Business management Society. Íŕâ÷ŕëüíčé ďîńłáíčę.p (1)

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Міністерство транспорту та зв’язку України Державний департамент з питань зв’язку та інформатизації

Одеська національна академія зв’язку ім О.С. Попова

Кафедра іноземних мов

Н.В. Чугунова , В.О. Кудряшова

Oдеса 2006



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УДК 811.111 (075 )План НМВ 2006 р.

Чугунова Н.В., Кудряшова В.О. Business management Society;Навчальний посібник . – Одеса : ОНАЗ ім . О.С. Попова , 2006. – 104 с.

Навчальний посібник призначено для студентів Інстітуту проблем інформаційного суспільства та Інстітуту економікі і менеджменту . Посібник має мету поглибленного вивчання термінологічних склодових текстового материалу , що , в кінцевому рахунку , сприяє формуванню специфічних професіональній комунікації .

This book brings the real world of international business into the class.It offers the widest and most flexible range of materials for learners. Keyfeatures of the book are authentic texts from different sources; up-to-datebusiness topic and issues; comprehensive language. It concentrates onreading skills and vocabulary development.

Both American and British English are used.

Схвалено на засіданні кафедри іноземних мов та рекомендовано до друку .Протокол № 6

від 31 січня 2006 р.



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CONTENTS

Unit 1 Connections 5Culture & communication 7

Company Culture Questionnaire 7Telephone language 9

Unit 2 A Company 14A company problem 15Company Structure 18Check Questions 24

Unit 3 Corporate Cultures 24

Check Questions 29The Customer 30

Unit 4 The Global Company 32Check Questions 36Meeting 37Presentation 39

Unit 5 Global Production. Global Careers 41The Global Company 41Check Questions 45Global Careers 46Check Questions 49

Unit 6 Market & Production 50Market 50Production 54Putting it in writing 56

Unit 7 Entering a foreign market 58Check Questions 62International Mergers 63Check Questions 67

Unit 8 Management 68Check Questions 76

Unit 9 MBA in Management 76

Check Questions 81

Unit 10 Selecting International Managers 81



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International Management Development 81Check Questions 86

Unit 11 Business and Society 91Business ethics 91

Unit 12 Business in the 21 st century 98Check Questions 102



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Unit 1Connections

In the Hollywood movie Big Night, one of the characters, gives a

definition for a businessperson :“ I’m a businessman . I am anything I need to be at any time. Tell me.What exactly are you?”

So, business, job, work and main question “What are you?”

Ex.1. Work with a partner.Discuss the definition above.Do you agree with him? Why – or – why not?

Compare your ideas with the others in the group.

Ex.2. Work with a partner.Which of these is the main focus of a businesspersonwork? Explain why.

Product; customers; money; other people.

Ex.3. Work with a partner.

Which of these best describes the kind of organizationthat he or she works for? Give a few details.A multinational; a medium-sized company; an institution;A small business; a government body; I don’t work for an organization.

Glossary:Affair(s) - дело : то , что происходит

The state affairs; a pleasant affair; foreign(domestic, home) affairs;private affairs.Matter - дело времени , вкуса и т.д.The matter is that … … …Business - дело , занятие , работа A business talk; It’s none of your business.Case - дело (судебное ), случай Job - работа , дело (исчисляемое )I have a new job at a hospital.Work - работа , дело (неисчисляемое )She has a lot of work.



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Occupation - род занятий Profession - профессия , работа , требующая проф .

подготовки .She’s a teacher by professionTrade - профессия , работа , ремесло , требующее

спец . навыков Tricky jobs - коварные профессии Chef = cooker; operator = telephone-operator.

Ex.4. Answer the questions.1. What are you?2. What do you do?3. What are you doing here?4. Where do you work?5. What’s you job?

Ex.5. Comment the following:Increasingly, men are taking on jobs traditionally done by women.Perhaps one nurse in six is a male; there are an estimated 5000 male.Secretaries in London; a probable one in eight home-helps is male.Husbands are even taking over at home!

Situation : Rodney Mace, 35, is married with two young children and isa part-time teacher of architectural history. His wife Jane, an Oxfordgraduate in modern languages, has a demanding full-time job. She isdirector of Cambridge House scheme. (Volunteers go to people’s homesand teach them how to read and write.).Her working week involves severalevenings and Saturdays, and at these times her husband is in sole charge ofhome and family.

Ex. 6. Read the situation above and discuss it in your group. What doyou think about roles of the couple?

Ex. 7. Rewrite the text below, read it once more very attentively, chooseunknown words, learn them and be ready to read the text within the givenperiod of time. Write the text down as a dictation.

The majority of the European businessmen whose jobs interests hadbrought them to Mexico had at first been somewhat skeptical over the



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prospect of a monarchy. But Bazaine’s (Marshal) continued successes inthe field and the enthusiasm with which the Mexicans were welcomingtheir Emperor was gradually bringing them round to the idea, andMaximilian’s charm succeeded in wining them over completely. Britishinvestors were already reported to be taking an interest in the future ofMexican railways, communications were the most pressing of Mexico’spriorities.

CULTURE AND COMMUNICATION

Read the story and answer the questions.1. What did the Tibetans think they were communicating?2. What did the British think the Tibetans were communicating?

A TALE OF TWO CULTURESWhen British soldiers entered the Forbidden City of Lhasa, Tibet, in the

summer of 1904, their leader, Colonel Fransis Younghusband, sawcrowds of local people clapping and cheering. Colonel Younghusbandthought it was a friendly welcome – but he was wrong.

A Tibetan writer explained the other point of view:‘When the British officers marched to the Tsuglakhang and other places,the inhabitants of Lhasa were displeased. They shouted and chanted tobring down rain, and made clapping gestures to repulse them. In theforeigner’s custom, these are seen as signs of welcome, so they took offtheir hats and said thank you’.

A Culture Questionnaire

Fons Trompenaars is a Dutch expert on business and culture. Heinterviewed over 15,000 business people in fifty countries to find out howculture affects business life. Here are a few of the questions that he asked.

COMPANY CULTURE QUETIONNAIREQ.1. EmotionYou are upset about something at your company. Yes / NoDo you show your emotions at work? Yes / No



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Q.2. RespectDo you respect someone because of theirfamily background ? Yes / No

Q.3. ResponsibilityYou are an employee of an engineering companyand work as part of a team. Another team membermakes a serious mistake while he is working on apiece of machinery for an important customer.Does the whole team take responsibility? Yes / No

Q.4. What makes a good manager?a) Does a good manager allow employees to work

alone? Yes / Nob) Does a good manager control everything? Yes / No

Q.5. Working life and private lifeYour boss asks you to help him paint his house

at the weekend. Would you help? Yes / No

(Source: Riding The Waves of Culture, Fons Trompsnaars)

Compare your answers to the results of survey of managers in severaldifferent countries. In your groups, discuss :

1. Do any of results surprise you?2. Can you see any general trends? What are they?3. What does this tell you about doing business in different cultures?

Q.1. Percentage of people who do not show emotions at work:

Italy 29% UK 71%France 34% Japan 83%USA 40%

Q.2. Percentage of people who say that respect does not depend on familybackground :



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Russia 53% UK 76%Italy 64% USA 77%Germany 65%

Q.3. Percentage of people who think that the individual should takeresponsibility :

Austria 28% Spain 47%Japan 36% Russia 68%USA 40%

Q.4. Percentage of people who think that a good manager allows peopleto work alone :

China 57% USA 83%Japan 71% France 89%Italy 78%

Q.5. Percentage of people who would not help the boss with his house –painting :

China 28% USA 89%Austria 65% UK 92%Spain 71%

TELEPHONE LANGUAGE

Richard made two calls after picking up his messages. Read theconversations and complete them with the expressions in the box. One ofthe expressions in each set of three is wrong. Choose the most appropriateexpression from the other two.

a) Hello. / Good morning. / Speak!b) Is (…) there? / I’d like to speak to (…). / Is there (…)?c) Are you (…)? / Is that (…)? / Who’s calling, please?d) Hold on, please, I’ll try to put you through. / Hang on, I’ll go and get

her. / One instant.e) I am (…). / It’s me. / This is (…) here.



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f) What are you up to later? / What do you do later? / Are you availablelater on today?

g) I’ll look forward to seeing you tomorrow./ To tomorrow. / See youtomorrow.

Phone conversation 1

Jane: a)………..Hello.Richard: Oh, hi. b) ……Jane : c)………Richard : Yes, hello, Jane. How are you?Jane : Fine, thanks. d)……

Maggie : Hello.Richard : Hi! e)…………Maggie: You got my message then. I thought you’d forgotten about me.Richard : Don’t be silly. Of course I haven’t forgotten you. I’ve just been abit busy, that’s all.Maggie : Busy playing computer games, I suppose.Richard : No, not all the time. Anyway how are you?Maggie :Not too bad. A bit tired. Too much work as usual. Which remindsme, have you heard anything from the travel agents?Richard : Oh, yes. They’ve got the tickets.Maggie: Great! I really need this holiday.Richard : Listen, I can’t chat now, but f)………Maggie : I’ve got to work this evening, but I thought we could go to the

cinema tomorrow.Richard: OK, I’ll come round at about seven.Maggie : g)………..Richard : Bye.

Phone conversation 2

Receptionist : a) … Good morning. South-Western Bank. Can I help you?Richard : Yes, b)….Receptionist: c)……..Richard: My name’s Richard Swainston.Receptionist : OK, d)….



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Oh, Mr Swainston, I’m afraid she’s on the other line. Wouldyou like to hold ?Richard : Yes, thank you.

Alison: Alison Moore.Richard: Oh, hello . e) ……..Alison: Oh, yes. Mr Swainston,. Thank you for getting back to me sopromptly. There seems to be a problem with your account.Richard: Oh, dear. What sort of problem?Alison: Well, you’re over your overdraft limit by more than 200$. Youreally need to come to the bank, to discuss it. f)…..Richard: I’m afraid I’m rather tied up today. Would tomorrow beconvenient for you?Alison: Yes, ten thirty’s fine for me.Alison : Well, thank you for ringing. g)……Richard: Goodbye.

ANSWERING THE PHONE

After the invention of the telephone in 1876, there was one immediateproblem:What do you say when you answer it?

At first people were not sure how to respond to a ringing phone.Edison ( Thomas Edison an American inventor) thought that callers shouldanswer with ‘Ahoy!’… Others said ‘Yes!’ or ‘What?’ and many merelypicked up the phone and listened hopefully.

How do you answer the phone in English …when you’re at work? when you’re in a hotel room?when you’re at home? when your mobile phone rings?Compare what you say with others.

Ex. 8 The film Glengarry Glen Ross starts with a businessman calledSheldon Levene making a phone call. We don’t hear what the person onthe other end of the line says, but you can probably guess.

Can you put the sentences below into the correct places in thedialogue?



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1. Just a moment, please.2. Can he call you back?3. No, it’s me again.4. No, I’m afraid he’s in a meeting.5. No, I’m sorry he’s not here.6. Hello. Dr Lowenmstein’s office.7. Is it urgent?8. Could you tell me your name, please?9. Hello.

Receptionist…………………..Levene : Could I speak to Dr Lowenstein, please?Receptionist :………………..Levene : Well, it’s rather important. Could you get him for me?Receptionist:…………………

(PAUSE)Receptionist: …………….Levene: Ah, doctorReceptionist: ………Levene: Well, could you get..?Receptionist: ……………..Levene: What do you mean? He’s not there? I have to speak to him.Receptionist: ……..Levene: Yes, it is fairly urgent.Receptionist: ………Levene: Mr Levene.Receptionist:…………..Levene : No, I can’t be reached. I’ll get back to him.

Ex.9. In this table, make summary of some telephoning phrases from thedialogue above. Compare your answers.

Asking to speak to someone

What you hear if the person is not available

Asking someone to wait

Asking for the other person’s name



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Saying that you’ll phone again later

Ex. 10. Less than 30% of business calls get through to the right personat the first attempt. How difficult is it to get through to you at work?Which of these do you have?A secretary voice mailAnswerphone a receptionist

Ex.11 Phone Verbs: Phone conversations use a lot of phrasal verbs.Match the phrasal verbs in the column on the left to the phrases withsimilar meanings in the column on the right.1) to get through a) to connect2) to put through b) to be connected3) to cut off c) to disconnect4) to hang up d) to wait5) to hold on e) to put down the receiver.

Notes: telephone – is more official; phone – is more common171 345 876 792 - one seven one – three four five – eight seven six –seven nine two;0 (zero) is read as oh (ou) 101 – one oh one66 – double six 666 – triple six

Ex. 12. Make up a dialogue using the following sentences.Would you take a message, please? We are disconnected.Hello? Can I help you? You are wanted on the phone.This is Mrs Grant. Am I through? (Did you disconnect?)Is that Mr Shell? Go ahead. (speak)Hold the line, please. There is no answer.You’ve got the wrong number. He is out at the moment.When will he back? Would you ask her to call me back?Will you tell him I called? My name is Harry Jackson.



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Unit 2A Company

The Irish management, Charles Handy, believes that the traditional

company is dying. In his book, The Age of Unreason , he says that todaymore and more people are working in a ‘shamrock organization’. Below isthe description of it.

The first leaf of the shamrock represents the organization’s coreworkers. These employees are usually qualified professionals andmanagers. They work very long hours and, in return, receive high salariesand generous benefits.

Work that is not essential to the organization goes to people in thesecond leaf of the shamrock. These people are normally self-employed andare specialists in certain kinds of work. they often sell their services tomore than one organization.

The third leaf of the shamrock is the flexible labour force – temporaryand part-time workers. The organization saves money because it only

employs these people when it needs them.

Ex. 1. Compare the shamrock organization with a traditional company.What are the advantages and disadvantages of a shamrock organization forthe following?For the company ( advantages; disadvantages)For the core workers …. …. …. …. …For the self-employed people …. …. …. ….

For the flexible labour force… …. …. …. ..Ex. 2. A traditional oil company has decided to reorganize as a shamrock

organization in order to cut costs. Work in small groups and discuss thesepoints. In each case, give your reasons.

1. Which of these jobs should you keep in the core?Account; computer programmer; lawyer; secretary; personnel

manager; company director; geologist; chief executive officer.What other jobs should be in the core?



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2. Is it better to use self-employed workers or a flexible labour force to dothe non-core jobs?

3. Which of these functions should you keep in the core?Cleaning; strategic planning; training; sales; catering; administration;travel booking.

4. Which non-core functions should be done by self-employed workersand which by a flexible force?

A COMPANY PROBLEM

1. It is estimated that there is an assault on a retail employee during everyminute of every day. Shoplifters make up 62% of this total – the rest aremostly drunks, drug addicts or angry customers. But few companies haveany kind of strategy to deal with violence in the workplace. Shouldemployers do more to protect staff against violence?

(Management Today, May, 1997)

Ex.3. Read this problem, then discuss these questions.1. What do you think – should employers do more to protect staff?2. What solutions to the problem can you think of?

