TOP MANAGEMENT LANGUAGE

Conf. Dr.

VIOLETA NEGREA

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 CONTENTS
PART I. BUSINESS COMUNICATION
UNIT 1. COMUNICATION IN BUSINESS..................................................
UNIT 2. FIGURES IN BUSINESS...........................................................
UNIT 3. DRAFTING FORMAL WRITTEN DOCUMENTS..............................
UNIT 4. EMPLOYEMENT FILE; JOB INTERVIEW.......................................
UNIT 5. INTERNAL FORMAL BUSINESS DOCUMENTS.............................
5.1. MEMORANDUM ..........................................................................
5.2. REPORTS...................................................................................
5.3. MINUTES....................................................................................
5.4. SURVEYS....................................................................................
UNIT 6. EXTERNAL FORMAL BUSINESS LETTERS ....................................
6.1. INVITATION .................................................................................
6.2. STATUS INQUIRY ..........................................................................
6.3. RECOMMENDATION LETTER............................................................
6.4. INQUIRY for GOODS and SERVICES.................................................
6.5. OFFERS/QUOTATIONS.....................................................................
6.6. ORDERS; ORDERS ACKNOWLEDGEMENT...........................................
6.7. COMPLAINTS..................................................................................
PART II BUSINESS RELATIONSHIP
UNIT 1. BUSINESS CONVENTIONS...........................................................
UNIT 2. ORDINARY CLAUSES IN BUSINESS CONVENTIONS.........................
UNIT 3. SPECIFIC CLAUSES IN BUSINESS CONVENTIONS..........................
UNIT 4. PAYMENT METHODS...................................................................
4.1. LETTER OF CREDIT..........................................................................
PART III BUSINESS MANAGEMENT
UNIT 1. MANAGEMENT OF BUSINESS ORGANIZATIONS...............................
UNIT 2. PRODUCTS, SERVICES, TRADE MARKS and BRANDS .......................
UNIT 3. ADVERTISING............................................................................
PART IV INTERNATIONAL BUSINEES ISSUES
UNIT 1. EUROPEAN COMMUNITY AND INTERNATIONAL BODIES AND
PROGRAMMES
1.1. ENLARGEMENT OF THE EUROPEAN UNION
1.1.1. ACCESSION PROBLEMS..................................................................
1.1.2. ACCESSION STRATEGIES................................................................
1.1.3.
CONCLUSIONS................................................................................
1.2. PHARE PROGRAMME..........................................................................
UNIT 2. INTERNATIONAL
INSTITUTIONS.......................................................
2.1. THE UNITED NATIONS........................................................................
2.2. REGIONAL
INSTITUTIONS.....................................................................
2.3. NORNS AND LEGAL PRACTICE OF INTERNATIONAL ORGANIZATIONS
3. THE NATURE AND DEVELOPMENT OF THE INTERNATIONAL LAW
3.1 INTERNATIONAL LAW TODAY
PART V INFORMATICS
UNIT 1 INFORMATION TECHNOLOGY..........................................................

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 PART I
BUSINESS COMMUNICATION

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 UNIT 1
COMMUNICATION in BUSINESS
Objectives:
- become familiar with notions and importance of non verbal
communication in business
- learn and use specific vocabulary
- adopt and perform appropriate tone and attitude

Communication is important to the point that without it an organization

cannot operate. Its activities require human beings to interact, react, and
communicate.
If you can communicate effectively in speaking and writing, you are
highly evaluated. Managers and top-level executives are concerned with the
need for better communication. Business executives usually rank the ability to
communicate in the first place among the personal factors necessary for
promotion within management, and business communication ability is
considered one of the most useful.
Oral communication obviously preceded written communication. The
ancient Greek and Roman world depended heavily on oral communication
especially in government assemblies and in the law courts.
A school of teachers called sophists taught ancients to speak well, for to
defend one and to speak eloquently were marks of a learned person. More
formal instructors were called teachers of rhetoric and taught ideas: Socrates,
Plato, Aristotle, Cicero, and Quintilian.
During the Medieval and Renaissance period the oral tradition
continued. But writing became more and more important as a permanent
record of communication, and authors and books on written communication
principles appeared. Desiderius, Erasmus, Richard Sherry, Angel Day are the
forerunners of those associated with our modern principles of written
communication. Some of today's principles of writing are a mixture of ancient
oral and written traditions. Business communication is one offshoot from an
earlier world where communicating well was a foundation of learning.
Correspondence is essential in establishing and confirming conventions
in business activity. Typed or produced on a word processor, it is a mirror of
the writer and of the business itself. Therefore what is written and how it is
written expressed is as much a part of a business education as accountancy
and economics.
On the other hand, information is power. Speed and efficiency in written
business communication depend on a great extent on how the organization
handles information. As an employee, manager, owner or supervisor, in a
rapidly changing business environment you will need to understand to use the

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technology of today's information age, to create, transmit and store
information.
Nowadays thousand of hours are devoted daily to interviews,
conferences, memos, report, employee manuals, letters, advertising, news,
articles, bulletins, newsletters and other messages. They require the time of
executives and assistants for researching, thinking, planning, organizing,
dictating, typing, editing, revising, proofreading, mailing (the written),
presenting (the oral), and filing records. That is why it is to be considered the
wasteful cost of unclear, incomplete, inaccurate inconsiderate and unduly long
or late letters. Poor messages are more expensive because they destroy
goodwill, waste time, and alienate the customers. Successful messages help to
enhance efficiency, goodwill, safety, productivity, profits and public credibility.

Many surveys and articles confirm that effective communication is

essential for a successful career and promotion in business. Top, middle and
operation managers confirm that business communication skills influence the
advancement to executive positions. Like any other worthwhile activity the
quality of the individual attitude and preparation affects communication. The
personality, the image and culture of a company are the extension of the
many personalities and traditions of its employees. Any of them, whether an
executive or a new clerk, is responsible for this image, for building the
goodwill. Most people can learn to communicate effectively for business and
build the goodwill attitude by developing intelligent, sound judgement when
choosing ideas and facts for each message. The integrity of the writer, backed
up by a valid code of ethics, a reasonable facility with the English language
and applied knowledge of the communication process and principles are also
important for a successful and effective communication skill.
Appearance conveys a non-verbal impression that influences the
recipients' attitude toward the message even before they read it. As for
written messages, the envelope’s overall appearance – size, color, weight,
postage – may impress the receiver as “important”, “junk” or “routine“ mail.
The letter report or title page communicates nonverbally even before its
contents are read. The appearance of the message’s stationery and its length,
format and typing is meant to lead to a certain attitude and impression of the
receiver. The enclosure – quantity and attractiveness (charts, graphs,
pictures) –also give nonverbal impression.
Whether when speaking to a person face to face, or to a group in a
meeting, personal appearance conveys nonverbal stimuli that influence
attitudes, even emotions, towards spoken words.
Clothing, jewelry, hairstyles, cosmetics, fingernails, neatness, and
stature represent parts of the appearance. They convey opinions regarding
occupation, age, sex, nationality, social and economic status, job level and
good or poor judgment.
Aspects of surroundings that communicate include room size, location,
furnishing, machines, architecture, wall decorations, floor (carpeted or bare)
lighting, windows and other aspects.

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 The body language also communicates by facial expressions, gestures
postures, smell and touch. Sometimes, they are more meaningful than words.
They are also important for special occasions, interviews, speeches, etc.
The eyes' expression can make the receiver understand hidden
emotions – anger, annoyance, confusion, enthusiasm, fear, hatred, joy, love,
interest, sorrow, surprise, and uncertainty. They can sometimes even
contradict verbal statements sometimes Direct eye contact is desirable when
people have a face-to-face conversation. Eyes that drop or shift away from the
listener may show a shy, dishonest or an untrustworthy person.
Continual gestures with arms while speaking may reveal nervousness,
or they also may distract listeners’ attention from the spoken words. One's
handshake can also show firmness or limpness, promptness attitudes.
Legs’ position can reveal certain nonverbal attitudes for a man sitting
with legs stretching on top of this office during an interview, or a standing
person shifting weight from one leg to another in a rhythmic motion while
humming – or pacing back and forth while speaking.
Confident executives may have a relaxed posture and yet stand more
erect than a timid subordinate. Interested persons may lean forward toward
the speaker, while those who are bored or annoyed may slump – as well as
yawn and repeatedly glance at their watches.
Touching people in different ways and places can communicate
friendship, love, approval, hatred, anger or other feelings. A kiss on a cheek,
pat on the shoulder or slap on the back is prompted by various attitudes and
emotions. Various odors and artificial fragrances on human beings can
sometimes convey emotions and feelings better than spoken words.
Different meanings can also be conveyed by the rate, pitch and volume
of the voice. Speaking fast can reveal nervousness, but a soft voice soothes
and calms. Even silence can determine serious hard feelings, loss of business
or profits.
Time is also an important conveyor of nonverbal communication. Being
on time for appointments, for work every day, and for deadlines
communicates favorable messages in our culture.
Human sounds communicate non-verbally such as clearing the throat,
sighing, laughing, etc. The ability to communicate and understand the
messages is an important business skill that that is to be developed.
Advantages of Using Electronic Technology in Business
Communication

