this section last, bearing
in mind that it may be the only part
that a busy person reads:
❯ Business summary Company
structure, name, product or
service, and customer profile
❯ Business aims Three objectives
over one, three, and five years
❯ Financial summary Expected
sales, costs, and funding
❯ Elevator pitch Two-minute talk
to sell your idea to an investor
Business
background
Provide details of each person in
the business:
❯ Experience Relevant
work carried out to date,
achievements, contacts made
❯ Qualifications Credentials,
such as diploma in horticulture
for a gardening service
❯ Training Past and future,
including business skills, such
as assertiveness

Products and The market

69% services Set out specific details of the

potential market:
Describe what the business
is going to sell: ❯ Typical customer Businesses
or individuals and their profile;
❯ Product or service With
of current a picture if the product is new
local, national, or international
❯ Market research What the
❯ Range If more than one, such as
small business garden design and maintenance
local market is like for similar
products or services
❯ How it is different What makes
owners the product or service stand out
from the crowd?
recommend
writing Marketing strategy
a plan. Choose about three
of these methods:
❯ Word of mouth
❯ Advertising
❯ Social media ❯ Business literature
❯ Website ❯ Direct marketing
 HOW COMPANIES WORK
Start-ups 32 33

TOP FIVE REASONS TO WRITE A PLAN NEED TO KNOW

❯ The process Working through each
element ensures nothing is forgotten.
❯ Costing The only way to find out
whether the business is viable is to
work out details of costs and sales.
❯ Funding A good business plan
improves chances of getting a loan.
❯ Areas of expertise Making a
business plan clarifies where outside
help is needed—for instance, for
bookkeeping or marketing.
❯ Getting to know the competition
Conducting market research is the
best way to give a business an edge.
❯ SWOT analysis Stands
for Strengths, Weaknesses,
Opportunities, and Threats
❯ Unique selling point (USP)
Feature that makes a product
different from competition

Competitor analysis Operations

Show how the business idea
compares with the competition:
❯ Table of competitors Who and
where they are, what they sell and
for how much, how good they are
❯ SWOT analysis Including how
to remedy any weaknesses and
combat known threats, such as
a garden center opening nearby
❯ USP Unique selling point of the
product or service
See Need to Know panel, above.
and logistics
Describe how the business
will run day to day:
❯ Supply and delivery How the
goods or service will get from A to B
❯ Equipment Transportation, office
items, and location
❯ Payment, legal, and insurance
How customers will pay and
how that translates into salaries;
compliance with the law

Costs and pricing Financial forecasts

strategy Predict sales and costs over the year,
allowing for seasonal fluctuation, such
Work out how much the product or
as spring demand for garden services:
service costs and its sale price:
❯ Sales calculations For each month,
❯ Cost How much each unit or
the expected number of sales
batch costs to make and deliver
❯ Costs calculations The costs of
❯ Price How much each unit or
the predicted sales each month
batch will sell for
❯ Cash-flow forecast The money
❯ Profit margin The difference
coming in and out of the business
between cost and price per unit
See How Finance Works, pp.98–175.

Back-up plan
Make a Plan B in case something goes
unexpectedly wrong:
❯ Short-term changes Cutting costs
or boosting sales immediately
❯ Longer-term changes Shifts, such
as working online, not on-site
❯ Closure Lessons learned and skills
acquired if the business closes
 Raising money
Almost every new enterprise needs funding to get it going and to
keep it afloat until it turns a profit. Financial help is available from
a variety of sources, suitable at different stages of start-up growth.

How it works capitalists (VCs), provide equity

Capital for new enterprises comes
from two main sources—lenders
and investors. Lenders, such as
banks, provide debt capital in the
form of a loan that is returned
with interest. Investors, such
as business angels and venture
capital in the form of a share
in the business that includes
a proportionate share of control
and rewards. Both types of
funding can be corporate—from
a company—or come from other
sources, such as crowdfunding.

Types of start-up funding $ Lenders

Debt capital most often takes
Corporate and traditional funding, which tend to the form of loans paid back
be substantial, come largely from banks and VCs, with interest.
while smaller sums come from individuals instead
of institutions.

Term loan Paid back regularly Bank overdraft or credit card Factoring/invoice discounting
over a set period of time Interest charged monthly if balance Unpaid invoices sold at a discount
not paid in full to a company that collects them
for commission

❯ Bank Offers either personal or ❯ Bank or credit company ❯ Factor or discounter

business loans Finance organization that makes Company that offers advances
❯ Building-and-loan association loans to commercial ventures on unpaid invoices, for a profit
Offers loans to buy a property
❯ Government Offers low-interest
start-up loans
❯ Credit union Cooperative that
NEED TO KNOW
offers members low-interest loans $
❯ P2P lending Loans made
❯ Peer-to-peer (P2P) lending
Unsecured personal loans $ between individuals over Internet
❯ Crowdfunding Debt or equity
❯ Friends and family May offer raised via internet platforms
interest-free loans

-up fund
rt
in
Sta
g
Investors
Equity capital is paid to the
start-up in return for a share
of the business.
Founders, friends, family (FFF)
May buy shares in the company
rather than lending money
Crowdfunding Large number
of supporters, each contributing
$ a small amount of money,
usually online
Angel investors Investors who
give favorable terms, as their
focus is on the company’s
success rather than on profit
Venture capitalists (VCs)
Companies that provide capital
for new businesses in the hope
of reaping profit
HOW COMPANIES WORK
Start-ups 34 35
36%
of prospective small
business owners say
that getting start-up
funding is a priority.
Grants
Financial awards and
prizes are provided
by public bodies.
Local, national, global
Funded by a local, state, or
federal government initiatives,
an agency, or a charity
TYPES OF CROWDFUNDING
Crowdfunding is becoming a more acceptable source
of alternative funding. There are four main types:
❯ Equity-based The company sells shares to raise
capital. In return, investor owns part of the business.
❯ Debt-based Where individuals lend money to the
company. In return, the company agrees to pay it
back at given intervals, with or without interest.
❯ Royalty-based Crowdfunders receive a percentage
of the company’s revenues once it generates returns.
❯ Incentive-based Investors donate money in
exchange for free products or merchandise, or
other incentives from the business.
RAISING MONEY

Alternative models
In the wake of the economic
downturn that started in 2008,
several innovative and more
personal types of funding, such
as crowdfunding and peer-to-peer
(P2P) lending, have evolved and
blossomed on the Internet. All
involve the principle of raising
small amounts of money from
large numbers of individuals,
who pool their resources to
provide the loan or equity needed.
CREDIT ANALYSIS CRITERIA FOR LENDING
Capacity
The borrower’s ability to repay the
loan is shown by the business plan.
Capital
Many lenders assess a borrower’s net
worth to verify assets versus debts.
Character
The borrower needs to show a good
credit history and ability to succeed.
Collateral
The borrower is often expected to
pledge an asset that can be sold to
pay off the loan if funds are too low to
pay the monthly interest or repay the
capital at the end of the term.
Conditions
The lender is swayed by the current
economic climate as well as by the
sum requested.