2. Time for a smoke break?The anti-smoking lobby continues. In the early 1980s less than 5% ofUK companies had a policy towards smoking. Today, according toASH (Action on Smoking and Health) nine out of 10 major companieshave some code of practice on smoking in the workplace. But more than25% of Britain’s adults continue to smoke, so what attitude should theother employers take? Should they try to accommodate the needs ofsmokers as well as non-smokers? Or should they ban smokingcompletely?

3. Travel sick bluesBusiness travellers are making up to 15% more trips than a year ago. Theconstant time zone changes, time wasted in transit and frequent delayswear down many. What can the tired executive do about the problems ofbusiness travel? And under what circumstances can he or she simply say‘no’ when asked to go on yet another trip?



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Ex. 4. Discuss solutions to these two business problems.

HANSON’S EMPIREBetween the early 1960s and the mid 1990s, two British businessmen,

James Hanson and Gordon White, built a global business conglomeratewith a value of over 10.5 billion pounds. During that period they boughtover 40 companies in the UK and the USA.

However, Gordon White died in August 1995 and a few months laterthe 74-year-old James Hanson decided to break up their empire.

Hanson wanted to divide his conglomerate onto four groups ofcompanies.

Ex. 5. Below there are details of eight of Hanson’s major companies.You don’t need to understand every word in the texts, but find the answersto these questions as quickly as possible.1. Which company owns power stations ?2. Which company is interested in continental Europe ?3. Which company’s main customers are in the paint and paper industries

?4. Which company had a flat turnover last year?5. Which company is the world’s biggest private coal miner?6. What are aggregates?7. Which company is based in California?8. Which company produces polyethylene?9. Which company has nearly no international business?10. Which company is interested in power generation in Asia?

1. Company name : SCMLocation: USAMain product : Titanium oxide

(a chemical used to make things white)Main customers: the paint and paper industriesSales: 531 million poundsFuture plans : to increase production capacity by 22% before 2000.

2. Imperial TobaccoImperial Tobacco is number two in the British cigarette market. Itsoperating profits are 350 million pounds from sales of 780 million poundsand it will soon have new factories that will make it even more efficient.



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But these profits are nearly all in the British market; it has almost nointernational business.

3. Company name : CornerstoneLocation : California, USAMain product : aggregates

( rock, sand, and gravel)Turnover : 930 million poundsProfit : 50 million pounds

4. Hanson BrickHanson Brick has about 30% of the UK brick market. Last year it

increased its profits from 23 million pounds to 38 million pounds despitethe difficult housing market. It is now turning its attention to continentalEurope.

5. Eastern GroupThe Eastern Group has a number of power stations in the UK andmakes most of its profits from electricity distribution in the south-eastof England. It is also the UK’s fourth largest supplier of gas. Eastern’smanagement would like to develop international interests.Profit last year: 245 million pounds.

6. ARCARC is the second largest producer of aggregates (rock, sand and

gravel) in the UK. It is also second in coated stone for road construction.Despite a difficult construction market last year, ARC increased operatingprofits from 69 million pounds to 84 million pounds on flat turnover of563 million pounds.

7. PeabodyPeabody is the world’s largest private sector coal miner and a leasing

US distributor of propane gas. Hanson’s accounts show that St Louis-based Peabody had a difficult time last year. While profits rose from 149million pounds to 215 million pounds, the underlying trend was down.Peabody is currently interested in power generation projects in Asia.



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8. QuantumQuantum is an American chemical company that specialises in

plastics, in particular, polyethylene products. Last year it made operatingprofits of 30% on sales of 1.4 billion pounds. However, it operates in avery unstable market and results will probably not be as good over the nextfew years.

COMPANY STRUCTURE

Ex. 6. Before you read discuss these questions.1 How many different ways of organising or structuring a company can

you think of? Think about departments, products and markets.2 If you work for a company or organization, how would you describe the

company structure?

Doing The Business

Roisin Ingle hears how efficient management structures are vital forsuccess

The need for a solid structurewithin all business entitiesis ‘absolutely fundamental’,according to Ms Angela Tripoli, a

5 lecturer in BusinessAdministration at UniversityCollege Dublin. ‘Organisationalstructure concerns who reports towhom in the company and how

10 different elements are groupedtogether. A new company cannotgo forward without this andestablished companies must ensuretheir structure reflects their target

15 markets, goals and available technology.’Depending on their size and

needs there are several organisationalstructures companies can

20 choose from. Increasingly though,in the constantly evolving business



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environment, ‘many firms are opting for a kind of hybrid of allof them’.

25 The most recognisable set up iscalled the functional structurewhere a fairly traditional chain of

command (incorporating seniormanagement, middle management

30 and junior management) isput in place. The main benefit ofthis system is clear lines ofcommunication from top to bottom butit is generally accepted that it can

35 also be a bureaucratic set upwhich does not favour speedydecision – making.

More and more companies areorganising themselves along

40 product lines where companies haveseparate divisions according to theproduct that is being worked on.‘In this case the focus is always onthe product and how it can be

45 improved.’The importance for multinational

companies of a good geographic structure, said Ms Tripoli,could be seen when one electrical

50 products manufacturer producedan innovative rice cooker whichmade perfect rice – according towestern standards. When theytried to sell it on the Asian market

55 the product flopped because therewere no country manages informingthem of the changes thatwould need to be made in order tosatisfy this more demanding



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60 market.The matrix structure first

evolved during a project developedby NASA when they needed topool together different skills from

65 a variety of functional areas.Essentially the matrix structureorganises a business into projectteams, led by project leaders, tocarry out certain objectives.

70 Training is vitally important herein order to avoid conflict between

the various members of the teams.During the 1980s a wave of

restructuring went through75 industry around the globe. This process,

known as delayering, saw achange in the traditional hierarchicalstructures with layers ofmiddle management being

80 removed. This development was

driven by new technology and bythe need to reduce costs. The overallresult was organisations thatwere less bureaucratic.

85 The delayering process has runIts course now. Among the trendsthat currently influence how acompany organises itself is the

move towards cetralisation and90 outsourcing. Restructuring hasevolved along with a more‘customercentric’ approach that canbe seen to good effect in the banks.They now categorise their

95 customers and their complexborrowing needs into groups instead ofalong rigid product lines.

Another development can beseen in larger companies, which



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100 are giving their employees morefreedom to innovate in order tomaintain a competitive edge.Ms Julia MacLauchlan, Directorof Microsoft’s European Product

105 Development Centre in Dublin,said the leading software companyhad a very flat organisationalstructure. ‘There would not bemore than around seven levels

110 between the average softwaretester and Bill Gates’, she said.

Microsoft is a good example of aCompany that is structured alongproduct lines. In Ireland, where

115 1,000 employees work onlocalisation of the software for allMicrosoft’s markets, the companyIs split up into seven business

Units. Each unit controls the120 Localisation of their specific products

while working closely with thedesigners in Microsoft’s SeattleHeadquarters.

It works, said Ms Maclauchlan,125 because everyone who works in

the unit is ‘incredibly empowered’.‘Without a huge bureaucraticinfrastructure people can react alot more quickly to any challengesand work towards the company’sobjectives’.

( From The Irish Times)

Ex.7. Read the text about the different ways in which companies areorganised and answer these questions:

1. Four main kinds of organisational structure are described in the article.What are they?



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2. Is one kind of organisational structure more common than the others?3. When did ‘delayering’ take place?4. What were the reasons for delayering and what were the results?5. How does Julia MacLauchlan describe Microsoft’s organisationalstructure?

Ex. 8. Match these definitions with the four organisational structuresdescribed in the text.1. A cross-functional structure where people are organised into project

teams.2. A structure rather like the army, where each person has their place in a

fixed hierarchy.3. A structure that enables a company to operate internationally, country

by country.4. A structure organised around different products.

Ex. 9. These words and expressions are used in the text to describedifferent aspects of organisational structure. Which are positive and whichare negative?

clear lines of communication (line 32) positive bureaucratic set up (line35)speedy decision-making (line36)traditional hierarchical structure (line77)

customercentric approach ( line 91 )freedom to innovate (line 101)flat organisational structure (line 107)

Ex.10. Match these nouns as they occur together in the text.1) product a) teams2) target b) objectives3) borrowing c) lines4) project d) units5) delayering e) company6) country f) process7) business g) markets8) software h) needs9) company i) managers



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Ex. 11. Complete the sentence. Use the appropriate phrase fromExercise10 to complete each sentence.1. Banks need to be fully aware of their customers’ ……..2. Silicon Valley is full of ….3. Many companies are now organised along ……, in which each divisionis responsible for a group of products.4. A matrix organisation groups people into …………..5. Some companies are divided into different…….., often also calledprofit centres.6. A multinational company will often have a number of ……., in chargeof activities in different parts of the world.

Ex. 12. Match these terms with their definitions

1) business entities (line 2) a) focusing on the customerrather than the product

2) set up (line25) b) new, original3) innovative (line 51) c) companies4) flopped (line55) d) something that makes you

better than other companies5) outsourcing (line90) e) did not succeed, failed6) customercentric (line91) f) structure7) competitive edge (line102) g) getting external companies

to do work for your company.

Ex.13. Complete the sentences with an appropriate preposition.1. Organisational structure concerns who reports …. whom.2. Depending …….its size, there are several organisational structures a

company can choose from.3. Many companies are organising themselves …. product lines.4. In the 1980s a wave of restructuring went ……industry.5. Delayering was driven ……the need to reduce costs.6. Microsoft in Ireland is split …….seven business units.

Ex. 14. The word business is used several times in the article combinedwith another word which comes after it ( e.g. business environment(line21)).It can also be combined with words that come before it,(e.g. bigbusiness). Try to think of as many word combinations using business as



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you can, then look at the entry for business in the Business EnglishDictionary.

Do the same exercise with the words company, management, managerand product .

CHECK QUESTIONS1. The functional organisational structure has clear lines of

communication. In contrast, where things are organised along productlines or with a matrix structure, people often report to two people atthe same time – their boss in the functional structure and theirmanager or team leader in the other structure. What, if any, problemscould you imagine in the second case?

2. Do you think people from certain cultures would favour one kind oforganisational structure over another? Can you think of someexamples and give some reasons.

3. Either use your own company’s organisational structure, or select onefrom a company’s annual report, and give a presentation of it to yourcolleagues.

Unit 3

Corporate Cultures

Ex.1. Discuss the questions.

1. Every organisation has its own distinctive culture, and this can varyenormously from company to company. To an outsider, corporateculture differences are usually reflected in external symbols or

characteristics, such as advertising and design. Other characteristics ofcorporate culture are only observable when you get inside thecompany as an employee or a supplier, such as the kind of dress wornby staff or the use of first names. Try to think of some othercharacteristics of corporate culture based on companies that you know.

2. Think of some large supermarket groups you know. What kind ofimage do they project to their customers, e.g. friendly, giving bestvalue?



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TRANSPOSING A CULTURE by Peggy Hollinger

NOT TO BE TAKEN FOR GRANTEDAsda and Wal-Mart should be the perfect merger, given that the formerhas deliberately set out to copy the US retailing giant’s style. But Asda idkeenly aware of the pitfalls.

You could not hope to find a neaterfit, said the commentators when

Wal-Mart, the world’s biggestretailer, agreed a 6.7 billion pounds takeover

5 deal with Asda, the UK’s numberthree supermarket group.

It had long been known that theteam which was brought in the rescueAsda from collapse in the middle

10 1980s had deliberately set out tocopy virtually every aspect of the

giant US discount group that couldbe replicated in the UK.

So Asda stores have ‘colleagues’,15 not employees. They have people

in the parking lots to help driversto park . They have old-age pensionerswearing colourful namebadges, standing at the door to say

20 hello and ask customers if theyneed help. In the Leeds headquartersno one has an individual office,not even the chairman.Finally , store staff get actively

25 involved in promoting individualproduct lines, and are rewardedwhen their efforts lead to tangiblesales improvements.Most of these ideas came

30 straight from Bentonville,Arkansas, home to one of theWorld’s most unusual retailers.



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For Wal-Mart’s corporate culturehas become a legend in retailing.

35 The company’s employees chantThe Wal-Mart cheer before storemeetings. They benefit from ashare ownership scheme which isone of the most widespread in the

40 industry. Top executives sharerooms when on business trips, andpay for their coffee and tea fromvending machines like the lowliestsales assistant.

45 Given the similarities, there arefew who really believe puttingAsda into the Wal-Mart networkwill result in anything but success.

But, says Asda’s Chief Executive,50 Allan Leighton, this is no reason

to be complacent. Failing to bringtogether corporate cultures, eventhose as similar as Asda’s and Wal-Mart’s, could lead to the downfall

55 of the most logical mergers. ‘Whenacquiring or merging with a business,getting the cultures to fit isfundamentally important’, he says.Half-way houses, where compro-

60 mises are made, never work, hebelieves, and nor does imposingone culture on another. ‘A companycalling their colleaguescolleagues and treating them like

65 staff is not the answer’, he says.The key to getting the deal to

work culturally rests on a fewfundamental issues, he believes. The

first and most important is termi-70 nology, he says. ‘Businesses have

their own language. You have to



27

get everyone aligned so that whensomeone uses a word it means thesame thing to everyone’.

75 Middle management comesnext. ‘Initially, everything is doneat the top of organisation’, hesays, ‘But most of the work is donein the middle’. If middle management

80 is not incentivised, a dealcan go horribly wrong. ‘It all boilsdown to people in the end. Andwhat motivates people? Unless youcan demonstrate very quickly that

85 their influence in the organisationis at least the same if not betterthan before, then people will getconcerned about it’, he says.

Third comes getting to know90 each other. Asda and Wal-Mart

have spent the last few weeksswapping store managers and ITsystems staff. ‘We will go out there,look and bring back’, Lerighton

95 says. ‘That way we will have own-ership of the changes as opposed tohaving them pushed on us.’

It will always be hard to deter-mine whether a merger or

100 takeover has failed because thecultures simply did not fit. Butsuccess is more likely to eludethose who do not really believe inthe cultures they are trying to cre-

105 ate. ‘This all comes from theheart’, says Leighton. ‘You do notget it from textbook managementor instruction. You have to createan environment where people feelcomfortable in expressing them-



28

selves in a different way’.

(From ‘ Financial Times ‘ )

Ex. 2. Read the text about the merger of two companies and their corporatecultures and answer these questions.

1. Which company is bigger – Asda or Wal-Mart ?2 .Which are employees at Asda called?3. Which two countries are Asda and Wal-Mart from?4. Which of these statements best summarises the corporate cultures of

Asda and Wal-Mart?a) We must keep costs as low as possible.b) We value the contribution of every employee to the success of the

company.c) Everyone in the company is considered equal.

5. What extra financial benefit do Wal-Mart employees have?6. Allan Leighton mentions three things needed to get the deal ‘to work

culturally’. What are they?

Ex. 3. Mark these statements T (true) or F (false) according to theinformation in the text. Find the part of the text that gives the correctinformation.

1. Asda and Wal-Mart have very similar corporate cultures.2. Asda is the biggest supermarket group in the UK.3. Wal-Mart is the biggest retailing group in the US.4. Asda had financial problems in the 1980s.5. Many of Asda’s employees are over 65.6. Allan Leighton is sure the merger of Asda with Wal-Mart will

succeed.7. Wal-Mart plans to impose its corporate culture on Asda.8. Creating a corporate culture cannot be planned in theory only.