Information now doubles every six years, causing managers to spend an

increasing amount of time receiving, absorbing, creating and distributing
information. The abundance of information is called information overload .It is
forcing managers to look for ways to reduce the amount of paperwork. They
realize that information is an extremely valuable resource only if received in a
timely, concise and accurate manner. Thus, control becomes a key factor in
the management of information. Using electronic technology is highly
recommended because of the advantages it offers:
- elimination of monotonous routine tasks

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- cost effectiveness
- Greater accessibility of data (information)
- The accuracy and quality of output
- The ability to forecast outcomes
People are interested in work that is satisfying and enjoyable. Routine
tasks such as formatting, editing, filing, copying, calculating and mailing mean
drudgery to many people. With a word processor or a personal microcomputer
most of these tasks can be handled electronically. By pressing one or more
special keys, you can convert a draft into a finished text, print it immediately
at high speed or store electronic data for later use. Because of the worldwide
competition, all businesses are interested in ways to help employees
accomplish more output in less time. In integrated office system computers,
word processors telephones, facsimile devices, scanners, printers and copiers
linked together accomplish numerous tasks in a semi or fully automated
fashion. In such an environment executives can feed information into the
system or check the electronic mailbox for messages via a phone line or
terminal, whether in or out of the office. The decreasing cost of computers and
peripherals (equipment tied to the computer) will continue to make technology
a cost-effective tool in the future.

A New Era of Bright Hopes and Terrible Fears

When we try to comprehend something as vast, amorphous and
downright scary as the Internet, it's no wonder we grope for familiar historical
precedents - the railway, the interstate highway system, the telephone
network. But none of those really captures the Internet's earth shaking impact
on the business world. Out of this primordial technological swamp called the
Internet are emerging new companies, business models, corporate structures
- even new industries. It's a time of such tumult and confusion that no one
can agree on what's happening now, much less on what's coming next.
Unknown upstarts with head scratching labels such as vertical portals, e-
markets threaten to hijack the leadership of countless industries, from plastic
to financial services. Some of the most innovative corporate companies are
likely to prove the commercial equivalent of mammals, which started out small
and rodent like but proved swift and highly adaptable.
Consider how the Net differs from microprocessors or other disruptive
technologies that have gone before. It's a readymade marketplace essentially
$1 trillion worth of network connections, computer power, and limitless
database full of information. And it is largely free to anyone with a phone line
and a personal computer, wherever he may be in the world and anytime, day
or night. In short, the Net offers an entry point to all comers in every market
and industry. And business people know that the Net is no laughing matter.
The Internet economy already amounts to $301 billion if you include on-line
sales of industrial and consumer goods and services as well as the equipment
and software to support e-commerce. With growth like that in just five years,
the commerce on the Net will be as perilous for many businesses - and entire
industries - as it is profitable for others. There's hardly an industry that isn't
undergoing an upheaval in how it deals with customers and partners,
organizes itself, or defines its essential purposes.
All of these consequences flow from one inescapable fact: The Net puts
the customer in charge as never before. Until the Net, buyers faced huge
obstacles to extracting the best prices and services. Research was time-

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consuming, and everyone - from producer to retailer - guarded information
just like the crown jewels.
Interactive TV (ITV) is the television that can offer from online
shopping, e-mail personalized news and entertainment to T-banking. This is
possible by
combining TV with Internet. Still at its beginning in Europe, ITV is expected to
become soon an everyday reality. In 1996 Television Par Satellite became the
first broadcaster in the world to launch fully digital interactive services via
satellite. The subscribers have access only to informational and e-commerce
sites offered by TPS commercial partners who have paid for the privilege.
Soon a new generation of satellite decoders is expected to enable viewers to
switch from TV and movies to full Internet browsing via a single set-top box.
Specialized companies offer interactive games plus ability to exchange e-mails
while watching films. Online auction channel and full Internet access are
planned for later. Some of them offer already interactive personal
programming thanks to digital video recorders that customize your TV
schedule by learning your viewing habits and automatically recording your
favorite shows. New competitors keep entering the fray, starting to roll out
interactive services which include full Internet access, video and audio on
demand, enhanced sports programs and channels with content partners.
To make sound decisions, relevant information must be available when
needed. Information sharing is one of the most effective tools of today's
information society. Large databases (stockpiles of information by subject and
type) make tens of millions of pieces of information available within minutes.
You can broaden or narrow your search from relevant information by
specifying one or more categories of key words.
To ensure accuracy of information, computers can be programmed to
perform a number of important functions, relevant to business communication,
such as grammar checkers, programs to generate forms, maintain calendars
and produce schedules.
These programs (software packages) are extremely beneficial and can
be purchased rather inexpensively.
The ability to take past data and chart future business operations, on
the basis of trends and conditions is essential in today's ever-changing
economic environment. Goals are important for success. By taking data
generated in recent weeks, months and sometimes even years, managers plan
budgets, produce schedules, control inventories, determine pricing and plan
for the best use of their resources. With computerized operations, information
that once took weeks or months to obtain can now be available in a matter of
hours.
EXERCISES
I. Match the following terms with their definitions about the new
technology in business: 1) computer conferencing; 2) desktop
publishing; 3) facsimile; 4) communication satellites; 5) CD-ROM; 6)
electronic meeting; 7) electronic messaging; 8) access to on-line data
bases; 9) audio conferencing 10) electronic mail.

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a) Makes possible the extension of basic communication and broadcasting
services throughout a country or region, including the most remote islands
and villages. They can be used to provide basic telephony as well as radio and
television networks with multiple sound tracks for local languages, where
appropriate.
b) A means of communication via computers as an immediate exchange of
information. Messages can be sent from one computer to another through a
host computer equipped with communications and message-processing
software including so-called mailboxes for subscribers. These services are
cheaper than voice communications and overcome the differences in tie zone
that hinder real-time communications.

c) Interaction of many users through a central host computer. Each member

can share ideas with others and respond to their comments. Participants may
log on at their convenience, thus avoiding the need to accommodate different
schedules at time zones.

d) Microcomputers are now enhanced with graphic capabilities to produce

newsletters and other printed material without typesetting.

e) Facsimile transmission and electronic mail may be particularly viable

alternatives to sending hard copies of correspondence and documents through
the mail in areas where service is often slow and unreliable. The technologies
can also be used to link staff in the field with one another and with
headquarters.

f) Managers, development experts and project staff may now stay in touch
electronically rather than through face-to-face meeting. It allows group
members to interact at their convenience by reading and contributing

g) A technology with widespread development applications that enables any

type of hard copy, including print, graphics and handwritten messages to be
transmitted over a telephone line. It can also be transmitted from a personal
computer.

h) A thin route service by which several sites can be linked together through a
bridge at as watching point or through a common frequency assigned on a
satellite audio channel. Used for holding meetings, tutor students in rural
areas or train staff in the field.

i) Information in the form of databases, full texts of journals, video images,

and other graphics stored on a compact disk and retrieved with a relatively
inexpensive reader attached to a microcomputer. It has a vast storage
potential, low cost, durability and ease of use.

j) Users of a computer terminal and modem can dial into a database and
search for information using key words or phrases. Relevant information is
then displayed as a citation, abstract or sometimes a complete text of

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documents. Users can then select the relevant information and download it
into their own computer or print it out.
II. Re-arrange the following characteristics under the separate titles:
A. Oral communication B. Written communication

1. Short sentences; 2. Possibility of review; 3. Immediate feedback; 4. More

detailed, technical information; 5. More conversational sentences; 6. Focus on
interpersonal relations; 7. Possibility of detailed documentation; 8. Less
colloquial quality; 9. Less spontaneity; 10. Highly contextual nature; 11. More
slang and contractions; 12. More involved sentence structure 13. Less detailed
technical information; 14. More personal pronouns; 15. Possibility of review;
16. Useful for permanent record; 17. Prompter action; 18. Greater linguistic
emphasis; 19. Later action; 20. Delayed action; 21. Focus on content; 22.
More imperative, interrogative, exclamatory sentences; 23. useful for
permanent record
III. Give examples of non-verbal communications that can contradict
spoken words.

IV. Look at the following images. Make a written description of each

item and of the way they work.

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 UNIT 2
FIGURES in BUSINESS
Objectives:

- use of figures and numbers appropriately in business

- make use of figures in oral and written presentation; graphs, statistics

Saying numbers correctly

A) 0 is pronounced:
- oh: - after a decimal point: 6.06 = six point oh six
- when dictating or indicating a telephone number: 0944532680 -
oh nine double four five three two six eight oh
- a room number: 303: three oh three
- a bus number: 105 one oh five
- in years: 1909 nineteen oh nine; 2003: two thousand oh three
(American); two thousand and three (British);
Nought: - when expressing a leading zero: 0.001% - nought point oh one
Zero: - for the number zero: 0
- for temperature: 5 five degrees below zero
- Nil: - sports scores: Romania won the match two nil (2-0)
Love: - in tennis scores: The score is thirty love after the break.

