Professional Documents
Culture Documents
1. Socialising
1. The Impact of Culture on Business
2. Telephoning
2. Telephoning across cultures
3. Presentations
3. Planning and preparation
4. Image, impact and making impression
5. The presentation
6. The end of the presentation
4. Meetings
7. Preparation for meetings
8. Participating in meetings
9. Ending the meeting
5. Negotiations
10. Know what you want
11. Getting what you can
12. Not getting what you dont want
6. Management
13. What is management?
14. Types of managers
15. The management process
16. Management level and skills
7. Companies and organisations
17. Company structure
18. The external environment of organisations
8. Production and products
19. Just-in-time production
20. Products and brands
9. Marketing, advertising, promotion
21. The centrality of marketing
22. How companies advertise
23. The four major promotional tool
10. Market structure and competition
24. Market leaders, challengers and followers
25.Takeovers, mergers and buyouts
26. Profits and social responsibility
3
Bibliografie
1. Socialising
Reading
The following text is about cultural diversity. Read it through once
and decide which of the three statements (A, B or C) given below the
extract offers the most accurate summary.
1. The Impact of Culture on Business
Take a look at the new breed of international managers,
educated according to the most modern management philosophies.
They all know that in the SBU, TQM should reign, with products
delivered JIT, where CFTs distribute products while subject to MBO.
(SBU = strategic business unit, TQM = total quality management, JIT
= just-in-time, CFT = customer first team, MBO = management by
objectives.)
But just how universal are these management solutions? Are
these truths about what effective management really is, truths that
can be applied anywhere, under any circumstances?
Even with experienced international companies, many wellintended universal applications of management theory have turned
out badly. For example, pay-for-performance has in many instances
been a failure on the African continent because there are particular,
though unspoken, rules about the sequence and timing of reward and
promotions. Similarly, management by objectives schemes have
generally failed within subsidiaries of multinationals in southern
Europe, because managers have not wanted to conform to the abstract
nature of preconceived policy guidelines.
Even the notion of human-resource management is difficult to
translate to other cultures, coming as it does from a typically AngloSaxon doctrine. It borrows from economics the idea that human
beings are resources like physical and monetary resources. It tends to
assume almost unlimited capacities for individual development. In
countries without these beliefs, this concept is hard to grasp and
6
Language Checklist
Cultural diversity and socializing
Welcoming visitors
Welcome to
7
My names
Arriving
Hello. My names from
Ive an appointment to see
Sorry Im a little late / early.
My plane was delayed
Introducing someone
This is He/shes my Personal Assistant.
Can I introduce you to He/shes our (Project Manager).
Id like to introduce you to
Meeting someone and small talk
Pleased to meet you.
Its a pleasure.
How was your trip? Did you have a good flight / trip / journey?
How are things in (London)?
How long are you staying in (New York)?
I hope you like it.
Is your hotel comfortable/
Is this your first visit to (the Big Apple)?
Offering assistance
Can I get you anything?
Do you need anything?
Would you like a drink?
If you need to use a phone or fax, please say.
Can we do anything for you?
Do you need a hotel / a taxi / any travel information / etc.?
Asking for assistance
There is one thing I need
Could you get me
Could you book me a car / taxi / hotel / ?
Could you help me arrange a flight to?
Can you recommend a good restaurant?
Id like to book a room for tomorrow night.
Can you recommend a hotel?
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Skills Checklist
Cultural diversity and socializing
Before meeting business partners and fellow professionals from other
countries, you could find out about their country:
The actual political situation
Cultural and regional differences
Religion(s)
The role of women in business and in society as a whole
Transport and telecommunications systems
The economy
The main companies
The main exports and imports
The market for the industrial sector which interests you
Competitors
You might also want to find out:
Which topics are safe for small talk
Which topics are best avoided
If you are going to visit another country, find out about:
The conversations regarding socializing
Attitudes towards foreigners
Attitudes towards gifts
The extent to which public, business and private lives are mixed
or kept separate
Conventions regarding food and drink.
You might also like to find out about:
The weather at the relevant time of the year
Public holidays
The conventions regarding working hours
Leisure interests
Tourism
Dress
Body language
9
Language.
Practice 1
Make a dialogue based on the following flow chart. If you need
help, look at the Language Checklist
Visitor
Receptionist
Introduce yourself
Say you have an appointment
with Sandra Bates.
Welcome visitor.
Explain that SB will be
along shortly.
Offer a drink / refreshments.
2. Telephoning
Reading
weather, health, business in general and what one has been doing
recently are all part of telephoning, laying a foundation for the true
purpose of the call. At the end of the call there may well be various
pleasantries, Nice talking to you, Say hello to the family (if you have
met them) and Looking forward to seeing you again soon. A sharp,
brief style of talking on the phone may appear unfriendly to a British
partner. Not all nationalities are as keen on small talk as the British!
Being aware of these differences can help in understanding
people with different cultural traditions. The difficulty on the
telephone is that you cannot see the body language to help you.
Choose the closest definition of the following words from the text.
1. literal
a. direct and clear b. full of literary style c. abstract and
complicated
2. understatement
a. kind words
b. less strong way of talking
c. clever
speech
3. deduce
a. reduce b. work out
c. disagree
4. vague
a. unclear b. unfriendly c. insincere
5. devious
a. rude
b. dishonest
c. clever
6. pleasantries
a. question b. request
c. polite remarks
Language Checklist
Telephoning (1)
Introducing yourself
Good morning, Aristo.
Hello, this is from
Hello, my names calling from
13
15
You
Secretary
You
Secretary
You
Secretary
On
Secretary
Rang
message
call
speak
hello
moment
bad
put
ring
speaking
through
This datafile gives you many of the terms and phrases commonly used
in making telephone calls.
The directory
Look up their number in the directory. (UK).
Ill look up the number in the telephone book. (US).
The number is ex-directory. (UK).
The number is unlisted. (US).
Ill ring Directory Enquiries. (UK).
Ill ring information. (US).
The receiver
Can I help you?
Putting you through.
Im afraid hes not available at the moment. (UK).
Im afraid hes tided up at the moment.
Youre welcome. Goodbye.
The line
Hes on the other line.
Would you like to hold the line?
The line is engaged. (UK).
The line is busy. (US).
The operator (in the public telephone system)
Dial 100 for the operator. (UK).
Dial 0 (zero) for the operator. (US).
Id like to make a reverse charge call. (UK).
Id like to make a collect call. (US).
Id like to make a transfer charge call. (UK).
The dial
Dial 123 for the correct time. (UK).
Listen for the dialling tone.
All lines to the country you have dialled are engaged.
Please try later. (UK).
The codebook
Im on a long distance (or international) call.
The STD code is (UK).
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Receptionist
Good morning, Gorliz and
Zimmerman.
Introduce yourself.
Ask to speak to Mr. Conrad Bird.
Mr. Bird is not in.
Ask when you can contact him.
Explain that he is away
offer to take a message.
You want Mr. Bird to call you.
Repeat your name.
Give your number.
Confirm the information.
End call.
End call.
Practice 2
In the following conversation, a Singaporean exporter plans to
send goods from Singapore to Greece. He wants to have a meeting
with a Greek shipping company, Intership.
Suggest suitable phrases for each step in the conversation, then
practice the dialogue with a colleague.
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Caller (Computech)
Greeting.
Introduce yourself.
Check name.
Confirm / correct.
Offer to help.
Ask for appointment
with Mr. Dionis.
Ask what its about.
Explain that you want
to discuss transport of goods
from Singapore to Athens.
Acknowledge ask when
would be a good time.
Suggest next week.
Reject Mr. Dionis is away.
Suggest beginning of next
month.
Agree.
Suggest Monday 3rd.
Reject On Monday Mr.
Dionis is busy all day.
Suggest Tuesday.
Agree. Suggest 10.00 a.m.
Agree ask for fax to
confirm.
Offer to book hotel.
Agree to fax hotel booking
is not necessary.
Signal end of call.
End call / thanks / refer to
fax, etc.
End call.
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Language Checklist
Telephoning (2)
Stating reason for a call
Im ringing to
Id like to
I need some information about
Making arrangements
Could we meet some time next month?
When would be a good time?
Would Thursday at 5 oclock suit you?
What about July 21st?
That would be fine.
No, sorry, I cant make it then.
Sorry Im too busy next week.
Changing arrangements
Weve an appointment for next month, but
Im afraid I cant come on that day.
Could we fix an alternative?
Confirming information
So
Can I check that? You said
To confirm that
Can you / can I confirm that by fax?
Ending a call
Right. I think that all.
Thanks very much for your help.
Do call if you need anything else.
I look forward to seeing you / your call / your letter / your fax / our
meeting.
Goodbye and thanks.
Bye for now.
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Skills Checklist
Telephoning (2)
Voice
Speed
Clarity
Volume
Structure
Background information
Key information
Repetition, emphasis and confirmation
Possible confirmation by fax
Style
Formal / informal
Cold call / new contact / established contact
In-company vs. Customer / Supplier / Outside agent
Colleague / friend / business associate / public
Company image
Structure of a call
Beginning
Introduce yourself
Get who you want
Small talk
State problem / reason for call
Middle
Ask questions
Get / give information
Confirm information
End
Signal end
Thank other person
Small talk
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Mr. Rossi? Its Jenny Kinsella here. From B.I.G. Im sorry but my
colleagues cant all make it on Thursday afternoon. Could I suggest
we meet on Tuesday instead?
Er yes why not? OK Well, thank you very much.
Hello again, Tim Brown here again. I forgot; I have some other
customers visiting on Friday morning. How about a meeting on
Thursday sometime, if thats all right with you?
Right. Sorry to be difficult. Thanks a lot, Mr. Rossi. Bye now.
Mr. Rossi? Good morning. Im ringing for Mr. Lund of Lund and Lund
Associates. Hes very sorry, but he wont be able to manage
Wednesday afternoon. Could I suggest Friday afternoon instead?
Well, I think that should be all right. Ill give you a cal this afternoon
to confirm. Thank you. Goodbye.
Monday, 12 November
Morning
Arrive Sydney airport 8.30 a.m.
Afternoon
3 p.m. Tim Brown (agent) at hotel
Tuesday, 13 November
Morning
10 a.m. Mr. Whitley, Australian Chemical Bank
Afternoon
Wednesday, 14 November
Morning
Afternoon
2 p.m. Lund & Lund Associates (Mr. William Lund)
Thursday, 15 November
Morning
Afternoon
3 p.m.
Distribution)
Jenny
Kinsella
Friday, 16 November
Morning
11 a.m. Tim Brown
23
colleagues
(B.I.G.
Afternoon
Practice 3
Use the flow chart below as the basis for a telephone conversation
involving a complaint. Refer to the Language Checklist if you
need to.
Berraondo S.A.
Greeting.
Introduce yourself.
Offer to help.
Explain problem.
Order HF5618 for 20 printers.
Only 17 have arrived.
Express surprise.
This is second time you have
received an incomplete delivery.
Suggest possible error in
order administration.
Agree say you need the
other three printers urgently.
Delays are costing you goodwill
unhappy customers.
Explain stock problems.
Ask for a promise of delivery
date ASAP.
Promise next Monday.
Complain you want despatch now.
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Language Checklist
Telephoning (3)
Stating reason for the call
Im calling about
Unfortunately, theres a problem with
Im ringing to complain about
Explaining the problem
There seems to be
We havent received
The doesnt work.
The quality of the work is below standard.
The specifications are not in accordance with our order.
Referring to previous problems
Its not the first time weve had this problem.
This is the (third) time this has happened.
Three months ago
We had a meeting about this and you assured us that
Threatening
If the problem is not resolved
Well have to reconsider our position.
Well have to renegotiate the contract.
Well contact other suppliers.
The consequences could be very serious.
Handling complaints and other problems
25
Skills Checklist
Telephoning (3)
If you receive a complaint:
Consider your companys reputation
Express surprise
Ask for details
Suggest action
Promise to investigate
Make reasonable suggestions, offers to help.
Consider your customer and:
Show polite understanding
Use active listening
Reassure customer.
If you make a complaint:
Prepare for the call
Be sure of the facts
Have documentation available
26
Who is to blame?
Who is responsible?
Are you talking to the right person?
Was your order or your specifications correct?
Were you partly responsible for arrangements which went wrong, e.g.
transport?
Does responsibility actually lie elsewhere, i.e. with a third party?
If you do not get what you want:
Keep control state what you need calmly
Do you need to continue to do business with the other side?
If you do, keep a good relationship
Express disappointment not anger
Dont use threats unless you have to!
Read the text, then mark the sentences that follow as True (T)
or False (F).
3. Presentations
3. Planning and preparation
Language Checklist
Structure (1) The introduction to a presentation
Greeting
Good morning / afternoon ladies and gentlemen.
(Ladies and) Gentlemen
Subject
I plan to say a few words about
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Content
What to include
Length / depth (technical details)
Number of key ideas
Structure
Sequence
beginning, middle, end
Repetition, summarizing
Delivery
Style
Formal / informal
Enthusiasm / confidence
Voice
Variety / speed
Pauses
Body language
Eye contact
Gesture / movement
Posture
Visual aids
Type / design / clarity
Relevance
Practice
Tape recorder
Script or notes
Room
Size / seating
Equipment (does it work?)
Sound quality
Language
Simple / clear
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Spelling
Sentence length
Structure signals
Practice 1
Look at the following situations.
A medical congress in Tokyo with papers
on new techniques in open heart surgery.
The Purchasing and Product Manager of
a Taiwanese company interested in buying
some production equipment from your company.
An internal meeting of administrative
staff to discuss a new accounting procedure.
A staff meeting to discuss a charity event for
earthquake victims.
Imagine you have to give a brief presentation in two of the above
situations. Make brief notes on the following:
a. Will your talk be formal or informal?
b. What are the audiences expectations in terms of technical detail,
expertise, etc.?
c. What is the audiences probable level of specialist knowledge?
Are they experts or non-experts?
d. How long will your talk be: five minutes, twenty minutes, half an
hour, or longer?
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Practice 2
In any presentation the beginning is crucial. Certainly some things
are essential in an introduction and others are useful. Here is a list
of what could be included in an introduction. Mark them
according to how necessary they are using the following scale:
Essential
1
Useful
3
Not necessary
5
Reading
Read the text below and find:
a. eight advantages of using visual aids
b. three warnings about using visual aids
32
diapositives (Am.E.)
overhead projector (OHP)
transparency (B.E.)
slide (Am.E.)
flip chart
whiteboard
metaplan board
Introducing a visual
Id like to show you
Have a look at this
This (graph) shows / represents
Here we can see
Lets look at this
Here you see the trend in
Comparisons
This compares x with y
Lets compare the
Here you see a comparison between
dramatically
34
A marked
A significant
A slight
increase / fall
markedly
significantly
slightly
To increase / fall
Describing trends
To go up
To increase
an increase
To rise
a rise
To climb
a climb
To improve
an improvement
To recover
a recovery
To get better
an upturn
To level out
a leveling out
To stabilize
To stay the same
To reach a peak
a peak
To reach a maximum
To peak
To undulate
an undulation
To fluctuate
a fluctuation
To go down
To decrease
To fall
To decline
To deteriorate
To get worse
a decrease
a fall
a decline
a deterioration
a downturn
Skills Checklist
Using visual supports
Visual must be:
well prepared
well chosen
clear
Available media
Use media which suit the room and audience size.
Overhead projector (OHP)
- Transparencies / OHTs / slides (Am.E.)
Slide projector
- Slides / diapositives (Am.E.)
Video / computer graphics / flip chart / whiteboard
35
product. Now lets turn to the actual marketing plan. This technique is
very helpful to the audience, including those who are mainly
interested in one part only.
Another type of signaling is sequencing of information. This
usually follows a logical order, perhaps based on time. So a project
may be described in terms of the background, the present situation and
the future. Key words in sequencing information are first, then, next,
after that, later, at the end, finally, etc.
Still another technique which helps to emphasize key points is
careful repetition. Examples are As Ive already said, there is no
alternative but to increase production by 100 per cent or Id like to
emphasize the main benefit of the new design it achieves twice as
much power with half as much fuel.
A final point concerns timing and quantity of information.
Psychologists have suggested that concentration is reduced after about
twenty minutes without a break or a change in activity. Furthermore,
audiences should not be overburdened with technical details or given
too many facts to remember. It is claimed that to ask people to
remember more than three things in a five-minute talk is too much.