Ex. 4. 1. Choose the best explanation of the phrase ‘ there are few whoreally believe putting Asda into the Wal-Mart network will result inanything but success’ (line45)

a) most people think the combination of Asda and Wal-Mart willsucceed



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b) not many people think the merger will succeed.2.What does Allan Leighton mean when he says ‘it all boils down to

people in the end’ (line 81)a) the number of people in the new organisation will need to be

reducedb) people are the most important element in a merger or takeover.

Ex. 5. Match these terms with their definitions1) virtually (line11) a) cause something to fail2) parking lots (line16) b) people of retirement age who no

longer work3) old-age pensioners(line17) c) almost all4) chant (line35) d) sing5) widespread (line39) e) escape6) lead to the downfall(line54) f) a place where cars are put7) incentivised (line80) g) motivated through money or

other means8) elude (line102) h) available to lots of people

Ex. 6. Complete the sentences1. …………schemes for employees help to develop loyalty and

commitment.2. Most large supermarkets sell hundreds of ……………3. With the increased emphasis on the customer in retailing, the role of

the …….. is imported.4. The increased use of audio and video conferencing should reduce the

number of …… executives need to make.5. Large organisations need sophisticated …. To operate efficiently.6. If people didn’t wear ….. at big conferences, you wouldn’t know who

anyone was.7. Most executives never progress beyond ……..8. The role of a …… is to motivate and control the sales staff in the shop.

CHECK QUESTIONS

1. Wal-Mart’s corporate culture ‘has become a legend in retailing’. Itincludes such things as employees chanting the Wal-Mart cheer each daybefore the store opens. How well do you think Wal-Mart’s corporate



30

culture would ‘travel’ across national cultures, especially outside the UKand the US? Would you feel comfortable with it?2. Choose two large retailing, restaurant or hotel groups that you arefamiliar with. If you have time, go and observe the way they presentthemselves to customers. Then give a presentation comparing the twoorganisations’ approaches to customers.

THE CUSTOMER

Here are nine things that you may need to be when dealing withcustomers: precise, persuasive, positive, polite, practical,punctual, persistent, patient, prepared.

Which do you think are the most important ?Rank them from 1 to 9.

Mark McCormack is probably the most successful sports agent in theworld. He represents the interests of hundreds of top sports stars. In hisbest-selling book, What They Don’t Teach You At The Harvard BusinessSchool, he tells this story about dealing with a customer.

For several years, I had been trying to convince Andre Heiniger, theworld-wide chairman of Rolex, to sponsor the construction of a newelectronic scoreboard at Wimbledon, but he felt it was a waste of money.

I knew the only chance of changing his mind was to rake him there,which I finally managed to do during one Wimbledon championship.

As we sat in the Royal Box, I could see him taking everything in: theelegance of the Centre Court, the excitement of the match, the beauty andthe charm of this very special place.

When the match was over, Heiniger turned to me and made a slowsweeping gesture with his hand.‘This’, he said, ‘is Rolex’.

(from What They Don’t Teach You At The Harvard Business School)

Ex. 7 Which of the above nine qualities does he show?Explain why.

Ex. 8. Here are four activities that connect a business to its customers:distribute, sponsor, advertise, sell.Match the number of the appropriate definition to each verb1. to give goods to someone else in exchange for money



31

2. to make something known to the public, for example in a newspaper oron television

3. to supply goods in a particular area4. to pay for a show, broadcast, sports event, etc. in return for advertising.

In his book, Mark McCormack also makes these statements aboutdealing with customers.‘I can’t imagine anyone being effective in business without having someinsight into people’.‘All things being equal, people will buy from a friend’.‘Effective selling is directly tied to timing, patience and persistence’.‘Just as there is a right time to make a sale, there is a right place for it aswell’.

Ex. 9. Read them and then look again at his story aboutAndre Heiniger and Wimbledon.

1. Which of these ideas does the story illustrate?2. Do you agree with Mark McCormack’s four statements?

Situation: You are selling a product for 1800 pounds, but your customerwants to pay 1500 pounds. Here are three things that you could say to thecustomer.1. ‘If I were in your position, I would also want to get the best possible

price. But we’re both in business to make a profit and we’re onlytalking about 300 ponds difference. If you meet me half way, I’ll workout a nice little deal for you. What do you say?

2. ‘This is crazy. If we were criminals, we would try to help each other.But we’re not. We’re honest businesspeople and we can’t reach anagreement. Now I want to help you, so this is what I’ll do. I’m going totake a coin out of my pocket and toss it. you can call “Heads” or“Tails”. If you call correctly, I’ll give you the product for 1750 pounds.But if you call incorrectly, you’ll pay me the full price. How does thatsound to you?’

3. ‘If you make me a reasonable offer, say 1750 pounds, then we canshake hands. If I accepted anything less, I wouldn’t make a profit. Ifyou don’t want to pay that much for it then, I’m sorry, but I won’t sell itto you.



32

Ex. 11. Read the text and then discuss these points.Which of the three approaches do you think would be most effective? Giveyour reasons.Can you think of any other ways of dealing with the situation? Decidewhat you would say to this customer.

Unit 4

The Global Company

Ex. 1. Discuss the following questions:Can there be such a thing as a ‘world car’? or

Should cars be designed to suit the tastes of different markets?What are the financial and marketing implications?Which do you think is better for an international company – strong centralcontrol of international operations or decentralised decision-making?Does it depend on the business the company is in?

CASE STUDY : FORD and HONDAHaig Simonian on two car groups’ different routes to the global market.

Rising costs and the worldwidespread of shared tastes in carstyling have prompted the indus-try’s giants to exploit global

5 economies of scale. But rivalssuch as Ford and Honda haveapproached the task very differ-ently.

Ford is one of the world’s earli-10 est multinationals. Its first foreignproduction unit was set up in

Canada in 1904 – just a year afterthe creation of the US parent. Foryears Ford operated on a regional

15 basis. Individual countries orareas had a large degree of auton-

omy from the US headquarters.That meant products differedsharply, depending on local execu-



33

20 tives’ views of regional require-ments. In Europe the companybuilt different cars in the UK andGermany until the late 1960s.Honda, by contrast, is a much

25 younger company, which grewrapidly from making motorcyclesin the 1950s. In contrast to Ford,Honda was run very firmly out ofJapan. Until well into the 1980s, its

30 vehicles were designed, engi-neered and built in Japan for salearound the world.Significantly, however, HondaTended to be more flexible than

35 Ford in developing new products.Rather than having a structurebased on independent functional

departments, such as bodywork orengines, all Japan’s car makers

40 preferred multi-disciplinaryteams. That allowed developmentwork to take place simultaneously,rather than being passed betweendepartments. It also allowed much

45 greater responsiveness to change.In the 1990s both companiesStarted to amend their organisa –tional structures to exploit the per-

ceived strengths of the other. At50 Ford, Alex Trotman, the newly

appointed chairman, tore up thecompany’s rulebook in 1993 tocreate a new organisation. TheFord 2000 restructuring pro-

55 gramme threw out the old func-tional departments and replacedthem with multi-disciplinary prod-uct teams.



34

The teams were based on five60 (now three) vehicle centres,

responsible for different types ofvehicles. Small and medium-sizedcars, for example, are handled by aEuropean team split between the

65 UK and Germany. The develop-ment teams comprise staff frommany backgrounds. Each takes

charge of one area of the process,whether technical, financial or

70 marketing-based.Honda, by contrast, has decen-tralised in recent years. While itscars have much the same namesaround the world, they are becom-

75 ing less, rather than more, stan-dardised. ‘Glocalisation’ – a globalstrategy with local management –is the watchword. Eventually thegroup experts its structure will

80 comprise four regions – Japan, theUS, Europe and Asia-Pacific –which will become increasinglyself – sufficient.Two reasons explain Honda’s

85 new approach. Shifting to produce-tin overseas in the past decadehas made the company moreattuned to regional tastes. About1m of Honda’s 2.1m worldwide car

90 sales last year were produced inthe US. A further 104,000 weremade in the UK. No other manu-facturer has such a high propor-tion of foreign output.

95 Honda engineers also reckonThey can now devise basic engineering structures which are com-



35

mon enough to allow significanteconomies of scale, but sufficient-

100 ly flexible to be altered to suitregional variations. The USAccord, for example, is longer andwider than the Japanese version.The European one may have the

105 same dimensions as the Japanesemodel, but has different stylingand suspension settings.Both Ford and Honda arguetheir new structures represent a

110 correct response to the demands ofthe global market. Much of whatthey have done is similar, butintriguingly, a lot remains differ-ent.

( From Financial Times, Wednesday October 15)

Ex. 2. 1. Read the text about two car companies’ global strategies andsay which of these statements apply to Ford and which to Honda.a) now has a strategy of decentralisationb) now works in multi-disciplinary teams for car design and developmentc) has always worked in multi-disciplinary teamsd) produces more cars abroad than in its home countrye) used to be very decentralisedf) used to be very centralisedg) has divided the world into four regionsh) designs and develops all its small cars in Europei) has always been flexible and able to respond to change.

2. According to the ideas in the text, why do car companies now need tohave a global strategy?

3. How did the two companies change their strategies?

Ex. 3. These phrases summarise the main idea of each paragraph of thetext. Match each phrase with the correct paragraph.

a) one reason for changes in Honda’s strategyb) Honda’s original strategy



36

c) Ford’s new strategyd) Conclusione) Honda’s new strategyf) Ford’s original strategyg) The advantage of Honda’s original strategyh) Introductioni) Ford’s new strategy in detail

j) Another reason for Honda’s new strategy.

Ex. 4. Complete the sentences

1. The company ….. three divisions - cars, trucks, and commercialvehicles.

2. Each division has a lot of ……. to decide its own strategy.3. Companies seem to change their ……… every few years in response to

changing economic and market conditions.4. Our total ……..of cars from all our factories in Europe went down last

year.5. We need to develop products that meet the …….. of the market.6. Big car market now produce different models based on the same

platform in order to achieve ………… .7. All the main Japanese car makers have ……. in Europe.

Ex. 5. Complete these sentences with the adverb or phrase used in thetext.1 For many years Ford’s products differed ……. from region to region.2 Individual countries had …… of autonomy.3. Honda grew……. from its early days as a motorcycle manufacturer.4. For many years Honda was run very ….. out of Japan.5. The use of multi-disciplinary teams allowed development work at

Honda to take place …… in different parts of the company.6. Honda experts its four regions to become ….. self-sufficient.7. No other car maker has ……..of foreign output as Honda.

CHECK QUESTIONS

1. You have been asked by the board of multinational car maker topresent the case for a ‘glocalisation’ strategy, as described in the



37

article. Prepare a presentation or write a report to give your argumentsin favour of this.

2. You are the members of the global strategy team of US Motor, anAmerican multinational car maker. The company currently hasproduction units in the UK, Germany, France and Spain for theEuropean market. But with the opening up of the markets in Centraland Eastern Europe, you are considering whether to set up a productionunit in Ukraine. Hold a meeting to discuss the advantages anddisadvantages of this strategy, and try to come to a decision.

MEETINGS

Michael Crichton is one of America’s best-selling novelists. This iswhat he writes about how to behave at a meeting with a Japanese person.The extract below comes from the novel, Rising Sun . It tells the story of apolice investigation into a murder at the head office of a Japanesecompany in the USA. It later became a film starring Wesley Snipes andSean Connery.

‘It’ll help to be formal. Stand straight and keep your suit jacketbuttoned at all times. If they bow to you, don’t bow back – just give a littlehead nod. A foreigner will never master the etiquette of bowing. Don’teven try.

When you start to deal with the Japanese, remember that they don’tlike to negotiate. They find it too confrontational. In their own society,they avoid it wherever possible.

Control your gestures. Keep your hands at your sides. The Japanesefind big arm movements threatening. Speak slowly. Keep your voice calmand even’.

Ex. 6. Read the description and answer these questions about the text.What does Michael Crichton say about…..

1…the best way to greet a Japanese person?2…being direct?3…your body language?

Kinds of meeting:

Ex. 6. Here are five situations which you could describe as‘ meeting’.



38

A progress review; a brainstorming; a chat;An appraisal; a briefing.

Match each situation to one of five meetings above.

1. Several people trying to think of new ideas2. Two people talking in a corridor3. One person giving several other people information about a new

project4. A boss talking to someone about his or her recent performance5. Several people having a regular meeting to discuss the way a project is

developing.

Ex. 7. 1. Which of the meetings do you think are normally formal andwhich are normally informal?

2.Which of these things do you expect at a formal meeting andwhich at an informal meeting? Give examples for some of the meetings inthe list above.

An agenda, matters arising, AOB, coffee, a chairperson, an objective,a time limit, minutes, any other business, briefing documents.

Ex. 8. Here are six phrases that you heard in the meeting. Write them inthe correct boxes.What do you mean by that? Are there any questions?We’re here today to sort out this mess. Can I say something here? Let’sget down to business. Can you repeat what you said about the money?To signal the start…..To introduce the objective….To ask for questions….To ask for clarification…..To ask for repetition….To interrupt…..

Ex. 9. Work in small groups and have a series of short meetings.Take turns to be chairperson.

The chairperson should choose the subject of the meeting and decide onthings like a time limit, agenda, minutes, etc. At the beginning of eachmeeting he or she should do the following:



39

1. Signal the start.2. Introduce the objective.3. Mention issues such as agenda, time limit as appropriate.4. Ask for questions.

Others in the group should interrupt, ask for clarification, repetition,etc. as appropriate.

PRESENTATIONS

This is what the American writer Steven Silbiger writes aboutpresentations (or public speaking) in his book, The Ten Day MBA.

The Mini-Course on Public Speaking

1. Know your audience. Their interests, attention span.2. Know your own capabilities. Can you deliver a joke?3. Keep it simple. Detailed information is best delivered

in print. Speeches should deliver conceptand motivate.

Ex. 10. According to Steven Silbiger, are the following true or false?You shouldn’t allow the audience to influence what you say.You should always use humour in your presentations.Presentations should be about ideas.There should be lots of facts and figures.Presentations should inspire people.

Planning a presentation.Nearly all speakers plan their presentations carefully. Here are three

ways of preparing a presentation.1. Practise the presentation beforehand and then deliver it without notes.2. Give the presentation from notes.3. Write the presentation in full and read it.

Ex. 11. Answer the questions :What are the pros and cons of each approach given above?Would you prepare a presentation in one of these ways?If not, describe how you would do it.



40

Ex. 12. Compare two visual aids given below. Which do you think wouldbe more effective on a screen during a presentation? Think about thesepoints.1. Which has more visual impact?2. Which is easier to read?3. Do you want people to read or to listen to you?

Audience1. It is important that you know as much as possible about your audience.2. You should try to find out who will be in the audience before the presentationstarts.(Phone the organiser or speak to the boss!!)3. You should also try to find out whatever you can about their interests.(You don’twant to make jokes about soccer in a room full of Americans!)