B) The decimal point

Point, not comma is used for decimals in English. Comma is used
for writing thousands, but computers do not use it. When reading, all
the figures after a decimal are pronounced separately:
- 10.33 - ten point three three (double three) but NEVER ten thirty three
- 0.25 nought point two five
- 10.002 ten point, oh oh, (double oh) two
- 10,002 ten thousand and two
Units of money are read like this:
- $5.25 = five dollars twenty five. (when doing business, pronounce each
figure separately, carefully)
- 0.250 nought point two five oh

C) When dealing with rates, in percentage, bear in mind the following

reading:
- 0.3% - one third of one percent
- 0.25% - a quarter of a percentage point
D) Hundreds, Thousands and Millions
- British English: 225 - two hundred and twenty five
- American English: 225 - two hundred twenty five; 1,999: one thousand
nine hundred ninety nine
year 1999: nineteen ninety nine
year 2000: two thousand
year 2005: two thousand and five
year 2010: two thousand and ten or, twenty ten
1,000,000: million, or ten to the power six (106 )
1,000,000,000: a billion or ten to the power nine (109)

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E) Squares, Cubes and Roots
52 five squared
53 five cubed
5 the square root of 5
F) Fractions
Fractions are usually similar to ordinal numbers: a half, a fifth, a
quarter, 2/3 two thirds, 3/4 three quarters
G) Foreign currency
1. How many lei-s are there to the dollar?
2. How many Euros shall we get per dollar?
3. The current rate is 35,000 lei to the dollar.
H) Numeric adjectives
Numbers can be used as adjectives before a noun:
1. A fifteen-minute meeting but NEVER a fifteen minutes meeting.
2. A twenty-dollar allowance, but NEVER a twenty dollars allowance.
I) Mathematical symbols and expressions:
1. 2+5=7 two plus five equals seven
2. 8-3 eight minus three
3. 7x6 seven times six
4. 12:3 twelve divided by three
5. A>B A is more than B; A is greater than B
6. A<B A is less than B; A is smaller than B
7. A ≥B = A is more or equal than B
8. A ≤B = A is less or equal to B
9. 30 % = thirty per cent
10. A≈B approximately equal to
11. A ±B = plus or minus
12. A x B= multiplied by/times(or, when giving dimensions, by)
13. x2 = x squared
14. x3= x cubed
15. x 4= x to the power of four/five, etc
J) Approximation is expressed by:
- nearly: ...nearly eight thousand pounds for each year;
- just under/over: ...just under the previous figure;
- approximately: ...the rise was approximately equal to the one expected;
- coming/ going up/down to: ...the trend is coming down to...;
- roughly: ...its entry price level was roughly 1 million dollars;
- more or less: ...the fall was more or less of ten pounds;
- well over/under: ...the price raise was under the one predicted by
specialists last year.
K) Rates and ratios are expressed:
- population density per (unit): ten items in one hundred were...
L) When presenting trends, some specific expressions are used:
upward movement:
- a rise: ... a significant rise has occurred in…;
- an increase: ... an incredible increase in real estate prices;
- a climb/jump:... a dramatic jump of the expenditures;
- go up: ... the prices went up substantially last year.
downward movement:
- a fall: ... a dramatic fall in consumers goods sales;
- a drop: a sudden drop in cars sales;
- a decline: ...an important decline is noticed in book sales lately;

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- decrease: ... business sector has decreased gradually.
M) Other ways of expressing tendencies and trends of different
economic phenomena:
- to level out/off: ... the prices leveled out this year;
- to remain stable: ... sales level remained stable for the whole year;
- to fluctuate: ... the export level fluctuated the last years;
- to reach/come to a peak: ... the Japanese car industry reached its peak in
1995.
N) Specific prepositions:
- productivity raised from 50% to 75%
- productivity fell from 60% to 40%
- the salaries in budgetary sectors stayed /stood/remained at the same level
- a basic salary increase of minimum 37,5%
- productivity rose by three percent
O) The extent of change is indicated through certain specific
vocabulary:
- fractionally/marginally/slightly/a little lower/higher
- somewhat lower/higher
-considerably/substantially/a great deal/noticeably/far lower/much
lower/dramatically/lower/higher
- grow - dramatically/sharply/rapidly
- grow gradual/steady fall
P) Contrast is also expressed specifically:
- although/despite/in spite of/whereas/however/nevertheless/
- phrases like: in contrast (to); ...while ...;...against...; ...compared to...; in
comparison (to)... on the other hand...; on the contrary.
R) Similarity is shown using: - like/ alike/ the same/is similar to/ neither...
nor/ similarly
S) Describing size and dimensions:
a. It is 6 meters wide and 12 meters long.
b. It is 6 meters by 12 meters.
c. It is square/rectangular/round
d. It is L-shaped.
e. Its like an H.
f. It has a seating capacity of sixty
g. It can take up to sixty people.

I Read the following aloud:

1. 0. 02 per cent only! Incredible!
2. Room service, for 609, please!
3. I'm shivering! It must be less than 10 degrees below 0.
4. My favorite team won 1-0.
5. My grandmother was born in 1909.
6. We shall get the 209 bus to reach to the zoo.
7. Write down my telephone number: 0945306558.
8. The score has already reached 15-0 for our tennis team.
9. How much did the dollar raise? 5.04 percent.
10. 0 is the first natural figure in mathematics.

II. Read aloud and write the following:

1. The exchange rate has raised 3.233 per cent.
2. The difference is hardly over 0.02 per cent.

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3. The price is around 20.50 in sterling.
4. Repeat, please, 0.25 or 0.025?
5. The dollar rose to 3.595 lei.
6. I said 12.002, not 12,002.
III. Dictate and write:
1. Say it clearly, once again, 2,000,000,000 or 2,000,000?
2. The leu rate of exchange has become more stable in 2004.
3. The denomination of $ banknotes are 1; 2; 5; 10; 20; 50; 500; 10,000.
4. The divisions of the $ are silver coins of 1¢ and 5¢ (nickel), 10¢ (dime);
25¢
(quarter); 50¢ (half a dollar).
IV. Calculate and read aloud:
1. 35+25=
2. 17-12=
3. 4+7+12+9-5-3=
1+2+3+4+5+6+7+8+9=
5. 5 =; 121 =
6. 32 =; 252 =; 35=

V. The following text includes measurements in feet and inches, which

are still used when talking about the people’s height in some English-
speaking countries. However, it is easy to calculate the equivalent
height in meters.
1 foot (‘) = 30 cm 1 inch (“) =2.5 cm
5 feet = 5x30 cm = 1.5 m 6 inch = 6x2.5 = 15 cm
So five feet six (5’6”) = 1.5 m + 15 cm, which is 1.65 m

VI. Look at the way numbers and figures are used in the dialogues.
Compare the spoken form with the written form on the right.
"That'll be thirty-seven pounds twenty, please..." (£37.20)
"Room four oh eight." (408)
"Two hundred divided by one point four equals one hundred and forty-two
pounds eighty-six..." (200:1.4=£142.86)
"... less two pounds commission ... comes to one hundred and forty pounds
eighty-six pence" (- £2.00 = £140.86)

VII. Read these amounts to a partner and get them to make the final
calculation:
1. £2.50+£4.15 =
2. 10% of $150 =
3. 5 x £14 =
4. £206 + £2,324 =
5. $16.95 x 2 =
6. $1000 -10% =
7. €60+ 15% =
8. $4,396 + $3,221 =

VIII. How quickly can you find the answer to this sum?
Five add three, divide by four, subtract one, multiply by six, take away five,
three times, plus eleven, minus four, halved, equals what?

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IX. Give an example of each item below:
1. an odd number
2. a three-figure sum
3. four consecutive numbers
4. a multiple of 17
5. an even number
6. a fraction
7. a number with three digits after the decimal point
8. an equation
X. Write a short paragraph about the beliefs and superstitions you
know about numbers.

After having revised the main ways of using figures in written and oral
English for business, let us have a look on how to use them when having a
business presentation to make possible a correct decision-taking process.
X. Describe the following graphs:

a) b) c)

…………………..d) e) f)

XI. Name the following types of graphs:

1. column chart; 2. pie chart; 3. stacked chart; 4. doughnut chart; 5. bar
chart.

35
30
25
20
15
10
5
0
Jan Feb Mar Apr May Jun

a)

15
 Food

Jan
Feb
Mar
Apr
May
Jun

b)

70

60

50

40

30 Motel
Gas
20 Food

10

0
Jan
Feb
Mar
Apr
May
Jun

c)

4%
10%

24%

62%

d)

16
 Japan 4

Others 10

Europe 24

America 62

0 10 20 30 40 50 60 70

e)

XII. Read the following introduction text describing the development

of ATM use and its future growth. Look at the graph and complete its
description.
More ATMs
Between 1998 and 2004 world automatic teller machine (ATM)
installations were predicted to rise by 45% according to Retail Banking
Research. The growth began immediately after 1975 and...