Some say that seven is the maximum number of any length of
presentation. Any such calculations are probably not very reliable, but
every speaker needs to think about exactly how much information of a
particular type a specific audience is likely to absorb and to plan
accordingly.
Read the following text and identify the following:
a. the relationship between the main body of the presentation and the
introduction
b. a recommendation on one way to divide the main body of the talk.
The main body of the presentation contains the details of the
subject or themes described in the introduction. All the above
techniques are especially useful in making the main body easily
understood. They help the audience to follow the information and to
remember it.
They also help the speaker to keep to the planned structure
and to know exactly what stage has been reached at all times during
the presentation. Clear structure doesnt just help the audience! In
many presentations the main body can be usefully divided into
38
different parts. The main parts, each with a main heading, are referred
to in the Introduction. Clearly there are many ways to divide the main
body of presentation and often different parts will themselves be
divided into smaller sections of information:
Introduction
Second part
Third part
Practice 4
The information below is part of a Product Managers notes for a
presentation on an advertising mix for a new range of beauty
products, with the brand name Cheri. He is talking to a marketing
team set up to promote the new range. Use the notes to give a
presentation of about 5 minutes using listing, linking and
sequencing where necessary.
Advertising mix for Cheri beauty products
Above-the-line advertising
television commercials
newspaper advertising
magazines
youth magazines
womens magazines
Below-the-line advertising
in-store
e.g.
displays,
merchandising
free samples
on-pack
targeted
e.g.
mailing
coupons,
competitions,
joint promotions
Begin as follow:
Good morning, everyone. Id like to talk about the advertising mix
for the new Cheri range of beauty products. We are planning two
categories of advertising, above-the-line and below-the-line. Ill talk
first about
39
Vocabulary
Merchandising: Any direct efforts to encourage sales of a product,
increase consumer awareness, etc.
Above-the-line advertising: Mass media advertising, such as
television, radio and newspaper.
Below-the-line advertising: Forms of advertising at the point of sale or
directly on the product, such as packaging, shop displays, etc.
Language Checklist
Structure (2) The main body
Signaling different parts in a presentation:
Ending the introduction
So that concludes the introduction.
Thats all for the introduction.
Beginning the main body
Now lets move to the first part of my talk, which is about
So, first To begin with
Listing
There are three things to consider. First Second Third
There are two kinds of The first is The second is
We can see four advantages and two disadvantages. First, advantages.
One is Another is A third advantage is Finally
On the other hand, the two disadvantages.
First Second
Linking: Beginning a new part
Lets move to (the next part which is)
So now we come to
Now I want to describe
Sequencing
There are (seven) different stages to the process
First / then / next / after that / then (x) / after x theres y, last
There are two steps involved.
The first step is The second step is
40
Sections
Subsections
a.
b.
ii.
i.
a.
b.
ii.
iii.
C
a.
b.
c.
a.
b.
i.
ii.
Internal structure of the main body of a complex presentation
Signaling the structure
Use listing techniques.
Link different parts.
Use sequencing language.
Signaling the structure
Makes the organization of the talk clear
Helps the audience to follow
41
Be polite.
Check understanding if necessary by paraphrasing.
Listen very carefully.
Dont say anything youll regret later.
Ask for repetition or clarification.
Agree partially before giving own opinions: Yes, but
Keep calm.
Tell the truth (most of the time!)
Practice 5
Imagine that you have given a talk on Marketing in Japan at a
conference on business trends. What would you say in these
situations? If you need to, refer to the Language Checklist.
1. At the end of your presentation, move to comments / discussion /
questions.
2. A member of the audience suggests that you said that many small
retail outlets, small shops, had actually closed down in recent
years. In fact, you said this process has been going on for a long
time. Politely correct the other person.
3. Ask the audience for comments on why this has happened.
43
Handling Questions
Understood but difficult or impossible to answer
Thats a difficult question to answer in a few words.
it could be
in my experience
I would say
I dont think Im the right person to answer that. Perhaps (Mr.
Holmes) can help
I dont have much experience in that field
Understood but irrelevant or impossible to answer in the time
available
Im afraid thats outside the scope of my talk / this session. If I were
you Id discuss that with
Ill have to come to that later, perhaps during the break as were short
of time.
Not understood
Sorry, Im not sure Ive understood. Could you repeat?
Are you asking if ?
Do you mean ?
I didnt catch (the last part of) your question.
If I understood you correctly, you mean ? Is that right?
Checking that your answer is sufficient
Does that answer your question?
Is that okay?
45
Skills Checklist
Structure (3) Ending the presentation
A summary
Restates main point(s).
Restates what the audience must understand and remember.
Contains no new information.
Is short.
A conclusion
States the logical consequences of what has been said.
Often contains recommendations.
May contain new and important information.
Is short.
Questions
Inviting questions implies that the audience is less expert than the
speaker.
Beware of the nightmare scenario total silence! Have one or
two prepared questions to ask the audience.
Keep control of the meeting.
Discussion
Inviting discussion gives the impression that the audience have
useful experience, so is often more diplomatic.
You still need to control the discussion.
Inviting discussion and questions
Offer the best solution.
Keep control, limit long contributions, watch the time.
Handling questions
Listen very carefully.
Ask for repetition or clarification if necessary.
Paraphrase the question to check you understand it.
Give yourself time to think perhaps by paraphrasing the
question.
46
d.
e.
f.
g.
h.
i.
j.
k.
l.
m.
n.
o.
p.
q.
In conclusion
I want to stress
Good afternoon.
That brings me to the end of my presentation.
Id like to talk about
To return to the point I made earlier
First, let me introduce myself; Im ------- from ---------- .
Feel free to interrupt if you have any questions.
Thank you for your attention.
First of all Next
Please excuse my rather poor English!
Id like now to turn to
If you have any questions, Ill be glad to answer them.
At this point we have to bear in mind
4. Meetings
7. Preparation for the meeting
50
Language Checklist
Chairing and leading discussion
Opening the meeting
Thank you for coming
(Its ten oclock). Lets start
Weve received apologies from
Any comments on our previous meeting?
Introducing the agenda
Youve all seen the agenda
On the agenda, youll see there are three items.
There is one main item to discuss
Stating objectives
Were here today to hear about plans for
Our objective is to discuss different ideas
What we want to do today is to reach a decision
Introducing discussion
The background to the problem is
This issue is about
The point we have to understand is
Calling on a speaker
Id like to ask Mary to tell us about
Can we hear from Mr. Passas on this?
I know that youve prepared a statement on your Departments
views
Controlling the meeting
Sorry Hans, can we let Magda finish?
Er, Henry, we cant talk about that.
Summarising
So, what youre saying is
Can I summarise that? You mean
So, the main point is
Moving the discussion on
Can we go to think about
51
Practice 1
Suggest phrases which could be used by a chairperson in the
following situations in a meeting.
a. To welcome the participants to a meeting.
b. To state the objectives of the meeting.
c. To introduce the agenda.
d. To introduce the first speaker.
e. To prevent an interruption.
f. To thank a speaker for his/her contribution.
g. To introduce another speaker.
h. To keep discussion to the relevant issues.
i. To summarise discussion.
j. To ask if anyone has anything to add.
k. To suggest moving to the next topic on the agenda.
l. To summarise certain actions that must be done following the
meeting (for example, do research, write a report, meet again,
write a letter, etc.).
m. To close the meeting.
Practice 2
1. In groups, work out a brief agenda, with an appropriate order,
for a meeting of the marketing department of Axis Finance Ltd., a
medium-size financial services company. Your agenda should
include the points listed here:
Any other business
New products
Minutes of previous meeting
53
8. Participating in meetings
Language Checklist
Discussion in meetings
Stating opinion
It seems to me
I tend to think
In my view
We think / feel / believe
Theres no alternative to
Its obvious that
Clearly / obviously
Asking for opinion
Id like to hear from
Could we hear from ?
Whats your view?
What do you think about ?
Do you have any strong views on ?
54
Any comments?
Interrupting
Excuse me, may I ask for clarification on this?
If I may interrupt, could you say ?
Sorry to interrupt, but
Do you think so? My impression is
What? Thats impossible. We / I think
Handling interruptions
Yes, go ahead.
Sorry, please let me finish
If I may finish this point
Can I come to that later?
Thats not really relevant at this stage
Can we leave that to another discussion?
Skills Checklist
Participating in meetings
Types of meeting
Decision making meeting
Information giving meeting
Spontaneous / emergency meeting
Routine meeting
Internal meeting
Customer / client / supplier - first meeting / established
relationship
Structure of decision making meetings
Study / discuss / analyse the situation
Define the problem
Set an objective
State imperatives and desirables
Generate alternatives
Establish evaluation criteria
Evaluate alternatives
55
Practice 3
Use the skeleton outline below to recreate the entire dialogue with
a partner. Choose alternative interruptions and ways of handling
interruptions.
The fall in sales is mainly due to
the recession affecting world markets.
Interrupt: ask for clarification.
Polite response.
(general fall of 5 % / most product areas
/ especially oil processing sector
/ also due to sale of Anglo, UK subsidiary)
Interrupt: ask why Anglo was sold.
56
Reject interruption:
No time / discussed before.
Try to move on to future prospects.
(the outlook is just good now)
Interrupt: disagree.
Respond: you disagree.
Forecast are much better.
Interrupt: you want to talk about
new markets.
Promise to discuss this later.
But first
Interrupt: suggest a break.
Reject the idea.
Reading
1.
a.
b.
c.
2.
a.
b.
c.
d.
59
Language Checklist
Ending the meeting
Asking for clarification
Could you be more specific?
Can you explain that (in more detail)?
What do you mean by ?
Clarifying
This means
What I mean is
What I want to say is
To explain this in more detail
Checking that the clarification is sufficient
Is that okay? / is that clearer now?
Referring to other speakers
As Peter has already told us
Im sure Mr. Kowski knows about this
Later well hear a report from Neil on
Professor Gilberto is certainly aware of
Delaying decisions
I think we need more time to consider this.
I think we should postpone a decision
Can we leave this until another date?
It would be wrong to make a final decision
Ending the meeting
Summarising
I think we should end there. Just to summarise
Weve covered everything, so Id like to go over the decisions weve
taken
So, to conclude weve agreed
Confirming action
Well contact
John will
Weve got to
We need to look at
60
61
Practice 4
You are at an internal meeting to discuss increases in the price of
your products. With a partner, use these prompts to make a
dialogue. Try to use new language from this unit.
Participant A
Participant B
Practice 5
In pairs use the outline below to create a chairs closing remarks
for a meeting. To make this more realistic, add names and other
details as required. Practice your closing remarks together.
Indicate that the meeting is almost over.
Check that no one has anything else to say.
Restate the purpose of the meeting.
62
5. Negotiations
10. Know what you want
Language Checklist
Negotiations (1)
Making an opening statement
Welcoming
Welcome to
Im sure we will have a useful and productive meeting
First meeting
We see this as a preparatory meeting
We would like to reach agreement on
One of a series of meetings
Following previous meetings we have agreed on some important
issues. Today we have to think about
We have reached an important stage
Stating your aims and objectives
Id like to begin with a few words about our general expectations
May I outline our principle aims and objectives today
We want to clarify our positions
We have a formal agenda
63
Prepare visuals
Types of negotiation:
Check every item of what the other side wants. Ask how
important items are and look for flexibility.
Do not guess their opinions or motives you could be wrong, or
they wont like your speculation.
Note the other sides answers, but dont immediately say what you
think.
Avoid being forced into considering one issue alone, consider two
or three at once aim for an agreement to a package.
If there are big differences between the two parties, you have a
choice of these options: to accept, to reject, or to carry on negotiating.
If you decide to carry on, then the options in the next round are:
To make a new offer
To seek a new offer from the other party
To change the shape of the deal (vary the quantity or the quality,
or bring in third parties)
Begin bargaining.
Your bargaining should be governed by three principles: be
prepared, think about the whole package, and be constructive. In
preparing, you must identify the issues, and prepare your bargaining
position. You need:
An essential conditions list issues where you cannot concede
anything
A concessions list issues where you can make concessions
To grade the concessions from the easiest to the most difficult,
where you need most in return.
As for the package, you must look for agreement in principle on a
broad front (zon cu elemente diferite). When the time comes for
compromise, each party will concede on one issue if they win a
concession on another.
The final principle is to be positive and constructive. You should
be fair and cooperative, even during difficult bargaining. This
approach is mot likely to move the negotiation towards a settlement
that both sides feel is to their advantage.
68
Looking ahead
So, the next step is
We need to meet again soon.
In our next meeting we need to
So, can we ask you to ?
Before the next meeting well
We need to draw up a formal contract.
Skills Checklist
Negotiations (2) Bargaining in negotiations
Concessions rules
A key principle in negotiation is to give a little and get a little at the
same time.
Practice 3
Make sentences which include concessions based on the prompts
below. The first is done for you as an example.
a. a better warranty / quicker payment terms
We could offer a better warranty if you would agree to quicker
payment terms.
b. free delivery / large order
c. free on-site training / small increase in price
d. 5 % discount / payment on delivery
e. extra 50, 000 compensation / agreement not to go to law
f. promise to improve safety for staff / agreement on new contracts
g. better working conditions / shorter breaks
Practice 4
You and a partner are representatives of Beck Instruments and
Ojanpera Inc., a machine tool maker. Ojanpera is in discussion with
Beck Instruments to buy a machine, the BI 25. Use the flow chart
below to negotiate some aspects of an agreement for the sale of the
BI 25.
Ojanpera
Offer to buy the machine if BI
can give a good price.
Beck Instruments
Say that your prices are very
competitive.
Offer 4 % discount.
Ask for 6 % discount.
Unfortunately, you cant
agree, unless Ojanpera pays
for the installation.
Agree.
Confirm your agreement.
Practice 5
The following letter is from Gibson Trust Ltd. To the Ministry of
Urban Development summarising the points agreed in the
negotiation between them and outlining the next steps. Complete
the spaces in the letter with appropriate words given below.
Enclosed developed specified examined excluded signed
Agreed drawn up confirm included
We would like to confirm through this letter and the (c) ________
drawings that the property (d) ______ in the above sale consists of the
land presently occupied by the station buildings and also the former
car parks to the east of the station, the offices to the west and the
warehouse alongside the traks. The government-owned housing on the
north side of the railway lines is (e) _______ .
We also agree that the station will be renovated by the Transport
Department and that the government will be responsible for running
an eventual museum and paying a rent of 100,000 per year to
Gibson Trust. The remaining land will be (f) _________ by Gibson
Trust and later sold off separately. The development is intended to be
for commercial and residential use. The eventual use of the land
should be (g) _______ in the contract.
Our next meeting will be on May 15 at 10 a.m., at which development
plans will be (h) ______. Soon after this, contracts will be (I) ______ .
Then we will need time to consider the contracts but hopefully they
will be (j) ______ by the end of September.
Do contact us if you have any comments or alterations you would like
to make to this summary. Thank you once again for a very
constructive meeting and we look forward to seeing you again on May
15.
Your sincerely,
Jill Kearne
Chief Negotiator
Encs. (I)
Practice 6
In pairs, use the given prompts to suggest a response to the
statements.
Situation 1
The problem is that we have never offered the kind of warranty you
are looking for.
Suggest leaving the point and returning to it later after discussing
other issues, i.e. training for technical staff.
Situation 2
Theres a number of issues on the table. We seem to be a long way
from an agreement.
Suggest changing the package on offer (variables include price,
shipment costs, payment terms).
Situation 3
The price you are asking is rather high, quite a lot higher than we were
expecting.
Send a signal that you could offer better payment terms.
Situation 4
There are several problems. We think there is quite a lot of negotiation
ahead before we can agree on a common strategy.
Suggest advantages of reaching agreement: more global influence,
better prospects for the future.
c. Leave the problem, discuss something else, come back later to the
problem.
d. Emphasise the loss to both sides of not reaching agreement.
e. Offer a conditional concession.
Practice 7
Below are four offers or request. Reject each one, using the
information in the prompts.
Situation 1
Let me make a suggestion. If you agree to buy 100 units every month
for the next twelve months, well agree a 10 % discount.
You dont know how many units you will need in six and twelve
months. It might be more or less.
Situation 2
The price we are offering excludes installation costs but does include a
twelve months guarantee.
Other suppliers offer free installation and a two year parts and labour
warranty.
Situation 3
I think the absolute minimum investment in advertising must be
$40,000, otherwise we cannot reach enough of our market. Its not
much to ask for.
You cannot spend more than your budget.