4.Think about their attention span. Make sure that you don’t give them too muchinformation or spend too long on a subject which they find boring.

AUDIENCE

Who are they?

What are they interested in?

What do they want to know?Ex. 13. Decide how you would present this as a visual aid in apresentation. Write your own version.

When giving presentations, it is important to keep thingsas simple as possible. If you have got lots of detailed

information, it is probably best to put it in print and allow people to read it

either before or after the presentation. Presentationswork best when they talk about ideas rather than facts. They can also begood for motivating and inspiring people. But, of course,that very much depends on your personal qualities!

Compare your visual aid with those of others in your group.



41

Unit 5Global Production. Global Careers.

Global Production

Discussion : Discuss these questions.

1. What criteria do you think global companies use when they choosethe location of their manufacturing operations around the world?Some examples are labour costs, education level of the localworkforce, and political stability. Can you think of others?

2. It has become increasingly common for organisations to subcontract

some aspects of their activity to outside companies. Typical examplesare catering (the company restaurant) or security (protecting thebuildings). What, in your opinion, are the advantages anddisadvantages of subcontracting work in this way?

The Global CompanyLowest Cost Isn’t Always The Answer

Lower tariffs and new markets opening to foreign investment have

complicated the decision about how manufacturing should be organised,says Nikki Tait

Visit any western toy superstore,and most of the basic products willsay ‘Made in China’ or, perhaps,Malaysia or Indonesia. Until, that

5 is, you reach the Lego section.

Suddenly, the boxes are more likelyto identify Denmark, Switzerlandor the US as the country of origin.It might seem logical that a

10 global company, selling into a mul-titude of country markets andmeasuring its market share inglobal terms, should place production

facilities wherever costs are15 lowest. But Lego, the privately-owned Danish company, has for



42

years concentrated its manufac-turing in Europe and the US, arguingthat this best satisfies design

20 and quality requirements. ForLego the notion of cost is only asmall part of the production pic-ture.So how does a global company

25 go about organising its manufac-turing network? The decision hasbecome more complicated over thepast two decades due to a numberof factors. On the one hand, trade

30 barriers across much of the worldhave declined sharply.Simultaneously, a range of newmarkets – notably in Asia andEastern Europe – has opened to

35 foreign investment.This has made global produc-tion much more possible. But ithas also reduced the need formany overseas plants. Markets

40 that previously demanded localproduction facilities – because tar-iff levels made importing far tooexpensive – can now be suppliedfrom other countries

45 Plainly, in this newly-liberalisedenvironment, basic manufacturingcosts do become more significant.

But there are limits to a purelycost-driven approach. Many

50 companies have built their currentproduction structure throughacquisitions over a number ofyears, rather than in a plannedway.

55 Another problem is that costs



43

themselves can be subject to rapidchange, making today’s Indonesia,for example, tomorrow’s HongKong. This adds a further dimen-

60 sion to any global company’sinvestment decision-making. Thereality is that manufacturing busi-nesses also need to think : howquickly can we pull the plug?

65 Some companies have addressedthis issue through what is calledthe ‘part configuration’ model.This involves selecting a numberof regional manufacturing bases

70 which are viewed as longer-terminvestments, and augmentingthem with lower-skilled assemblyplants, which can more easily bemoved between markets.

75 The availability of suitableemployees also needs to be exam-ined when investment decisionsare being made. There may beclose links between manufactur-

80 ing and product innovation and iftoo much focus is put on low-costassembly operations, productinnovation tends to suffer.Perhaps the hottest topic is

85 whether a global company needsto be a producer at all.Outsourcing of production toother suppliers gives a companymore flexibility, and fits well with

90 a global strategy. A business maybe better placed to supply differen-tiated products into differentregional markets, and it can proba-bly adjust more swiftly to chang-



44

95 ing cost considerations. Theseoperational advantages come inaddition to the financial benefitsof outsourcing, such as lower capi-tal employed.

100 But there can be pitfalls.Perhaps no company exemplifiesthe outsourcing trend better thanNike, the sports shoe group. Onpaper, its strategy of subcontract-

105 ing the production of its shoes tolocal factories looks eminentlysensible. But these arrangementshave turned into a public relationsdisaster in recent years, as human

110 rights campaigners have com-plained of ‘sweatshop’ conditionsin many of the Asian plants pro-ducing Nike products. Lack ofownership, it seems, does not bringfreedom from responsibility.

( From Financial Times).

Ex. 1. Read the text about how global companies organise their productionand answer these questions.

1. Where are most simple toys manufactured and why?2. Why does Lego do things differently?3. What is the reason for a global company to have a ‘part configuration’

model?4. According to the text, what are the advantages and disadvantages of

‘low-cost assembly plants’?5. What are the operational advantages of outsourcing?

Ex. 2. Mark these sentences T(true) or F(false) according to theinformation in the text. Find the part of the text that gives the correctinformation.



45

1. The main reason to have overseas plants is to be close to local markets.2. A lot of plants are now being located in Eastern Europe.3. Imports to many markets are now cheaper.4. The number of overseas plants is increasing.5. Cost is the main factor in choosing the location of a foreign plant.6. Outsourcing production to subcontractors gives a company more

flexibility.

Ex. 3. Match the terms with their definitions.

1) notably (line33) a) is a typical example of something2) augmenting (line71) b) especially, particularly3) links (line79) c) a relationship or connection

between two things4) swiftly (line94) d) quickly5) exemplifies (line101) e) very, extremely, completely6) eminently (line106) f) increasing something by adding

to it.

Ex. 4. Complete the sentences. Use an appropriate word from Exercise 3to complete each sentence.

1. The success of the engineering company ABB …….. the ability of anorganisation to think globally and act locally.

2. We recruit our future international managers from the top businessschools, ………Harvard, INSEAD and London.

3. Many business schools and management faculties haveclose……….with industry.

4. Our new Chief Executive was easily the best candidate for the job. Infact, he is …… suitable for this position.

5. During the busy months of the year we deal with the extra work by …..our full-time staff with temporary employees.

6. If incorrect and potentially damaging news is reported about thecompany in the press, it is important to move …….. to deny it.

CHECK QUESTIONS

1. Some of the main benefits for a company that is listed on the stockexchange are that it can raise capital by issuing new shares, and it can



46

also use its own shares as payment when acquiring or taking overanother company. But there are some disadvantages too. What do youthink they are?

2. Most big international companies are listed on the stock market. ButLego is not. What do you think the reasons are?

3. Your company, a well known multinational producing components forthe car industry, has a production plant in southern Italy, an area of highunemployment. The plant received Italian government and EU financialassistance when it was built three years ago. Now, due to poorproductivity levels at the plant, the company is considering closing itdown. However, there could be social, economic and political problemsif it does so. You have been asked by the top management to write areport to present the case in favour of not closing it. Do so, giving asmany reasons as you can.

4. You are a member of the strategic planning team of a company thatproduces PCs. Till now, the company has produced most of thecomponents for the PCs itself. Hold a meeting to discuss the argumentsfor and against outsourcing the production of some of thesecomponents, so that your company becomes only an assembler anddistributor of the finished PCs.

Global Careers

Discussion: Discuss the questions.1. What qualities do you think a person needs in order to be a

successful global manager? Some examples may beindependence, or an interest in foreign cultures. Try to think ofothers.

2. What personal and professional skills do you need for asuccessful business career in your country, e.g. specialist training,knowledge of foreign languages, outgoing personality?

GLOBAL CAREERS

Ideally, it seems a global manager should have the stamina of an Olympicrunner, the mental ability (1)of an Einstein, the conversational skill of a professor oflanguages, the detachment of a judge, the (2) tact of a diplomat, and the

perseverance of an Egyptian pyramid builder. And that’s not all. If they (3) are goingto measure up to the demands of living and working in a foreign country, they shouldalso (4) have a feeling for the culture; their moral judgement should not bee too



47

rigid; they should be able to (5) merge with the local environment; and they shouldshow no signs of prejudice.(6)

Thomas Aitken

According to Colby Chandler, the former Chief Executive of EastmanKodak Company, ‘these (7) days there is not a discussion or a decision thatdoes not have an international dimension.(8) We would have to be blindnot to see how critically important international experience is’.(9).International companies compete with each other for global executives tomanage their operations(10) around the world. Yet what it takes to reachthe top of a company differs from one country to (11) the next. Forexample, whereas Swiss and German companies respect technicalcreativity and (12) competence, French and British companies often viewmanagers with such qualities as ‘ mere technicians’.(13) Likewise,American companies value entrepreneurs highly, while their British andFrench (14) counterparts often view entrepreneurial behaviour as highlydisruptive. Similarly, whereas only (15) just half of Dutch managers seeskills in interpersonal relations and communication as critical to (16)career success, almost 90 per cent of their British colleagues do so. (17).

Global management expert, Andre Laurent, describes German, British,and French managers’ (18) attitude to management careers as follows: (19)

German managers, more than others, believe that creativity is essentialfor career success. (20) In their mind, successful managers must have theright individual characteristics. German(21) managers have a rational outlook; they view the organisation as acoordinated network of individuals(22) who make appropriate decisionsbased on their professional competence and knowledge.(23)

British managers hold a more interpersonal and subjective view of theorganisational world.(24) According to them, the ability to create the rightimage and to get noticed for what they do is (25) essential for careersuccess. British managers view organisational primarily as a network ofrelation(26)ships between individuals who get done by influencing eachother through communicating (27) and negotiating. (28).

French managers look at organisations as an authority network wherethe power to organise (29) and control others comes from their position inthe hierarchy. French managers focus on the organ(30)isation as a pyramidof differentiated levels of power. They perceive the ability to manage

power(31) relationships effectively and to ‘work the system’ as critical totheir career success.(32)





49

4) tact d) determination to keep trying to dosomething difficult

5) perseverance e) not becoming involved in thingsemotionally.

Ex. 7. Complete the sentences.

1. German managers take decisions …….their professional knowledge.2. The qualities most valued in managers ….. country to country.3. To operate successfully in different countries you need to ….. good….

different cultures.4. In a global company, managers from different countries …. ….each

other for the top jobs.5. Expatriates who don’t …….. to the demands of working and living

abroad sometimes return from their foreign assignment early.

CHECK QUESTIONS

1. Do you agree with the list of personal qualities necessary to be a globalmanager which are quoted by Thomas Aitken at the beginning of thetext? Can you add anything?

2. If you have experience of companies in Germany, Britain and France,would you agree with Andre Laurent’s analysis of what is essential forcareer success and how organisations work in each country? Can youadd anything?

3. Imagine that you wish to apply for the job advertised below. You havethe right qualifications and experience, and these are on your CV. Writea letter of application to accompany your CV, empasising your personalqualities and suitability for this position.

EUROPEAN MANAGEMENT JOURNALDirector, International Sales & Marketing

As a key member of our managerial team, you will direct theinternational business, promotional, and advertising sales activities for TheEuropean Management Journal. You will determine the profitability andfeasibility of establishing new products and build strategies for deliveringcurrent products into new international markets. You will also direct anindependent sales force on three continents and be responsible for the day-



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to-day management and coordination of marketing strategies betweennational and international divisions.Requires a BA (or equivalent) in Marketing or Finance, and 7 years’product management or development experience, with 3+ years’international marketing/sales experience in publishing or managementdevelopment. An MBA, experience in start up ventures, and the ability toadapt to different cultures preferred. English and one other Europeanlanguage essential. Overseas travel is required. The post is based inBrussels.

Unit 6Market and Production

Market

In 1924, Philip Morris named Marlboro cigarettes after the Englisharistocrat, the Duke of Marlborough – but the company cut the final threeletters from the name. that’s because ‘gh’ or ‘ugh’ are sometimes silent inEnglish, as in this case. In some cases, though, it’s pronounced as ‘f’’.

Marlboro is probably the most successful brand of cigarettes in the

world. Its advertising and its image are famous in nearly every country.Marlboro’s image has changed dramatically since its early days. Infact, when the tobacco company. Philip Morris, launched Marlboro in1924, its target market was women. Its advertising slogan said that it was“Mild as May”. But it wasn’t a great success and by the early 1950s it stillhad only around 1% of the total tobacco market. That was when thecompany asked the Chicago advertising executive, Leo Burnett, toreposition the product as a cigarette for men. He came up with an

advertising campaign based on the image of a cowboy – and Marlboro’ssales suddenly soared. Within a year it became the fourth best-sellingbrand in the USA; before long it was the biggest in the world.

But Marlboro hasn’t always had its current image, as the text explains.Ex. 1. But, what is special about Marlboro’s image?Look at the Marlboro advert and choose the two advert and choose the twoadjectives which you think describe it best.Glamorous, upmarket, masculine, luxurious, tough, functional,

downmarket, feminine, caring, simple.What three other products could these adjectives describe?



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Ex. 2. Match the words with their definitions.

Launch a)a person with an important job in theadvertising business

target market b) a series of advertisementsslogan c)to introduce a product to the marketadvertising executive d) the group of people that the company

wants to buy the productadvertising campaign e)to make the product appeal to a

different type of customerreposition f) a short phrase

Ex. 3. Read the text and answer these two questions.1. Who were Marlboro cigarettes originally for?2. How successful was Marlboro before the 1950s?3. Can you think of other products which have been repositioned?

Here are two ideas.Explain how their images and target markets have changed.1. Japanese cars (compare the 1960s with now).2. Running shoes ( compare the 1970s with now).

Ex. 4. Discuss which of these groups of people you think this Marlboroadvertisement appeals to. Rank them from 1 (high) to 5 (low).

Category Definition Rank

Yuppies young urban professionls with ahigh income

dinkies couple with a double income andno kids

the green market people who are concerned aboutthe environment

blue collar workers people who work with their handsethnic minorities people who are of a different race

from the majority of people in a country

Ex. 5. Now discuss which target markets these brands are for:McDonald’s, Disney, Mercedes – Benz, Levi’s.



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Ex. 6. Explain your answers to these questions:1. What image does the most important product of your company (or

one you know) have?2. What is its target market?3. How is it advertised?

MAKING A PROPOSAL

The GodfatherThe Godfather is a film about the New York Mafia. In the

film,Sollazzo, a gangster, makes a business proposal to the man they call‘The Godfather’, Don Corleone.

Sollazzo Don Corleone, I need a man who has powerfulfriends. I need a million dollars in cash. I need,Don Corleone, those politicians that you carry inyour pocket like so many nickels and dimes.

Don Corleone What is the interest for my family?Sollazzo 30%. In the first year, your end should be 3…4

million dollars. And then it would go up.Don Corleone And what is the interest for the Tattaglia

family?Sollazzo I’ll take care of the Tattaglias… out of my share.Don Corleone So I receive 30% for finance, political

influence and legal protection. That’s whatyou’re telling me.

Sollazzo That’s right.Don Corleone Why did you come to me? Why do I deserve

this generosity?Sollazzo If you consider a million dollars in cash just

finance…ti salute, Don Corleone.

Glossary:Nickels and dimes = small American coins of not much value

( 5c. And 10c.)your end = your returnthe Tattaglia family = one of Don Corleone’s big rivals



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Ex. 7. Read the script and make a summary of the deal:What does Sollazzo want?What is he offering?