Life cycle of , fr
iends, fam owd
funde
rs
rs Cr
investment
ily
de
Foun

(FFF
The key to successful funding is to
choose the right type of finance at
each stage of a company’s early )
$
growth. Start-ups usually begin
modestly, with self-funding and help
from friends, family, and anyone else
who is prepared to take a high risk.
Crowdfunders are amateurs who
are willing to help the entrepreneur
succeed, while angel investors and
venture capitalists will likely take RISK
more risks than other lenders, such
as banks, if they believe that injecting
substantial funds will return them a
healthy profit. As sales soar and success
looks probable, public markets, such as
stock exchanges, can provide an extra T
MEN
VEST
funding boost. At all stages, investors IN
will conduct credit analyses to assess
a firm’s ability to repay its debt.

REVENUE

TIME
Idea Seed
 HOW COMPANIES WORK
Start-ups 36 37

Financing 5,000 startups over the last decade

The chart shows sources of start-up finances from over 5,000 entrepreneurs in the US from 2005 to
2015, taken from a 2015 survey by the Kaufman Foundation. By far, the most funding comes from
bank loans and individual savings.

30% Personal
savings 6.2% Credit
card

34.9% Bank or
other loan $ 18.5% Other
$
nv marke
gel i estor tur
e capita
lis blic ts
An s en ts Pu
V

SALES

Early Mid Late

 Business accelerators
and incubators
Starting a new venture can be a long process. Business (also called
venture) accelerators and incubators are specialist organizations
devoted to developing and supporting start-ups.

How it works including mentorship, business advice,

Business accelerators and incubators provide expertise
and connections in the formative stages of a business
in return for a percentage of ownership. They are two
separate types of service. Business accelerators are
short-term programs that offer wide-ranging support,
and connections to potential sources of finance.
Business incubators, on the other hand, provide a
supportive environment in which fledgling start-ups
can develop, offering technical assistance, working
space, and networking opportunities.

Business accelerators
Suited to start-ups that have limited financing, accelerators offer short–term (one to three months)
boot camps. Individual accelerators may specialize in a specific area, such as software development.

Help with bank

loans, funds, € Links to
and guarantees
programs € € potential
investors
Introduction
to potential
partners
Access to
Accounting
mentors and
and financial
advisory
services advice
boards

Marketing
Networking
Start-up pays advice
accelerator % of
equity in the business.

Management
Seed capital In return, accelerator of intellectual
provides help and property
services.
 HOW COMPANIES WORK
Start-ups 38 39

Business incubators
Start-up pays
Often sponsored by nonprofit incubator %
organizations, incubators tend to be of equity in the
longer term (one to five years) and business. It may
cater to a variety of clients, many also pay rent to
science-based. share part of the
incubator’s work
space. In return,
it receives a range
of benefits.
Start-up
introduced
to incubator

NEED TO KNOW
❯ Incubator networks Support and education Mentorship
Collaboration of incubation
centers, research facilities,
and science parks
❯ Virtual business incubator
Online hothouse for start-ups

$107 Specialized facilities, such as Office space to

million
science laboratories work from

invested globally
by US and Canadian
accelerators from
2012 to 2017. Interaction with
other start-ups
Seed money
to get started
 Buying & selling
businesses
Both private and public companies regularly change hands—they are bought,
sold, and restructured to reflect changing business conditions. These deals
all come under the umbrella term of mergers and acquisitions (M and A).
Acquisition financing is usually needed to pay for the purchase of another
company, often in the form of a loan or venture capital.

How to acquire a company

A company is typically acquired in one of two ways—either by a
management team or by another company. When a company is
buying, the result can be a merger, in which two companies join
ompany
tc
forces; an acquisition, or an outright purchase; or a demerger, in
which part of a company is broken off and may be sold.
e
rg
Management team purchases are often funded by private equity. Ta

Mangement team acquiring FOR

SALE
Private equity firms look for companies
to buy and then sell their shares when
profits have maximized. They fund the
management team. See pp.48–49.

Buy-out Demerger
The existing management team buys out Part of a company
the company that they work for. is split off to form a
Buy-in new company; may
become acquisition
An external management team buys into target. See pp.44–45.
the company.
 HOW COMPANIES WORK
Buying & selling businesses
45,652
the number of M and A
deals, globally, in 2020
Another company acquiring
Companies may want to expand by
joining up with another business.
Merger
The company combines with
another company. See pp.42–43.
Acquisition
Horizontal The company
buys another company that
makes similar products or offers
similiar services.
Vertical The company buys
another company that makes
different products or offers
different services. See pp.46–47.
40 41
M AND A KNOW-HOW
Measuring a big deal
The corporate world categorizes acquisition
deals according to the capitalization size (the
value of the company’s shares).
$ Small Under $500 million
Mid-market $500 million
$ $
to $2 billion
$ $ $ Large $2 billion
to $10 billion
$ $ $ $ Megadeal More
than $10 billion
Due diligence
Before any company sale, the potential buyers
see a detailed report prepared by lawyers,
covering key aspects of the target business.
❯ Financial Identifies problem
areas that could affect the future
value of the company.
❯ Legal Gauges possible legal
risks attached to corporate
status, assets, securities,
intellectual property, and
employee restructuring.
❯ Commercial Includes industry
$ trends, market environment, the
company’s capabilities,
and the competition.
❯ Environmental Uncovers
potential liabilities, such as
land or water contamination,
and estimates remedial cost.
 Mergers and
acquisitions
Two of the quickest ways to accelerate expansion are
for a business to buy out another—an acquisition—or
REASONS TO PURSUE
M AND A
to combine with another business in a merger.
❯ Improved economies of scale
Wider operations streamline
How it works on reasonably equal footing to
production and sales.
“Mergers and acquisitions” create a new company, which will
❯ Bigger market share
(M and A) is a general term used benefit both parties, an acquisition
Combining the existing markets
to describe the ways in which is usually a purchase of a smaller expands share of the total market.
companies are bought, sold, and company by a larger one. This
❯ Diversification A different
recombined. In the case of either benefits the company making the product lineup gives the chance
a merger or an acquisition, two purchase but may not necessarily to cross-sell or create more
separate legal entities are unified benefit the target company. efficient operations if the
into a single legal entity. While a M and A can be friendly or products are complementary.
merger combines two companies hostile, agreed to or imposed.

Merger Company A
manufactures
Company B
manufactures
luxury cars in the US. luxury cars in Italy.

merges with
A B

B
Acquisition

A takes over

Company A produces films. Company B creates animations.

 HOW COMPANIES WORK
Buying & selling businesses 42 43

FRIENDLY VS. HOSTILE NEED TO KNOW

❯ The target company’s board of
directors and management agree
to be bought out.
❯ The acquiring company makes an
offer of cash or stock to the target
company’s board and management.
❯ The stock or cash offer is set at a
premium level.
❯ Because the offer is above actual
market level, shareholders usually
agree to it.
❯ The acquiring company bypasses
management and goes straight to
the target company’s shareholders.
❯ The target company’s management
fights the deal.
❯ The buying company convinces
shareholders to vote out the
management (a proxy fight), or it
makes an offer to shareholders to
buy shares at an above-market price
(a tender offer).
❯ Pacman strategy The target
company tries to take over the
very company attempting the
hostile buyout
❯ Swap ratio An exchange
rate between the value of
the shares of two companies
when merging
❯ Defensive merger Undertaken
to anticipate a merger or takeover
attempt that threatens a company
❯ Economies of scale Benefit to a
company of M and A expansion

$734
New company A + B now has
an expanded market spanning
Europe and North America.