Situation 4
Now, some excellent news: wed like to increase our order. Right now
you are sending us 350 boxes a month. We need at least 500, demand
is very high
Your order books are full, the plant is working at capacity.
Practice 8
Suggest what you could say in the following situations.
Situation 1
After a long negotiation, you have reached agreement and now plan a
meal in a local restaurant with the other party in the negotiation.
77
Situation 2
Your efforts to reach agreement have been unsuccessful. It is late. End
the negotiation but offer some hope that in the future you might
manage some cooperation with the other side.
Situation 3
A colleague has asked you to cooperate on a project, but after long
discussion you feel you cannot participate because of fundamental
disagreement. It is important that you continue to work together in the
other areas.
Situation 4
You want to repeat an order with a supplier but they are trying to
increase prices by 20 %. You cannot agree to this. End your
discussion.
Situation 5
A customer is asking you to supply goods in a month. This is
physically impossible. End the discussion.
Language Checklist
Negotiations (3)
Dealing with conflict
I think we should look at the points we agree on
We should focus on the positive aspects
We should look at the benefits for both sides
It is in your interests to resolve the issue
What do you think is a fair way to resolve this problem?
We hope you can see our point of view
Let us explain our position
Could you tell us why you feel like that?
I think we should look at the whole package, not so much at individual
areas of difficulty.
Perhaps we could adjourn for a little while.
I think we need to consider some fresh ideas
78
Rejecting
Im afraid we cant
Before agreeing to that we would need
Unfortunately
I dont think it would be sensible for us to
I think if you consider our position, youll see that
Ending negotiations
So, can we summarise the progress weve made?
Can we go through the points weve agreed?
Perhaps if I can check the main points
So, the next step is
What we need to do now is
Its been a very useful and productive meeting.
We look forward to a successful partnership.
Breaking off negotiations
I think weve gone as far as we can.
Im sorry, but I dont think were going to agree a deal.
Its a pity we couldnt reach agreement this time.
Unfortunately we appear unable to settle our differences.
It would be better if we looked for some independent arbitrator.
Skills Checklist
Negotiations (3)
Dealing with conflict
Show understanding of the other sides position
Highlight advantages of agreement
Dont
Be sarcastic
Attack
Criticise
Threaten
Blame
Do
ask questions
listen
summarise
build on common ground
explain your feelings
Types of negotiators
79
Hard
Negotiates to win
Makes demands
Principled
Looks for common benefits
Makes offers
Soft
Looks for agreement
Accepts whats on offer
Fighter
Win-lose
Independent advantage
win-win
Creative negotiator
looks for agreement
Rejecting
Ask for an adjournment.
Discuss options.
Remember your limits.
Decide if your interests are being met: if not, reject the proposal
on offer, or suggest alternatives.
After the negotiation
Compare the result with your objectives, targets and limits.
Examine the process of the negotiation:
The planning the strategy team roles the issues.
Learn from failure:
What went wrong and why?
Identify weaknesses and errors
Discuss and plan ahead.
Build on success:
Recognise success
Praise people
Develop teamwork and partnership.
Negotiating Conditions
Conditions
Examples
80
Unit price
Minimum quantity
Credit period
Delivery date
Bulk discount
Penalty clause
Cancellation clause
Exclusivity
Royalty on sales under licence
Commission
Early settlement discount
Option period
Method of payment
Warranty period
DATAFILE: Negotiation
Below are the stages of negotiation and some expressions which you
may find useful at each stage:
Conversation (1)
Im sure/confident we can reach agreement. (optimistic)
Im sure theres room for negotiation.
We have a lot to discuss.
Lets see how we get on. (cautious)
Presenting your position (2)
This is our position.
This is how we see it.
We think the following is reasonable/appropriate.
Our approach is this.
Questioning the others position (3)
How do you/ explain your attitude?
/ justify ? Account for? Arrive at?
81
84
Understanding contracts
85
Terminate
clause
draw up
condition
binding
Section
party
provide for
compromise
comply with/abide by
Litigation
out of court
breach
court
term
void
agreement
arbitration
valid
illegal copying
Official manufacturer
have the legal rights over
copiers
Further years
period
country
Ask for a ban
when it ended
permission
An immediate payment
5 % to pay
6. Management
13. What is management?
Discussion
87
board of directors
communicate
manageable
performance
setting
supervise
innovations
Measure
Motivate
Perform
Set
Supervise
people
performance
resources
strategies
subordinates
Planning
Plans give the organization its objectives and set up the best
procedures for reaching them. In addition, plans become the guides by
which the organization obtains and commits (a angaja) the resources
required to reach its objectives, members of the organization carry on
activities consistent with (concordant cu) the chosen objectives and
procedures, and progress toward the objectives is monitored and
measured, so that corrective action can be taken if progress is
unsatisfactory.
The first step in planning is the selection of goals for the
organization. Then objectives are established for the subunits of the
organization its divisions, departments, and so on. Once the
objectives are determined, programs are established for achieving
them in a systematic manner. Of course, in selecting objectives and
developing programs, the manager considers their feasibility and
whether will be acceptable to the organizations managers and
employees.
Plans made by top management for the organization as a
whole may cover periods as long as five or ten years. In a large
organization, such as a multinational energy corporation, those plans
may involve commitments (angajamente) of billions of dollars.
Planning at the lower levels, by middle or first-line managers, covers
much shorter periods. Such plans may be for the next days work, for
example, or for a two-hour meeting to take place in a week.
Organizing
Once managers have established objectives and developed
plans or programs to reach them, they must design and staff an
organization able to carry out those programs successfully. Different
objectives will require different kinds of organizations. For example,
an organization that aims to develop computer software will have to
be far different from one that wants to manufacture blue jeans.
Producing a standardized product like blue jeans requires efficient
assembly-line techniques, whereas writing computer programs
requires teams of professionals systems analysts, software engineers,
and operators.
Although they must interact effectively, such people cannot be
organized on an assembly-line basis. It is clear, then, that managers
must have the ability to determine what type of organization will be
92
Reading
Read the text below, about different ways of organizing
companies, and then label the diagrams, according to which of
these they illustrate:
Line structure / functional structure / matrix structure / staff
structure
A.
B..
95
C..
D..
To be in charge of
to be responsible for
To support or to be supported byto assist or to be assisted by
To be accountable to
e.g. The marketing department is in charge of the sales force.
The five department heads are accountable to the Managing Director.
This is an example of part of a company organization chart:
Board of Directors
with a Chairman (GB)
or President (US)
Managing Director (GB)
or
Chief Executive Officer (US)
Production Marketing
Market
Sales
Research
Northern
Region
Finance
Advertising
Promotions
Research &
Development
Personnel
Financial
Management
Accounting
Southern
Region
component
inventory
lead time
plant
subcontractor outsourcing or contracting out
101
Read the text below, and insert the eight words defined in
vocabulary a) in the spaces.
Capacity
Location
component
outsourcing
inventory
plants
lead time
subcontractor
all the waiting and moving time involved in sending half-finished item
from one department to another, although it often requires flexible,
multi-skilled employees.
JIT thus greatly reduces transportation and inventory costs, and
should ensure that there is no waste from overproduction, or from idle
workers waiting for parts. It allows increased productivity because of
shortened throughput time (timpul de prelucrare a materialelor). If
factories are equipped so that set-up times are short, very small
production runs (etape de producie) are possible. Any quality
problems or product defects should be noticed more quickly,
production (8) (timpul de conducere a produciei) are reduced,
and the firm can react more rapidly to demand changes.
20. Products and brands
Read the following text, and write a brief heading for each
paragraph.
1
Marketing theorists tend to give the word product a very broad
meaning, using it to refer to anything capable of satisfying a need or
want. Thus services, activities, people (politicians, athletes, film stars),
places (holiday resorts), organizations (hospitals, colleges, political
parties), and ideas, as well as physical objects offered for sale by
retailers, can be considered as products. Physical products can usually
be augmented (a spori, a crete) by benefits such as customer advice,
delivery, credit facilities, a warranty or guarantee, maintenance, aftersales service, and so on.
2
Some manufactures use their name (the family name) for all
their products, e.g. Philips, Colgate, Yamaha. Others, including
Unilever and Procter & Gamble, market various products under
individual brand names, with the result that many customers are
unfamiliar with the name of the manufacturing company. The major
producers of soap powders, for example, are famous for their multibrand strategy, which allows them to compete in various market
segments, and to fill shelf space in shops, thereby leaving less room
for competitors. It also gives them a greater chance of getting some of
103
2 to launch a product
3 market opportunities
4 market research
5 market segmentation
6 packaging
105
7 points of sale
8 product concept
9 product features
10 sales representative
Focus
Means
Ends
Products
Vocabulary
Find the terms in the text which mean the following.
1 free advertising, when satisfied customers recommend products to
their friends.
2 advertising that mentions a companys name but not specific
products
3 companies that handle advertising for clients
4 a contract with a company to produce its advertising
5 the amount of money a company plans to spend in developing its
advertising and buying media time or space
6 the statement of objectives of an advertising campaign that a client
works out with an advertising agency
7 the advertising of a particular product or service during a particular
period of time
8 a defined set of customers whose needs a company plans to satisfy
9 the people who choose where to advertise, in order to reach the right
customers
10 the fact that a certain amount of advertising is necessary to attract a
prospective customers attention
11 choosing to spend the same amount on advertising as ones
competitors
12 advertising during periods or seasons when sales are normally
relatively poor
Discussion
110
85%
90%
aimed awareness
channel
loyalty
medium
tactics
target
trial
113
player, but perhaps one in each room, one in the car, plus a Walkman
or two.
3 ..
In many markets, there is often also a distinct market
challenger, with the second-largest market share. In the car hire
business, the challenger actually advertises this fact: for many years
Avis used the slogan Were number two. We try harder. Market
challengers can either attempt to attack the leader, or to increase their
market share by attacking various market followers.
4 ..
The majority of companies in any industry are merely market
followers, which present no threat to the leader. Many market
followers concentrate on market segmentation: finding a profitable
niche in the market that is not satisfied by other goods or services, and
that offers growth potential or gives the company a differential
(distinctiv, deosebit) advantage because of its specific competencies.
5
A market follower, which does not establish its own niche is
in a vulnerable position: if its product does not have a unique selling
proposition there is no reason for anyone to buy it. In fact, in most
established industries, there is only room for two or three major
companies: think of soft drinks, soap and washing powders, jeans,
sports shoes, and so on. Although small companies are generally
flexible, and can quickly respond to market conditions, their narrow
range of customers causes problematic fluctuations in turnover and
profit. Furthermore, they are vulnerable in a recession when, largely
for psychological reasons, distributors, retailers and customers all
prefer to buy from big, well-known suppliers.
Vocabulary
Find words in the text which mean the following.
1 a companys sales expressed as a percentage of the total market
2 short-term tactics designed to stimulate stronger sales of a product
3 the situation in which there is only one seller of a product
4 companies offering similar goods or services to the same set of
customers
5 a short and easily memorized phrase used in advertising
6 the division of a market into submarkets according to the needs or
buying habits of different groups of potential customers
115
Reading
Leveraged buyouts
One indication that the people who warn against takeovers
might be right is the existence of leveraged buyouts.
In the 1960s, a big wave of takeovers in the US created
conglomerates collections of unrelated businesses combined into a
116
120
Jingle = a zorni
Rustle = a foni
Clink = a zngni
Piggy-bank = puculi
Cowrie = scoic, ghioc
Beads = mrgele, mtnii
Wampum = colier de scoici
From Chickens to Plastic
At the end of the day, of course, it doesnt really matter what
shape or size the money takes, as long as everyone recognises it and
accepts it in payment. But, over the course of history, money has
predominantly been associated with metals, in particular gold, silver
and copper.
Bartering (troc)
Before metal money become the usual means of exchange,
people would swap (schimba) goods and services in a process known
as bartering Ill swap you ten chickens for your goat. This kind of
exchange does not really encourage trade, as all sorts of problems
arise; are all the chickens of the same size? If Ive only got five
121
123
think youre mean or stingy (zgrcit). Perhaps theyll call you a miser
behind your back; in the US youd be called a tightwad (calic, avar).
You might reply that money doesnt grow on trees but then
others might say that you cant take it with you (when you die) and so
they spend money as if it were going out of fashion. In this case,
money burns a hole in their pocket, and you would be the first to
remind them that a fool and his money are soon parted. If, on the
other hand, you look after the pennies, then the pounds will look
after themselves.
28. The profits of labor
Roman soldiers were given part of their pay in salt, as it was
so valuable at least thats the excuse the Senate gave!
At the time it was called their salario, and it is for this reason that we
still use the word salary to describe the regular monthly payment
made to employees especially white-collars workers. If you receive
your pay every week, then you receive wages on payday, in the form
of a paycheck in the US, or a paypacket in the UK.
You may find that some of your money is taken from you
before you even see it, that is it is deducted at source; in the US these
deductions are known as deducks or ducks. They may be for tax and
also, in the UK, National Insurance, which means that your takehome pay may be a lot less than you expected!
Those who are unlucky enough not to have a job will be on
the dole receiving unemployment benefit in the UK or on welfare in
the US. If you pay money for your retirement then your company
runs a pension scheme. If you work more than your normal hours,
then youre paid overtime. If your company has been doing well, you
may get a bonus.
If youre one of the bosses of a newly-privatised monopoly,
your employees may call you a fat cat, and part of your pay may take
the form of share options; when you started to work for the company
you were given a golden hello and, regardless of the companys
performance, you will be given a golden handshake when you leave.
Perhaps youre the kind of boss that never stops complaining about
your employees; if so remember: if you pay peanuts you get
monkeys!
125
collector or you may receive a visit from the bailiffs in the UK. If
youve been buying something in instalments or on a hire purchase
(HP) scheme, defaulting on the repayments will probably lead to a
visit from the dreaded repo (repossesssion) man.
Gouged = escrocat, tras pe sfoar
Bailiff = inspector
Dreaded = de temut
Forgery
With the invention of money came forgery. Modern
counterfeit notes can be extremely difficult to spot and new
developments in the production of notes are soon copied by the
forgers. Heres a quick guide to recognizing a counterfeit Bank of
England note:
The feel of the paper: it should be crisp and slightly rough in the
heavily printed areas.
The watermark: you shouldnt be able to notice it until you hold the
note up to the light; then you can see a picture of the Queen.
The thread: all genuine notes have a thread embedded in the paper.
Recent notes have a windowed thread which does not appear as a
continuous line until the note is held up to the light.
Quality of printing: pure, clear colours and sharp, well-defined lines.
Spot = a identifica, a distinge
Counterfeit notes = bancnote contrafcute
Forgers = falsificatori
Crisp = fragil
Embedded = introdus
IDIOMS
Hard Times
If youve fallen on hard times, you might tell people that you
need to watch your spending, your money or your pennies. In the
States, you might say that you have to watch every dime. Perhaps
your bank account is in the red, so you decide to control your
spending and keep track of your expenses more closely. This will
certainly involve cutting down on expenses in general, budgeting
your money, tightening your belt and saving your pennies.
127
Reading
129
131
1993
[1 .]
(income from football and related
activities: gate receipts, broadcasting,
ground advertisements, prize money)
21,471,680
15,341,689
Costs and [2 ],
less other income (costs include
salaries, [3 ], auditors
remuneration, and lease payments; other
income includes Interest Receivable)
(14,951,737)
(12,804,538)
6,519,943
2,537,151
(889,588)
(54,259)
5,630,355
2,482,892
Taxation
(1,596,226)
(750,000)
4,034,129
1,732,892
28,478,922
Fixed Assets
(including [4 .],
132
1993
18,982,931
9,607,592
7,991,088
Creditors
Amounts falling due within one
year (including [8 .]
and social security)
(9,863,457)
(8,755,491)
28,223,057
18,218,528
(17,893,500) (11,923,100)
[9 ..]
10,329,557
56,000
237,201
846,000
9,190,356
56,000
237,201
846,000
5,156,227
10,329,557
6,295,428
Shareholders Funds
6,295,428
Vocabulary
adjust appreciate
fluctuate
peg
convert
suspend
diverge
revalue
cash dispenser
banking
mortgage
overdraft
credit card
Loan
standing order
137
home
..
Commercial or retail banks are businesses that trade in money.