STRUCTURING A PROPOSALLook again at the script and notice how the meeting is structured. In

which order do these stages occur?

Don Corleone summarises. Sollazzo says what he wants.Don Corleone asks what is in it for him. Sollazzo explains what he’soffering.

Here is some of the language you can use for each of those four stages : Ineed… Let’s sum up… I’m offering,…What is the interest for me?…Sothis is the position… I’d like you to consider… I’m looking for… What’sin it for me?

Write the phrases and sentences in the appropriate places. If you‘re making an offer…. …

How to say what you want …..How to say what you’re offering…

And if you’re listening to an offer ……How to ask about your interests…How to summarise the deal….

A REFUSALDon Corleone I said that I would see you because I heard

that you were a serious man, to be treatedwith respect. But I must say no to you andI’ll give you my reasons. It’s true I have alot of friends in politics, but they wouldn’tbe friendly very long if they knew mybusiness was drugs and not gambling –which they regard as a harmless vice. But

drugs is a dirty business……Sollazzo Don Corleone ……Don Corleone It doesn’t make a difference to me what a

man does for a living, you understand. Butyour business is a little dangerous….



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Glossary:A harmless vice = behaviour which is bad but not very dangerous.

Ex. 8. In Don Corleone’s position, if you wanted to refuse Sollazzo’sproposal, which of these phrases would you use?

- I’m sorry, but that’s out of the question.- I must say no to you and I’ll give you my reasons.- I’m afraid we can’t agree to that, but I hope to do business with you

some other time.- I need some time to think about that.

ACCEPTANCEHere are four ways of accepting a proposal. But which ones are

unconditional acceptances and which allow space for a negotiation todevelop?

- I like the sound of the idea.- I think we have the basis of an understanding.- That seems like a reasonable offer.- OK, it’s a deal.

How else can you accept a proposal?

Production

What makes an efficient production process? Here are seven things whichcould be important. Rank them from 1 to 7.Large inventories of partsPlenty of spaceGood communicationStrict quality controlFair division of labour amongst workersSmooth flow of production through the factoryGood safety producers(inventories US) = stocks (UK)).What other factors do you think are important in an efficient productionprocess?



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The Machine That Changed The World is a book that contains the resultsof a 5 million dollars research project which examined the reasons for thesuccess of Japanese car manufacturers.

Below is the description of two car factories : a General Motors plantat Framingham in the USA and a Toyota plant at Takaoka in Japan.

Ex. 9. Read the text and make notes listing the differences between theToyota and GM factories.

The differences between Takaoka and Framingham are striking toanyone who understands the logic of lean production. Toyota’sphilosophy about the amount of plant space is just the opposite of GM”s atFramingham : Toyota believes there should be as little space as possible.This means that face-to-face communication among workers is easier, andthere is little room to store inventories. GM, by contrast , believes thatextra space is necessary so that people can work on vehicles which needrepairs. They can also store the large inventories required for smoothproduction.

The final assembly line revealed further differences. Less an hour’sworth of inventory was next to each worker at Takaoka.The parts went on more smoothly and the worker tasks were betterbalanced, so that every worker worked at about the same pace. When aworker found a defective part, he sent it to the quality control area in orderto obtain a replacement….

At Takaoka, each worker can pull a cord just above the work station tostop the line if any problem is found; at GM only senior managers can stopthe line for any reason other than safety – although it stops frequently ….At Takaoka the line is almost never stopped.

At the end of the line the difference between lean and mass productionwas even more striking. At Takaoka, we observed almost no rework areaat all. Almost every car was driven directly from the line to the boat ortrucks taking cars to the buyer.

Ex. 10. Which of these sentences do you agree or disagree with?

Workers are more productive when music is being played in a factory.Output is improved when conditions are made more comfortable forworkers.



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Less management time is wasted when managers spend more time talkingface-to-face with factory workers.Breaks should be taken at regular intervals, but production should not beinterrupted at any other time.

Ex. 11. Complete this summary by putting the verbs in brackets into thecorrect passive form.

The Hawthorne Experiments

A SummaryThe Hawthorne experiments (conduct) by Elton Mayo in Chicago in the1920s. More than 20,000 workers at Western Electric’s Hawthorne Plant(involve).

In the first experiment, lighting conditions in the Hawthorne factory(improve); in this case, it (find) that output also improved. In the secondexperiment, lighting conditions (make) worse. Unexpectedly, output wentup again. Finally, lighting conditions in the factory (return) to normal.Much to Mayo’s surprise, once again, the workers’ productivity improved.

Ex. 12. A Hamburger Production ProcessTake turns to describe each step in the process, using the passive

form as appropriate.

Grill meat + heat bun > hot plate > assemble burger > wrap burger >reheatburger in microwave > serving bin

PUTTING IT IN WRITING

In business, is it better to write something down or to say it on the phoneor in a meeting?Here are three reasons why you might prefer to write something down onpaper.

- You don’t want to speak to the other person.- The material needs to be kept for future reference.- You need proof that you have taken actions.

Here are two documents – the accident report form and the memo. What isthe difference in the content of the two?

What is the difference in style?



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Accident Report Form__________________1/8/03

Dear, Bob, I thought you should know that we’ve had a few problems on the nightshift. I’m afraid that one of the lads has caught his arm in a machine. Hewent off to hospital – but its’ nothing too serious. He’s made a mess of themachine, though, I’m afraid. I had to shut the line down for a couple ofhours, so we lost a fair amount of production last night.

We followed all the procedures, so there’s nothing to worry about but I’ll talk you through it when I get back to work this evening. A/f

MemorandumDate 1.8.03From Bob Russell, Factory ManagerTo Cynthia Prytherch, Production Controller__________________________________

RE: Accident on production line

I have been informed that there was an accident at the factory last nightinvolving a worker and one of our machines.

The man in question was taken to hospital, although I understand that hewas not seriously hurt.

However, the machine was damaged and, as a result, the production linehad to be shut down for two hours with a corresponding loss of production.

I have been assured that proper health and safety procedures werefollowed, but I am, of course, investigating the incident to see if anylessons can be learnt.

Ex. 13. Look at these pairs of phrases from the two documents.1. a) I thought you should know….

b) I have been informed that…..2. а) I had to shut the line down for a couple of hours.

b) The production line had to be shut down for two hours.



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3. a) We followed all the procedures, so there’s nothing to worry about.b) I have been assured that proper health and safety procedures werefollowed.

In each case, Bob Russell has used the passive rather than active form ofthe verb. This moves the focus of the sentence from the subject to theobject.

Unit 7Entering a foreign marketInternational Mergers

Discussion: Discuss these questions.

1. What are the main reasons for manufacturing a product in the countryor region where you want to sell it?

2. A lot of products are increasingly being ordered by phone or throughthe Internet, assembled to order and delivered from the factory directlyto the customer. This is especially the case in the US and Europe. Doyou think this approach would work well in South America?

Information Technology Logistics

DELL TRIES TO CRACK SOUTH AMERICAJohn Barham examines the US computermaker’s strategy for expansionusing a Brazilian base

Dell Computers, the Texas – basedcomputer-maker that was amongthe pioneers of online ordering, ispreparing to attack the difficult

5 Latin American market.Soon, Dell will start makingcomputers at a new factory in thesmall, southern Brazilian city of

Eldorado in its first manufactur-10 ing venture in South America.

Within a few hours’ flying time ofEldorado lie four of the conti-

nent’s main metropolitan regions-Buenos Aires, Rio de Janeiro, Sao



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15 Paulo and Santiago – which gener-ate about half the region’s wealthand where most of the computer-

using populace is concentrated.Dell hopes to serve all these mar-

20 kets – including more distantregions in northern Brazil and theAndean countries – fromEldorado.According to Dell’s plan, air-

25 craft from Miami will land at anearby international airport car-rying computer components thatwill be sent straight to Dell’s facto-ry. Together with parts delivered

30 from suppliers in Brazil, they willbe assembled to order, packed anddelivered to consumers across thecontinent.The challenge for Dell is not

35 only to mount an effective market-ing campaign to educate cus-tomers about online ordering, itmust also manage a complex logis-

tics system and deal with the prob-40 lems of unreliable road and air

transport networks. And it mustoperate in half a dozen volatileLatin countries, with unpre-dictable governments and con-

45 sumers as well as well-establishedcompetitors.Dell could not afford to ignore

the South American market muchlonger. It currently exports com-

50 puters to a few Latin Americancountries such as Mexico andColumbia, but has never sold tomarkets in Argentina or Brazil.



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Latin American consumers last55 year bought 5 million PCs and

demand is growing at 15 percent ayear. Growth is likely to remainstrong for some time to come: inBrazil, the region’s largest market,

60 only 3-4 percent of the populationowns a PC.Dell is not the first company to

view South America as a singlemarket. For a decade, Ford and

65 Volkswagen and many othermultinational companies haveoperated in the region’s main

countries as if they formed oneintegrated market. That was a nat-

70 ural reaction to falling import tar-iffs and consolidation of theMercosur customs union linkingArgentina, Brazil, Paraguay, andUruguay. However, the distances,

75 the red tape and the animositiesbetween national governmentsoften make fulfillment of this strat-egy difficult.Dell decided to locate in Brazil

80 because it is the region’s biggestmarket and because the govern-ment gives computer companiessubstantial tax incentives as partof its plan to develop local high

85 technology industries. If Dellmeets Brazilian local content crite-ria and attains agreed productionvolumes, its products are consid-ered to be 100 per cent locally made

90 and automatically gain duty-freeaccess to Mercosur countries.However, there is little Dell can



61

do about the internal transportnetworks in Brazil or the bureau-

95 cracy in neighbouring countries.Although roads, air transport anddelivery systems are tolerably effi-cient in south eastern Brazil and

parts of Uruguay, Chile and100 Argentina, Dell may still find it is

struggling to coordinate opera-tions and sales over a vast region.

(From Financial Times ).

Ex. 1. Read the text about Dell’s plans to assemble PCs in South Americaand answer these questions.

1. Is the writer generally positive about Dell’s chances of success in itsSouth American venture?

2. Why has Dell decided to attack the South American market?3. Based on the information in the text, which country is the odd one out,

and why?4. Colombia b) Argentina c) Brazil d) Paraguay e)Uruguay5. Why has Dell chosen to locate its manufacturing plant in Brazil?6. Which of the following ‘challenges’ facing Dell are mentioned in the

article?a) unreliable transport networks e) terrorismb) poor productivity f) large distancesc) political instability g) high import tariffsd) high inflation h) well-established competitor

Ex. 2. Mark these statements T(true) or F(false) according to theinformation in the text. Find the part of the text that gives the correctinformation.

1. Dell will sell only in the big cities.2. Dell already sells computers in South America.3. The company also produces PCs in Mexico.4. It plans to import all the components it needs.5. Ford and Volkswagen have been operating in South America for some

years.



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6. Considering South America as a single market is not an easy strategy.7. To meet ‘local content criteria’ Dell must use a certain percentage of

components produced locally.8. Dell hopes to sell its computers duty-free in many countries.9. Delivery systems in Brazil are better than in other parts of South

America.

Ex. 3. These phrases summarise the main idea of each paragraph. Matcheach phrase to the correct paragraph.a) the challenge for Dellb) reason for choosing Brazilc) an overview of Dell’s intentionsd) reason to enter the South American markete) how Dell’s plan will workf) other companies’ experiencesg) problems Dell may face in Brazil and elsewhereh) advantages of Eldorado’s location.Ex. 4.Complete the sentences.1. Many countries offer companies …….to encourage inward investment.2. When we launch our new Internet service we will need to ……a big

marketing……. .3. In order to be successful, the new manufacturing plant will have to

reach target…….within six months.4. Assembling to order and delivering direct to each customer means

managing a complex ……. .5. When importing is expensive due to high……, the alternative is to

manufacture locally.6. In order to have free access to the EU market, Japanese car

manufacturers in the UK need to …….minimum content….. .7. In some countries the only way to …….well is to have local production.8. Most countries in Europe are now part of a ……which allows free

movement of goods.

CHECK QUESTIONS

1. Imagine you work in the marketing department of a European truckmanufacturer. Prepare a presentation giving arguments for setting upproduction in South America.



63

2. You are a consultant specialising in economic and political fields. Youhave been asked by a client, a European computer manufacturer, tosummarise in a report the difficulties and challenges of setting up aproduction operation in one of the following countries: Colombia,Russia , Ukraine or Indonesia. Choose one and write a report.

International Mergers

Discussion: Discuss these questions.1. How would you define a merger? How does it differ from an

acquisition?2. Think of three or four big international mergers in recent years. Have

they been successful?3. What kind of things do you think can lead to problems or even failurein international mergers and acquisitions?

HOW TO MERGE

AFTER THE DEALDoing deals is easy. As mergers hit record levels, now comes the hard part.

The merger wave, which in1998 was a predominantlyAmerican affair, is nowsweeping over Europe. Cross-bor-

5 der deals, such as Daimler-Benz’stakeover of Chrysler, accountedfor a quarter of mergers in 1998;more are expected as firms goglobal.

10 In many cases this consolida-tin makes sense – at least onpaper. But just as certain as theflow of deals is that most will befailures. Study after study of past

15 merger waves has shown that twoout of every three deals have notworked.Success in the future will



64

depend more than ever on the20 merged companies’ ability to cre-

ate added value. And that willdepend mainly on what happensafter the deal has been done. Yetmany deal makers have neglected

25 this side of the business. Once themerger is done, they simplyassume that computer program-mers, sales manages and engineerswill cut costs and boost revenue

30 according to plan.Yet, just when post-merger inte-gration has become decisive, it hasbecome harder to pull off. Not onlyare modern firms complicated

35 global affairs, but executives areputting today’s deals together in ahurry. Few give enough thought tothe pitfalls.One set of obstacles is ‘hard’

40 things, such as linking distribu-tion or computer systems. In par-ticular, many recent mergers havebeen undone by the presumptionthat information technology is

45 easy to mesh together.More difficult are the ‘softissues’; and here the same wordkeeps popping up – culture. Peoplenever fit together as easily as flow

50 charts. Culture permeates a com –pany, and differences can poisonany collaboration. After one largeUS merger, the two firms had arow over the annual picnic:

55 employees of one company wereaccustomed to inviting spouses,the others were totally against the



65

idea. The issue was resolved byinviting spouses only in alternate

60 years.Two new things made cul-ture clashes harder to manage.The first is the growing impor-tance of intangible assets. In an

65 advertising agency, for instance,most of the value can walk out of

the door if key people leave.The second new thing is thenumber of cross-border mergers.

70 In this area Daimler Chrysler mayprove to be an interesting casestudy in differing managementcultures. One worry is compensa-tin: Chrysler’s pay levels are

75 much higher than the Germancompany’s. So a US manager post-ed to Stuttgart may end up report-ing to a German manager who isearning half his salary.