A+B
billion
the value of all
mergers and
A acquisitions in
the Asia-Pacific
Expanded region in 2020
company A
now has
in-house
expertise for

A
producing
animated films.
Another random document with
no related content on Scribd:
largo tiempo, y raya a veces en familiar y cómico. Como ninguno de
los dos primeros tiene pretensiones de orador, no defienden causas en
la escena, ni se ven obligados a dividir sus oraciones en diversas
partes, ni a emplear exordios ni pruebas ordenadas como Eurípides
que no pierde ocasión de hacerlo. El teatro es para ellos un templo
venerable en donde el pueblo cree y aprende, no cátedra de filosofía n
escuela de relajación. En una palabra, y usando una frase repetida
muchas veces, pero que pinta el genio de estos tres poetas: Esquilo
representa el nacimiento de la tragedia, pero el nacimiento de un
gigante; Sófocles su más acabada perfección, y Eurípides su
decadencia.
Sin embargo, discurriendo sin pasión, debemos decir que Eurípides
poseía grandes cualidades, como ingenio e inventiva inagotables y
fácil y amena poesía, y que sus tragedias se distinguen, ya por lo
patético, ya por sus felicísimos rasgos, ya, en fin, porque su autor es e
que más se acerca a nosotros y más se ajusta a nuestras ideas. Su
diálogo es animado y vivo; bellísimas sus descripciones; sentencioso y
profundo a veces; gran poeta en sus coros; variado y nuevo en sus
fábulas, y hábil en la elección de las situaciones dramáticas de sus
personajes. Era griego al fin, y contemporáneo de muchos de los
hombres más eminentes de su patria en la política, en la filosofía, en
las letras y en las artes. Ninguno como él ha representado pasiones
vehementes, de esas que rayan en la locura; ninguno conmueve a sus
lectores con tanta fuerza; ninguno, en fin, ha sondeado como él e
corazón humano, ofreciéndolo sin disfraz a la expectación de las
gentes. Hasta en sus defectos es admirable, y así se explica la
estimación que le dispensaron sus contemporáneos y la fama que
logró en toda la Grecia, lo cual ni allí ni en parte alguna suele
adquirirse sin dotes eminentes.
 HÉCUBA

ARGUMENTO
Cuando los griegos pusieron sitio a Troya y Príamo se vio
acometido de tantos y tan fuertes enemigos, no solo acudió a la
defensa de su reino poniendo al frente de sus tropas a sus numerosos
hijos, que podían manejar las armas, sino que, presintiendo el fata
desenlace que esta guerra podría tener para su familia, confió su hijo
impúbero Polidoro a la custodia de Poliméstor, rey del Quersoneso de
Tracia, y depositó en sus manos al mismo tiempo un cuantioso tesoro
Poliméstor, mientras resistieron los troyanos, fue fiel a los deberes que
le imponían sus antiguas relaciones con Príamo, en cuya mesa había
apurado tantas veces la copa de la hospitalidad; pero cuando pereció
el anciano rey de Ilión y los griegos la tomaron e incendiaron
repartiéndose su rico botín y las cautivas que habían hecho, según las
leyes de la guerra entonces vigentes, codicioso del oro que guardaba
o por congraciarse con los vencedores, o sin temor ya a los parientes
de su tierno pupilo, lo asesinó con alevosía, apoderándose de sus
riquezas. A los tres días de muerto, y deseosa la sombra de Polidoro
de que se diese sepultura a su cadáver, se apareció a su madre
Hécuba, que, en compañía de las esclavas troyanas, esperaba en e
Quersoneso vientos favorables a la navegación de los griegos
Hallábanse estos detenidos allí, aterrados con el fantasma de Aquiles
que, derecho sobre su túmulo, situado enfrente, había rogado que se
le sacrificase Políxena, hija también de Príamo y de Hécuba, y
hermana de Polidoro; y con tal premura que, a no hacerlo, no podrían
navegar hacia su patria. Esta tragedia de Eurípides se propone
representar dramáticamente los dolores de Hécuba, herida en su
corazón por la muerte de sus dos hijos Políxena y Polidoro, y la
venganza que toma de Poliméstor, cegado por ella y por sus esclavas
que matan también a sus hijos.
He aquí su argumento. Es fácil de observar que abraza dos
acciones distintas, la venganza de Poliméstor por Hécuba, y la muerte
de Políxena, si bien su centro de unidad es la mísera exreina de Troya
dolorosamente afectada por la muerte de sus hijos, corona de sus
terribles infortunios. Es eminentemente trágico, quizá demasiado, y su
desarrollo, aparte del defecto de la duplicidad de la acción, trazado con
la maestría que caracteriza a Eurípides. Pertenece al ciclo troyano, y
expone dramáticamente un episodio posterior a la guerra de Troya
Ofrece, por tanto, algunos puntos de contacto con Las Troyanas, s
bien la fábula de esta última tragedia es anterior a la de Hécuba. E
coro se compone en ambas de cautivas troyanas, y así en la una como
en la otra describen los horrores del asalto y los males que la
esclavitud les promete lejos de su patria. En Las Troyanas se reparten
los griegos las esclavas, y en la Hécuba sirven ya a sus distintos
dueños, como dice el verso 95, τὰς δεσποσύνους σκηνὰς προλιποῦσα
En ambas es también Hécuba la protagonista, perdiendo en una a su
mísera hija Políxena y a Polidoro, y en la otra a su nieto Astianacte
hijo de Andrómaca y de Héctor.
En las demás peripecias de ambas tragedias hay ya notables
divergencias, que podrán conocer los estudiosos, si quieren
compararlas. Los caracteres, tales como se representan en el teatro
griego, están bien sostenidos, y tanto Agamenón como Odiseo y
Poliméstor conservan sus diferencias y cualidades tradicionales. El de
Políxena, su heroica resolución y su muerte, es de gran mérito
artístico, y ofrece esa belleza plástica de primer orden en que fueron
inimitables los griegos. No podemos decir lo mismo de Hécuba
vengativa, furiosa y cruel, hasta el punto de apelar para e
cumplimiento de su venganza (en el verso 789) a la deshonra de su
hija Casandra, para conciliarse el favor de Agamenón, diciendo:
ποῦ τὰς φίλας δῆτ᾽ εὐφρόνας δείξεις, ἄναξ,
ἢ τῶν ἐν εὐνῇ φιλτάτων ἀσπασμάτων
χάριν τίν᾽ ἕξει παῖς ἐμή, κείνης δ᾽ ἐγώ;
ni aprobar sus sangrientos sarcasmos contra Poliméstor, ya ciego, y la
ira insensata que la domina, la cual, si bien disculpable en cierto modo
por su especial y desgarradora situación, no por eso nos parece hoy
de buen gusto, ni creemos que tampoco lo fuese entre los griegos. La
mitad o algo más de esta tragedia es de lo mejor que ha escrito
Eurípides por su patético; lo restante vale mucho menos. Entre sus
escenas dramáticas más curiosas debemos citar la de la llegada de
Odiseo para llevar a Políxena al sacrificio; y entre sus más bellos
trozos, por el aroma helénico que respira, la descripción de la muerte
de Políxena hecha por el heraldo Taltibio. Los dos poetas latinos Ennio
y L. Accio y el erudito Erasmo de Rotterdam la han traducido en versos
latinos; Lodovico Dolce en italiano, y nuestro Fernán Pérez de Oliva ha
escrito una traducción de ella; Racine ha copiado algunos versos en su
Iphigénie, y Voltaire en su Mérope.
En cuanto a la época en que se representó, parece lo más probable
que fuera en la olimpiada 88, 4. Así lo hace presumir la parodia de los
versos 162 y 173 de esta tragedia, hecha por Aristófanes en los 708
709 y 1148 de su comedia titulada Las Nubes; y como esta se
representó en la olimpiada 89, 1, parece lo más verosímil fijar la de la
Hécuba en el año anterior, porque esas alusiones del cómico griego no
podían referirse sino a tragedias representadas poco tiempo antes
cuya memoria conservaba todavía el público. Esto debe entenderse
dando por supuesto que Aristófanes no retocase su comedia, como
todo lo hace sospechar, en cuyo caso viene a tierra todo el edificio
levantado con tanto trabajo por los eruditos, puesto que la parodia
indicada pudo ser muy bien una adición posterior. Teobaldo Fix, en su
Chronologia fabularum Euripides, pág. 9, añade que debió ser en la
época que hemos fijado, y da como razón que en el verso 558 y
siguientes se alude a la fiesta instituida por los atenienses después de
la toma de Delos, de que habla Tucídides (III, 104) y Plut. (Nic., c. 3)
pero es poco convincente, porque la alusión, si existe, es tan vaga, que
nada prueba. Aun sin haberse instituido esas fiestas, pudo Eurípides
decir muy bien lo que aparece en los versos citados. Lo mismo sucede
con lo que ha creído ver M. Artaud (Tragédies d’Euripide, tomo I, pág
15) en los versos 649 y 650, alusivos, en su concepto, a la derrota de
los espartanos en Pilos. Aun suponiendo que los espartanos no
hubiesen sido derrotados, era natural que Helena llorase a las orillas
del Eurotas, acordándose de Paris y de sus goces en Troya. Algo más
vale lo que añade después, fundándose en la versificación de esta
tragedia, indicio de ser de las más antiguas de Eurípides.