They receive and hold deposits, pay money according to customers
instructions, lend money, offer investment advice, exchange foreign
currencies, and so on. They make a profit from the difference (known
as a spread or a margin) between the interest rates they pay to lenders
or depositors and those they charge to borrowers. Banks also create
credit, because the money they lend, from their deposits, is generally
138
advice
bonds
business
currencies
deposits
funds
interest
loans
profits
security issues
Bank Clerk Doesnt take long, sir. Let me see Today is Thursday,
if you can complete this form today, your cheque-book will be ready
for you on Tuesday.
Mr. X Fine. So, my salary could be paid in at the end of the month.
Bank Clerk No doubt, sir.
Mr. X There are two questions Id like to ask. Will this be the only
place where I can cash a cheque?
Bank Clerk Oh, no, sir. You can have them cashed at any of our
branches.
Mr. X Good. And what about statements of account? How
frequently does one get them?
Bank Clerk Normally, once a month. But we shall send one out
after each transaction if you want us to.
General Information:
When do/are you open?
How late do you stay open?
When do you close?
What are your opening hours?
In the US: Does this bank have an ATM (Automatic Teller Machine
bancomat)
In the UK: Do you have a cash point/dispenser?
The ATM ate/kept my card.
The cash dispenser wont give me my card back.
If you want to use bank services you may have to queue (UK) or stand
in line (US) and wait for the next available teller (US) or clerk (UK):
When their desk is free, a light will come on:
Next, please.
Please step down (US).
Im open over/down here.
Queue / stand in line = a sta la coad
Teller / clerk = funcionar la ghieu
You can then tell him or her what you want:
I want/need/would like to cash a check.
Id like to cash these travelers checks, please.
Can you change a ten-pound note, please?
142
It makes more sense. Just give him a ring, will you? Im sure hell
settle immediately.
Ill do that. Something else. Ive had very bad information about B,
you know, the reseller (vnztor) who wanted immediate delivery.
I see who you mean. Its his first order with us?
Thats it. Hes already had a current account cancelled and has a
reputation for being a slow payer.
If so, insist on payment with the order (plata la comand). Delivery is
out of the question until the sum has been paid into our account.
Well, I think thats all. Oh yes! One more thing, the drafts to be
discounted
Means of payment. Key sentences.
His account is overdrawn (in the red).
Cecul su este descoperit.
The settlement is long overdue.
Plata ar fi trebuit s fie fcut demult.
Whats his current account number?
Care este numrul contului su curent?
Charge it to my account.
Scoatei suma din contul meu.
Settle the amount by money order if you find it more convenient.
Pltii suma prin mandat potal dac considerai c este mai practic.
The cheque was made out to his order.
Cecul era fcut la ordinul su.
He intends to open a deposit account at one of our branches.
El are intenia s deschid un cont pentru depuneri la una din
sucursalele noastre.
I think I remember it was a bearer cheque.
Cred c mi amintesc, era un cec la purttor.
Normally, that payment-in ought to have been recorded on my last
statement of account.
Normal, acea plat (vrsmnt) ar trebuie s figureze pe ultimul meu
extras de cont.
For sight withdrawals, you simply have to go to counter no.3
Pentru retragerile la vedere, ajunge s mergei la ghieul nr.3
She will pay us by instalments over six months.
Ea ne va plti n rate ealonate pe ase luni.
145
them. The former will enable a person to use a cheque for payment
instead of hard cash, whereas the latter will bring a small interest.
People can ask their bank to pay recurring expenses for them, such as
subscription, rents, telephone, gas or electrical bills. Valuables or
deeds can be left in custody in a bank safe on payment of certain
charge. The bank will obtain foreign currencies, issue travellers
cheques and letter of credit payable at their branches or at
correspondent banks.
Besides, banks will operate transactions on the stock
exchange for you and give advice on investments. They also lend
money, generally on a short term basis: thus they can allow overdraft
facilities or personal loans; if your credit rating is good and if you can
offer some sort of security, they may consider longer term credit. Most
of this applies to business discounting of their bills Bills of
Exchange (drafts), or even Promissory Notes. In the field of foreign
trade, the banks can help by financing or advising their clients. They
can be referred to by either party for status enquiries in business
transactions.
Recurring expenses = cheltuieli recurente
Valuables / deeds = acte, valori
Overdraft = cont debitor, descoperire de cont
Be referred to = a fi ndrumat
Definition
A cheque is signed by the payer and payable to the payee or to his
order. A draft (or bill of exchange) is drawn by the creditor on the
debtor and payable to the drawer or to a third party after acceptance
by the drawee.
Un cec este semnat de pltitor i se pltete beneficiarului sau la
ordinul su. O trat este tras de creditor asupra debitorului i se
pltete trgtorului sau unei tere pri dup acceptare de ctre tras.
12. The U.S. investment banks have just raised their prime rate by
point to 6,75%.
Bncile de investiii americane tocmai au crescut rata de baz (a
dobnzii) la 6,75% mrind-o cu un sfert de punct.
13. The increase in the price of short-term money has been confirmed
whereas longer term rates remain stable.
S-a confirmat creterea preului pentru mprumuturile pe termen
scurt, n timp ce ratele (dobnzii) pe termen lung rmn stabile.
14. The Prime Rate (fine rate, blue-chip rate, [B.E.] base rate) is the
rate granted by U.S. banks to their clients with the highest rating.
Rata de baz reprezint rata acordat de bncile americane
clienilor care prezint cel mai mic risc.
15. The spell of monetary stability has lasted since the begining of the
year.
Aceast perioad de stabilitate monetar dureaz de la nceputul
anului.
16. The policy of expensive money is meant to fight inflation.
Politica dirijat mpotriva creterii preurilor este destinat
combaterii inflaiei.
17. but it has immediate repercussions on corporate income
statements.
dar acest lucru are repercursiuni imediate asupra conturilor de
venit i pierderi ale ntreprinderilor.
18. The Central Bank acts as banker to the government and to other
banks, and as the central note-issuing authority.
Banca central funcioneaz n calitate de bancher pentru guvern
i alte bnci i ca autoritate central de emisiune monetar.
Banking. Key sentences.
1. Id like to change French francs into pounds.
A vrea s schimb franci francezi n lire.
2. Your account is in the red (overdrawn).
Contul Dumneavoastr este epuizat.
3. Should I (must I) endorse the cheque?
Trebuie s andosez cecul?
4. He has opened a giro account.
El a deschis un cont-cec potal.
5. My salary is paid into my account every month.
149
150
Vocabulary
Which terms do the following sentences define?
1. The tax people pay on their wages and salaries is called
Capital transfer tax
income tax
wealth tax
2. A tax on wages and salaries or on company profits is a/an
Direct tax
indirect tax
value-added tax
3. A tax levied at a higher rate on higher incomes is called a
Progressive tax
regressive tax
wealth tax
4. A tax paid on property, sales transactions, imports, and so on is
a/an
Direct tax
indirect tax
value-added tax
5. A tax collected at each stage of production, excluding the alreadytaxed costs from previous stages, is called a/an
Added-value tax
sales tax
value-added tax
6. Profits made by selling assets are generally liable to a
Capital gains tax
capital transfer tax
wealth tax
7. Gifts and inheritances over a certain value are often liable to a
Capital gains tax
capital transfer tax
wealth tax
8. The annual tax imposed on peoples fortunes (in some countries)
is a/an
Added-value tax
capital gains tax
wealth tax
9. Making false declarations to the tax authorities is called
Fiscal policy
tax avoidance
tax evasion
10. Reducing the amount of tax you pay to a legal minimum is called
Creative accounting
tax avoidance
tax evasion
Income tax impozit pe venit
Wealth tax impozit pe avere
Direct tax impozit direct
Indirect tax impozit indirect
Progressive tax impozit progresiv
Regressive tax impozit regresiv
Value-added tax TVA
Sales tax impozit pe vnzri
Capital gains tax impozit pe plusul de capital
Capital transfer tax impozit pe transferul de capital
Fiscal policy politic fiscal
Tax avoidance evitare fiscal
Tax evasion evaziune fiscal
151
Reading
153
Comprehension
According to the text, are the following statements True or False?
1 Taxes can be designed both to discourage and to encourage
spending.
2 The same amount of money can be taxed more than once.
3 Progressive taxes may discourage people from working extra hours.
4 Sales taxes are unfair because poor people spend more than the rich
do.
5 The Italian government knows that about one seventh of national
income escapes taxation.
1. Loopholes are a common form of tax evasion.
2. If you pay a lot of your income into a pension fund or a life
insurance policy you never have to pay tax on it.
8 A company that makes an unusually large profit during a tax year
might quickly decide to spend it, for example, on a new factory or
equipment.
Vocabulary
Find words in the text that mean the following.
1 reducing the value of a fixed asset, by charging it against profits
2 something which discourages an action
3 an adjective describing a tax that is proportionally higher for people
with less money
4 spending money to buy things, rather than saving it
5 working for yourself, being your own boss
3. a tax on incomes that pays for sickness benefit, unemployment
benefit, and old-age pensions
4. non-financial benefits or advantages of a job
8 a way to delay the payment of tax to a later time
9 an adjective describing expenditure that can be taken away from
taxable income or profits
10 a country offering very low tax rates to foreign businesses
154
The act of issuing shares (GB) or stocks (US) for the first time
is known as floating a company (making a flotation). Companies
generally use an investment bank to underwrite the issue i.e. to
guarantee to purchase all the securities at an agreed price on a certain
day, if they cannot be sold to the public.
Companies wishing to raise more money for expansion can
sometimes issue new shares, which are normally offered first to the
existing shareholders at less than their market price. This is known as
a rights issue. Companies sometimes also choose to capitalize part of
their profit, i.e. turn it into capital, by issuing new shares to
shareholders instead of paying dividends. This is known as a bonus
issue.
Buying a share gives its holder part of the ownership of a
company. Shares generally entitle their owner to vote at a companys
Annual General Meeting (GB) or Annual Meeting of Stockholders
(US), and to receive a proportion of distributed profits in the form of a
dividend or to receive part of the companys residual value if it goes
into liquidation. Shareholders can sell their shares on the secondary
market at any time, but the market price of a share the price quoted
at any given time on the stock exchange, which reflects (more or less)
how well or badly the company is doing may differ radically from
its nominal value.
Vocabulary
Find words in the text which mean the following
1 having a responsibility or an obligation to do something, e.g. to pay
a debt
2 a person or organization to whom money is owed (for goods or
services rendered, or as repayment of a loan)
3 to be insolvent: unable to pay debts
4 everything of value owned by a business that can be used to produce
goods, pay liabilities, and so on
5 to sell all the possessions of a bankrupt business
6 money that a company will have to pay to someone else (bills, taxes,
debts, interest and mortgage payments, etc.)
7 to provide money for a company or other project
8 money invested in a possibly risky new business
9 the people who begin a new company
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Alternative terminology
36. Bonds
Companies finance most of their activities by way of
internally generated cash flows. If they need more money they can
either sell shares or borrow, usually by issuing bonds. More and more
companies now issue their own bonds rather than borrow from banks,
because this is often cheaper: the market may be a better judge of the
firms creditworthiness than a bank, i.e. it may lend money at a lower
interest rate. This is evidently not a good thing for the banks, which
now have to lend large amounts of money to borrowers that are much
less secure than blue chip companies.
Bond-issuing companies are rated by private rating companies
such as Moodys and Standard & Poors, and given an investment
grade according to their financial situation and performance, Aaa
being the best, and C the worst, i.e. nearly bankrupt. Obviously, the
higher the rating, the lower the interest rate at which a company can
borrow.
Most bonds are bearer certificates, so after being issued (on
the primary market), they can be traded on the secondary bond market
until they mature. Bonds are therefore liquid, although of course their
price on the secondary market fluctuates according to the changes in
interest rates. Consequently, the majority of bonds on the secondary
market are traded either above or below par. A bonds yield at any
particular time is thus its coupon (the amount of interest it pays)
expressed as a percentage of its price on the secondary market.
For companies, the advantage of debt financing over equity
financing is that bond interest is tax deductible. In other words, a
company deducts its interest payments from its profits before paying
158
3 principal
4 maturity
5 pension funds
6 buy-and-hold investors
7 non-payment
8 price appreciation
9 price depreciation
10 capital gains
Vocabulary
Match up the expressions on the left with the definitions on the
right.
1 equity financing
2 debt financing
3 bearer certificate
4 liquid
5 par
6 coupon
7 yield
Reading
Select ten or eleven of the following words that you would expect
to find in an introductory text about futures and options.
Assets
beer bush call
commodities
Copper currencies
discount store foodstuffs
Liabilities
plastic
phone
raw
shout
Spot market
supermarket tea
contracts
hedge
materials
Now read the text, and see if you find the words you selected.
Futures
Every weekday, enormous amounts of commodities,
currencies and financial securities are traded for immediate delivery at
their current price on spot markets. Yet there are also futures markets
161
call discount
drought
spot market
strike price
Glossary
floating
Austerity austeritate
Back a susine financiar
Bad cheque, dud check cec fr acoperire
Bad debt o crean nepltit
Balance of account un sold de cont
Balance of Payments balana de pli
Balance of Trade balana comercial
Bank clerks funcionari bancari
Bank (A.E. discount) rate rata scontului Bncii centrale
Bank account cont bancar
Bank tellers casieri (la banc)
Bank wickets ghiee ale bncii
Banking regulation reglementri bancare
Banknotes (A.E. bills) bancnote
Bargain a negocia
Barrier o barier
Barter / counter-trade troc
Base rate / prime rate tax preferenial / rata de baz
Be in the black a fi creditor
Be in the red a fi descoperit/ n deficit
Bear un speculator de burs (care mizeaz pe scderea cursului)
Bear an interest a produce o dobnd
Bearer un purttor
Bearer cheque cec la purttor
Benefit un avantaj
Bill, a check (US) o not de plat
Bills facturi, note de plat, efecte bancare
Bills of Exchange (B.E.), drafts cambii, polie, trate
Bite a avea efect
Blank cheque cec n alb
Blue chips aciuni ale marilor companii
Board of directors consiliul de administraie
Bond o obligaiune
Bonus issue, shares / stock dividends aciuni gratuite, dividente
nominale
Boom un avnt (perioad de succes)
Boost a relansa
Borrow a lua cu mprumut
Borrower cel care ia cu mprumut
Branch sucursal
165
Executive administrator
Expenses cheltuieli, pli
Face value valoarea nominal
Fall back a se replia
Fall due a sosi la scaden
Fall, drop in prices o scdere a preurilor
Federal Reserve Bank (the Fed) (A.E.) banca federal de rezerve,
banca central a S.U.A.