1200
1100
1000
..900
..800
..700
600
500
400

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XV. Translate into English:
A.
Agenţia de turism J’Info Tours a înregistrat în această vară o creştere cu
peste 3o% a numărului de clienţi faţă de perioada similară a anului trecut,
fiind estimată o cifră de afaceri pentru acest an, de aproximativ 11 milioane de
dolari, superioară cu 30% încasărilor din 2001. In perioada mai-septembrie,
această agenţie a avut în total 12.000 de clienţi, dintre care peste 8.000 au
fost turişti români, 1.500 au fost străini, iar restul este reprezentat de
participanţii la diverse congrese şi conferinţe internaţionale. Cele mai
importante creşteri ale numărului de clienţi au fost înregistrate la plecările în
străinătate şi la sectorul de business. Destinaţia preferată a turiştilor români
care şi-au petrecut concediile în străinătate a fost în acest an Spania, motiv
pentru care agenţia a organizat curse charter în colaborare cu operatorul
SpainAir.
B. Principala forţă a Ordinului Templierilor rămâneau afacerile monetare.
Intrucât dispuneau de sedii întărite şi puternice forţe de apărare într-o epocă
de arbitrar şi nesiguranţă, templierii ofereau clientelei, în care se includeau şi
capete încoronate, locuri de siguranţă destinate depozitării banilor şi obiectelor
preţioase, convoaie puternic escortate pentru transportarea valorilor,
ascunzători în care se puteau face depuneri tainice.
Având la dispoziţie resurse imense, templierii erau în măsură să acorde
împrumuturi care, din punct de vedere valoric, nu îşi aveau egal pe atunci.
Amănuntele operaţiunilor au rămas învăluite de mister şi nu se cunosc prea
multe despre termene şi dobânzi. Dar este ştiut faptul că ordinul s-a ocupat,
între altele, de finanţarea celor mai importante acţiuni întreprinse în acele
vremuri - cruciadele. Astfel, au fost făcute transferuri de aur dispuse de
suverani pontifi, mari avansuri acordate regelui Ludovic al VII-lea pentru a
porni spre locurile sfinte; mai târziu au fost plătite soldele trupelor trimise
acolo de Ludovic al IX-lea; alt client important, cu ocazia cruciadelor, era
faimosul rege britanic Richard Inimă de Leu.

18
 UNIT 3
DRAFTING FORMAL WRITTEN DOCUMENTS

Objectives:
- make familiar with general formal rules in business letter
writing
- use appropriate tone, attitude and vocabulary

Letter Layout and Style of Formal Business Letters

When preparing for a successful and effective written business message,
it is important to have in mind several steps to take even if your organization
has the best modern office technology for inputting ideas, processing
messages, and storing, retrieving, reproducing and disseminating them:
planning, organizing, composing, drafting, editing and revising. The written
message must also be proofread and corrected before being mailed, sent by
fax or by Internet.
Apart for the specific purpose of the written message, there is the
underlying general purpose of building goodwill. In a refusal o a collection
letter, the purpose should be twofold – to refuse the request or ask for money,
but also to maintain the customer’s goodwill. For this reason, the writer must
take into account his message adapting to the recipient’s views and needs,
even if the sender has never met him or her. It is of great help to picture the
recipient, - a business or professional person; a superior (boss), colleague, or
subordinate; man or woman; new or longtime customer; young, middle aged
or elderly; educational level, attitudes. All types of communication will also
take into account areas in which the recipient is well informed, pleased or
displeased, positive or negative, or neutral; interested, enthusiastic or
uninterested or unreceptive.
The next step is to choose the ideas to be written. When replying to a
letter the main points to be dealt with can be jotted briefly in the margin or on
a memo pad. For a welcome letter for a new customer, that selected your
bank, for example to open an account, only one or two sentences will not
suffice. He should be made aware of your bank policy concerning the opening
accounts, and the message will also contain information about overall services
available to them and the sender’s association eagerness to become his
financial headquarters.
After deciding what ideas to include it is important to select any specific
facts, updated figures or quotations according to the sender’s organization
policies, procedures.
The order, in which the ideas are outlined, is often as important as the
ideas themselves, as disorganized writing reflects disorganized, illogical
thought process or careless preparation. The organizational plan will be
pendent on the reaction expected from the recipient: direct-request; good-
news, bad news, or persuasive request plan.

19
 These are considered flexible guide patterns.
A direct approach can be used when the message conveys good news,
favorable or neutral information or exchange routine information between
companies. The direct-request plan is used when the main purpose of the
letter is making a request that requires no persuasion.
Direct-Request Plan/Good-News Plan

1. Main idea/Best news

- request, main statement, or question
- reasons
2. Explanations
- all necessary details
- easy-reading devices
- educational material
- promotion material
3. Courteous close, with motivation to action
- clear statement of action desired
- easy action
- appreciation and goodwill
The indirect-approach is used when an unfavorable reaction is expected
to the information or request conveyed by the message. The main idea will
never be present in the first paragraph. Some relevant, pleasant, neutral or
receiver-benefit statements and then some reasonable explanations before the
introduction of the unpleasant idea will take its place.
Bad-News/Persuasive-Request Plan
1. Pleasant, neutral or reader’s interest statements
2. Explanation
- details, tactfully stated
3. Decision implied/statement of request and offer of additional help
or suggestion
4. Positive, friendly close/action
- invitation to future action/clear statement of action desired
- easy action (stamped envelope, etc); dated action
- willingness of further help
- recipient benefit
Mind the following formal characteristics of a business letter shown in
the following pieces of correspondence:

Main Idea
Main Idea

20
ICC

INTERNATIONAL CHAMBER OF COMMERCE

The World Business Organization
Department of Commissions

Mr. Hernando Zerda N.

International Trade Office
Ecopetrol
Fax 563 447 2465
2 November 2000

Dear Mr. Zerda,

With regard to your query number T.S.134 to the ICC Banking Commission, please be
advised that our initial response to this query, set out in our letter to you of 15
September, 2000, has been amended by the Banking Commission at its meeting of
October 3-4. The full-amended text is the official response of the Banking Commission
to your query. Please find below the opinion of the officers of the Banking Commission.

ANALYSIS & CONCLUSION

1. Sub-article 39b covers the situation where the credit prohibits partial shipments and
the quantity of goods shown in the credit is not given as individual items or packing
units. This could be where there is no quantity described or where the quantity is
expressed as a unit of weight such as metric tons. In these circumstances, the
beneficiary has the ability to ship up to 5% less or 5% more provided the credit
amount is not exceeded. If the shipment falls within 5% less than a quantity stated it
will be deemed to be a partial shipment.
2. When issuing credits, banks wish to be aware of the total liability hereunder
therefore the credit needs to express a maximum amount that could possibly be drawn
hereunder. The credit would then have a clause that states that only one drawing is
allowed hereunder and the drawing may be for any value not exceeding the value of
the credit. In this way the provisions of Article 39 would not apply.

The opinion rendered on this query reflects the opinion of the ICC Banking
Commission.

Neither the ICC nor any of its employees, nor any member of the Banking Commission,
shall be liable to any person for any loss or damage arising out of any act or omission
in connection with the rendered opinion.
Yours sincerely,
Ron Kats,
Policy Manager - Banking Commission

The letter shown is sent from an institution (International Chamber of

Commerce to an individual as an answer to his inquiry. The first main parts of
a business letter is the letterhead that is printed on the top of the sheet of
paper, usually of white color, It can be replaced by the sender’s address which
is usually placed on the top left hand side of the letter. It is of considerable
assistance to business correspondence when letters include the sender’s name
and appropriate letters at the top:
“From Dir. Marshall, Sir David Smith, K.L.T.” (The custom of printing
letters after people’s names has arisen in modern times and has been
determined by the great expansion of the Orders of Chivalry and higher
honors, together with the multiplication of degrees and appointments. In