80 Nor is pay the only difference.Chrysler likes to pride itself on itsflexible approach, where speedand ingenuity are prized. Whendesigning new models, teams of

85 engineers, designers and market-ing people work on each model.Daimler –Benz has a more tradi-tional structure, in which design-ers and marketing people mix less

90 and engineers are in charge.Some recent deals will no doubtprove a stunning success.Nevertheless, there are three omi-nous signs about the current

95 merger boom. First, much of theattention seems to be on the deal



66

itself rather than the integrationthat must follow. Second, manydeals are rushed. And third, merg-

100 ers have too often become a strate-gy in their own right.So the things that are so impres-

sive about today’s mergers – theirsize, complexity and daring –

could count against them if theeconomy turns down.

(From The Economist)

Ex. 1. Mark these statements T(true) or F(false) according to theinformation in the text . Find the part of the text that gives the correctinformation.

1. The majority of mergers take place in the USA.2. Many international mergers are failures.3. Most attention is concentrated on what to do after the merger is

completed.4. Many mergers are done too quickly.5. Connecting different computer systems together is not usually a

problem.6. High salaries were given to Chrysler managers as compensation for the

merger with Daimler-Benz.7. Chrysler has won many prizes for its production methods.8. Engineers have a high status as Daimler-Benz.

Ex. 2. Choose the best explanation for each extract from the text.1. ‘the merger wave is now sweeping over Europe’ (line1)

a) a lot of American companies are merging with European onesb) there has been a big increase in the number of mergers involving

European companies2. ‘success will depend on the merged companies’ ability to create addedvalue’ (line18)

a) they must try to make sure the share price goes up after the mergerb) they must try to reduce costs and increase revenue in the new merged

company





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taken place. Which are the most important? Can you add others? Whatfactors need to be taken into account when coming to decision?

• who will be the chief executive of the new company?• where will the HQ be?•

if it is a merger between companies from different countries withdifferent languages, what should the company language be?• on which stock exchange should the new company be listed?• where there is duplication, e.g. two centres for R&D, should one be

closed?• should key managers be moved to different parts of the merged

company to speed up integration?2. Differences in pay levels between the two companies in a merger can

cause problems. Imagine you are members of the Human Resourcesdepartments of the two company. Hold a meeting to discuss thisproblem and try to suggest some solutions.

Unit 8Management; Management Attitudes in Germany and Britain

ManagementMANAGEMENT BRIEFFord 2000

One afternoon in 1993, 15 senior managers from Ford’s American andEuropean divisions met in London. At the head of the table sat AlexTrotman, an Englishman who had just become the company’s chairmanand chief executive officer.

Mr Trotman is a perfect example of a company man. His entire careerhad been at Ford, starting in 1955 as a clerk at one of its factories nearLondon. But he was about to change Ford dramatically.

At the meeting, Mr Trotman introduced the ‘Ford 2000’ initiativewhich brought together the company’s European business (sales: $23billion ) with its North American one ($105 billion). Since each continenthad separate management structures, products, factories and ways of doingthings, it was, in effect, a huge corporate merger.

Full-scale globalisation, like this, is a difficult thing to do. In theory, acompany can get rid of lots of unnecessary duplication and benefit fromhuge economies of scale. But, in practice, things can easily go wrong.



69

One of the reasons that Ford 2000 went relatively smoothly wasbecause Mr Trotman worked hard to involve his workforce. In a videoshown to all Ford’s 320,000 employees, he explained that Ford 2000 wasnot just a re-drawing of an organisation chart, but a whole new way ofworking. The aim was not just to cut costs and increase efficiency, but toproduce cars to delight their customers.

Perhaps this seems like a Disneyesque approach to re-engineering amajor multinational. But , by 1996, Ford had become a very differentorganisation.

How far have Ford’s high hopes been realised? As an exercise inchange management, Mr Trotman can claim considerable success, butthere is a suspicion that Ford 2000 may be a solution to yesterday’sproblems rather than a great leap forward. As one leading analyst observed:‘ All Ford 2000 is aimed at doing is solving a problem that they had

created’.

( From The Economist)Ex. 1. Read the article about Ford and then decider whether thesestatements are true or false.

1. Ford’s new boss had spent his whole career at Ford.2. Ford’s American and European working practices were very similar.3. The Ford 2000 plan had a lot of problems.4. The main aim of the Ford 2000 plan was to cut costs.

Ex. 2. When you’ve read about Ford 2000, look at this summary andreplace the phrases in italics with words or phrases that are underlined inthe text.

Ford is one of the world’s most famous (1) companies which operates inmany different countries. The project Ford 2000 was the (2) comingtogether of Ford’s American and European operations. It involved greatchanges to the (3) way that management is organised, but it was more than

just a change to the (4) diagram of the company hierarchy. Among otherthings, Ford hoped to get (5) lower costs due to the increase in the scale

production. The success of the project was partly due to the way thatFord’s (6) boss communicated with the (7) people who work for thecompany.



70

Ex. 3. Below are three pieces of management jargon which are used in thetext. Try to explain what they mean.Globalisation, re-engineering, change management.Match them to the three definitions.

a) way of completely reorganising a company which ignores both its pastand present working practices.

b) introduction of new ideas and new working practicesc) using the same products and methods in all parts of the world.

GETTING INFORMATION

In the film The Firm , Tom Cruise plays the part of Mitch McDeere, a

brilliant young lawyer with several job offers from America’s leading lawfirms. At the end of a job interview with the partners (senior lawyers) ofthe law firm Bendini, Lambert & Locke, they give him a sealed envelope.

McDeere Do I open it here?McKnight Of course.Bendini Unless you can tell us what’s in it. A lawyer

worth that offer shouldn’t have to open theenvelope. (Pause).

McDeere Mr McKnight, you are the managing partnerat Bendini, Lambert and Locke, is that correct?

McKnight Yes.McDeere Did Mr Lambert as senior partner give you any

instructions regarding my employment?McKnight He did.McDeere And Mr McKnight, do you usually follow Mr

Lambert’s instructions?Quinn Objection. Vague, imprecise.Bendini Sustained.McDeere What precisely were those instructions?McKnight That you were in great demand and that I

should make sure that we obtained yourservices before a bidding situation developed.

McDeere How did you go about making certain?McKnight I bribed a clerk at the Harvard law placement

centre for the exact amount of the highest offer…. and added 20%.



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Glossary:Objection – a word that a lawyer uses in court to say that a

question is not fair.Sustained - a word used by a judge to show that she/he agrees

with an objectionA bidding situation – a situation in which competing companies

make higher and higher offers for something.To bribe - to buy information illegally.The Harvard law placement centre – an office at Harvard

University that helps young lawyers to find jobs.

Ex. 4. Read the scene above and answer these questions.1. In the room, which of the characters is the boss?2. The four men are pretending to be in a particular situation. What is it?3. What is the salary offer?

Ex. 5. Leonora, a new manager, is preparing for a series of individualmeetings with the members of her new department. She wants to hear theiropinions of recent changes in the company. Before the meetings, shemakes a note of five things that she particularly wants to find out about.

Write the five questions that you would use to find out someoneelse’s opinion on these five subjects(They could be open or closed questions.).new arrangements in the officenew management structuremorale in the departmenttraining needsthe department’s progress over the past year.

AN INTERVIEW

A job advertAFRICA - General Manager

A large international energy company is looking for a general managerto run its east African office. Based in Nairobi, you will work closely withtechnical and operational specialists and play a leading role in all thecompany’s commercial activities in the region.

You should be a graduate with a working knowledge of English.You must also have excellent communicative and interpersonal skills.



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In addition to a performance-related salary, we provide an attractivebenefits package.

Please reply with c.v. to:Nicholl Executive Search, PO Box 1997, London, UK

Ex. 6. read this job advertisment and answer these questions.1. What kind of company is advertising?2. Where is the job based?3. What special skills are required?

Ex. 7. Discuss which of these people you think would be the bestcandidate for the job. Give your reasons.1. A 25-year-old graduate from Harvard Business School who grew up in

Kenya.2. A 35-year-old major in the South African army who is looking for a

new career.3. A 40-year-old communications consultant who has worked in 12

different countries.

Ex. 8. To make its decision on the best person for the job, the companyneeds to find out about these four areas:The skills the candidates have; their personality;Their experience; their expectations.Think of two or three questions to ask about each area.

Ex.9. Which of the four areas is each of the questions asking about?1. Do you think that you’re a natural communicator?2. What did you like most about your last job?3. How do you try to motivate the people that you manage?4. How do you spend your free time?5. What kind of job would you like to have in five years’ time?6. Why did you leave your last job?7. What do you think are your weak points?8. How much do you expect to earn?

Ex. 10. * A. You are a senior manager who has recently joinedB’s company. You want to get to know B, so you invite B into your officeto discuss a few personal and job-related questions.



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B. Play yourself.* B. You are a journalist who is interviewing A for a magazine.

A Play yourself.* A. You are applying for the job below.

B. Interview A.

Salespeople For Young Biotech CO.We are a biotechnology company based in Boston, Mass. and we arelooking for new salespeople. You don’t have to have specialist knowledgeor years of experience. But you do need confidence, ambition andunlimited potential.

Do you have excellent communication skills? Do you have the rightimage for this young, thrusting organisation?

Then you could be the person for us!Call 0101020 for an interview - right now!

Management Attitudes in Germany and BritainDiscussion: Discuss the following:

Based on your experience or what you may have read,how do you think British and German managers would differ in theirapproach to management?

STYLES OF EXECUTIONChristopher Lorenz looks at the contrasting attitudes between Germanand British managersA study comparing shown most clearly in theBritish and German contrasting attitudes of

approaches to man- 25many Germans and Britonsagement has revealed the to managerial expertise and

5 deep gulf which separates authority, according to themanagerial behaviour in academies. This schismmany German and British results, in turn, from thecompanies. The gap is so 30very different levels of quafundamental, especially lification, and sorts of career

10 among middle managers, paths, which are typical inthat it can pose severe prob- the two countries.lems for companies from the German managers - both



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two countries which either 35top and middle -considermerge or collaborate. The technical skill to be the most

15 findings are from a study important aspect of theircalled ‘Managing in Britain jobs, according to the studyand Germany’ carried out by It adds that German man-a team of German and 40 agers consider they earnBritish academics from their authority with col-

20 Mannheim University and leagues and subordinatesTempleton College, Oxford. from this expert knowledge

The differences are rather than from their posi-45 tin in the organisational thirteen had held their cur-

hierarchy. rent job for less than twoIn sharp contrast, British years, compared with only

middle managers see them- 85 three in Germany. Many ofselves as executives first and the Britons had also moved

50 technicians second. As a between unrelated depart-result, German middle man- ments or functional areas,agers may find that the only for example from marketingpeople within their British 90 to human resources. In con-partner companies who are trast, all but one of the

55 capable of helping them Germans had stayed in thesolve routine problems are same functional area.technical specialists who do Twenty of them had occu-not have management rank. 95 pied their current positionsSuch an approach is bound for five years or more, com-

60 to raise status problems in pared with only five of thedue course. Britons.

Other practical results of The researchers almostthese differences include a 100 certainly exaggerate thegreater tendency of British strengths of the German

65 middle managers to regard pattern; its very stabilitythe design of their depart- helps to create the rigid atti-ments as their own responsi- tudes which stop manybility, and to reorganise them 105German companies frommore frequently than hap- adjusting to external

70 pens in Germany. German change. But the authors ofmiddle managers can have the report are correct about‘major problems in dealing the drawbacks of the morewith this’, the academics 110unstable and less technical-



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point out, since British mid- ly oriented British pattern.75 dle managers also change And they are right in con-

their jobs more often. As a cluding that the two coun-result, UK organisations tries do not merely haveoften undergo ‘more or less 115 different career systems butconstant change’. also, in effect, different

80 Of the thirty British mid- ways of doing business.dle managers in the study, (Financial Times)

Ex. 11. 1. The text describes two main differences between British andGerman management. What are they?

2. Mark these statements T(true) or F(false) according to theinformation in the text. Find the part of the text that gives the correctinformation.

a) Mergers between British and German companies rarely succeed.b) The study mainly concentrated on middle managers.c) Both German and British managers consider technical skills to be

very important.d) German managers prefer working with technicians in British

companies.e) British managers are very concerned about their executive status.f) There is much more change in British companies than in German

companies.g) German companies are strong and successful because of the way

they are organised.h) British managers are probably more flexible than their German

counterparts.3. In your opinion does the article suggest that one country’sapproach to management and organisation is better than theother’s?4. Pick out some extracts from the article which make positive or

negative comments about British or German approaches.

Ex. 12. These sentences summarise the main idea of each paragraph.Match each sentence to the correct paragraph.a) British managers change jobs within a company far more often than the

Germans.b) A study has shown big differences in managerial behaviour in Britain

and Germany.



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c) Approaches to management in both countries have disadvantageswhich are clearly different.

d) British managers are ‘generalists’ rather than ‘specialists’.e) Attitudes to the qualifications and the role of managers are different in

Britain and Germany.f) The structure of British companies changes frequently.g) German managers are ‘experts’ in their jobs.

CHECK QUESTIONS

1. From what you have read and heard, do you agree with the points madein the text?

2. If you have experience of working with managers from countries suchas Japan, Sweden, USA or France, how would you describe theirapproach to management and organisation?

3. If you were going to collaborate with a British or Germany company,what could the potential problems be?

4. Write a short report giving suggestions and recommendations on waysto try to avoid or reduce these problems.

Unit 9MBA in Management

The value of MBAs

First a bit of history : in 1959 obtaining an MBA ( Masters of BusinessAdministration) was far less common, each could enter the MBA programat Harvard Business School.

The times were stable enough, and employees docile enough, to makemore quantitative and strategic concepts appropriate.

Then came the sixties and the wave of disrespect for authority, the tougheconomy of the seventies, and the glorification of financial manipulationof the eighties, now has come the dawning realization of the nineties thatthe Japanese, Germans, and many others in the Pacific Rim and Europe areserious competitors that wanted to the dominant economy in the world.

The fifties – style US business practices no longer are the envy of theworld, and they no longer work. Management practices need to change tofit the times.



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Global competition is one important force. When competitive pressuresforce downsizing, reorganization, and company-preserving mergers andalliances, old models of managerial behavior begin to disintegrate.Furthermore, some management practices of other countries, especiallyJapan, seem to produce greater employee loyalty, more numerous ideas forimproving processes and products, and higher quality and productivity.American managers are no longer so confident about their ability to gaincooperation and commitment from employees.

The rapid acceleration of technology in many fields is another majorforce driving the need for changed practices. Information cannot slowlytravel its way up and down the hierarchy, while layers of managers studyand polish their recommendations. Decision cannot be made by those whodo not understand the rapidly shifting marketplace and technologies, whichrequire either dramatic decentralization or delayering. In fact, one of thedirty-little secrets of modern business life is that bosses no longer knowthe answers. It is not because they are dumb or lazy – if they are, theydon’t stay bosses for long - but because they cannot know.

In some cases even the boundaries between industries are crumblingbecause of the advent of new technologies.