Fee un onorariu
Figure o cifr
File for bankruptcy, to file under chapter 11 (US) a-i depune
bilanul, a cere falimentul
Fill in a form a completa un formular
Finance, to fund a finana, a acorda fonduri
Financial backing (support) susinere financiar, sprijin financiar
Firm ferm
Flat rate rat uniform
Float (a currency) a face/ a lsa s oscileze o moned strin
Float a company a lansa o societate
Flourish a prospera
Foot the bill a achita nota de plat
Forecast, an outlook o previziune
Foreign / overseas trade comer exterior
Foreign resident rezident strin
Forge a falsifica, a contraface (bancnote, documente)
Forgery contrafacere, falsificare, falsuri (bancnote, documente)
Free trade liber schimb
Fringe benefit beneficiu suplimentar (n afara salariului)
Futures market piaa tranzaciilor la termen
Gain a ctiga / un ctig, o plus-valoare
Gilt-edged securities valori/titluri fr risc (obligaiuni de stat)
Giro cecuri potale
Giro account cont-cecuri potal
Give notice a da un preaviz
Globalise a se extinde la scar mondial
Go belly up (US) a da faliment
Go into administration a fi supus unei proceduri de lichidare
juridicar
Go into liquidation a intra n lichidare
Go on a welfare a se nscrie la asisten social
169
Order o comand
Outlet un debueu, un punct de desfacere
Outstanding neachitat, ntrziat (la plat)
Overdraft descoperire n cont, sold debitor
Overdraw (an account) a descoperi, a epuiza un cont
Overdue expirat, ntrziat, scadent
Overheads, fixed costs cheltuieli fixe
Overheat a supranclzi
Over-the-counter market pia de titluri fr valoare
Pace beneficiar
Paper money bani de hrtie, bancnote
Pawn a gaja, a amaneta
Pawnbroker cmtar
Pay (in) cash a plti n numerar, a plti cu bani ghea
Pay as you earn (PAYE) plata prin prelevare direct de la surs
Pay back, to repay a rambursa
Pay into an account a vrsa ntr-un cont
Payee beneficiar
Pay-in slip foaie de depunere sau de vrsmnt
Payment by installments plat n rate
Payment in cash plat n numerar
Payment-in virament (ntr-un cont)
Pick up the tab a achita nota de plat
Plough back profits a reinvesti profiturile
Plummet a merge foarte prost, a avea greuti mari
Policy o politic, o strategie
Portfolio un portofoliu (de valori)
Postpone a ntrzia, a amna
Premise locaie
Price index un indice de pre
Prime rate (A.E.) rat de baz
Private limited company societate cu rspundere limitat
Privatise a privatiza
Production, output producie
Profit margin o marj de profit
Promissory note bilet de ordin, cambie, titlu de gaj, obligaiune
Pundit un expert
Purchase o achiziie, o cumprare
Qualified majority majoritatea calificat
Quid (B.E.) bancnot sau bancnote de o lir (familiar)
172
Quota o cot-parte
Quote a cota
Quoted or listed company societate cotat la burs
Rally a se reface, a se ntri
Recover a se restabili, a-i reveni, a se reface
Recurring care se repet, periodic, recurent
Recurring expenses cheltuieli recurente
Reduce, to cut back a reduce
Refund a rambursa
Registrar of companies registrul de comer
Regulation regulament, reglementare
Remittance vrsmnt
Rents chirii
Repay, to pay back a rambursa
Residual value valoare rezidual
Restrict a impune o restricie
Retail price index indicele preurilor cu amnuntul
Revalue a reevalua
Revenue venituri
Rights issue emisiuni rezervate acionarilor
Rise in prices o cretere a preurilor
Running costs cheltuieli variabile
Safe cas de bani
Savings economii, bani economisii
Savings account cont de economii
Savings Bank cas de economii
Security titlu de valoare
Sell at a premium a vinde sub preul pieei
Sell short a vinde la termen, a subevalua
Setback o cdere, o involuie, un regres
Settle a echilibra un cont, a plti
Settlement plat
Share a mpri, a participa mpreun
Share o aciune
Shoot up a crete vertiginos
Short term pe termen scurt
Shortage o penurie
Shortfall o lips, o insuficien
Sight withdrawal retragere la vedere
Single market o pia unic
173
Cheia exerciiilor
Module 1
5 devious
b. dishonest
6 pleasantries
c. polite remarks
Exercise 1 Making a call
(in order): speak to; through; office; can; hello; bad; speak; speaking;
put; through; hold; office; moment; number; ring; back; on; message;
rang; call
Practice 1 a model answer
Reception: Good morning, Gorliz and Zimmerman.
Lara Camden: Hello, my names Lara Camden from Bulmer Cables
Ltd. Please could I speak to Mr. Conrad Bird?
Reception: Im sorry, but Mr. Bird is not in at the moment.
Lara Camden: I see. Er when do you think I could contact him?
Reception: Well, at the moment hes away. Would you like to leave a
message?
Lara Camden: Yes, perhaps you would ask Mr. Bird to call me? My
names Camden, Lara Camden, on 0181 299 462.
Reception: Right, thats Lara Canden on 0181 299 462. Okay?
Lara Camden: Yes, er Camden. CAMDEN.
Reception: Oh yes, sorry! Ive got that now.
Lara Camden: Thank you. I look forward to hearing from Mr. Bird.
Reception: Its a pleasure. Thanks for calling. Bye for now.
Practice 2 a model example of the conversation
Intership: Intership, good morning.
Computech: Hello, my names Alex Hall from Computech Arcos in
Singapore.
Intership: Sorry, did you say Alex Hall from Computech Arcos?
Computech: Yes, thats right.
Intership: Okay, how can I help you, Mr. Hall?
Computech: Well, Id like an appointment with Mr. Dionis.
Intership: Can you tell me whats about?
Computech: Certainly. Id like to discuss the transporting of goods
from Singapore to Athens.
Intership: I see. When would be a good time for you to come here?
Computech: May I suggest next week?
Intership: Im sorry, next weeks not possible Mr. Dionis is away
next week. How about the beginning of the next month?
Computech: Yes, that would be okay. Could we say Monday 3 rd of
May?
177
Intership:
Er, unfortunately Mr. Dionis is busy all day on that
Monday. He could make it Tuesday 4th.
Computech: Thats fine. Shall we say ten a.m.?
Intership: Yes, thats a good time for us. Erm can I ask you to
confirm by fax? And would you like us to book you a hotel?
Computech: Ill fax and thank you but no, the hotel booking isnt
necessary. I think thats everything, for now
Intership:
Right, many thanks, we look forward to your fax to
confirm the meeting. Goodbye, Mr. Hall.
Computech: Bye for now.
A model of a fax message of confirmation:
Computech Arcos
Lorong One Toa Payoh
Singapore 1253
Telephone: ++65 350 574
Fax: ++65 250 552
Fax to: Mr. Dionis (Intership S.A.)
Fax Number: 30 1 657677
From:
Page 1 of 1
Date: 19 April 19
Good morning, everyone. Id like to talk about the advertising mix for
the new Cheri range of beauty products. We are planing two
categories of advertising, above-the-line and below-the-line. Ill talk
first about above-the-line advertising. There are three kinds: these are
television commercials, secondly, newspapers newspaper
advertising. The third kind is magazines. There are two basic types we
aim at: youth magazines and those aimed specifically at the womens
market. Now, below-the-line advertising: there are three methods here
also: the first is in-store advertising, then theres on-pack promotions
and finally targeted mailing. So, in-store advertising: what does it
mean? Basically, displays in the shop, merchandising, and that sort of
thing. The second below-the-line advertising is on-pack promotions
there are many kinds, most obviously things like coupons,
competitions, joint promotions and free samples. The last kind of
below-the-line advertising is targeted mailing, using a mailing list.
That completes the overview of what we can do to launch the product,
so
Reading
a. No response from the audience.
b.
A truly successful and interesting talk will avoid the problem.
The speaker can give an instruction to the audience especially in
sales presentations.
To have question prepared to ask the audience, or identify
someone whom you know will have something to say.
Handling questions
Difficulties may arise because:
5 questions / discussion is relatively unstructured
5 the speaker has less control
5 speaker has to switch into listen and answer mode
5 it may be difficult to hear, to understand, to answer or to
distinguish between an opinion and a question.
Practice 5 model answers
1. So, that concludes what I want to say, so now Id like to ask you
for your comments, opening up discussion, or perhaps you have a
question or two?
2. Er, in fact what I said was this process has been going on for a
very long time. Im sorry if I was not clear on this point.
182
c. We have an agenda with three points. (Youve all seen the agenda.
Id like to ask if anyone has any comments on it.)
d. I think Mr. Kano is ready to tell us something about (Can I ask
to open with his remarks.)
e. If you dont mind, can we let Mr. Kano finish? (Sorry, , I cant
allow us to consider that question just yet)
f. Thank you for that
g. Now, can I ask Ms Perez de Sanchez to tell us her views
h. Er, can we try to keep to the topic I think we have gone away
from it a little.
i. Id like to sum up the main points. (So let me summarize that. You
say that )
j. Would anyone like to say anything else on this? (Does anyone
have anything to add to that?)
k. I think we ought to move on to the next topic on the agenda.
l. So, before the next meeting, Ill send out a report on this one, Mr
Kano will prepare () and will then fix a new date, some time
next month.
m. Thank you. thats everything. Thats it for today.
Practice 2
1. A model of Agenda
Axis Finance Limited
Marketing Group: Year-end meeting
Time:
Place:
Participants:
1.
2.
3.
4.
5.
6.
7.
8.
Finish:
Agenda
Apologizes for absence
Minutes of previous meeting
Chairs opening address
Personnel changes
Review of marketing performance in the current year
New products
Marketing plans for next year
Any other business
185
B: Well, I feel first of all, we need to know more about the effects of
a price increase.
A: Perhaps we should, er, commission some market research?
B: Yes, I agree. Thats right. We could ask Hamid to recommend
someone.
A: Well, I think before that we could look at our own experience of
price rises. Then later we can perhaps ask a marketing consultancy.
Does everyone agree with that proposal?
All: (murmur of agreement)
A: Okay, lets move to the next item on the agenda.
Practice 5 a model example
So, weve almost finished. Does anyone have anything else to say?
Well, we had to decide on action regarding training courses. To
summarize, to confirm our decision, weve agreed a $10,000 budget.
And also that Peter is going to identify three possible training
organizations. Is everyone happy? Is that okay? Now, Peter will
organize a presentation for next week, on the 14 th at 2 p.m. until then,
thanks everyone for coming. Thats it for today.
Exercise 1 Chairing a meeting
Chairman Id like us to reach a decision today about item 1. The
issue is falling sales in the Italian market. Henry will explain the
background to this, and the present situation.
Henry Thanks. Well, as you know, in Italy weve always so thats
how things are at the moment.
Chairman Thank you, Henry. Now, lets look at possible courses of
action.
Bob
Could I just say something ? The Italian market isnt as
important to us as the Russian orders. I was in Moscow last week, and
learnt some pretty interesting things about the way things are moving
out there.
Chairman Lets keep to the immediate subject, which is the Italian
market.
Arnold
Sorry to interrupt, but if we launch a new advertising
campaign in Italy it would cost a fortune! You said yourself that we
havent enough money to advertise on every television in Europe!
Chairman Lets not jump too far ahead at this stage.
Bob
My own feeling is this : in years of experience, in many
different markets throughout the world, Ive often found that, when
and you know, if I could pass on my experience to the younger people
188
here, Id say that the only way to sell in Italy is to go there and see the
market for yourself, instead of asking your agents to do it.
Chairman Sorry to interrupt you, Bob, but Id like to know if the
others agree. What do you think about this, Walter?
Walter Im not too sure about this . My own feeling is that if
Bob I dont know why you dont ask me. Ive been to Italy so many
times recently.
Chairman Could you let Walter finish? Id like to have his view on
this .
Walter Well, Id like to say that for the last two years we havent had
a stand at the Milan Trade Fair. I understand that the Fair has produced
lots of contracts in the past.
Chairman Thats an interesting point, Walter . Lets summarize what
weve said so far. Bob thinks we depend on the agents too much, and
Walter suggests that the Trade Fair is important.
Exercise 2 Formal meetings
a. address; approve; move; second; carried; casting; on
b. true: 1, 2, 6, 7
false: 3, 4, to second means to give formal support to the motion
for presentation to the board, 5 to abstain means to decide no to
vote
Exercise 3 Could I ask you a question?
You: Im afraid I cant comment at the moment.
You: A statement will be issued shortly.
You: Im sorry, but I cant comment at this stage.
You: Yes, Im pleased to be in your country.
You: I cant tell you anything before the statement is issued.
You: I would rather not answer that question at present.
You: I did not say that at all.
Module 5
Practice 1 a model
a. Well, welcome to Its very good that you could come to see us
here.
b. I hope you had a good trip? Not too long ? Did you get a taxi
when you arrives here?
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2.
a. Check what they say without commenting, at least not
immediately.
b. Vary the quantity or the quality, or bring in third parties.
c. Be prepared, think about the whole package, be constructive.
Practice 3
5 We can give you free delivery with a larger order.
5 We provide free on-site training for only a small price increase.
d. We can give 5 % discount if you agree to payment on delivery.
e. We can offer you an extra 50,000 compensation in exchange for
your agreement not to go to law.
f. We promise to improve safety for staff provided that we reach
agreement on new contracts.
g. The company will introduce better working conditions if the staff
accept shorter breaks.
Practice 4
Ojanpera: Well, were happy to buy a machine if you can give us a
good price.
Beck: Im sure we can. As you know our prices are very competitive.
Ojanpera: Even so, Im sure you can allow us a discount?
Beck: Okay, well a discount could be possible if you agree to pay for
the shipping costs.
Ojanpera: That sounds okay, if the discount is a good one.
Beck: How about 4 %?
Ojanpera: 6 % would be better.
Beck:
Im sorry, we cant manage that unless you pay for the
installation.
Ojanpera: Okay, our engineers will take care of that.
Beck: Okay then, so to confirm: a 6 % discount but you pay all the
shipping and installation costs.
Ojanpera: That sounds all right.
Practice 5
GIBSON TRUST LIMITED
Units 9-12 East Side Monks Cross Industrial Estate BRISTOL BSI4
6TR
Telephone 01272 547777 Fax 01272 547701
191
Neil Finch
Ministry of Urban Development
140- 144 Whitehall
London WCI 4RF
May 2 200
Dear Neil,
Re: Meeting in Bristol, April 30 --- Railway Land Sale
I am writing to (a) confirm points (b)agreed in the above meeting,
held to discuss the sale of government owned railway land to Gibson
Trust Limited.
We would like to confirm through this letter and the (c) enclosed
drawings that the property (d) included in the above sale consists of
the land presently occupied by the station buildings and also the
former car parks to the east of the station, the offices to the west and
the warehouse alongside the tracks. The government-owned housing
on the north side of the railway lines is (e) excluded .
We also agree that the station will be renovated by the Transport
Department and that the government will be responsible for running
an eventual museum and paying a rent of 100,000 per year to
Gibson Trust. The remaining land will be (f) developed by Gibson
Trust and later sold off separately. The development is intended to be
for commercial and residential use. The eventual use of the land
should be (g) specified in the contract.
Our next meeting will be on May 15 at 10 a.m., at which development
plans will be (h) examined. Soon after this, contracts will be (i) drawn
up. Then we will need time to consider the contracts but hopefully
they will be (j) signed by the end of September.
Do contact us if you have any comments or alterations you would like
to make to this summary. Thank you once again for a very
192
Practice 7
Situation 1
Let me make a suggestion. If you agree to buy 100 units every month
for the next twelve months, well agree a 10 % discount.
Unfortunately, I cant say how many well need in six months and
certainly not in twelve. I cant take the risk on such a large order at
this stage.
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Situation 2
The price we are offering excludes installation costs but does include a
twelve months guarantee.
Im afraid thats not really acceptable. You know that other suppliers
offer free installation and two year parts and labour warranty?
Situation 3
I think the absolute minimum investment in advertising must be
$40,000, otherwise we cannot reach enough of our market. Its not
much to ask for.
Its a pity but its still more than our budget. I cant go that high.
Situation 4
Now, some excellent news: wed like to increase our order. Right now
you are sending us 350 boxes a month. We need at least 500, demand
is very high
Well, Im glad youre having a lot of success with our products, but
the bad news is that our order books are full, and the plant is working
at full capacity. Were a bit stuck Im afraid
Practice 8
Situation 1
Its been a long meeting, but finally Im very glad were able to reach
agreement. I think it would be good if we could go on to a restaurant
now, wed be pleased if you can join us.
Situation 2
Im sorry our efforts to reach agreement have not been successful. I
suggest we stop here, but I hope that in the future we might work
together on something.
Situation 3
Unfortunately I feel it would be better if I dont join you on this
project, but no doubt therell be plenty of other things well work on.
Situation 4
Id like to repeat our order, but not on those terms. Im sorry, we cant
agree to this. I think well go elsewhere, but thanks anyway.
Situation 5
Im sorry, but it really is physically impossible. We cannot supply
goods in so short time. Its just impossible. Sorry we cant help you.
Exercise 1 Your turn to negotiate
Suggested replies: Lets see how we get on. Why such a long delivery
period? This is our position. We need delivery of six weeks maximum,
with four weeks for installation. Im sorry, but I cant accept eight
weeks. Youll have to do better than that, Im afraid. Im afraid I cant
195
Module 6
Discussion
A personal choice of qualities: D, F, H, and J.
Vocabulary
a. 1 resources 2 manageable 3 setting, communicate
4 supervise, performance
5 achieved
6 board of directors
7. innovations
196
Module 7
Vocabulary
1 C; 2 E; 3 B; 4 A; 5 F; 6 G; 7 D
Reading
A functional structure
B matrix structure
C line structure
D staff position
Describing company structure
Here is a short description of the organization chart illustrated.
The chief Executive Officer reports to the President and the Board of
Directors. The company is divided into five major departments:
Production, Marketing, Finance, Research & Development, and
Human Resources. The Marketing Department is subdivided into
Market Research, Sales and Advertising & Promotions. The Finance
Department contains both Financial Management and Accounting.
Sales consists of two sections, the Northern and Southern Regions,
whose heads report to the Sales Manager, who is accountable to the
Marketing Manager.