PERSONAJES
La sombra de Polidoro, hijo de Hécuba.
Hécuba, reina cautiva de Troya.
Coro de cautivas.
Políxena, hija de Hécuba.
Odiseo.
Taltibio, heraldo griego.
Una esclava de Hécuba.
Agamenón, general de los griegos.
Poliméstor, rey de Tracia.

El lugar de la acción es la costa meridional del Quersoneso de Tracia, frente a la Frigia.

La escena representa el campamento de los griegos, y se ven en ella dos tiendas, a la
izquierda la de Hécuba y las cautivas troyanas, y a la derecha la de Agamenón y Casandra
Empieza a romper el día.

LA SOMBRA DE POLIDORO
Vengo de la mansión de los muertos y de las puertas de las
tinieblas, en donde Hades habita, separado de los demás dioses; soy
Polidoro, hijo de Hécuba, cuyo padre fue Ciseo,[21]y del rey Príamo
Este, viendo el peligro que corría la ciudad de los troyanos de caer a
empuje de las lanzas griegas, me llevó ocultamente de Ilión al palacio
de Poliméstor, huésped suyo tracio que siembra las muy fértiles
llanuras del Quersoneso,[22] rigiendo con su cetro a un pueblo
cabalgador. Mucho oro envió también conmigo mi padre, para no deja
sumidos en la miseria a los hijos que le sobreviviesen, si alguna vez se
hundían las murallas de Ilión; y como yo era el más joven de los
Priámidas, secretamente me alejó de mi patria, cuando ni podía
soportar el peso de las armas,[23] ni sostener la lanza con mi infanti
brazo. Mientras no variaron las lindes troyanas y sus torres no se
derrumbaron, y mientras mi hermano Héctor venció con su lanza
como a tierno renuevo me alimentó el varón tracio, huésped de m
padre. Pero cuando Troya sucumbió y exhaló el alma Héctor, y fue
derribado mi hogar paterno, pereciendo Príamo junto al ara
consagrada a manos del sanguinario hijo de Aquiles, el huésped de m
padre me mató sin compasión, codicioso del oro, y me arrojó a las
ondas del mar, para guardar en su palacio mis riquezas. Yazgo, pues
en la ribera, a merced de las tempestades, agitado por las movibles
olas, no llorado, insepulto.[24] Ahora recurro a Hécuba, mi amada
madre, habiendo abandonado mi cuerpo, y después de vagar durante
tres días por el aire, ya que esa desgraciada ha venido desde Troya a
esta región del Quersoneso. Todos los aqueos, que tienen naves
hállanse en esta costa tracia, porque Aquiles, el hijo de Peleo
apareciéndose sobre su túmulo, detiene a la armada griega, que
movía hacia su patria los marinos remos, pidiendo que se le sacrifique
sobre el túmulo mi querida hermana Políxena. Y lo conseguirá, y le
harán esa ofrenda sus amigos, porque el destino ha fijado para este
día la muerte de mi hermana. Mi madre verá dos cadáveres de dos
hijos: el mío y el de esa infeliz doncella. Me apareceré, pues, para que
me sepulten, a los pies de una esclava, en brazos de las olas. He
rogado a los que imperan en el infierno que me concedan la sepultura
y que me vea mi madre; se cumplirá mi mayor deseo; pero me
apartaré un poco, que sale ahora la anciana Hécuba hacia la tienda de
Agamenón,[25] asustada de mi sombra. (Sale Hécuba de la tienda).
¡Ay, madre mía, que de reina te has convertido en esclava, y de
feliz en infortunada! Algún dios te castiga hoy por tu ventura anterior
(Sale Hécuba apoyada en sus esclavas, y se dirige con tardo paso a la
tienda de Agamenón).
HÉCUBA
Llevad delante de la tienda a esta anciana, ¡oh vírgenes troyanas!
sostened a vuestra consierva, antes vuestra reina; coged mi arrugada
mano; guiadme, llevadme, ayudadme, que yo, apoyado en el corvo
báculo, aceleraré cuanto pueda mi tardo paso. ¡Oh relámpagos de
Zeus! ¡Oh tenebrosa noche! ¿A qué me despertáis con terrores y
apariciones? ¡Oh tierra veneranda, madre de los sueños de negras
alas!;[26] libradme de esta visión nocturna, de la sombra de mi hijo, que
vive en Tracia, y de la terrible aparición de mi hija Políxena, que he
visto con mis ojos durante mi insomnio. ¡Dioses indígenas, proteged a
mi hijo, áncora de mi linaje y el único que de él queda en la fría Tracia
bajo la tutela del huésped de su padre!
Algo nuevo va a ocurrir; con lúgubres lamentos se mezclarán
nuestros llantos. Nunca mi alma ha sentido tanto miedo ni tanto horror
¿En dónde encontraré al divino Heleno o a Casandra, ¡oh troyanas!
para que me interpreten estos sueños? He visto una manchada cierva
que despedazaba un lobo con sus garras llenas de sangre
arrancándola violentamente de mis rodillas, que movía a compasión
También me aterró el espectro de Aquiles sobre lo alto del túmulo, que
pedía se le sacrificase algunas de las desdichadas troyanas. ¡Que no
sea mi hija, oh dioses, que no sea mi hija! ¡Yo os lo suplico!
EL CORO (apareciendo sobre la timele).[27]
De prisa, ¡oh Hécuba!, he dejado la tienda de mi dueño para
buscarte, ya que la suerte me ha hecho esclava suya, arrebatándome
de Ilión, cautiva por la lanza de los aqueos, no para aliviar tus males
sino para anunciarte, mensajera de dolores, triste nueva. Dícese que
en solemne asamblea han decretado los aqueos sacrificar a tu hija a
los manes de Aquiles: tú sabes que se apareció sobre su túmulo con
sus doradas armas, y detuvo las naves que surcaban las ondas con
sus hinchadas velas, sujetas por cuerdas, exclamando así: «¿Adónde
habéis de ir, ¡oh dánaos!, sin tributar antes a mi túmulo los honores
debidos?».[28] Gran tempestad se promovió entre ellos, dando origen a
dos opiniones opuestas en el belicoso ejército de los griegos, y
creyendo unos que debía ofrecérsele una víctima, y otros lo contrario