21
business and officially it is polite to get all that lettering right: Letters are but
abbreviations, and customs has evolved certain standards abbreviations and
most people seek guidance about conventions.)
A reply is often wrongly addressed because the writer has no
knowledge of the letter’s recipient or sometimes his or her rank. When the
writer is a woman, the practice gives the recipient the advantage of knowing
whether she should be styled with a title (Lady Brown) or, much more often,
Mrs. or Miss Brown. One also knows that the correct form of address is Mrs.
Joan Davidson, instead of, according to her signature, “Mrs. Davidson Joan”,
or “Mrs. J. Davidson”. “Esq.” or “Mr.” may be omitted because it sounds
pretentious, but it presents no difficulty to which it replies.
This system has some advantages over typing the name under the
signature. It is not customary to include the letters after the name here and
seldom a title.
The inside or the receiver’s address is positioned on the left hand side,
also, under the letterhead. It will contain either the surname of the addressee
if the writer knows it, on the first line of the address, preceded by a courtesy
title or the person’s initial(s) or his or her first given name. The writer should
know or be able to assume the addressee’s position in the company (Sales
Manager, The Finance Director, etc). The letter can be also addressed to a
particular department of the company. If the sender does not have any
information about the person or department, the letter should go to, he can
simply address it to the company itself. In UK, after the name of the
addressee the followings are written in the order:
Name of the building
Number building and name of the street, road, or avenue
Name of town or city and the postcode
Name of the country
Or the number of the fax code or/Internet address
Both the addresses may be “blocked” (i.e. each line is vertically aligned
with the one above), or indented.
There are no rules stating that one style or other must be used, but any
of them used, the writer must be consistent, i.e. not to block the sender’s
address and then indent the inside address or the body of the letter.
A comma, except for the last line, can follow each line of the address
but the majority of firms now use the open punctuation, i.e. without commas.
In order to direct the letter to a certain addressee, there is also the
alternative “Attention line”:
For the attention of the Security Department:
For the attention of the Deputy General Manager
Which is placed between the date and the salutation line.
The date is written below the sender’s address, separated by it with a
space, on the right hand side of the page. The month should not be written in
figures, as they can become confusing. Should be abbreviated, as it simply
looks untidy. It takes a moment to write the date in full, but it can take a lot
longer to

22
find a misfiled letter that was put in the wrong file because the date was
written in a confusing way.
As a salutation line is usually used “Dear…”. The American Style of
including both the Christian and the surname is growing in Europe, for
example “Dear John Watson”. The younger generation considers it to be useful
in the business world where informality is on the increase.

When corresponding with a firm, letters should be addressed to an

individual, whenever possible, such as the Chairman, The Managing Director,
The Secretary or The Manager. When a firm writes to another firm
“Gentlemen” is used instead of the usual “Dear Sir”, which is also adopted by
a private individual when addressing to an organization or group.
“ Mesdames is not normally used in business letters and it can be avoided
by writing Dear Madam” or “Dear Mrs. Stephenson”. “Messrs” has become
archaic but it is still used for the profession of law or to firms with personal
names: “Messrs Berkley & Co. “Messrs John & Mary Bloomfield”, but it is never
used when the firm’s name bears a lady’s name: “Josephine Dowel &
Associates”.
The body of the letter may be full-block or indented, according to the
sender’s wish. The length of the letter depends on the subject, but the right
length includes the right amount of information. The letter should also make
all the necessary points in a logical sequence, with each idea or piece of
information linking up with the previous one in a pattern that can be followed.
No jumping around statements or switching to other subjects are allowed.
Before passing to the drafting of the letter, it is advisable to make a plan and
then check if all the necessary information was included and put it into the
right order.
The first paragraph of the letter will settle the tone of the whole letter,
and gives the reader his first impression about the writer and the company.
The writer should thank his correspondent if he is replying to him, setting also
the purpose of the letter.
The main paragraph will concern the points that need to be made,
answers to give or questions to ask.
When closing the letter a thank-you line should be included in the letter
as a reply if there was not such a line in the beginning. The letter will invite for
further enquiries or correspondence and mention that the writer looks forward
to hearing from the addressee soon.
Simplicity and clear style, accuracy of the business letter lead to a
better understanding and closer relationship of the business partners. But the
style should not, however, be so simple that the letter become discourteous,
and sound rude: complex sentences, passive rather than active, full forms,
rather than abbreviated ones should be used.
The stereotype formal style of ending business letters has become
almost obsolete, except for official and formal letters to Ambassadors, High
Commissioners, Governors, senior officials. The following endings of letters are
now generally used, but the very formal style may occasionally be preferred:
Formal: I remain (or am)
Your Grace, Most Reverend Sir, Right Reverend Sir, Your Excellency, My Lord,
Mr. President, Mr. Chairman, Sir, Madam, etc.

23
“Yours Faithfully,” (or “Yours truly”)

24
 “Faithfully” is used on a matter of business, but “truly” is used when the
writer does not know the recipient, but the subject of the letter is not
business. For social style of ending a letter “Yours sincerely” (or “Yours very
sincerely”) is commonly used.
It is important that the letter actually have the right documents
enclosed: if, in the body of the letter a document is mentioned as enclosed,
the writer makes sure that it is that document itself enclosed, with it specific
number of pages registered also on the bottom of the letter.
The signature of the sender is laid on the right hand side of the letter,
after the name of the writer and position typed not to induce confusion for the
receiver. When the person entitled to sign the letter is not available, then a
“p.p.” is mentioned down before the signature to make the receiver
understand who signs the letter actually.
When not having a letterhead, the sender's address is written on the top
right-hand side of the page. As for the date, the abbreviation "th" can be left
out after the date: e.g. June 12 instead of June 12th. The inside address
(receiver's address) is written below the sender's address, on the opposite
side of the page. When writing the salutation line, the surname of the
addressee is to be written when it is known, preceded by a courtesy title. If
you know nothing about the 5) company you are addressing to, the letter can
be addressed simply to the company itself. If the letter begins with "Dear Sir/
Sirs/ Madam", it will close with "Yours faithfully", but if it begins with "Dear
Mr. Peter/ Mrs. Weldon/ Ms. Duddles, it ends with "Yours sincerely". At the
end, it is common and safe to sign with the given name and title.
So that your written and oral communication will be easily
understood, friendly and accurate, make your message clear by using words
that are familiar to your receiver. Aim for unity, coherence, and emphasis in
your sentences and paragraphs. Have an average sentence length of around
15-20 words and an average sentence length of around 4-5 lines in letters and
8-9 lines in reports.
To make figures stand out clearly, you may find headings to be useful.
Give your reader examples with appropriate easy-to-read characteristics or
other visual aids. The courteous communicator is sincerely tactful and
appreciative: he omits expressions that irritate, belittle, or have questionable
humor and he also grants and apologizes and answers mail as soon as
possible.
Overall corectness requires correct language level and accurate facts,
figures, word choices, grammar, spelling and punctuation. Nondiscrimination
toward people because of their gender, race, ethnic origin or physical
disableness is necessary.
The body of the letter should be displayed in a block form or indented.
Whichever style you use, you must be consistent and use that style all through
the letter. Mind the different styles of the two letters:

25
A.

Dear Sirs:

Thank you for your letter of 7th March in which you enquire about insurance cover
for your shipments of computer components from Sydney to Rio de Janeiro.

In view of the very different nature of the consignments, I would recommend that
you adopt two different solutions. I suggest that you take out our marine all-risk
valued policy. This provides cover against all standards risks such as wreckage, fire,
theft and damage while loading and unloading, but you would be also strongly
advised to include a "with particular average" clause. Thus, in the event of barratry
(voluntary damage to goods in order to save the rest of the cargo) you would receive
compensation.

This solution would mean a policy at 70p% and therefore a total premium of
$564,390, but the extra outlay is less worthwhile. for the extent of cover provided.

Should you require further information, please do not hesitate to contact us.
Yours faithfully,

T.L. Lawrence
Insurance agent

The Commercial Bank Ltd

Stratford Street Branch
Barcelona

26
CAS
Blvd. des Italiens
3256
France

Dear Sirs,

We are still missing your reply to our letter of December 16 (a photocopy is

enclosed).
As we have not advised our customer due to the difference in the amount
claimed and the invoices, please advise us as soon as possible whether the
documents may be released against payment of FF 32,305,413.
As already advised, the relative documents are held at your disposal.

Yours faithfully

D. Bartolomeo

Encl: Letter No. 237/December, 16 2001

27
EXERCISES
I. Look at the following letter structure and identify its main parts and
their position: a) date; b) letterhead; c) subject line; d) inside
address; e) copies; f) body ; g) reference line; h) salutation line; i)
signature; j) complimentary line.

28
II. Correct the following sentences so that the meanings become
clear. If necessary use more than one concise sentence:

From one insurance company to another insurance company:

Frankly, the information we have while it may disclose some
contributory negligence on our assured's part which of course, is questionable,
we still feel that your assured had he not been driving at the high rate of
speed, that he was could have swerved to his right and avoided our assured's
vehicle but due to the fact he was coming down a hill at such a tremendous
rate of speed with no control over his car and struck our assured there was
enough room to the right of our assured to have turned slightly and,
therefore, avoided the accident.
III. Match the following "main parts" of a business letter with their
"content" and those from the letter before: 1. letterhead; 2. inside
address; 3. attention line; 4. addressing line (salutation line) 5.
reference line/ subject line; 6; body of the letter; 7. date; 8.
complimentary close; 9. signature; 10. enclosure; 11. copies.

a) draws attention to the topic of the letter and it can be used as

reference throughout the letter; b) usually at the end of the letter when copies
are sent to people other than the named recipient (c.c. - carbon copy); c)
main part of a business letter containing: name and type of the company, the
address of the main office or registered office, telephone, fax, the registered
number with the country or city in which the company was registered, the logo
of the company; d) ending line of a business letter before the signature: G.B.
Yours faithfully, Faithfully yours, Sincerely; U.S.A.: Yours truly; e) the address
of the addressee; f) It will include the typed position in the firm; p.p. (per pro)
means for and on behalf of; g) the content of the letter; h) reference to a
certain person in the recipient firm: for the attention of / private and
confidential; i) courtesy titles: Dear Sirs (U.S.A. Gentlemen)/Sir/ Madam/ Sir
or Madam; Dear Mr./Mrs./Miss./Ms.; j) copies of the letter sent to other
recipients or different other documents attached; k) written below the sender's
address or in the right hand side of the page: month never written in figures
or in short.