Module 8
Vocabulary
a. 1 subcontractor
2 component
3 outsourcing or contracting out
4 capacity
6 location
7 inventory
8 lead time
197
5 plant
b. 1 A and E
2C
3D
4 A and E
5 A and E
6D
7F
8E
9F
10 E 11 B 12 E 13 B 14 C and E
15 B and F
Reading
1 component 2 subcontractor 3 inventory
4 outsourcing
5 location
6 plants
7 capacity
8 lead times
Reading
1. What is a product? / The definition of a product.
2. Brand names.
3. Product lines and product mixes.
4. Line-stretching and line-filling.
Vocabulary
1 credit facilities
2 warranty or guarantee
3 shelf
4 brand-switchers
5 (product) life cycle 6 profitability
7 opportunities
8 market share 9 image
10 niche
Module 9
Vocabulary
1A
2I
3F
4H
5D
6J
7E
8B
9C
10 G
Reading
Paragraph 1 the selling and marketing concepts
Paragraph 2 identifying market opportunities
Paragraph 3 the importance of market research
Paragraph 4 the marketing mix
Paragraph 5 company-to-company marketing
Comprehension
8. Customer needs; 2. Market; 3. Coordinated marketing; 4. Profits
through customer satisfaction
Vocabulary
1 word-of-mouth advertising
2 institutional or prestige advertising
3 advertising agencies 4 an account
5 an advertising budget
6 a brief
7 advertising campaign
8 target customers or target market
9 media planners
10 the threshold effect 11 the comparative-parity method
12 counter-cyclical advertising
Discussion
198
Module 10
Reading
1 Market leaders
2 Expanding markets
199
3 Market challengers
4 Market followers
5 Establishing a niche / Dangers faced by market followers
Vocabulary
1 market share
2 promotions 3 monopoly
4 competitors 5 slogan
6 market segmentation 7 niche
8 differential advantage
9 turnover
10 recession
Vocabulary
1 to innovate (innovation)
2 to diversify (diversification)
3 to merge (a merger) 4 a raid
5 a takeover bid
6 horizontal integration
7 vertical integration 8 backward
integration
9 forward integration 10 synergy
Summarizing
1 The fact that many large conglomerates assets were worth more
than their stock market valuation demonstrated that they were clearly
not maximizing stockholder value, i.e. giving their stockholders the
maximum possible return on their investment.
2 Raiders bought conglomerates in order to strip them of their assets,
i.e. to restructure them, split them up, and resell the pieces at a profit.
3 Raiders showed that the stock market did not necessarily value
companies assets correctly, especially land, buildings and pension
funds.
4 Raiders were particularly interested in companies with large cash
reserves, companies with successful subsidiaries that could be sold,
and companies in fields that are not sensitive to a recession.
5 Investors were prepared to lend money to finance LBOs because
they received a high rate of interest which more than compensated for
the risk that the bonds would not be repaid.
11. Raiders argue that the possibility of a buyout forces company
managers and directors to do their jobs well, and to use their
capital productively.
Vocabulary
1 charities
2 legitimacy
3 perfect competition 4 welfare
5 threatening 6 vitality
7 free enterprise
8 conforming
9 embodied
10 proponents
Module 11
Vocabulary
200
1B
2C
3D
4G
5A
6E
7F
Vocabulary
1 shareholders or stockholders 2 earnings or income 3 liabilities
4 turnover
5 assets
6 depreciation or amortization
7 debtors or accounts receivable
8 creditors or accounts
payable
9 stock or inventory
10 overheads or overhead
Reading
1 assets
2 stock or inventory
3
depreciation
or
amortization 4 shareholders or stockholders 5 earnings or income
6 turnover
7 overheads or overhead
8 liabilities
9 debtors or accounts receivable
10 creditors or accounts
payable
Vocabulary Financial statements
1 turnover
2 overheads
3 depreciation 4 freehold properties
5 historical cost
6 debtors
7 cash in hand and at bank
8 corporation tax
9 net assets
10 called-up share capital
Reading
A The period of gold convertibility.
B Floating exchanges rates.
C The abolition of exchange controls.
D Intervention and managed floating exchange rates.
E The power of speculators and the collapse of the EMS.
F Why many business people would prefer a single currency.
G The introduction of the single European currency.
Comprehension
1 False
2 False
3 True
4 False
5 True
6 True
7 True
8 False
Vocabulary
1.
1B
2D
3A
4C
5F
6E
2.
1 adjust
2 convert
3 abolish
4 suspend
5 fluctuate
6 diverge
Module 12
Vocabulary
1 overdraft
2 credit card
Module 13
Vocabulary
1 liability
2 creditor
3 bankrupt
4 assets
5 to liquidate 6 liabilities
7 to put up capital
8 venture capital
9 founders
10 premises
11 underwrite 12 dividend
Vocabulary
1 mutual fund 2 portfolio
3 stockbroker 4 blue chip
5 defensive stock
6 growth stock
7 market-maker
8 institutional investors
9 inside share-dealing
Vocabulary
1H
2B
3A
4C
5I
6E
7F
8D
9J
10 G
Vocabulary
1F
2E
3A
4B
5G
6C
7D
Vocabulary
1B
2A
3F
4C
5E
6D
Summarizing
1 The difference between futures and forward contracts is that futures
are standardized deals and forwards are individual over-the-counter
agreements between two parties.
2 Producers and buyers often choose to hedge because this allows
them to guarantee prices for several months.
3 Speculators can make money on currency futures if they correctly
anticipate exchange rate appreciations or depreciations or interest rate
changes.
4 If you believe that a share price will rise, possible option strategies
include buying a call, which you will be able to sell at a profit, and
writing (selling) a put, which will never be exercised, so you earn the
premium.
5 On the contrary, if you think a share price will fall, possible option
strategies include buying a put, so you will be able to sell your shares
at above the market price, and writing a call, which will never be
exercised, so you earn the premium.
6 The risk with currency and interest rate swaps is that the exchange
and interest rates may change unfavourably.
Vocabulary
203
Appreciate depreciate
Call put
Discount premium
Drought flood
Floating fixed
Hedging speculation
Spot market futures market
Strike price market price
The word premium is used twice with two different meanings in the
text. At a premium means above the nominal or market price;
premium also means the price of an option contract.
Extra Readings
(Industry Profile and Career Overview from WetFeet.com)
204
agencies that its the account planners who do most of the strategizing
on behalf of clients, rather than the account management staff.
Other New Media
The Internet is not the only new medium when it comes to advertising.
It seems that people are jaded by the overload of ads in traditional
media, like television or newspapers, and often wont even pay
attention to ads. As a result, advertisers are now trying to get your
attention through nontraditional advertising media like the movies,
where product placement has become a permanent part of business.
Other nifty places where you can now see ads: on bus rooftops (ads
atop buses reach the professional market that works in office towers,
apparently) and at the bottom of golf holes. Beer ads have even begun
to show up on disinfectant cakes in mens room urinals, of all places.
Targeted Marketing
Computer databases let advertisers store detailed information about
each of their customers. On-demand printing lets advertisers
customize brochures to individual customers. E-mail and automated
direct mailing let advertisers reach individual customers
economically. So, for the first time, the advertising industry is learning
how to create ads like smart bombs, capable of delivering a
customized message to a precise target. That means that technological
expertise is increasingly important within advertising agencies and, to
a lesser extent, PR firms.
How It Breaks Down
Though boutique agencies are growing in number and revenue, the big
names continue to handle most of the accountsand earn most of the
dollars. They also are the primary source of employment
opportunities. In addition to the size of the firm, you'll need to think
about its location, its client list, and the kind of advertising it does:
branding vs. promotional, general vs. specific industries, all media
versus specific media.
Big Global Networks
In the past decade, global has become the way to go. Several huge
global marketing and media conglomerates now dominate the
advertising industry. These include Omnicom, the WPP Group, the
207
Interactive Agencies
Interactive agencies specialize in online marketing and advertising.
This includes everything from concepting, designing, and placing
banner ads to designing corporate websites to developing e-commerce
solutions for corporations. This segment of the industry has been
devastated in recent times. As Corporate America cut back on
advertising expenditures, online-ad click-through rates plummeted
resulting in dismal online-advertising revenues. But the segment looks
to be on the rebound, as advertisers try out new online strategies with
a newly realistic perspective on what advertising on the Internet can
and cannot do.
Public Relations
Firms that specialize in providing PR services include Edelman,
Ketchum PR, and Hill and Knowlton (owned by WPP). Internally, one
difference between PR and ad agencies is that PR firms tend to
organize themselves around practice areas, such as public affairs,
investor relations, labor relations, crisis management, entertainment,
media relations, consumer-product marketing, and corporatereputation management. Smaller PR firms, like ad agencies, may
specialize in a particular field, such as the Internet, health care,
telecommunications, or consumer-product marketing.
Nonagency Opportunities
Beyond the traditional ad and PR agencies, there are a number of
other job sources in this field. Research firms, such as IRI
(Information Resources, Inc.), Nielsen (of TV-ratings fame), Gallup,
and J.D. Powers all measure the success of agency campaigns. Other
firms specialize in certain aspects of the advertising world, such as
direct marketing or promotions. Although some of these are
independent, others are owned by big players.
Also, large corporations usually have marketing communications
(marcom) departments, which create and produce brochures, product
sheets, and other so-called marketing collateral. Marcom departments
also often write and distribute press releases and perform other PR
functions. Typically, marcom work is not on the creative edge, but on
the other hand, you won't lose your job if you can't come up with a
brilliant idea every week.
209
213
Advertisers play a role in shaping the ads that shape our culture. The
work you do will be determined partly by the type of agency you're in
and your role within it. You'll work in one of five departments
account management, account planning, media, production, or
creative.
Account management is the clients' primary contact. There you'll
juggle a number of projects, and ensure that they come in on time, on
budget, and on strategic target.
In account planning, you'll try to understand consumer behavior and
use your knowledge to devise strategies for clients.
Media decides where to place ads, and in which mediumradio,
television, print, or Webwhen, and for how long.
Production involves physical creation of the ads, either in-house or
outsourced. If you're a creative, you'll be responsible for turning
strategies into concepts that can be made into finished adsfor
example, showing well-dressed people driving up to a discount store
to highlight a change in product selection.
Creative departments also create
summaries of what an ad will contain.
storyboardscartoon-style
the client, helping the client understand what the public wants, needs,
and is concerned about.
Those who do well in PR have strong communication skills, are
articulate both with the written and spoken word, are able to
understand a variety of people, are confident, and quick studies
you'll need to learn quickly what your clients do in order to
communicate their messages effectively. PR professionals should also
be quick thinkers and persuasive.
While there are some behind-the-scenes opportunities such as research
that could accommodate introverted types, most jobs in the PR field
require assertiveness and an outgoing personality. One insider says
that if you know you're shy, PR probably isn't the best career choice
for you. A public relations professional who is afraid of the public
won't be able to represent his or her clients authoritatively.
Mitigate = to make a situation or the effects of something less
unpleasant, harmful, or serious
Antitrust (violations) = which attacks monopolies and encourages
competition
Akin to = foarte asemntor cu
Huckster(ish) = someone who uses very strong, direct selling
methods, sometimes dishonest
Flack = strong criticism
To pull the wool over the eyes of somebody = to deceive someone by
not telling the truth
Elicit = to succeed in getting information or a reaction from someone,
especially when it is difficult
Spark = a strni interesul cuiva n ceva
Potholder = a piece of thick material used for holding hot cooking
pans
Ploy = a clever method of getting an advantage, especially by
deceiving someone
Issue = a emite
Glutted = ncrcat, plin de
Practitioners = someone who regularly does a particular activity
Endeavor = a ncerca din greu
217
deals" with
varies from
initiative, a
e-commerce
When you think about cola, what do you think? Coke? Pepsi? That's
due to marketing. What comes to mind when you think of computers?
Dell? Apple? IBM? That's no coincidence. Those companies have
spent a lot of money so that you'll associate a generic product such as
a computer with a brand name.
What You'll Do
Broadly speaking, marketing is the intermediary function between
product development and sales. In a nutshell, it's the marketer's job to
ensure that consumers look beyond price and functionality when
they're weighing consumption options.
Marketers create, manage, and enhance brands. (A brand can be
thought of as the way consumers perceive a particular company or its
products and how a company reinforces or enhances those perceptions
through its overall communicationsits logo, advertising, packaging,
and so on.) Marketers want the consumer to ask: "Which brand helps
me look and feel my best? Which brand can I trust?" Their goal is to
make the brand they represent the obvious and uncontested answer to
those questions in the consumer's mind. In marketing terms, this is
called owning share of mind.
Of course, a brand can't be all things to all people. A key part of a
marketer's job is to understand the needs, preferences, and constraints
that define the target group of consumers (who may be from the same
geographic region, income level, age range, lifestyle, or interest
group) or the market niche corresponding to the brand. How can a
company aggressively expand its market share and keep customers
satisfied? That question is central to everything a marketer does.
Marketing is a function at every company in every industry. In the
consumer products industry, marketing (called brand management) is
the lead function. In other industries marketing may play a supporting
role to another function. At a high-tech company, for instance,
marketing may play a supporting role to research and development.
And in advertising, market research, and public relations, a specialized
marketing function is the industry.
Who Does Well
224
229
the rank and file. Players in this field include HR consulting firms like
Hewitt, Hay, and Towers Perrin, and specialists in managing benefit
programs, such as Ceridian, and even some of the investment houses
and insurance companies that offer benefits packages. This field
requires an interest in research, analytical ability, good communication
and negotiating skills, and patience.
HR Information Systems (HRIS)
Players here include service bureaus, such as ADP and Paychex for
payroll, and IT firms such as PeopleSoft and Resumix that offer
software and systems for operating the company's payroll, employee
information, human resources management, and recruitment systems.
HRIS has much in common with IT jobs elsewhere in a company,
requiring the ability to work with users in defining needs and with
vendors in understanding the capabilities and weaknesses of their
wares. Success in this division also requires technical knowledge
about systems and software and an ability to plan and implement
training.
Job Prospects
The Bureau of Labor Statistics expects 27,788 new human resources
jobs to be created between 2000 and 2010, and has identified the
computer and data processing services as the largest area of growth.
While human resource jobs are expected to grow by only 12.7 percent
(lower than the average for jobs overall), HR jobs in the computer
industry are expected to grow by an impressive 66 percent.
Look for changes in the HR profession to reflect overall lifestyle and
population trends. For instance, as the population ages, residential care
and home health care services are expected to grow. Those two
industries are tied for second place in terms of expected HR
employment growth. Also related to the aging population is the need
for more human resources workers in hospitals and in health allied
services.
Another area of expected growth isnt an industry per se, but rather the
area of specialized HR business services. The staffing industry is rated
fourth by the BLS as an area of expected growth by the end of the
decade. Both BLS statistics and studies by SHRM indicate that
231
salespeople, though even they can face the ax. And if a company
closes its doorsas many have in recent times (716 companies closed
up shop between January 2000 and November 2001)everybody is
out of a job, no matter what his or her job title.
The Bright Spots
The Internet seems to work best, from a business perspective, for
companies engaged in low-overhead e-commercefor instance,
financial, software, and travel-services sites that dont deal in storing
or shipping inventory have low costs once theyve established their
technological infrastructure. For example, Expedia, a leading travel
site, operates on a 70 percent profit margin. Amazon.com, on the other
handwhich has to deal with procuring and shipping actual physical
productsoperates at a 26 percent margin.
Blog-a-Thon
Back in the 1990s, Web pundits hyped the ability of the Internet to
bring people together on a one-to-many basisto give Internet users a
voice they didnt have previously, and thus make the world a smaller
place. It might not be doing quite that, but the promise of one-to-many
connections is being fulfilled these days by the weblog phenomenon.
Weblogsblogs, for shortare a kind of online diary, in which the
author, or blogger, writes regular postings about whatever interests
him or her, often including hyperlinks to other Web pages containing
information about the topic at hand. Now Web pundits are making the
claim that blogs are going to change the face of journalism; again,
well have to wait and see on that claim. But theres no doubt blogs
are proliferatingand that even journalists and newspapers are getting
in on the act.
How It Breaks Down
The industry is a baggy monster that resists classification. The
following breakdown is not a definitive taxonomy but rather a chance
for the uninitiated to make some sense of a rapidly changing
landscape.
Publishers
Online publications make money by selling advertising or
subscriptions or both. Most of the players are losing money, and
235
result: A tough road to hoe for job seekers. But while theres little
demand for new hires in business development, marketing, research,
and operations in todays tight job market, there is still a need for good
programmers and engineers.