Agamenón no se olvidaba de ti, porque la profetisa Casandra tiene la
honra de frecuentar su lecho; pero los Teseidas,[29] nobles atenienses
pronunciaron dos arengas, conviniendo ambos en la necesidad de
regar el túmulo de Aquiles con sangre caliente, y negando que el lecho
de Casandra debiera ser nunca preferido a la lanza de Aquiles. Igua
era el número de los que defendían estas dos opiniones antes que e
hábil, ingenioso, elocuente y popular hijo de Laertes persuadiese a
ejército, que no debía desairar al más fuerte de los griegos po
víctimas serviles, no fuese que alguno de los que habitan en la
mansión de Perséfone dijera que los dánaos, ingratos con sus
hermanos, muertos por la Grecia, abandonaban los campos de Troya
Pronto, pues, vendrá Odiseo a arrancar de tu pecho y de tus
arrugadas manos a la doncella. Acude a los templos, acude a los
altares, prostérnate ante las rodillas de Agamenón y suplícale; invoca
a los dioses que están en el cielo y debajo de la tierra. O tus ruegos
impedirán que te arrebaten tu mísera hija, o la verás sucumbir sobre e
túmulo,[30] virgen manchada con su sangre, que, como río, correrá de
su aurífero[31] cuello.
HÉCUBA
¡Ay de mí, mísera! ¿A qué he de gritar? ¿De qué servirán mis voces
y mis lágrimas? ¡Vejez infortunada! ¡Intolerable servidumbre, que no
podré sobrellevar! ¡Ay de mí! ¡Ay de mí! ¿Quién me defenderá? ¿Qué
gente? ¿Qué ciudad? Murió el anciano Príamo, y morirán también sus
hijos. ¿Iré por aquí o iré por allí? ¿Adónde me encaminaré? ¿Do habrá
algún dios, o algún genio, que me socorra? Ya no me será grato ver la
luz. ¡Oh, troyanas, mensajeras de malas nuevas, mensajeras de
calamidades; me habéis dado muerte, habéis acabado conmigo! ¡Oh
pies míseros! Llevadme, conducid a esta anciana a la tienda
inmediata. (Volviendo hacia su tienda). ¡Fruto de mis entrañas, hija de
misérrima madre! Sal, sal de tu habitación; oye la voz de tu madre, ¡oh
hija!, para que conozcas la amenaza contra tu vida que ha traído la
fama.
POLÍXENA
Madre, ¿por qué te quejas? ¿Qué novedad anuncias, haciéndome
salir de mi tienda, aterrada como un pajarillo?
HÉCUBA
¡Ay de mí! ¡Oh hija!
POLÍXENA
¿Por qué sollozas?
HÉCUBA
¡Ay, ay de tu vida!
POLÍXENA
¿Por qué dices esto?
HÉCUBA
¡Hija, hija de desdichada madre!
POLÍXENA
¿A qué llamas con esa voz de mal agüero? Nada bueno me indica
Habla, no me lo ocultes más tiempo. ¡Tengo miedo, madre, tengo
miedo!
HÉCUBA
Refiero, ¡oh hija!, un rumor fatal: dicen que los argivos han
decretado arrancarme tu vida.
POLÍXENA
¡Ay de mí, madre! ¿Cómo me anuncias tan horrendos males?
Explícate, madre, explícate.
HÉCUBA
 Los argivos, de común acuerdo, tratan, ¡oh hija!, de sacrificarte
sobre el túmulo del hijo de Peleo.
POLÍXENA[32]
¡Oh, madre, que tales penas sufres! ¡Oh tú, la más infeliz de las
madres! ¡Oh mujer desdichada! ¿Qué numen ha suscitado contra ti de
nuevo tantas infaustas e inauditas calamidades? Ya no seré tu
compañera de esclavitud; ya no podré, siendo tu hija, consolarte en tu
deplorable vejez. Como a leoncilla criada en las selvas, como a
ternerilla nueva, me verás separada de ti, me verás degollar, y bajaré a
las subterráneas tinieblas de Hades, en donde yaceré con los muertos
Por ti lloro, ¡oh madre desdichada!, por ti me lamento amargamente
No por mi vida, llena de males y de oprobio, porque es mejor mi suerte
muriendo.
EL CORO
He aquí a Odiseo, que viene con pies ligeros, ¡oh Hécuba!, a
participarte sin duda alguna nueva.
ODISEO
Paréceme, ¡oh mujer!, que conoces la decisión del ejército y e
resultado de sus sufragios; pero te lo diré, sin embargo. Los griegos
han decretado que tu hija Políxena muera sobre el alto túmulo de
sepulcro de Aquiles. Quieren que yo sea quien acompañe y conduzca
a la virgen, y que el hijo de Aquiles presida y ejecute el sacrificio
¿Sabes, pues, lo que has de hacer? No me obligues a emplear la
violencia ni intentes luchar conmigo; resígnate ante una fuerza mayo
y, de lo contrario, teme mayores males. Sabido es que hasta las
desdichas se han de sentir con moderación.
HÉCUBA
¡Ay de mí! Gran lucha, según presumo, se prepara, y abundantes
gemidos y no pocas lágrimas. ¡Y no morí cuando debía haber muerto
y Zeus no me mató; antes me conserva para que cada día sufra
mayores males! Pero si es lícito a esclavas preguntar a los que son
libres, sin amargura ni encono, dígnate contestarme, y que nosotras
que preguntamos, escuchemos.
ODISEO
 Te es lícito; interroga; te concedo sin obstáculo este plazo.
HÉCUBA
¿Recuerdas que fuiste de espía a Ilión, disfrazado con viles
harapos, y manchada tu barba con las gotas de sangre que caían de
tus ojos?[33]
ODISEO
Me acuerdo; grande fue mi apuro.
HÉCUBA
Pero te conoció Helena, y a mí sola lo dijo.
ODISEO
No se me olvida que estuve en gran peligro.
HÉCUBA
Y abrazaste humildemente mis rodillas.
ODISEO
Y mi mano, fría como la de un difunto, se agarró a tus vestidos.
HÉCUBA
¿Qué decías entonces cuando eras mi esclavo?
ODISEO
Atormenté mi ingenio y mi lengua para no morir.
HÉCUBA
Te salvé, y te dejé salir de Troya en libertad.
ODISEO
Por esto veo la luz ahora.
HÉCUBA
¿Y no podré echarte en cara tu ingratitud, habiendo confesado lo
que acabo de oír, y no haciéndome bien, sino todo el mal que puedes?
Ingratos sois los que anheláis alcanzar fama en las asambleas; que yo
no os mire, que para nada os acordáis de vuestros amigos que sufren
ganosos de decir algo que os concilie la gracia del pueblo. ¿Pero a
qué astuta invención habéis recurrido para decretar la muerte de esta