For example, telecommunications companies are competing withcomputer companies because digital computing is the core of moderntelecommunications ( thus…. sells computers now), and telephonecompanies are trying to gain permission to compete with cable – TVcompanies, which in turn want to provide telephone service. Meanwhilecable companies have had competitive impact on TV networks and moviecompanies. Picturetel, a young company that makes low-cost telephonevideoconferencing equipment, is growing competitor for airlines andhotels, since meetings can be held over the videophone, eliminating sometravel. Makers of fax machines also have an impact on the need to travel,as do low-cost long-distance providers. All of this is going on around ATand T, which only a few years ago used a 40-year depreciation life for itsequipment! At this level of rapid technological change, managers are hardpressed to keep up, and that’s just one of the factors making it impossiblefor bosses to know.

As more companies figure out how to make the entire sales-servicecycle more convenient and reliable for the customer, competitive pressuresrise with rising expectations.

Managerial jobs were never easy, but they are far more loaded andcomplex than ever before. Managers used to be able to think of themselves



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and act heroically, taking responsibility for everything, having theanswers, making bold decisions when needed, but spending most of theirtime keeping the corporate ship on an even keel. Now they must find away to go beyond heroism and make everyone else heroes and heroines.They have to mobilize scare resources and get employee to figure out howto do more with less.

So leadership requires more than setting people free to follow theirown stars. That’s why management can be an extremely challenging butthrilling profession.

( From Allan R. Cohen, The Portable MBA in Management, New York).

Ex. 1. Read the text and try to write the summary of it.

The Value of MBAsDiscussion : Discuss these questions1. What do the letters MBA stand for?2. In your country how important is it to have an MBA to succeed in

management?3. Do you know many people who have an MBA, or who are studying or

plan to study for one? Are you one of them? What are the reasons fordoing so?

WHAT DO EMPLOYERS SAY?Getting an MBA is one thing. Getting employers totake it seriously is another. MBAs have not tradition-lly commanded the same respect in the UK as in theUS, but an increasing number of UK employers are

5 now taking them very seriously indeed.None more so than top management consultingfirm McKinsey. Of its 260 London consultants, aroundhalf have MBAs. The company actively recruits 30 – 40people a year from major business schools, such as

10 INSEAD in France, Harvard and Stanford in the US,and London Business School and Manchester in theUK. It spends around $1million a year sponsoring its25-30 graduate recruits to complete full-time MBAs atthe same institutions.

15 ‘Essentially we see an MBA as a short cut to business experience’ , says Julian Seaward, head of recruit-



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ment for McKinsey’s London Office. ‘It enriches peo-ple with a lot of management theory, and perhaps a bitof jargon thrown in‘.

20 However, the company still prefers MBAs gainedabroad. With a longer established reputation in theUS, business schools there still have the edge inattracting candidates, while INSEAD has positioneditself as an international school with a cosmopolitan

25 faculty and student body.‘The networking and experience of other culturesis very useful as a lot of our clients are global’, saysSeaward.Nevertheless, McKinsey is actively raising its pro-

30 file over here with a recently-launched scheme offer-ing external candidates sponsorship through a UnitedKingdom MBA with a guaranteed job afterwards.With a $50,000 Harvard MBA, Mckinsey knows howattractive its staff are to other employers. Those who

35 wish to leave within two years have to repay theirsponsorship, but Seaward believes the staff develop-ment strategy has a good return rate. ‘We look for peo-ple to develop a long-term career with us, not just ananalyst job for a couple of years, and reward high

40 achievers with good salaries and opportunities’.Equally convinced of the value of MBAs is directmarketing company OgilvyOne Worldwide, whichrecently established an MBA bursary for staff mem-bers.

45 Chairman Nigel Howlett believes the MBA’s formaleducation in analytical skills and constructing solu-tions provides a very useful training, producing peoplewho have a good overview of business issues ratherthan a concern for details.

50 The company is currently undertaking an evalua-tion of the best UK schools in which to invest theirbursary. With the recent big increase in the number ofinstitutions offering MBA’s, Howlett is concerned thatnot all MBAs are equal. ‘There are clear differences in

55 terms of quality’.



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But not every company favours MBAs. In the early1990s, Shell actually abandoned its own MBA course atHenley when it realised it was not producing gradu-ates who fitted the jobs for which they were destined.

60 ‘We’re slightly ambivalent towards MBAs,’ saysAndy Gibb, Shell’s head of global recruitment. ’A lot ofShell’s work is technical, while MBAs from leadingschools are pitched at a more strategic level. It can befrustrating and unnecessary to be trained for strategic

65 thinking, when the job you’re moving into is not reallysuited to that. We would rather focus them on techni-cal leadership’.

Companies like chartered accountantsPricewaterhouseCoopers take a more middle-of-the-

70 road approach. While it does not actively target MBAsor recruit them directly from business schools, a grow-ing proportion of its senior consultants have gotthem, and it is increasingly on the lookout for MBAgraduates.

75 ‘Our business is changing from audit and tax man-agement more into consultancy roles’, says UKrecruitment partner Keith Bell. ‘MBAs do bring abreadth of vision to the business problem rather thana narrow viewpoint, and tat can be an advantage.

80 But the issue is longer term. If you sponsor some-One to do an MBA, will you get them back again?’

( From The Independent)

Ex. 1. Read the text about different attitudes towards MBA graduates andanswer these questions.

1. What is the attitude of UK employers to MBA? Are they verypositive, negative or in between?

2. Several top business schools are mentioned in the text – which onesare they? Do you agree with the list? Would you add others?

3. According to the article, do most MBA students pay for themselves?4. In which country are MBAs very highly regarded by employers,

according to the article?



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Ex. 2. Understanding details1. Four companies are mentioned in the article. Rank them in order in

terms of their attitude to MBAs, starting with the one most in favour.2. Some disadvantages about MBAs are mentioned by people quoted in

the article. What are they?3. Business are generally grouped into two broad categories –

manufacturing and production on one side, and services on the otherside. Into which categories do the four companies mentioned in thearticle fit? What does this tell you about the type of companies whichgenerally favour MBAs? Is this the case in your country too?

CHECK QUESTIONS

1. Should companies have some of the following policies towardsMBAs?

• sponsor students fully and with no conditions;• sponsor students partly and/or with conditions;• form a partnership with a particular business school to design a

‘company-specific’ MBA;• recruit only from the top international business schools.

2.

Many people study for MBAs part-time over several years, or evenby distance learning. What are the advantages and disadvantages ofthis route compared to a full-time MBA?

3. Imagine that you are applying to a business school to do an MBA.Write a letter of application giving brief details of your workexperience and previous education. Also give some reasons why youwant to study for an MBA.

Unit 10Selecting International ManagersInternational Management Development

Selecting International Managers Discussion: Discuss these questions.1. What are the different methods a company can use to find new

employees? Which are you most familiar with? Which do you think aremost effective?



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2. What are the most common selection methods used by companies andorganisations in your country (e.g. interviews, intelligence tests)? Doyou think selection methods vary from country to country?

RECRUITMENT AND SELECTIONApproaches to selection vary sig-

nificantly across cultures. Thereare differences not only in the pri-otities that are given to technical

5 or interpersonal capabilities, butalso in the ways that candidatesare tested and interviewed for thedesired qualities.In Anglo-Saxon cultures, what

10 is generally tested is how muchthe individual can contribute tothe tasks of the organisation. Inthese cultures, assessment cen-tres, intelligence tests and mea-

15 surements of competencies arethe norm. In Germanic cultures,the emphasis is more on the quali-ty of education in a specialistfunction. The recruitment process

20 in Latin and Far Eastern culturesis very often characterised byascertaining how well that person‘fits in’ with the larger group. Thisis determined in part by the elit-

25ism of higher educational institu-tions, such as the ‘grandes ecoles’in France or the University ofTokyo in Japan, and in part bytheir interpersonal style and abili-

30 ty to network internally. If thereare tests in Latin cultures, theywill tend to be more about person-ality, communication and socialskills than about the Anglo-Saxon





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firm based in the Mid West, has75 had difficulties extending its key

selection criteria outside the USA.It is known for selecting ‘SWANs’:people who are Smart, Willing,Able and Nice. These concepts, all

80 perfectly understandable to otherAmericans, can have very differ-ent meanings in other cultures.For example, being able may meanbeing highly connected with col-

85 leagues, being sociable or beingable to command respect from ahierarchy of subordinates, where-as the intended meaning is moreabout being technically compe-

90 tent, polite and relatively formal.Similarly, what is nice in one cul-ture may be considered naive orimmature in another. It alldepends on the cultural context.

95 Some international companies,like Shell, Toyota, and L’Oreal,have identified very specific quali-ties that they consider strategical-ly important and that support

100 their business requirements. Forexample, the criteria that Shellhas identified as most importantin supporting its strategy includemobility and language capability.

105 These are more easily understoodacross cultures because people areeither willing to relocate or not.There is less room for culturalmisunderstandings with such qualities.

(From Managing Cultural Differences, Economist Intelligence Unit)



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Ex. 1. Mark these statements T(true) or F(false) according to theinformation in the text. Find the part of the text that gives the correctinformation.1. Many international organisations have decentralised selection.2. They look for different personal qualities in different cultures.3. The ‘SWAN’ criteria have international validity.4. The definition of some qualities can lead to cultural misunderstandings.5. Mobility and language capability are clearly understood across cultures.

Ex. 2. The text states that different cultures look for different qualitieswhen selecting personnel. Match the cultures with the qualities or attributesaccording to the text.

1. Anglo-Saxon (UK, USA, Australia etc.)2. Germanic3. Latin4. Far Eastern

a) being able to fit in with the organisationb) having the relevant kind of education for the jobc) having the right intellectual or technical capabilitiesd) having good interpersonal skillse) having attended the ‘top’ universities in the countryf) being able to carry out relevant tasks and jobs

Ex. 3. Find at least five methods for testing or assessing a candidate’ssuitability for a job (e.g. assessment centres) which are mentioned in thetext.

Ex. 4. Match these terms with their definitions.1) assessment (line13) a) finding out2) the norm (line16) b) noticeable3) ascertaining (line22) c) pay and conditions4) elitism (line24) d) evaluation5) striking ( line 44) e) usual, standard6) compensation and benefits (line72) f) concern for status



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CHECK QUESTIONS

1. Make a list of qualities or skills that you think an international managershould have. Divide your list into technical skills and interpersonalskills.

2. What are the best ways to measure or evaluate technical skills?3. How can you measure interpersonal skills?

International Management DevelopmentDiscussion: Discuss these questions.1. What do you think would be the best ways to learn to be an

international manager?

2. What do you know about management development in differentcountries? Is it very different?

HOW TO LEARN IN A GLOBAL CLASSROOMToday’s Tuesday, this must be

Hong Kong. No, not the con-fused words of a jet-laggedtraveller, but the words of an1 international executive on a busi-

ness management course.Our German manager fromLufthansa will have flown in to theformer British colony on whistle-

10 stop tours of LG, the Korean con-glomerate, and StandardChartered Bank, whose main oper-ations are in the Middle East andAsia – Pacific, as part of his interna-

15 tional training programme. Afterthat, the next stop could be Brazilto see how ABB, the internationalengineering group, adapts itsworking practices to local condi-

20 tions.The globe-trotting executive is

already a well-established figurein the international picture. But



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he or she is now being joined by25 the global executive on a manage-

ment training course. Why holddry in-house study programmes,repeating old ideas, when the envi-ronment that today’s top-flight

30 executives operate in is global?Business schools have respondedby offering courses in which the

international element is the cen-tral point. At London Business

35 Scholl’s Global BusinessConsortium, for example, a senior

manager from each of ABB,British Telecom, LG, Lufthansa,SKF from Sweden, and Standard

40 Chartered Bank come togetherEach year to learn about how dif-ferent global business operate.Each of the regions of Europe,Asia and South America are repre-

45 sented in the operations of thesesix blue chip multinationals. Theemphasis is on participants learn-ing from each other. Insights intocultural pitfalls and practical

50 guidance are also part of the pack-age.But the only way of getting afeel for the special considerationsof operating on the ground in

55 another country is to visit theregion itself and meet local lead-ers, academics and senior man-agers. Here course participantswill aim to gain a better under-

60 standing of the relationshipbetween global strategy andregional characteristics. Each of



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the participating companies actsas host to the other five as part of

65 the module-based learning pro-gramme. On site they will work ina multinational team analysingvarious aspects of the host compa-ny’s strategy.

70 The Ashridge EuropeanPartnership MBA has been run-ning since September 1998. Three

German companies – Lufthansa,Deutsche Bank and Merck – have

75 formed a consortium enablingemployees to study for an MBAwith Ashridge ManagementCollege, in the UK.‘The English learning atmos-

80 phere is different from that inGermany’, said Dr Peter Weicht,director of personnel and organi-sational development at Merck,the international chemical and

85 pharmaceutical group. ‘It is goodfor team-building, which will bevery important between differentcultures. In England there is amore relaxed relationship between

90 lecturer and student’.Dr Martin Moehrle, head ofmanagement development forDeutsche Bank, also favours glob-al training. ‘In Germany we are too

95 domestically oriented; to becomemore international it is a must tobe exposed to the English lan-guage and to other industries’.He was impressed, too, by the

100 ‘modern approach’ of theAshridge MBA compared with its



89

more technical accounting-ledGerman equivalent, which is lessconcerned with leadership issues.

105 Another plus for organisationsfavouring the international ele-ment in training is that it will helpthem to attract those ambitiousmen and women who want to con-

110 tinue their studies. These trainingoptions enable high-fliers to carryon with education without leavingthe company.However, there are drawbacks.

115 Deutsche Bank, in particular, hashad the experience of talentedemployees leaving their job toattend the Ashridge course, onlyto join another company later.

( From The Independent on Sunday)

Ex. 5. Read the text above and answer these questions.1. The text describes two international management development

programmes, each designed for small groups of companies.a) How many companies take part in each programme?b) Which company is involved in both programmes?

2. What is the main emphasis on the London Business School (LBS)Programme?a) to learn about how different global businesses operateb) for the participants to learn from each otherc) to provide experience of working in multinational teams.

3. In which country does the second programme take place, and whatlanguage is used?

Ex. 6. Mark these statements T (true) or F (false) according to theinformation about the LBS Programme. Find the part of the text that givesthe correct information.a) Much of the course is based on lectures and discussions.b) The programme runs every year.c) The programme is aimed at young managers with high potential.



90

d) The participants travel a lot as part of the programme.e) Part of the course involves staying in Brazil to get work experience.f) The programme involves a lot of project work.g) Each participant visits five different companies.

Ex. 7. Answer these questions.1. Which regions of the world are studied in the London Business School

Programme and which important part of the world, from an economicpoint of view, seems not to be included?

2. Which of two programmes offers a formal qualification, and what is it?3. What are the characteristics of the course at Ashridge, as described in

the article?4. What are the characteristics of equivalent courses in Germany?

Ex. 8. Choose the best explanation for the phrase “blue chip”The London Business School’s Global Business Consortium consists

of six ‘blue chip multinationals’. (line 46).a) large and very profitableb) well-established and well-knownc) listed on the stock market

Choose the best explanation for the word “conglomerate”.One of the six companies, the Korean group LG is described as a

‘conglomerate’ (line10).a) a company operating in many different countriesb) a large company with many subsidiariesc) a very large company which is in many different kinds of business.