Books
In the past, book publishers acted as gatekeepers, offering authors the
only viable means of producing books and persuading stores to sell
them. But the proliferation of the Web and the publishing alternatives
it offers are challenging this staid Goliath. As technology forges
ahead, this segment lags behindreluctance to embrace new media is
common among traditional publishersand cynics allege that the
death of print is approaching. But having recovered from similar
catastrophes, such as the introduction of radio, television, and CDROM, the book publishing industry is realistically predicted to
weather the storm.
In spite of the current identity crisis, this segment is a multibilliondollar business of pulp titles and blockbusters that accounts for about
a fifth of the publishing industry pie. The big players are New York's
clashing titansBertelsmann (Random House) versus Viacom (Simon
& Schuster) versus AOL Time Warner (Warner Books)whose
diversified interests put them on the path towards world domination.
Online Information
This is an ever-expanding universe. A quick browse on the Web will
produce a spectrum of publications, including encyclopedias, daily
journals, interactive newspapers, and even novels. The rapid
dissemination rate and global capabilities of this far-reaching medium
exceed traditional methods and offer information that can be easily
updated. Revenue is generated by advertisements, subscriptions, and
e-commerce partnerships, but long-term profitability is yet to be
determined. The biggest players are well-established publications that
support an online presence, such as the Wall Street Journal Interactive
Edition, and focused content-based sites like CNet.
Job Prospects
Publishing has been marked recently by massive mergers,
consolidations, decreased circulation, and lower advertising revenues.
As a result, the job market is stagnant with employment expected to
grow more slowly than other occupations through the year 2010
according to the Bureau of Labor Statistics.
241
Publishing is still one of the bright and shining career options for
humanities majors and people who love to read, think, and discuss
their ideas, but it will continue to be one of the more difficult
professions to break into. An internship or apprenticeship is often the
best idea for recent gradsyou'll gain valuable experience and make
industry connections. Seasoned reporters concede that whatever one's
education, on-the-job experience is where most skills are cultivated.
Once you enter the field, there are myriad possibilities due to the
diverse interests of corporate employers.
The diversification of the media giants has had interesting
repercussions on the job market. As recently as 15 years ago, if you
began life as a print reporter, you did not generally end up in
television or book publishing. If you covered hard news stories, you
did not moonlight in PR and other promotional copy. The mix is much
more fluid now. And although a few old-school journalists decry these
developments, they make your job prospects more interesting than
they once would have been.
Broadcasting
Peter Jennings. Barbara Walters. Rush Limbaugh. Oprah Winfrey.
Howard Stern. What do they all have in common? Besides being
extremely rich and famous, these on-air personalities all started their
broadcasting careers as unknown announcers at local radio and
television stations.
While such dramatic rises to superstardom attract many young
hopefuls to broadcasting, there are many more professionals working
behind the scenes. For every well-known newscaster or talk-show
host, there's a score of people hired to create a program and keep it
running. In addition to on-air announcers, broadcasting stations hire
writers, program directors, and producers who manage the overall
creation and delivery of station content.
What Broadcasting Is
From world news to local weather and the Top 40 countdown,
broadcasting generally encompasses any audio or visual programming
that is disseminated to a large number of radio or television receivers.
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networks like Fox, UPN, and the WB. To enhance their moneymaking
ability, the major networks have adopted an if you cant beat em,
join em strategy, making all kinds of production and distribution
agreements with their cable competition.
How It Breaks Down
Despite the blurring lines between sports, music, movies, cable, and
publishingand the media behemoths that preside over them all
these various forms of entertainment are distinct domains. And though
at Time Warner you could conceivably enjoy a career that includes
working for the Atlanta Braves, Home Box Office, Six Flags theme
parks, and the Atlantic record label, most people choose one area and
stick with it. These worlds are closely knit, and whom you know and
whom you oweand who owes youcounts for a great deal,
particularly when you're looking for work.
Film
In the days of celluloid movie factories, the major studios controlled
the project from the earliest script draft to the opening night at Radio
City. Most films were completed in under a month and cost as little as
$200,000 to produce. Today there are six major entertainment
companies: News Corp, AOL Time Warner, Vivendi, Sony, Viacom,
and Walt Disney. Known as the Big Six, they all have their roots in the
original Hollywood studios: MGM, Warner Brothers, Paramount, and
others. But the modern studios control Hollywood in a different way
now: They solicit projects, provide the financing, and make the deals
with thousands of smaller production companies. The indies
(independents) remain only marginally profitableand are often
owned by one of the Big Six. (Miramax, for example, is a Disney
subsidiary.)
Music
Like most movies, music is often created by committee and on the
whim of the record label. But the artists retain some control. At least,
some do; the Billboard charts always seem to have room for packaged
products like Menudo, the Monkees, and N'Sync. The 1996
Telecommunications Act lifted restrictions on how many radio stations
a company can own and the ensuing domination by conglomerates
resulted in more standardized (and oft-criticized) playlists nationwide.
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Beyond the Top 40, music is also big business in conjunction with the
advertising industry: Whoever owns the rights to songs used in big
national ad campaigns stands a good chance of making even more
than the record company or the artist. Sony is currently the
acknowledged leader in the business. Other top music companies are
Time Warner (Atlantic), EMI (Virgin, Capitol), Vivendi (PolyGram,
Universal), and Bertelsmann (Arista, RCA).
Television
The old news in television is the emergence of cable, the decline in
network viewership, and the surprising success of Fox TV, the only
new network to date that has threatened the supremacy of reigning
giants CBS, NBC, and ABC. The more interesting and pertinent news
for job seekers is the slow but inexorable digital convergence of
computer technology, the Internet, and television, and also the 1996
Telecommunications Act, which allows phone companies and power
utilities, among others, to create and distribute entertainment content.
These developments opened the floodgates for telecommunications
and technology companies to enter the competitionPacific Telesis
(NYNEX and SBC), AT&T (TCI), Intel, and Compaq have become
strong players. Also building on this technology, Microsoft and other
companies are melding broadband cable and electronic media to
enhance Internet capabilities.
Sports
When world-class athletes cry, "Show me the money," team owners,
managers, agents, and sponsors dance to the tune. The popularity of
professional sports teams is phenomenal, and sky-high revenues are
pulled in through a variety of avenues including advertising,
sponsorships, team name and logo licensing, ticket sales, and
worldwide broadcasts.
As far as professional organizations go, the National Football League
(NFL) leads the pack in profits, with the National Basketball
Association (NBA), Major League Baseball (MLB), and the National
Hockey League (NHL) not far behind. Teams, once owned by
individuals, are increasingly owned by companies: AOL Time Warner
(publisher of Sports Illustrated) owns baseball's Atlanta Braves,
basketball's Atlanta Hawks, and hockey's Atlanta Thrashers; the
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opportunities such as hedge funds and venture capital funds for socalled high net-worth individuals, such as multimillionaires, and
institutional investors, such as pension funds, insurance companies,
and university endowments.
There is an unimaginably large amount of money chasing investments
these days, which is part of the reason that the stock market rose so
steeply during the 1990s. Brokerages and mutual funds are the two
primary means by which all these investments are made.
Trends
The Financial Supermarket
Brokerage firms (such as Merrill Lynch, Citigroup/Salomon Smith
Barney, and discounters Charles Schwab and E-Trade) and mutual
funds (like Fidelity, Vanguard, and Dreyfus) have invaded each other's
turf in an ever-escalating financial-services war. Fidelity was the first
fund to offer a large discount-brokerage operation. Virtually every
national and regional brokerage firm now offers its own family of
mutual funds, in addition to traditional offerings of funds run by other
firms like Fidelity, Eaton Vance, Nuveen, Putnam, and MFS. But all
that was merely prelude.
In late 1999, Congress repealed the 1933 Glass-Steagall Act, opening
the door for banks, securities brokers, and insurance companies to
engage in each other's formerly exclusive businesses, without
restrictions. More consolidation of financial companies and of
services within individual companies has followed. The aisles of
financial supermarkets of the future will be lined with not just mutual
funds, but every other kind of brokered investmenteven credit
transactions. In one account you might combine mutual funds;
individual stocks, bonds, and options; credit products such as credit
cards, credit lines, and home mortgages; and even a money market
checking account.
Fearful Investors
The struggling economy, an increasing number of examples of
corporate financial shenanigans, and a plummeting stock market have
combined to give investors cold feetquite a change from the late
1990s, when everyone from the guy behind the counter at the corner
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plans have changed dramatically in recent years. But those who have
been able to tough it out for five years or more report that it can be
quite rewarding both personally and financially.
In addition to brain analysts and savvy fund managers, most mutual
funds also need retail sales personnel, marketers, and a slew of
operational folks. There was $5.5 trillion in mutual funds in 1999, and
while that number has diminished somewhat over the past few years
as portfolio values have declined and investors have pulled out, theres
still a pile of cash invested in funds.
Whether you choose a brokerage firm or mutual fund, career growth
and income can be excellent after your first three to five years. But
those first few years of building a client base and learning the markets
are difficult. There's little patience in this industry for either mediocre
or incompetent performance resulting in slow or zero growth in client
assets (and correspondingly in firm income from those assets). Also,
hiring numbers are way down due to the current bear market, but
expect the situation to change as the market regains ground.
Corporate Finance
If you work in private enterprise, your company measures its success
at the end of the year by comparing how much money it made to how
much it spent. If it has made more than it has spent, it was a good
year. If it has made less than it has spent, it was a bad yearor the
company is in an investment phase. (In other words, like
Amazon.com, it spent more than it made because the company and its
investors believed it would realize a profit in the near future.)
People who work in corporate finance and accounting are responsible
for managing the moneyforecasting where it will come from,
knowing where it is, and helping managers decide how to spend it in
ways that will ensure the greatest return.
This career profile focuses on opportunities in corporate finance and
accounting in private industry. To learn about other areas in financial
services, read our industry profiles for investment banking, mutual
funds and brokerage firms, commercial banking, insurance, and
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Retail Industry
Consumer money drives the economy, and retail is where consumers
spend that money. Boutiques and department stores, mail-order
companies and discount outletsthese are the establishments where
consumers spend their hard-earned dollars. When goods are put in the
hands, or shopping bags, of consumers, retailers realize revenues
and so do the wholesalers, distributors, and manufacturers that make
up the rest of the consumer-goods distribution chain. In addition, retail
transactions serve as the means for collecting sales taxes, which
support public services of all kinds.
Retail goods are traditionally divided into durable goods, like
furniture, cars, and large appliances, which are expected to last at least
three years, and non-durable goods, which include food, clothing, and
other categories far too numerous to mention but which eventually
form the bulk of the stuff you see on makeshift tables at garage sales.
Most of the retail industry's employees are salespeople and clerks, but
the industry also has opportunities for people interested in determining
what goods will be sold, getting these goods to the right place at the
right time, and managing the operations, finances, and administration
of retail companies. Retail executive-training programs are crammed
with energetic 20-somethings, all hoping to perform those functions as
sales and merchandise managers, buyers, and marketers at major retail
organizations, such as Ann Taylor, Macys, J.C. Penney, The Limited,
and Saks.
Trends
Mom and Pop Disappearand Traditional Stores Are in Trouble
The retail landscape is changing as new store categories start to
dominate the marketplace. Mass merchandisers (Wal-Mart, Target),
discount clubs (Costco), so-called category killers (Home Depot,
Barnes & Noble, Staples), and specialty retailers (J. Crew, Coach)
have all developed successful retail models. At the same time, both
smaller mom-and-pop stores and traditional department stores, like
Sears, Macy's (owned by Federated Department Stores), and Mervyn's
(owned by Dayton Hudson), have found the competition intense.
Indeed, in 2001, while Wal-Mart and Target saw revenue growth (by
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Department Stores
A few years ago, names like Sears, J.C. Penney's, Macy's, and
Montgomery Ward's dominated malls and downtowns all over
America. Over the last decade or so, however, department stores have
suffered. In part this is a result of changing shopping patterns and
increased competition from discount stores. It has also come from
financial burdens incurred by companies that acquired competitors
and grew too fast. It's unlikely that these players will disappear from
the market. However, expect more bumps as the strong get stronger
and the weak get absorbed.
Discount Stores
These are giants such as Wal-Mart, the largest retailer in the world,
and warehouses such as Costco. Originally set up to serve members
only, the deep discounters now face competition from category killers,
non-membership warehouses, and mass merchandisers like Ross.
Even more alarming is the growing realization among their harried
shoppers that traipsing through endless aisles of merchandise just to
buy a roll of tape and some underwear isn't worth the savings.
Category Killers
These are the giant retailers that dominate one area of merchandise
(Office Depot, Tower Records, and The Sports Authority). They are
able to buy bathroom tiles, file cabinets, electronic goods, or pet food
in such huge volume that they can then sell them at prices even fairly
large competitors can't match. The outlook for this category is better
than for many of the more general discounters, but the same
employment caveats apply. For most job seekers, these companies
offer earn-and-learn experiences with vendors and distributors before
you move onward and upward.
Specialty Stores
These include Crate & Barrel, the Body Shop, and Victoria's Secret.
These stores concentrate on one type of merchandise and offer it in
some manner that makes it special. Some are very high-end (Louis
Vuitton); others cater to the price-conscious masses (Old Navy). Many
are so successful that department stores have started to emulate their
buying, marketing, and merchandise display strategies. Industry
experts predict growth in this segment, particularly for home
furnishings and home improvement, and it seems to attract many of
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Insurance Industry
If you want to impress your friends and family with a job full of
glamour, sizzle, and prestige, insurance is the wrong game for you.
But while no industry offers genuine job security these days, insurance
comes closer than most.
About 1,800 U.S. insurance companies offer personal and commercial
product lines including basic health/life and property/casualty
protection as well as a long list of other coverages ranging from
automobiles to mortgages to insurance for insurance companies
(known as reinsurance). These products protect customers from losses
resulting from illegal actions, medical needs, theft, earthquakes and
hurricanes, and a variety of other causes.
Insurance companies calculate the likely cost of a given loss, divide it
by the number of people who want protection against it, add
something for profit, and reach an amount that they charge each
customer for a policy guaranteeing compensation should the loss
occur. But that's only the beginning. Insurance companies also mount
huge marketing campaigns to convince customers that they need
protection in general and the company's products in particular.
They also function as financiers, deriving a large part of their revenues
from investments. Insurance companies must maintain enormous
reserves of capital to back up potential claims obligations. They invest
those reserves in stocks, bonds, and real estate, within the U.S. and
overseas, providing an enormous amount of liquidity to financial
markets and giving the industry an influence on the national economy
far out of proportion to its size. That can be a risk, as when
industrywide over-investment in Latin America during the 1970s led
to huge losses for the entire industry and repercussions far beyond the
insurance industry itself.
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this means in macro terms is that the life insurance sector has had to
shift its primary capability from analyzing and predicting mortality
rates to a more investment-management capability. The recent
collapse of the stock market has made annuities relatively even more
attractive. And in a creative move insurers are building a market for
products that protect the investor against a variety of risks
simultaneously while allowing them to draw down a death benefit
while still alive.
Technology
The Internet promises to cut costs in a competitive market, provide a
new way for consumers to compare quotes and choose policies, and
make for a more convenient servicethe ideal customer-friendly
combination. This transition is having an impact on the job market,
with companies increasingly seeking tech-savvy candidates who can
support the move to e-commerce.
Consolidation
Continuing the trend that essentially began 30 years ago, insurance
companies are responding to global competition and the need for cost
efficiency by forming strategic alliances, merging into conglomerates,
and buying smaller companies. This trend is doing away with the
independent agencies that used to define the industry. Consolidation
also means that companies will offer a full range of insurance products
instead of specializing in certain realms such as property or casualty.
How It Breaks Down
Life and Health Insurance
The policies in this sector provide benefits packages that
policyholders pay a premium to enjoy. Health insurance has gone
through some major overhauls, including the replacement of fixed-fee
Blue Cross/Blue Shield-inspired policies with managed care networks.
The life insurance business is experiencing slow growth, and life
insurance companies are likely to be merging with banks and
securities firms. Hartford, Prudential, and Metropolitan Life are U.S.
leaders in the life insurance game, while Aetna and CIGNA rule the
HMO realm.