IV. Write Letter, Fax, or e-mail next to each of these descriptions:

1. This is used in routine day-to-day communication where the correct choice
of words is not so important. The subject title is important to help the reader
find it in files later. The style is informal and very direct. The content is very
short as only the basic information is mentioned.
2. This is used for those situations where the writer wants to make a good
impression or where the correct choice of words is important (e.g.) for a first
contact with a possible new customer or for making a complaint). The style is
careful and polite and there is much use of standard expression.
3. This is used for some day-to-day communication, particularly to transmit
copies of documents that are not in electronic form. Then style is intermediate
and depends on who will read it: informal, direct language can be mixed with
some longer, standard expressions.

29
 UNIT 4
EMPLOYMENT FILE; JOB INTERVIEW
Objectives:

- students will learn to self assess: draft application letter; CV; prepare
the interview
- formal letter skills development
- interviewing skills

ROMANIA CABLE SYSTEMS

Is looking for:
FINANCIAL EXECUTIVE FOR RCS OPERATIONS IN HUNGARY
Requirements:
Relevant bachelor degree (post graduation degree is a plus)
Minimum 3 year experience as consultant in international company
Very good knowledge in International Accounting Standards
Relevant experience in preparation of consolidated accounts
Fluency in English is a must
Knowledge of Hungarian is an advantage
__________________________________________________________
Candidates should send their CV and letter of intention to :39.20.832,
latest 28.10.2000

INSURANCE TRAINEE
$5,000 per annum plus bonus plus luncheon vouchers
We are seeking a young ambitious person with
mathematical ability, to be trained an all aspects of marine
insurance. Full training will be given.
Call 001 342 9044 for further details and speak to Philip
Donaldson
Philip Donaldson Insurance Brokers

It is highly likely that you will change jobs and positions several times
during your life. Responding to advertisements, to posted job openings in your
current organization or to recruiters’ demands, some form of written
presentation. Most "ads" use abbreviated forms: "Wntd" (wanted); "smll co"
(small company); "slry" (salary); "usl bnfts" (usual benefits); "clk" (clerk);
"accnts" (accounts); "mngr" (manager); "asst" (assistant), "vcs" (vacations);
etc.
When you seek a first position or you desire a new position, you must
promote and "sell" yourself as a product. Therefore, market research is
needed concerning job and career opportunities before starting to write and
make a product attributes analysis that will attract the employer.
For an adequate self-appraisal take an inventory of your employment
qualifications. List your specific achievements, capabilities, interests, attitudes
and characteristics under certain heading:

30
1. Work experience: dates, employers, titles, duties, responsibilities,
successes, promotions.

31
2. Education: schools you attended: junior colleges, colleges, universities,
technical schools, -dates, names, locations, degrees, scholastic standing in
each, accomplishments.
3. Extracurricular and professional organization achievements: membership in
sports, church, social community, projects, coaching, student teaching,
tutoring; achievements, honors, awards-scholarships, honor rolls,
recognitions.
4. Interests, preferences, attitudes: integrity, enthusiasm, dependability,
ability to communicate in writing and orally, intelligence, ability to listen,
maturity, analytical, ability, to cooperate with others, emotional stability,
decision-making ability, capacity of leadership, self-confidence, adaptability,
sense of humor, determination, health and energy, etc, etc.
The next step will be your job-getting campaign and determine which
job and employers require what you have to offer. Published sources and
various people can help to inform you about careers and jobs available in your
domain. Annual reports, recruiting booklets, occasional articles in business and
professional journals present companies' new ventures, expansions, additional
products.
After having evaluated your assets, and researched job opportunities
and employers' requirements, you are ready to prepare your written "sales
promotion". Prepare a CV (resume) organizing pertinent facts under
appropriate headings, emphasize your strong points honestly. Write then an
application letter.

4.1. CV (Resume)
The CV gives the reader a general image of the applicant - who you are,
what you want, what you have to offer, where you can be contacted.
Prepare your resume ready for any time you may need it. Its content
will provide information required by any employer and its layout will follow
some general rules. Dates may be arranged in reverse chronological order, if
preferred, and the headings and dates are placed usually either on the left
margin or centered, and the subheadings begin at the left margin and dates
near the end of the same line. It is desirable that the CV have only one page.
The content will comprise:
I) Opening section:
a) Your name, address, telephone number
b) job or career objective
II) Summary of basic qualifications
a) Education
-school names and locations, dates attended, degrees, certificates
-major, significant courses; academic honors, grade-point average if
high; achievements
III) Work experience
- employers' names and locations, dates (beginning and ending month
and

32
year), titles, positions, specific accomplishments
- volunteer work, research, publications

IV) Achievements, awards

-honors, publications
-travel, foreign languages, self-support, other facts

V) Personal data
-age, health, military service, hobbies
VI) References -usually provided upon request

4.2. Cover Letter

What Experts Say About Cover Letter

" ... you need to make it easy for the employer to buy. You need to clearly
state when you will be available to talk to the employer. Be specific: give
telephone numbers where you can be reached both at work and off work. You
could have a tremendous background and see yourself very well, but if the
employer can't reach you, everything could be lost."
(Lola M. Crawford, Resume Writing Made Easy)
"A CV without a cover letter is like an unannounced sales person
showing up at your door. If you are going to let in a perfect stranger, you at
least, want to see their credentials. This is exactly what a cover letter does- it
introduces you, a total stranger to the reader. It must be compelling,
personable, and brief. It needs to specifically relate to the position in question.
Remember you only have eight seconds to convince the reader to invite you
in".
(Barbara B. Vinitsky and Janice Y. Benjamin, "How to become Happily
Employed")
"No cover letter should carry the salutation: 'To whom it may concern'.
It will concern no one if you don't personalize it. The surest way to get the
information is to find the name in trade journals or call the company and ask
for the name of the appropriate person".
(Kenneth and Sheryl Dawson, Job Search, The Total System)

„The cover letter is rarely anything but a liability, but you must include it
because its absence is worse".
(Jeff B. Speck, Hot Tips, Sneaky Tricks & Last Ditch Tactics)
"Poor grammar, bad punctuation, and misspelled words suggest that the
applicant is either poorly educated or simply doesn't care about the impression
created. The chances are unusually high that the employer is going to forgo
reading the accompanying resume and quickly move on to the next job
applicant".
(Richard H. Beatty, The Perfect Cover Letter)

33
 A cover letter should be sent together with the applications forms and
C.V., either explaining points that might not be clear, or giving information to
emphasize your suitability for the job. The cover letter should not be used to
repeat the details of your resume, such as work history, education, or personal
objectives. The CV is about you, your experience and your skills. The cover
letter is about what you can do for the employer.
What the cover letter should contain:
The first paragraph needs to grab the hiring manager's attention: you
are interested in the company and you want to fill a need they have. Show
that you work in the same field, that you have common professional interests,
or you have been following the company in the news. Mention the source of
information: a mutual friend or an associate. The manager will feel more
obligated to reply to your letter. Be as specific as possible: Don't just mention
the job position, but describe what the company requires from the position.
In the second part of the letter state briefly the skills you bring that will
specifically meet the employer's needs. The CV will give details.
This section will highlight the way you will use your endowments and
experience to benefit of the company. The use of the personal pronoun is to
be kept at a minimum. It can be used this way: "Here is how I can help you".
The letter will close by indicating what you would like to happen next.
Take action: Tell the potential employer where you can be reached, either by
phone or by e-mail, but don't wait for his or her call. Let him know that if you
don't hear from them within a few days, you will follow up with a phone call to
make sure your CV and cover letter have reached the intended recipient, and
to settle an interview. Be assertive but polite.
As for the formatting of the cover letter there are some basic rules to
keep in mind when drafting it.
A three-line block, flush left, one space below the date and one space
above the greeting. This block contains the address, the zip code, and the
date. (The date may be separated from the block by one line)
Another three-line block, flush, one space below the date and one space
above the greeting. This block contains the addressee's full name and address,
including zip code.
A colon is better to use instead of a comma. The greeting should
address a specific person in a formal manner: Dear Mr. Johnson, but not Dear
William. If you don't know the name, address the letter to "Hiring Manager",
"Human Resources Manager" or simply "Manager".
You may use bullets and bold print in the body of your cover letter to
organize and highlight information, and make it easier to read. If you do
decide to use them, do it conservatively.
The closing should read Sincerely, because you don't know the person.
Leave enough room for the signature between the closing and your name
when you print your cover letter.