Ex. 9. Match these terms with their definitions.1) dry (line27) a) something essential2) pitfalls (line49) b) serious and academic in style3) getting a feel for (line52) c) dangers4) operating on the ground (line54) d) understanding and

experiencing5) a must (line96) e) working in a real situation6) another plus (line105) f) an extra advantage7) drawbacks (line 114) g) disadvantages.



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CHECK QUESTIONS

1. The article describes two very different types of training programme– one very project oriented and the other more traditional, involvinglectures, case studies, etc. which do you think might be moreeffective for producing international managers? Which programmewould you prefer to attend?

2. Do you think the two approaches to management development aresuited different kinds of people, in terms of age, experience, culturalbackground, education, the industry they work in? If so, why?

3. Imagine you work in the management development department ofone of the six multinationals which take part in the London BusinessSchool programme. Write a description of the programme, askingfor applications from managers in the company; this will becirculated on the company’s intranet around the world.

Unit 11Business and Society

Below there are extracts from speeches made by these four national

leaders:Bill Clinton -the Democrat politician from Arkansas who wonhis second term as American president inNovember 1996 .

Tony Blair - became the UK’s youngest prime minister of thetwentieth century when his Labour party won theUK General Election in May 1997.

Vaclav Havel – after the end of Communism in Czechoslovakia

in 1989, the playwright Vaclav Havel waselected as the country’s new president.Nelson Mandela- spent twenty-seven years in prison, before

becoming President of South Africa in1994.

Match the politicians above to their speeches below and discuss thereasons for your choices.

1. ‘So tonight let us resolve to build that bridge to the 21 st century… Letus build a bridge… to break the cycle of poverty and dependence, to



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protect our environment for generations to come and to maintain ourworld leadership for peace and freedom’.

2. ‘The apartheid destruction of our subcontinent is incalculable. Thefabric of family life of millions of my people has been shattered.Millions are homeless and unemployed. Our economy lies in ruinsand our people are embroiled in political strife.’

3. ‘Our country is not flourishing. The enormous creative and spiritualpotential of our nation is not being used sensibly. Entire branches ofindustry are producing goods which are of no interest to anyone,while we are lacking the things we need.’

4. ‘I certainly believe that when there is no overriding reason forpreferring the public provision of goods and services… then thepresumption should be that economic activity is best left to theprivate sector with market forces being fully encouraged to operate.’

Glossary:Embroiled = involvedStrife = troublesOverriding = most importantPresumption = principle

Ex. 1. Extracts 1-3 describe some problems associated with the economy.1. Which of these problems are described in each of the three extracts?

Put the appropriate number in the column.Social breakdownInflationUnemploymentPovertyTrade deficitInefficiencyPollution

2. Write three sentences which summarise the first three extracts.

Ex.2. Extract 4 talks about the public (state) and private (commercial)sectors of an economy.Match the terms in the left-hand column with the appropriate descriptionsin the right-hand column.



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Transport infrastructure the army, navy and air force;Utilities payments for people who have

retired from work ;Defence help for people who are

unemployed or very poor;Pensions the supply of gas, water,

electricity ;Social security road and railway networks,

airports, etc. .

Ex. 3. Discuss the points :1. What do you think is the biggest economic problem facing your country

at the moment?2. In your ideal economy, how would you divide the above list between

the public and private sectors? Add other areas that you think areinteresting for your discussion (e.g. health, education,telecommunications).

IS PROFIT THE ONLY GOAL?Is profit the only real goal of a company? In the United States, 47%

say ‘Yes’, but most Japanese people think that other goals are moreimportant.

Do you agree that profit is the only real goal of a company?Here are some other possible goals of business. Choose the three whichyou think are the most important.To protect the environment; to develop new ideas;To make products for customers; to employ workers;To provide a service to society;To support government policies.

Here is what four businesspeople say about the priorities oftheir businesses. Read the extract and discuss these points.

Glossary :Invested capital = money which a business uses to make

more moneystockholder = American word to shareholderon a whim = a sudden or unexpected decision.



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John Akers : ‘IBM exists to provide a return on invested capital to itsstockholders’.

( While John Akers was its boss, the American company IBM was thebiggest computer company in the world. Akers left his job in January1993.)

Akio Morita : ‘The investor and the employee are in the same position,but sometimes the employee is more important., because he will be there along time, whereas an investor will often get in and out on a whim in orderto make a profit.’

( Akio Morita was the boss of Japan’s giant Sony Corporation. Heintroduced the Sony Walkman to the world.)

Walter Schusser : ‘Maximum profit for shareholders cannot be essentialaim of a company, because maximum profit today is not necessarilymaximum profit for tomorrow. For us, economic performance andmotivation are the basis of a company’s capacity to perform socially.’

(Walter Schusser is Vice President of Human Resources Managementand Development for the German company Siemens.)

Anita Roddick : ‘…..the responsibility of business is not to create profitsbut to create organisations with a real commitment to the community. Todo this business has to become a major educator of staff, customers andshareholders.’

(Anita Roddick and her husband started the British cosmetics company,the Body Shop, in 1976. It now has over 1,500 shops in around 40countries.)

Glossary:A commitment = a strong beliefEducator = a person or an organisation which teaches

others.

General Robert Wood Johnson, who was once president of the Americancosmetics company, Johnson & Johnson, summed up his view of businessin the company credo.Service to customers comes firstService to employees and management comes secondService to community comes third



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Service to shareholders comes last

Ex. 4. Write your own credo!

BUSINESS ETHICS

When you make judgements about business, you can use the law, you canuse a set of moral principles (ethics), or you can use your own feelings(common sense). Here are some adjectives you can use when you’remaking these kinds of judgements.The law - legal; justEthics - moral; ethicalCommon sense - honest; fair

Ex. 5. Here are four activities which are against the law in manycountries. Match each activity to its definition, by writing appropriateletter in the middle column.

Crime Definition Verb

Bribery to bribeTheft to stealFraud to defraudDeception to deceive

a) the crime of taking someone’s propertyb) making someone accept that something which is false or bad is true or

goodc) unfairly influencing someone by giving them money or giftsd) dishonest behaviour for the purpose of making money.

This extract comes from Khoo Kheng – Hor’s book Sun Tzu and Management. Sun Tzu was an ancient Chinese military strategist whoseideas are still seen as relevant to the modern business world.This is the area commonly known as industrial espionage. Also somepeople have condemned such activities, my personal feeling is that all isfair in war.The following shows some of the ways one can obtain information frommen who know the enemy position :



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1. Getting information from potential recruitsIn the past when conducting job interviews, I found some applicants

….would often unknowingly or even deliberately become invaluablesources of information.2. Conducting false job interviews

Here the intention is not really to employ but rather to get the selectedcandidates to talk and hopefully reveal some useful information.3. Hiring people away from competitors

A deliberate ‘headhunting’ activity.4. Deliberately planting spies in a competitor’s firm

There have been cases where a person leaves his organisation to join acompetitor for a while before returning to his original organisation.5. Encouraging key customers to talk

From my experience, key customers such as my wholesalers andindividual buyers are always more than ready to talk.6. Interviewing competitors

A way of interviewing your competitors is to pretend to be a potentialcustomer or supplier.7. Taking factory tours

Highly trained and observant engineers have been known to take inwhat they see and reproduce blueprints after visiting their competitors’factories.8. Taking competitors’ product apart

Some companies spend years in research and development activities.But the moment they put a new product on the market, you can buy it, takeit apart and improve on it.9. Buying competitors’ garbage

A disgusting business but high returns for the enemy if one is nottoo careful what one throws into the wastepaper baskets!

Glossary :Industrial espionage = spying on another companyBlueprints = plansGarbage = rubbish

GIFTS

In the mid 1970s, the Saudi Arabian businessman, Adhan Khashoggi,became famous for his role in a major business scandal. It was said that in



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five years he received $106 million in commissions from the Americancompany, Lockheed. Here is a brief description of his business style.

Khashoggi’s attitude to business and hospitality was that there wasno basic distinction between the two … In Paris his visitors would findthemselves caught up in his ‘cast of thousands’ with attentiveexecutives….To some of the senior executives, Khashoggi showed ahospitality which seemed almost magical. A private plane just happened tobe waiting at the airport to fly them to some resort: Khashoggi’s yacht justhappened to be waiting…

(From The Observer, 14.3.76.)

Ex. 6. Read the article and then answer these questions.1. What do you think is meant by the idea that there is no distinction

between business and hospitality? Do you agree?2. How would you have reacted if you had been one of his visitors in

Paris?3. Can you think of any similar examples of this style of doing business?

Ex.7. You are on a business trip to visit one of your company’s suppliers.Which of the things below would you accept and which would yourefuse? Explain your reasons.a) tickets for the Opera;b) a teddy bear for your child;c) an invitation to a meal at the most expensive restaurant in a town;d) a case of wine;e) a cash incentive.

Ex. 8. Have five conversations based on the five gifts above. Taketurns to offer / invite and accept / refuse, using the phrases above andothers that you know. Then try to finish the conversation in an appropriateway.

Ex. 9. Put these sentences into the appropriate column.a) Can I invite you to dinner this evening?b) This is a small token of our gratitude.c) Thank you. that’s very kind of you.d) Thanks very much for everything. I’d like you to have this.e) That’s very kind of you, but I must refuse.f) I’m sorry but my company doesn’t allow me to accept gifts.



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g) Would you like to go to the concert tonight?Invitations and offers……Acceptances……Refusals……

Unit 12Business in the 21 st century

Discussion: Discuss these questions.1. What impact are developments in information technology having on the

way companies are organised, e.g. the use of video conferencing, whichmeans people need to travel less?

2. How has the Internet changed the way you work or study?

THE e-LANCE ECONOMYSummary

Despite the wave of big mergers and acquisitions over thepast few (1) years, the days of the big corporation – as weknow it – are numbered.(2)While the cash flows that they control are growing, the

direct power that(3) they exercise over actual businessprocesses is declining. Because mod-(4) erncommunications technology makes decentralisedorganisations pos-(5)sible, control is being passed downthe line to workers at many different(6) levels, or

7 outsourced to external companies. In fact we are movingtowards what can be called an ‘e-lance economy’, whichwill be charac-(8)terised by shifting coalitions of freelan-

cers and small firms using the (9)10 Internet for much of their work.Twenty-five years ago, one infive US workers was employedby one of the top 500 companies.Today , the ratio has dropped to

15 fewer than one in ten. Large com-panies are far less vertically inte-

grated than they were in the pastand rely more and more on outsidesuppliers to produce components



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20 and provide services, with a conse-quent reduction in the size of theirworkforce.At the same time, decisionswithin large corporations are

25 increasingly being pushed to lowerlevels. Workers are rewarded notfor carrying out orders efficiently,but for working out what needs tobe done and doing it. many large

30 industrial companies – ABB andBP Amoco are among the mostprominent - have broken them-selves up into numerous indepen-dent units that transact business

35 with one another almost as if theywere separate companies.What underlines this trend? Theanswer lies in the basic economicsof organisations. Business

40 organisationa are, in essence,mechanisms for coordination, andthe form they take is stronglyaffected by the coordination tech-nologies available. When it is

45 cheaper to conduct transactionsinternally, with other parts of thesame company, organisationsgrow larger, but when it is cheaperto conduct them externally, with

50 independent entities in the openmarket, organisations stay smallor shrink.The coordination technologiesof the industrial era – the train

55 and the telegraph, the car and thetelephone, the mainframe comput-er and the fax machine – madetransactions within the company



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not only possible but advanta-60 geous. Companies were able to

manage large organisations cen-trally, which provided them witheconomies of scale in manufactur-ing, marketing, distribution and

65 other activities. Big was good.But with the introduction ofpowerful personal computers andelectronic networks – the coordi-nation technologies of the 21 st

70 century – the economic equationchanges. Because information canbe shared instantly and inexpen-sively among many people in many

locations, the value of centralised75 decision-making and bureaucracy

decreases. Individuals can managethemselves, coordinating theirefforts through electronic linkswith other independent parties.

80 Small becomes good.In the future, as communica-tions technologies advance andnetworks become more efficient,the shift to e-lancing promises to

85 accelerate. Should this happen, thedominant business organisation ofthe future may not be a stable, per-manent corporation but rather aflexible network of individuals and

90 small groups that might some-times exist for no more than a dayor two. We will enter the age of the

temporary company.( From Financial Times)



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Ex. 1. Read the text about how business will be organised in the future andanswer these questions.

1. Which of these statements gives the best summary of the ideas inthe article?

a) New communications technologies enable information to be sharedinstantly across the world.

b) In the future most people will be self-employed or will work asfreelancers.

c) Companies are having to restructure due to developments in electroniccommunications.2. What exactly do the authors mean by the term ‘e-lance economy’?

a) Most work inside large companies will be done using e-mail andcomputers.

b) In the future tasks will be done by individuals and small companieslinked to the Internet.

c) Business between companies will increasingly be done through theInternet.

Ex. 2. Mark statements T (true) or F (false) according to the informationthe text. Find the part of the text that gives the correct information.1. Big corporations will soon go out of business.2. There is a move towards decentralisation of decision-making in many

countries.3. Many companies are now experiencing cash flow and similar4. financial problems.5. No more than 10 per cent of workers in the USA work for the top 500

companies.6. ABB and BP Amoco have sold many parts of their businesses.7. Large organisations can save money by centralising all transactions.8. Computer companies have decentralised their decision-making process.9. It is possible that the shape and structure of companies will be different

in the future.

Ex. 3. These phrases summarise the purpose of each paragraph. Matcheach phrase to the correct paragraph.a) illustrate the decline of big companiesb) give a prediction about the futurec) give examples of changes in the way big companies are organised



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d) introduce the idea that big companies are starting to change and evendecline

e) describe the new way of workingf) explain why these changes are taking placeg) describe the old way of working.

Ex. 4. Choose the best explanation for each phrase from the text.1. ‘the days of the big corporation are numbered’ (line2)

a) big companies will become less important in the futureb) companies will have to improve their financial controls

2 . ‘control is being passed down the line’ (line 6)a) nobody in the company wants to take decisionsb) some decisions will be taken at lower levels in the company

3. ‘what underlines this trend’ (line 37)a) Is this trend really true?b) What are the reasons for this trend?

4. ‘ in essence’ (line 40)a) basicallyb) necessarily

5. ‘organisations shrink’ (line 51)a) they become smallerc) they disappear completely

6. ‘the economic equation changes’ (line 70)a) things become cheaper because of the Internetb) there is a move in favour of decentralisation.

CHECK QUESTIONS

1. Do you agree with the opinions in the article? Can you give someexamples from real cases to support your opinion?

2. The authors are both on the academic staff of MIT ( The MassachusettsInstitute of Technology) in the USA. Till now, most of the innovationsin using the Internet and in

3. ‘e-commerce’ have come from the USA, where companies seemprepared to use new technology quickly. Do you think that the conceptof the ‘e-lance economy’ described in the article is mainly relevant tothe USA or do you think it will work in other parts of the world too?



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4. If what the authors write is true, what are the implications for the wayinternational managers will need to work in the future and also for thetraining and education they will need?



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Business Management Society

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