niña? ¿Manda acaso el destino sacrificar hombres sobre el túmulo, en
donde debieran sacrificarse toros?[34] ¿O Aquiles reclama esa sangre
con justicia para matar a su vez a los que le mataron?[35]
Pero esta no le hizo mal alguno. Mejor fuera que pidiese a Helena
víctima más grata a su sepulcro, causa de todas sus desdichas y de
su venida a Troya. Si conviene que muera alguna cautiva ilustre, de
notable hermosura, esto no nos atañe, que Helena es bellísima, y ha
hecho no menor daño que nosotras. Oblígame la equidad a defende
así mi causa; oye lo que debes exigir en cambio, siendo yo quien te lo
pide. Tocaste mi mano, como tú mismo dices, y estas débiles rodillas
cayendo a mis pies; yo ahora toco las tuyas, y te suplico que me
pagues mi anterior beneficio, y te ruego que no arrebates de mis
manos a mi hija, y que no la sacrifiquéis. Bastantes han muerto ya
esta es mi alegría; esta sola el olvido de mis males;[36] esta me
consuela por muchos, y es a un tiempo mi ciudad,[37] mi nodriza, m
báculo, la estrella de mi vida. Los que vencen no han de manda
injusticias, ni porque son felices creer que lo han de ser siempre. Yo
también lo era y ya no lo soy, y un solo día me arrebató para siempre
mi dicha; respétame, pues; ten compasión de mí, vuelve al ejército de
los argivos, y adviértele que es odioso matar mujeres cuya vida
perdonasteis al arrancarlas de los altares, apiadándoos de ellas
Prohibición de derramar sangre hay por la ley entre vosotros, tan
favorable a los libres como a los siervos. Basta tu autoridad para
persuadir a los demás, aunque defendieras peor causa, porque las
palabras de villanos y nobles, siendo las mismas, no valen lo mismo.
EL CORO
No hay hombre, por feroz que sea, que al oír tus gemidos y
continuos sollozos no llore también.
ODISEO[38]
Escúchame atenta, ¡oh Hécuba!, y que la ira no te ciegue hasta e
punto de interpretar mal mis benévolas frases. Pronto estoy a
protegerte, porque tú me salvaste, y así lo he dicho siempre, que no
negaré lo que todos han oído. Tomada Troya, es preciso que tu hija
sea sacrificada al más valeroso de nuestro ejército, que la pide, si es
cierto que los males de muchas ciudades provienen de que se
recompensa lo mismo a los fuertes y buenos que a los cobardes
Aquiles merece entre nosotros ese honor, ¡oh mujer!, habiendo muerto
como un valiente por los griegos. ¿No es vergonzoso que al que en
vida tuvimos por amigo no lo sea después de muerto? ¿Qué, pues, se
dirá si es preciso juntar otro ejército y venir de nuevo a las manos con
el enemigo? ¿Pelearemos, o cuidaremos solo de nuestra vida, viendo
que ningún homenaje honroso se tributa a los difuntos? Bástame
cualquier cosa mientras yo exista, aunque tenga poco; mi mayo
deseo es que sea honrado mi sepulcro, porque esta gracia dura
mucho tiempo. Si dices que sufres males dignos de lástima, oye de m
en cambio que hay entre nosotros ancianos y ancianas como tú, y
muchas esposas que perdieron esforzadísimos esposos, a quienes
hoy cubre la tierra idea.[39] Ten, pues, paciencia; si hicimos ma
decretando honrar al fuerte, habremos pecado sin saberlo; vosotros
bárbaros, ni tratáis a los amigos como a amigos, ni honráis a los
muertos, y por eso es la Grecia afortunada y vosotros sufrís las
consecuencias de vuestro yerro.
EL CORO
¡Ay! ¡Qué dura es la esclavitud, y vivir en ella, y sufrir lo que no
debemos, y ser víctimas de la violencia!
HÉCUBA
¡Oh, hija! El aire se ha llevado mis palabras, proferidas en vano
para librarte de la muerte; si tú puedes más que tu madre, no pierdas
tiempo; habla en diversos tonos, como el ruiseñor, para que no te
arranquen la vida. Abraza las rodillas de Odiseo, que acaso excites su
compasión y lo persuadas; sobrado justa es tu causa, y acaso lo
muevas a lástima, porque tiene también hijos.
POLÍXENA
Te veo, ¡oh Odiseo!, ocultando tu diestra bajo el vestido e
inclinándote hacia atrás para que no toque tu barba.[40] Alégrate, que
has esquivado mis súplicas, que ensalza Zeus; yo te seguiré, obligada
por la necesidad y sin rehuir la muerte, que si otra cosa hiciera
parecería mujer cobarde y demasiado amante de la vida. ¿Para qué
he de vivir habiendo sido mi padre rey de toda la Frigia?[41] Plácida
comenzó mi existencia, haciéndome esperar que después me casaría
también con reyes, y que haría envidiable la suerte del que me tomase
por esposa y me hiciese compañera de su casa y de su hogar. Yo
ahora infeliz, reina era de las mujeres del Ida, virgen notable e igual a
los dioses, y solo me diferenciaba de ellos en que estaba expuesta a
la muerte. ¡Y soy esclava! Este solo nombre me hacía desearla en un
principio, no pudiendo acostumbrarme a oírlo. Acaso tocaría después
a dueños crueles que me comprarían por dinero, siendo hermana de
Héctor y de tantos héroes, y me obligarían a amasar el pan, a barre
su casa y a tejer con la lanzadera, pasando triste vida; y mi lecho
antes digno de un rey, sería profanado por cualquier esclavo. No será
así; al Orco entregaré mi cuerpo, y mis ojos, siempre libres,[42] no
verán ya la luz. Llévame, pues, y mátame de paso, ¡oh Odiseo! No
debemos esperar nada ni confiar en nadie, que el destino me fuerza a
sufrir esta desventura. No te opongas, ¡oh madre!, a mi propósito n
con palabras ni con obras; déjame morir antes que apelar a ruegos
vergonzosos, indignos de mí. Quien no está acostumbrado a los
males, los sufre en verdad, pero le duele sujetar a ellos su cerviz; e