34
EXERCISES
I. Mind the following text of a cover letter and comment upon the
ideas, their order and tone. Match the following parts where possible:

a) If the name of the person you are to write to is given in the advertisement,
then include their name in the salutation.
b) In the first body paragraph give examples of what you do now and
underline how that makes you suitable for the post you are applying for.
c) Remember that if you begin the letter Dear Sir or Madam, then you should
end “Yours sincerely,” If you include the person’s name in the salutation, end
the letter with “Yours faithfully,”
d) Make yourself as flexible as possible when it comes to interview availability.
e) The heading gives a quick idea as to the content of the letter. The harassed
reader can see at a glance what the letter is about.
f) Always quote the reference number if it appears in the advertisement.
g) In the second paragraph outline what you would expect from the job.
Sound enthusiastic about it. Let your prospective employer know you feel
challenged by and you are confident that you have the requisites to meet that
challenge.
h) Read the advert carefully, and in the body of your letter refer to all the
points about the job that were mentioned there.
i) It’s best to put the phone number at the top left, so that the reader doesn’t
mix it up with the address.
j) Always include the post code (GB) or the zip code (US) with the address.
k) Check in the advert if you need to ask for an application form or a full job
description.

35
November, 15, 2001

Astoria Federal Savings

Dear Sir or Madam,

Please consider my enclosed curriculum vitae in application for the position of

Personal Banker as announced on the Internet, on www.careerbuilder.com.

I am particularly interested in your announced position because of your stated

desire for a person able to fulfill the mentioned responsibilities. As you will
see in my curriculum vitae, my continuing interest in this field is reflected not
only in my education but also in the additional courses I have taken and the
work experience I have achieved.

I am willing, qualified and experienced in the area, I have excellent

communication skills and my PC literacy, as mentioned in the CV is fully
satisfactory. As far as the customer service background is concerned, I
developed specific skills during my last job, which offered me the opportunity
to meet various customers but did not meet my work location and work time
conditions.

I am aware of the reputation of Astoria Federal Savings and I believe I can

make a meaningful contribution to the Marketing Department.

Thank you for considering my application. I look forward to meeting you in

Suffolk at your convenience.

Sincerely,

Anita Smithfield

36
4.3. JOB INTERVIEW

The employment interview is one of the most important events in the

average person's experience, as the 20-30 minutes spent with the interviewer
may determine entirely the future course of one's life. The marks of
inexperience can be avoided by knowing a little of that actually is expected of
you and by making a few simple preparations before the interview.
Whether you are the interviewer or the interviewed person, you should
plan the following steps:
a) know the specific purpose;
b) find out as much as possible about the other person - name, position,
attitude, work, needs, background, biases;
c) collect all the necessary facts and materials for attaining the
objectives.
d) plan questions you will ask and consider answers you may give to
questions of the other person asks you;
As for the interviewee, he should prepare himself mentally for success,
and add some other particular aspects:

a) the applicant should know himself - compare his or her strengths and
weaknesses with the job requirements;
b) read the latest annual report of the company or on-line database, talk to
friends who work for that company;
c) know the current beginning salary range for your type of job and
experience;
d) pay a lot of attention to your appearance as it always conveys significant
non-verbal impression. Wear conservative, neatly pressed, appropriate
clothing of good quality. Avoid gaudy colors and style (Men suits and ties, and
women tailored skirted suits). Be well groomed, with a neat hairstyle, clean
fingernails and shined, unstuffy shoes. A pleasant smile is desirable;
e) know exactly when and where the interview will be held. Arrive a few
minutes before. Know the interviewer’s name and how is it pronounced;
f) rehearse your opening statement and handshake perhaps in front of a
mirror;
g) avoid negative body language as signs of nervousness and tension:
frequently touching your mouth, faking a cough to think about the answer;
gnawing on your lip; tight or forced smile; swinging your foot or leg; folding or
crossing your arms, slouching, avoiding eye contact; picking at invisible bits of
lint, etc.

EXERCISES
I. Separate the following attitudes according to the table

37
 A. Desirable Behavior B. Attitudes to avoid

1. Stick to the facts, state achievements without exaggeration.

2. Use expressions that indicate you are competent and dependable, with a
positive attitude.
3. Smoke and use the first name (unless invited to do so), show disinterest,
chewing gum, doodling.
4. Let the interviewer finish each question, then reply precisely to the
question. Link your achievements to this answer.
5. Use expressions like: "yeah", "y' know", "cool", "stuff like that".
6. Make negative reference about former teachers or employers.
7. Tactfully relate your achievements to employer's needs whenever possible.
8. Show superiority complex and "know-it-all" feeling.
9. Take a time to weigh pros and cons of an idea- note the long and short-
term benefits and consequences of your decision.
10. Communicate clearly and accurately.

II. Mind the body language; add to the list different other significant
gestures in business:
- don’t display dominant body positions, such as standing too upright, or
with hands on your hips and your elbows sticking out, that would suggest too
much confidence and dominance.
- business man should smile and raise his eyebrows when meeting his
partners, estimate the physical distance between them. An acceptable
distance in Western Europe is an arm’s length, but an elbow length is suitable
in the Mediterranean, and closer contact is acceptable in Eastern Europe
- when covering the mouth, or touching the nose, means that the
partner does not necessarily tell the truth, or he is thinking, or he thinks that
the interlocutor is lying.
- crossing legs in front of an American customer, should appear rather
effeminate
- using hands when expressing an opinion represents vagueness
- open palm indicates firmness, truth, honesty and sometime
submission
- persuasiveness can be increased by an open body position when
addressing to an audience – arms and legs outward, upright position, frequent
head nods and hand gestures

III. Answer sincerely to the typical questions of an interview where

possible:
1. Why did you leave the last job?
2. What are your future vocational plans?
3. What sort of professional position are you most interested in?
4. What course did you like best? Least?

38
5. What do you know about our company?
6. Why did you choose to work with us?
7. Do you prefer working with us or by yourself?
8. Can you take instructions without feeling upset?
9. Do you like routine work?
10. What size of city do you prefer?
11. Mention your major weakness.
12. What kind of books do you prefer?
13. What is the last book you read and when?
14. Describe your special abilities.
15. Mention the disadvantages of the professional field you chose.
16. Tell me about likes and dislikes of your last position.
17. Describe me a difficult situation you handled in your last position.
18. Mention some short-term and long-term goals. (5 and 15 years)

IV. After the interview send a brief "thank-you note" or an "e-mail"

through the Internet (if the job contact was made through the
Internet or e-mail) immediately after the interview, then mail a
second letter by post timed to arrive the week before the hiring
decision will be made.

V. Translate into English:

a) Din moment ce este destul de uşor să faci un "click" pe un site, mulţi
dintre candidaţi presupun, în mod eronat, că este la fel de uşor să-ţi găseşti şi
de lucru prin Internet, astfel încât ei renunţă să mai urmnărească anunţurile
de angajare care apar în diverse publicaţii. Căutarea Locului de muncă în
variantă electronică presupune aceleaşi abilităţi ca şi în cazul cautării
tradiţionale. Candidatul trebuie să facă cercetări, să-şi stabilească obiectivele,
să fie răbdător şi să muncească pentru a avea succes.
b) Pentru businessmeni, selectarea ţinutei trebuie făcută ţinând cont de
interlocutorii profesionali din timpul zilei. In cazul unei călătorii de afaceri
peste hotare, ţara vizitată trebuie să reprezinte un factor cheie în selectarea
hainelor. Faceţi o impresie mai buna superiorului dvs dacă vă îmbrăcaţi mai
formal. Felul în care vă îmbrăcaţi vă influeţeaza direct chiar nivelul salariului
sau al cifrei de afaceri.
c) Pregătirea unui interviu înseamnă să fii obişnuit cu prezentarea
propriilor calităţi şi mai ales a felului în care aceste calităţi pot prezenta un
avantaj pentru un potenţial angajator. Iată câteva întrebări tipice pentru un
interviu:
"Spune-mi câte ceva despre tine!" Ţi se cere o descriere scurtaă, bine
organizată a pregătirii tale, a carierei profesionale, a principalelor realizări şi a
obiectivelor de viitor.
De ce doriţi să lucraţi la noi? Ce cunoaşteţi despre societatea noastră?
Ce cărţi vă place să citiţi? Cum vă petreceţi timpul liber? Spuneţi-ne câte ceva
despre avantajele şi dezavantajele trăsăturilor dumneavoastră de caracter?