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Job Prospects
Due to the replacement of agents by Internet sales, job opportunities in
this industry are increasing at a below-average pace. But the entrance
of insurance companies into the grand arena of financial services
marks a new era: Agents will be called upon to provide a full range of
servicesincluding insurance, investment banking, and savingsin
multidisciplinary teams, on a global scale. Companies are looking to
hire college grads with proven ability in sales and information
analysis. Growing occupations include systems analysts, adjusters,
and examiners: These positions require fewer hands-on skills and
more interaction with information, especially the ability to gather and
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Agents fill a sales function, and actually sell the policies. Underwriters
determine how much overall risk a buyer will add to the company's
business and figure out the premium at which to insure a buyer.
Money managers invest the money the insurance company takes in
through premiums. Claims adjusters decide what, if anything, the
company will pay on claims. Risk managers determine and help
implement policies and processes to help clients avoid making claims.
Insurance companies also hire folks for marketing, business
development, IT and corporate finance positions.
Insurance companies tend to be large in terms of both employees and
assets, because they need to take in a lot of premiums from a variety
of customers in order to diversify and lower their risk of being put out
of business by a small number of large claims.
Insurance companies also manage their risk by paying reinsuance
companies to take on some of that risk. Reinsurers essentially insure
insurance companies against unexpectedly large claims. By writing
policies with a variety of insurance companies, reinsurers effectively
take on many times the number of individual risks as primary
insurance companies do. This lessens the likelihood that a small
number of large claims will result in an unforeseen risk to their bottom
line.
Many jobs in insurance require certification or licensing. Since
insurance regulations differ from state to state, certification and
licensing requirements vary accordingly.
Who Does Well
If you like sales, have a strong quantitative bent, or like to investigate
mysteries, this is a very good place to consider looking for a job. It's
also a great field to consider if you're looking for top-notch benefits,
reasonable hours, and a sense of belonging to a large organization.
There's also a place in the industry for entrepreneurs who want to run
an insurance agency or work in other sales positions.
Accounting Industry
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But due to the crisis in accounting and the markets, the clamor to split
accounting and consulting is louder than ever. A number of states are
going so far as to consider legislation barring accounting firms from
doing consulting work for audit clients.
As you step into the wonderful world of accounting, you have three
obvious career options: 1) work for a Big Four public accounting firm;
2) work for a smaller national or regional public accounting firm; or 3)
work in the accounting department of a private or government
organization.
If you go the public accounting route (options 1 and 2), you'll
typically start by studying for and taking the CPA exam and then
working for several years on a variety of tax or audit assignments. At
that point, assuming you want to remain in accounting, you'll either
leave to join a client or stay and try for the partner track. If you start in
the private sector (option 3), you may or may not be able to get your
CPA (some states require experience working for a public accounting
firm to do this), but you will learn about one business in far greater
depth than your public accounting pals will in their short-term
auditing assignments.
Although the Big Four get most of the publicity, there are many
smaller, less well-known national players and regional public
accounting firms that do a lot of accounting and hire lots of people.
Representative national firms include Grant Thornton, RSM
McGladrey, BDO Seidman, and Moss Adams. Within different regions
of the country, there are also strong regional players that usually
affiliate themselves with some national network of other such players.
Insiders tell us that the hours are often a little better than at the Big
Four, the path to partner a little quicker, and the work itself more
varied and interesting. If you go to a Big Four firm, your only
responsibility for three months might be to audit the cash account at
IBM. Ugh! According to one insider, at a regional firm you'll be a
bigger fish in a smaller pond.
In-House Accounting
Whether publicly traded or not, every company has internal
accountants to set budgets, manage assets, and keep accurate track of
payroll, accounts payable and receivable, and other financial matters.
For medium-sized and large firms, the internal staff works closely
with the public auditors at the fiscal year-end and with senior
management and IT staff year round.
Controllers and CFOs at smaller firms often enjoy even more
important and influential roles in running and developing the business.
These jobs are just as demanding as those in public accounting.
Most accountants in the private sector stay in one place, in one job,
working with the same colleagues, for extended periods. However,
should you choose to move around, accounting skills are very
portable.
Some businesses prefer to outsource their internal audit functions to a
third party. For these companies, and for auditors who want to work in
this capacity, accounting firms like Jefferson Wells International are
the answer.
Government
Although its not the biggest blip on the radar screen for aspiring
accountants, the government hires a lot of people with accounting
skills. The biggest federal employers are traditionally the Department
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transaction processing and data services like First Data and Fiserv;
and bill-payment-services marketers like MFSDC and Integrion.
Deregulation
The Glass-Steagall bill, passed by Congress in 1933, served as the
backbone of banking regulation. During the late '90s, however, banks
and other financial institutions found ways around the restrictions
placed on them by Glass-Steagall and related legislation. Finally, in
late 1999, Glass-Steagall was repealed, eliminating the legal
framework for Depression-era boundaries that had already been
abandoned by large financial services firms, including banks.
In theory, the repeal of Glass-Steagall opened the floodgates to
consolidation, spawning superfirms that will offer banking, insurance,
and securities. However, big firms are already doing this through
affiliated companiesCitigroup, for example, offers insurance
through its Travelers subsidiaryso the impact of the Glass-Steagall
repeal remains to be seen.
Problem Loans and Lower Profits
The recent spate of corporate accounting misdeeds, and the resulting
bankruptcy of some companies, means that some banks are stuck
trying to recoup loans from corporations that are cash-starved. On the
consumer side of the business, in January 2002, 4.9 percent of all
home loans were past due, a full point higher than a year earlier. And
the average household has $8,000 in credit card debt, up from $3,000
in 1990. Profits at deposit-taking banks declined 5 percent in 2001,
and in the current economic environment, banks performance could
get even worse.
How It Breaks Down
As a job seeker, the most important distinction to keep in mind is
between regional banks and the big global ones. Here we've broken
down the industry by type of banking, rather than size of player, since
banks are increasingly adding new services to their array of traditional
ones.
Consumer or Retail Banking
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This is what most people think of when they think of banking: A small
to midsized branch with tellers and platform officersthe men and
women in suits sitting at the nice wooden desks with pen setsto
handle customers' day-to-day needs. Although thousands of small
community banks, credit unions, and savings institutions still exist,
employment opportunities are increasingly coming from a few
megaplayers such as Citibank, Bank of America, and Bank One, most
of which seem hell-bent on building nationaland even international
banking operations.
One complicating factor in this picture is that the banks mentioned
above, in addition to extending their consumer-banking operations,
have added to their portfolios by strengthening their investmentbanking and asset-management capabilities, among others. So, if you
want to work at a Citibank branch, make sure that you're applying to
the right part of the organization.
Business or Corporate Banking
Many of the players in this group are the same ones in the consumerbanking business; others you'll find on Wall Street, not Main Street. At
the highest level, the larger players (Bankers Trust, Bank of New
York, and J.P. Morgan Chase & Co. being three names to add to the
list of megaplayers above) provide a wide range of advisory and
transaction-management services to corporate clients. Depending on
which institution and activity area you join, the work can resemble
branch banking or investment banking.
Securities and Investments
Traditionally, this field has been the domain of a few Wall Street
firms. However, as federal regulations have eased, many of the biggest
commercial banks, including Bank of America, Citibank, J.P. Morgan
Chase & Co., and others, have aggressively added investment-banking
and asset-management activities to their portfolios. For people
interested in corporate finance, securities underwriting, and asset
management, many of these firms offer an attractive option. However,
the hiring for these positions will frequently be done separately from
that for corporate and consumer banking.
Nontraditional Options
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Commercial Banking
Banks used to be the dorky cousins of the hot and flashy investment
banks and brokerages. No longer. The legislation that kept banks and
investment banks separateGlass Steagallwas struck down by
Congress in 1999. So banks are now moving into highly visible
spheres of activity, such as investment banking, mutual funds, and
brokerage.
What It Is
Commercial banks hold customers money and supply loans, in
exchange for check-writing fees and interest collected from loans. The
work of commercial bankers is criticalretail consumers get their
credit lines extended, their checking accounts upgraded, their
mortgages, cars, and home improvement loans approved.
Small businesses are also highly dependent on the goodwill of
commercial bankers. Even as dot coms, angel investors, and VCs
monopolize the news, most small businesses continue to fund their
growth with commercial loans. Such loans allow them to secure new
inventory, cover payroll, remodel their stores, buy registers, and
manage their overseas accounts receivables.
What They Do
Commercial bankers perform core financial analysis to assess risk,
creditworthiness, and the likelihood a business will succeed. They
play a key part in deciding the best business initiatives, expanding
existing businesses, developing new markets and clients, and creating
new products for e-commerce, the Internet, international markets, and
consumers.
Commercial bankers have to combine business acumen with strong
accounting and interpersonal skills. After all, commercial bankers are
at the front lines of the banking business. Ideally, they know their
clients' lives intimately and can recommend additional products and
services. Commercial bankers are a key distribution point and referral
source for the rest of a bank's financial services activities.
Trends
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Trends
Cooldown
As the global economic climate cools down, so has investment
banking. In 2001 and 2002, I-banking heavyweights Credit Suisse
First Boston, Merrill Lynch, JPMorgan Chase, and Goldman Sachs all
laid off a significant chunk of their employees. But the bulge-bracket
firms were not the only ones to feel the pinch of thinner profitsor to
react by cutting costs via layoffs. In 2001 alone, approximately 30,000
Wall Street workers were laid off. Also, I-banking bonuses, which can
comprise half or more of some employees total annual compensation,
fell by some 30 percent in 2001. I-banks have also pulled back on
college and MBA recruitingbut, because its cheaper to employ a
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recent grad than someone with more experience, there are still jobs to
be had for the cream of the crop from the best schools. More than
ever, though, those who do I-banking internships will have the best
shot at full-time openings.
Deregulation and Financial-Services Consolidation
Investment banking has witnessed a rash of cross-industry mergers
and acquisitions in recent times, largely due to the late-1999 repeal of
the Depression-era Glass-Steagall Act. The repeal, which marked the
deregulation of the financial services industry, now allows commercial
banks, investment banks, insurers, and securities brokerages to offer
one another's services. As I-banks add retail brokerage and lending to
their offerings and commercial banks try to build up their investment
banking services, the industry is undergoing some serious global
consolidation, allowing clients to invest, save, and protect their money
all under one roof. Coupled with a slowing economy, these mergers
have also triggered layoffs, as I-banks make an effort to cut spending
and reduce overlap. Among the recent M&A activity: Donaldson,
Lufkin & Jenrette was acquired by Credit Suisse First Boston; J.P.
Morgan and Hambrecht & Quist were swallowed by Chase; Robertson
Stephens was acquired (and then dumped) by FleetBoston; and Alex.
Brown was acquired by Deutsche Bank.
PR NightmareOr Something Worse?
The swing in the markets from up, up, up to down, down, down
focused a lot of scrutiny on firms on the Street. The biggest issue so
far has been whether banks overrated the investment potential of client
companies stocks intentionally, deceiving investors in the pursuit of
favorable relationships and ongoing banking revenue opportunities
with those companies. The outcome: a regulatory settlement released
Dec. 20, 2002, directs the nations largest securities firms to pony up
$450 million over five years to buy stock reports from independentresearch firms, ones not involved in I-banking. This means investors
will be able to view at least one research report that was developed
outside of the brokerage firm with which they have dealings. As well,
I-banking firms have been mandated to put stock ratings from various
sources on brokerage statements sent to investors after they buy a
stock. Citigroup/Salomon Smith Barney, Credit Suisse First Boston,
Goldman Sachs, and Morgan Stanley will also have to pay fines of
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$50 million on up. And a restitution fund will be put into place for
investors burned in such dealings.
Of course, a lot of the details still need to be worked out, such as when
this regulatory settlement is to take effect and what makes a research
firm truly independent. These types of issues and other potential
quagmires put into question how effective this settlement will be.
According to the New York Attorney General Eliot Spitzer, all
changes will take place before the end of 2003.
How It Breaks Down
The Bulge Bracket
There's no clear and uniformly accepted definition of this group, but it
basically includes the biggest of the full-service investment banks.
This is the group that matters most in investment banking, and their
names confer distinction, whether you're a start-up with an IPO to sell,
a Fortune 500 company planning an acquisition, or a job seeker
sending out rsums. Merrill Lynch, Morgan Stanley, Goldman Sachs,
Citigroup/Salomon Smith Barney, Lehman Brothers, Credit Suisse
First Boston, and JPMorgan Chase hold top spots in this bracket, at
least for the moment. A whole host of others fall into the second tier of
major players, including Bear Stearns and UBS Warburg, the
investment-banking division of the giant Swiss bank, UBS.
Boutiques and Regional Firms
Obviously, the investment banking world extends beyond New York
and the bulge bracket, but the list of small firms is getting smaller as
the market consolidates. The strongest boutique firmsHambrecht &
Quist, Montgomery Securities, and Alex. Brownhave all been
acquired by commercial banks. But that's not to say independent firms
are nearing extinction. The equity markets are strong, and that means
big business for niche firms focusing on technology, biotechnology,
and other high-growth industries. In New York, Allen & Co. and
Lazard Frres still do big business in specialized fields. Volpe Brown
Whelan and Thomas Weisel are Silicon Valley firms capitalizing on
their technology connections and expertise.
Job Prospects
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Investment banking is one of the best ways a young person can learn
about finance and make a lot of money right out of school. Even if
you ultimately decide to reclaim your personal life by pursuing other
options, the skills you learn on Wall Street will be valuable in most
business careers.
But before you can cash in on those potential returns, youll have to
put up with some very substantial hardships, including high pressure,
long days and nights of hard work, a few difficult personalities, and
the expectationno, the requirementthat all personal plans are
subject to the demands of work.
In addition, youll find that life on the Street is very much at the
mercy of the markets. Bull markets bring more work to do than is
humanly possible, but youll be rewarded with a paycheck that can
sometimes double year-to-year. Bear markets can leave you sitting at
your desk with a pile of deals on hold, hoping that the rumored layoffs
and smaller-than-usual bonuses dont come to pass. Despite this
inherent uncertainty, the field remains a popular destination for
undergraduates and MBAs. And, because of the current difficult
economic environment, count on competition for open spots in
investment banking to be especially stiff.
Still, firms are always looking for new (read: cheaper) bodies; even
though they certainly arent hiring to the extent they did a couple of
years back, banks are still bringing on best-and-brightest hires for
analyst and associate programs by way of summer internships for the
most part. As one recruiter puts it, Well never not hire new talent,
even during a merger, even during a downturn.
Investment Banking
Youve heard about the long hours, the big bonuses, and the
megabillion-dollar deals. You can recite the names of the big firms by
heart. You can even write a good enough cover letter or bid enough
points to land a coveted first-round interview slot with one or more of
these firms. But suddenly it dawns on you. What the heck is
investment banking? You panic. What do investment bankers do?
Whats the difference between sales and trading and corporate
finance? More to the point, why do you want to be a banker?
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What I-Banking Is
The intensely competitive, action-oriented, profit-hungry world of
investment banking can seem like a bigger-than-life place where deals
are done and fortunes are made. In fact, its a great place to learn the
ins and outs of corporate finance and pick up analytical skills that will
remain useful throughout your business career. But investment
banking has a very steep learning curve, and chances are youll start
off in a job whose duties are more Working Girl than Wall Street.
Wall Street is filled with high-energy, hardworking young hotshots.
Some are investment bankers who spend hours hunched behind
computers, poring over financial statements and churning out
spreadsheets by the pound. Others are traders who keep one eye on
their Bloomberg screen, a phone over each ear, and a buyer or seller
on hold every minute the markets in session. Traders work hand in
hand with the institutional sales group, whose members hop from
airport to airport trying to sell big institutions a piece of the new stock
offering they have coming down the pipeline. Then there are the
analytically minded research analysts, who read, write, live, and
breathe whichever industry they follow, 24/7.
Investment banking isnt one specific service or function. It is an
umbrella term for a range of activities: underwriting, selling, and
trading securities (stocks and bonds); providing financial advisory
services, such as mergers and acquisition advice; and managing assets.
Investment banks offer these services to companies, governments,
non-profit institutions, and individuals.
An investment bank acts as an adviser to corporations. In that capacity
it serves many functions. It's a middleman in the creation and issuance
of financial products (stocks, bonds, and the like); a sales-anddistribution organization for the same financial products; a major
investor, market maker and position taker in the financial markets; and
a research organization.
What You'll Do
Traditionally, commercial banks and investment banks performed
completely distinct functions. When Joe on Main Street needed a loan
to buy a car, he visited a commercial bank. When Sprint needed to
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