muerto es, bajo este aspecto, más feliz que el vivo; que una vida sin
honra es la mayor de las desdichas.
EL CORO
Favor insigne y señalado entre los hombres es nacer de nobles
padres, y más nobles aún son aquellos que a la nobleza de su linaje
añaden la de sus acciones.[43]
HÉCUBA
Con dignidad has hablado, ¡oh hija mía!, pero con dignidad no
exenta de amargura. Mas si conviene honrar al hijo de Peleo y podéis
evitar el oprobio que os amenaza, no quitéis a esta la vida, ¡oh
Odiseo!, sino conducidnos a ambas a la hoguera que arderá junto a
sepulcro de Aquiles, y sacrificadnos sin compasión. Yo di a luz a Paris
que mató al hijo de Tetis, hiriéndole con sus flechas.
ODISEO
La sombra de Aquiles, ¡oh anciana!, no pidió a los griegos que
fueses tú la víctima, sino solo esta.
HÉCUBA
Matadme al menos con mi hija, y beberá la tierra y el que la pide
doble raudal de sangre.
 ODISEO
Basta la muerte de tu hija; no añadiremos otra, y ojalá que ni aun la
suya fuese necesaria.
HÉCUBA
Morir con mi hija es mi más ardiente deseo.
ODISEO
¿Cómo así? Yo no sabía que también tuviese dueños.
HÉCUBA (abrazando a Políxena).
Como la hiedra a la encina me adheriré a ella.
ODISEO
No lo harás si obedeces a quienes son más prudentes que tú.
HÉCUBA
Jamás consentiré que se la lleven.
ODISEO
Y yo no me iré sin ella.
POLÍXENA
Escuchadme: tú, hijo de Laertes, muéstrate más generoso con
madres justamente irritadas; y tú, madre, no luches con los
vencedores. ¿Quieres caer en tierra, y que se lastime tu débil cuerpo
vencida por la fuerza, profanándote un brazo vigoroso que te separará
de mí? Así sucederá sin duda. Nada hagas que no debas hacerlo
Dame tu dulcísima mano, ¡oh madre amada!, y que tus mejillas toquen
las mías, que nunca después (esta es la vez postrera) veré el disco y
los rayos del sol. Y no volverás a oírme hablar, ¡oh madre!, ¡oh tú que
me diste a luz!, que ya voy a los infiernos. (Abrazadas las dos entablan
el siguiente diálogo):
HÉCUBA
Nosotras, ¡oh hija!, seremos esclavas en la tierra.
POLÍXENA
Sin haber conocido esposo, ni casarme como a mi linaje convenía.
HÉCUBA
 Digna eres de lástima; yo también soy desgraciada.
POLÍXENA
Allá en el Orco yaceré separada de ti.
HÉCUBA
¡Ay de mí! ¿Qué hacer? ¿En dónde acabaré mi vida?
POLÍXENA
Moriré esclava, habiendo sido mi padre libre.
HÉCUBA
Y yo he perdido cincuenta hijos.
POLÍXENA
¿Qué he de decir a Héctor o a tu anciano esposo?
HÉCUBA
Diles que soy la mujer más digna de lástima.
POLÍXENA
¡Oh seno maternal! ¡Oh pechos que tan suavemente me
alimentasteis!
HÉCUBA
¡Deplorable e inesperada desdicha!
POLÍXENA
Vivo feliz, madre mía; adiós, Casandra...
HÉCUBA
Otros podrán vivir, no una madre.
POLÍXENA
Y tú, hermano Polidoro, ahora entre los caballeros tracios...
HÉCUBA
Si vive, que lo dudo, siendo tanta mi desgracia.
POLÍXENA
Vive, y cerrará tus ojos al morir.
 HÉCUBA
Matáronme mis males antes de haber llegado mi última hora.
POLÍXENA (arrancándose de los brazos de su madre).
Llévame, Odiseo; cubre con el peplo[44] mi cabeza, porque, antes de
sacrificarme, desgarran mi corazón los gritos de mi madre, y yo e
suyo con los míos. ¡Oh luz! ¡Siquiera puedo invocar tu nombre! Nada
tuyo me pertenece, sino el espacio que media entre este lugar, y la
cuchilla y el túmulo de Aquiles. (Se retira).
HÉCUBA
¡Ay de mí! Ya no puedo sostenerme, y desmaya mi fuerza. ¡Oh hija
¡Abraza a tu madre, extiende tu mano, dámela! (Acuden sus esclavas
y la sientan en el suelo). ¡No me dejes sin hijos! Yo muero, ¡oh amigas
(Con la vista fija en Políxena). ¡Oh, si yo viera a la lacedemonia
Helena, hermana de los Dioscuros, la de los bellos ojos, que arruinó a
Troya ignominiosamente!
EL CORO
Estrofa 1.ª — ¡Oh aura, aura marina, que impeles a las ligeras
naves, surcando las olas! ¿Adónde llevarás a esta mísera? ¿Qué
dueño me comprará para arrastrarme a su hogar? ¿Iré a las riberas de
la Dóride,[45] o a las de la Ftía,[46] en donde dicen que el Apídano,[47] río
de cristalinas ondas, fertiliza los campos?
Antístrofa 1.ª — ¿O a alguna de las islas, al son del marino remo
para vivir triste vida, a do crece la primera palma que vieron los
hombres,[48] y el laurel sagrado en honor de Leto y de sus hijos
delicias de Zeus? ¿Cantaré himnos con las vírgenes delias a la diosa
Artemisa, y celebraré sus blondos cabellos y su arco?
Estrofa 2.ª — ¿O en la ciudad de Palas y en el peplo amarillo de
Atenea labraré con la aguja la cuadriga y sus caballos, sembrándolo
de tejidas y artificiosas flores, o al linaje de los titanes, a quienes Zeus
el hijo de Cronos, condenó con sus rayos a perpetuo sueño?[49]
Antístrofa 2.ª — ¡Ay de mis padres, ay de mis hijos, ay de mi patria
que cayó envuelta en humo, vencida en la guerra por los griegos! Yo
dejo el Asia sierva de la Europa, trocando el tálamo por el Orco,[50] y
me llamarán esclava en tierra extraña.
TALTIBIO
 ¿En dónde, ¡oh doncellas troyanas!, podré encontrar a Hécuba, la
que hace poco era reina de Ilión?
EL CORO
Es la que miras, ¡oh Taltibio!, junto a ti, tendida en tierra y envuelta
en su vestido.
TALTIBIO
¿Qué diré, oh Zeus? ¿Te interesas por los hombres, o ellos lo creen
falsamente, pensando que hay dioses, y que la fortuna domina a
mismo tiempo a los mortales? ¿No fue Hécuba reina de los frigios
ricos en oro? ¿No fue esposa de Príamo, gloriosamente afortunado?
La lanza ha derribado su ciudad, y ella, esclava y anciana, huérfana de
sus hijos, yace en tierra, manchando con el polvo su cabeza
desventurada. ¡Ah!, ¡ah! Viejo soy, pero más quiero morir que sufri
vergonzosos males. (Acercándose a Hécuba). Levántate, ¡oh muje
infeliz! Que tu cuerpo y tu blanca cabeza abandonen la tierra.
HÉCUBA (levantándose).
¡Ah! ¿Quién turba mi reposo? Quienquiera que seas, ¿por qué no
respetas mi aflicción?
TALTIBIO
Yo soy Taltibio, heraldo de los hijos de Dánao, qué vengó a llamarte
de orden de Agamenón.
HÉCUBA
¿Has venido acaso, y entonces llenarás mis deseos, para
sacrificarme ante el túmulo por mandato de los griegos? ¡Oh, cuán
grato me sería! Vayamos cuanto antes, apresurémonos; guíame, ¡oh
anciano!
TALTIBIO
Vengo a llamarte, ¡oh mujer!, para que sepultes a tu hija, ya muerta
Encárganmelo los dos Atridas y el pueblo aqueo.
HÉCUBA
¡Ay de mí! ¿Qué dices? ¿No has venido a buscarme, cuando estoy
a punto de morir, sino para anunciarme males? Pereciste, ¡oh hija!
arrancada de los brazos de tu madre: yo quedo sin hijos, sin ti a
menos; ¡oh, cuán desgraciada soy! ¿Cómo la sacrificasteis? ¿Con
respeto, os ensañasteis en ella, ¡oh anciano!, como si fuese un
enemigo? Habla, aunque tus frases me aflijan.
TALTIBIO[51]
Me harás llorar dos veces, ¡oh mujer!, compadecido de tu hija
ahora humedeceré mis ojos recordándolo, y al morir lloré también
junto al sepulcro. La muchedumbre infinita del ejército aqueo acudió
alrededor del túmulo para presenciar el sacrificio de Políxena: el hijo
de Aquiles la llevó de la mano hasta colocarla en lo alto del túmulo
teniéndome a su lado; seguíanle los principales jóvenes aqueos para
sujetar a la víctima en las convulsiones de la agonía. El hijo de
Aquiles, con el vaso dorado de las libaciones, las hizo a los manes de
su padre, ordenándome después que impusiese silencio a todo e
ejército. Yo entonces, en medio de ellos, dije: «Callad, ¡oh griegos!
haya silencio en el pueblo; que ninguno hable, que todos guarden
compostura», y la muchedumbre calló en efecto. Él, a su vez, se
expresó así: «Recibe, ¡oh padre mío!, hijo de Peleo, estas libaciones
que evocan a los muertos, y muéstrate propicio: ven a beber la negra y
no libada sangre de esta virgen, que el ejército y yo te ofrecemos
favorécenos, desata nuestras popas, suelta nuestras naves, y
concédenos a todos que tornemos con felicidad desde Troya a nuestra
patria». Así dijo, y todo el ejército le acompañó en su oración. Cogió
luego la empuñadura de oro de su espada, y, desenvainándola, hizo
seña a los jóvenes griegos para que sujetaran a la víctima. Ella, a
conocerlo, habló de esta manera: «De buen grado muero, ¡oh argivos
que arruinasteis mi patria!; nadie toque mi cuerpo, que ofreceré a
hierro mi cerviz con ánimo esforzado; pero por los dioses os ruego que
no me sujetéis, para que muera como debe morir una mujer libre, que
me avergonzará ante los manes el nombre de esclava, siendo reina»
Murmullos de aprobación se oyeron en la muchedumbre, y el rey
Agamenón ordenó que los jóvenes soltasen a la virgen. Ella, a
escucharlo, desgarró su peplo desde los hombros hasta la cintura,[52] y
enseñó su pecho, tan hermoso como el de una estatua, e hincó en
tierra sus rodillas, y pronunció esta frase muy animosa: «He aquí m
pecho; hiérelo, ¡oh joven!, si lo deseas; si ha de ser en la garganta
prepara la cuchilla». Él vacilaba, movido a compasión; pero al fin la dio
muerte, y su sangre corrió a raudales. Al morir no se olvidó de su
decoro, y ocultó a nuestras miradas lo que no deben ver los hombres
Después que exhaló el alma, ocupáronse los griegos en distintos
menesteres, ya cubriéndola de hojas, ya llenando la pira con ramas de
pino. Los que nada hacían, oyéronles expresarse así: «¿Te estarás
quieto, ¡oh perezoso!, y no ofrecerás a esta doncella ni fúnebres galas
ni tu peplo? ¿Nada darás a esta víctima tan valerosa como noble?»
Esto es lo que puedo decirte acerca de la muerte de Políxena
considerándote, si miro a tus numerosos hijos, la más feliz de las
mujeres, y si a tu suerte, como a la más infortunada.
EL CORO
Horribles desgracias han sobrevenido a los hijos de Príamo y a m
patria por decreto inexorable de los dioses.
HÉCUBA
¡Oh, hija! En medio de tantos males, no sé a cuál atender: si uno
me alcanza, el otro no me deja: sucédense sin cesar y acumúlanse sin
descanso. Y ahora no puedo olvidar tu triste suerte y dejar de gemir
pero no lo haré con exceso, sabiendo con cuánta grandeza has
muerto.[53] No es, pues, de admirar si una tierra estéril, favorecida po
el cielo, produce rica cosecha, y que la fértil, privada de este bien, dé
amargo fruto: solo entre los hombres el malo es siempre malo, e
bueno siempre bueno, y no le dañan las calamidades, y siempre es
virtuoso. ¿Proviene esto del linaje, o acaso de la educación? No puede
negarse que algo contribuye la educación, enseñando la virtud, que
quien bien la aprende distingue lo bueno de lo malo. Pero todo esto es
inútil: tú, Taltibio, vete y di a los argivos que nadie toque a mi hija, y
que la preserven de la multitud, que no faltarán atrevidos en tan
numeroso ejército, y cuando la licencia entre marinos es más violenta
que el fuego, teniéndose por malo al que no lo es. (Vase Taltibio).
Tú, anciana servidora, toma esta urna, y sumergiéndola en la mar
tráeme agua para lavar por última vez a mi hija, esposa y no esposa
virgen y no virgen,[54] para exponerla al público como merece; pero
¿cómo lo haré sin recursos? ¿De qué medio me valdré? Reuniré las
joyas de estas cautivas que me acompañan en la tienda, si han podido
ocultar algo suyo de la vista de sus nuevos dueños. (Vase la esclava).