39
 UNIT 5
INTERNAL FORMAL BUSINESS DOCUMENTS

Objectives:
- familiarize with the principles and rules of internal documents drafting
and wording
- get used with the formal rules of drafting formal internal documents

Human activity of an organization is based on exchange of information,

ideas, plans; the decision-making process implies internal communication in
oral and written forms, making rules, proposals, concluding contracts and
agreements. Both within and outside, communication is the lifeblood of the
effectiveness of any organization.
The company's goals are attained due to "downward", "upward" and
"horizontal" effective communication. If the employees receive appropriate
downward messages from the management they become more motivated and
more efficient. They need and want not only clear job directions and rules of
the activity in the organization, but also information about the strategy of the
company, viewpoints on controversial matters. They need clear and correct
information about their benefits- health care, fringe benefits, promotions,
pensions, training, and work environment. Employers are then accountable for
their decisions through effective downward communication. Upward internal
communication has become increasingly more significant as the executives
seek for comments from employees on controversial issues, listen more
closely to their opinions, complaints, problems, suggestions turning them into
participants to the management of the company.
Horizontal communication is also important for the effectiveness of the
company's activity. Peers must exchange information and ideas to solve
problems, perform job duties, prepare for meetings, and cooperate on
important projects.
Memorandums, staff meeting reports, meetings, teleconferencing and
videoconferencing, audiotapes, represent some ways of internal
communication within companies. But there is still another oral communication
channel, though unplanned by the sender, the "grapevine" through which
news and rumors often travel quickly -often times quite accurately, sometimes
inaccurately.

EXERCISES

I. Fill in the blanks the following words: a) executives; b) messages;

c) mail, d) devoted; e) generate; f) alienate.

Thousands of hours are 1) ___________ daily to interviews, conferences,

memos, reports, employees' manuals, letters, advertising, news articles, bulletins,
newsletters and other types of messages. 2) ________ and their assistants need time
for researching, thinking, planning, organizing, dictating, typing, editing, revising,

40
proofreading, mailing, presenting and filing records. Computers, electronic
3) ___________, videoconferences, are developments and ways to reduce costs and
time of communicating efficiently. A significant fact to be considered is the wasteful
cost of poor messages, inaccurate, inconsiderate unduly long and late communication
that destroys goodwill and 4) _________ customers. They require additional 5)
_________, or they can determine even loss of life or money. It is worth bearing in
mind that successful messages help 6) __________ efficiency, goodwill, safety, profits
and public credibility.

II. Match the words with the definitions: A) denotations; B)

connotations; C) euphemisms; D) bypassed instructions.

1) The meaning on which most people will probably agree according to the dictionary
definition.
2) Communication errors when instructing or discussing issues; words or sentences
may convey unclear messages to the recipient; he should ask before putting them to
practice, to determine the sender's intended meaning.
3) Mild, innovative expressions with which most people do not have negative
associations. E.g.: maintenance worker or staff member instead of janitor; slender
instead of skinny; laid off, terminated instead of victim of reorganization or staff
cutbacks.
4. Qualitative judgments and personal reactions added to the connotative meaning of
words: "Director's lounge", "executive suite", "rickety firetrap", and "rat-filled joint".
They tell how the communicator evaluates the subject.

III. Make the difference between connotations and denotations:

Free enterprise Sucker (customer)

Free manners Sucker (candy)
Cheap product Cheap price

IV. What was the feedback of the new employee?

An office manager handed a new assistant a letter, with the instruction "Take it
to your stockroom and burn it." In the office manager's mind (and the firm's jargon
the word "burn" meant to make a copy on a company machine that operated by a
heat process. As the letter was extremely important, she wanted an extra copy.
However, the puzzled new employee afraid to ask questions, burnt the letter and thus
destroyed the only existing copy!

5.1. MEMORANDUM
In market economy system organizations are autonomous entities, so
they become able to build their own specific culture. One of its characteristics
is the internal correspondence that usually follows internal specific rules and
regulations according to their target addressees.
Memos have a format which is simpler than the correspondence
conceived for external destinations. They miss the heading, but they bear a
subject line which is compulsory, but they can omit the salutation line and
complimentary clause.
Memos are pieces of internal correspondence that are used to inform
the staff upward, downward and horizontally. They are informative and can be
conveyed either on paper or on internet mail.

41
 The purposes of memos are defined on two-tier stages:
- I. they give professional information to the reader and make him
acknowledge it
- II. built positive images of the writer
- build positive image of the organization itself
- set and consolidate good relationship between the writer and
the reader
- avoid further correspondence on the same subject
Memos provide detailed verbal and numerical information,
classifications, background that is specific for the matter. Any negative
elements should be presented as positively as possible. The reader should be
focussed on his benefits that must be clearly and convincingly stated. The
message will also indicate the steps the reader has to follow to set the
problems. A positive and a goodwill ending will always make the addressee act
accordingly to the writer's wish.
The printed standard block form lines up the name of the writer, of the
reader and the subject line vertically. Some organizations have the option to
alter the order of these items, or request the sender to sign the document
instead of initialing it. The signature goes below the last line, starting half-way
over on the page, this way adding unauthorized information is prevented. The
possible second page of the memo is set up as an ordinary external business
letter. The format of the memo allows fast and easy typing, so that
information should be easily filed. The body is typed in block fashion. The
message is not supposed to end by calling for further information, as the
reader might understand that the memo was not complete.
Memo stationery quality is improving according to the increasing use of
word processing systems. Memos can be sent via electronic mail (E-mail) or
simply can be printed out on a computer paper. Formal memorandum reports
may use a higher quality paper. Here you have an example of pre- printed
memo stationery:
MEMORANDUM
(Compnay's name)
DATE:
FROM:
TO:
TELEPHONE:
DEPT:
SUBJECT:
Message, comment or reply
For your:
Approval Comment Information

42
 The standard memo parts presented can be programmed to appear
automatically with just a keystroke in a word processing system. Items as:
reference initials, enclosures, file number, sender's department and telephone
number are optional. It requires no inside address, salutation, complimentary
close or full signature. A message-reply form of memo is a good time and
expense saver for both sender and recipient. It can be transmitted in a three
perforated sheets packet in different colors making up a message-reply
packet.

MEMORANDUM
(Company's name)
DATE:
FROM:
TO:
TELEPHONE:
DEPT:
SUBJECT:
Message, comment, or reply For your:

Approval Comment Information

Here are some samples of memos:

a)
Memo

To: International Department

From: Accounting Department
CC:
Date: December 7, 2000
Subject: Opening of new customer nos. for banks

Please be informed that we opened in our evidences the respective customer

numbers for the following banks:
ABN Amsterdam - 4 000 537
Banca Commerciale Italiana - 4 000 412
Credit Commercial de France - 9 00247
Royal Bank of Canada - 4 000 328
Bayerische Landesbank 4 000 495
Rabobank Utrecht 4 000 867

Should you have any query do not hesitate to contact us.

Angela Little Josie McKennitt

___________________________________________________________
Page 1 of 1 Memo-Open Nos

43
b)
Memo

To: International Department

From: Accounting Department
CC:
Date: 10 February
____________________________________________________________
Re: WHT payment for January 2001
_____________________________________________________________

Please debit the account 9 800 438 00 ROL by the amount of ROL 2520 342.37
representing 1% tax withheld on term deposit interest paid in January 2000
which must be paid to the state budget.
Please verify the amount against individuals' deposits maturing by the end of
January.

Alex Warner Gina Lopez

c)
GRAND HOTEL
From: The General Manager
DATE: September, 6, 2004
TO: All Front Office Staff
SUBJECT: Pricing policy

It is clear that some clarification of our policy on pricing and room rates are needed.
BASIC RATES: We have a basic rate of all room types. However, it is common for different rates to be charged. This is
because the Sales and Marketing Department negotiate special rates for different agents, corporate clients and other
clients.
The basic rates are:
Standard room: € 8o (double) Luxury/Executive Plus: €115 (double) Suite: Individually priced
Standard discounts:
Weekend rate (Fri/Sat or Sat/Sun) 15% discount
Weekly rate: seven nights for the price of five
Specially negotiated rates:
Most guests come as part of a tour, through a tour operator, or as a corporate guest. In this case a special
Rate will have been negotiated and will be on the computer for Reservations and the Front Office to access.
Free Sales Agents:
Free Sale Agents are sent availability charts every two weeks. They sell rooms at an agreed rate (usually the corporate
rate). They don't have to check with us, so administration costs are kept low.
Allocation Holders:
Allocation Holders have a certain number of rooms which they agree to sell (usually at FIT rates). The customer pays
them directly and they take commission and pass on what is left to the hotel.
For week-ends they have the rooms on a 48-hour release (in other words the hotel can take them back by Thursday and
resell).
If you have any more questions, please speak to the Reservations Manager or the Sales and Marketing Department.
( chenar )

44
45
46
EXERCISES
I. Your employer encourages young executives to enroll for additional
university training whenever possible, and the firm pay tuition for the
desirable programs. You would like to attend the Graduate School of
Business Administration Management Program at Cambridge
University branch in Bucharest. Because most classes meet three
evenings a week and a few on Saturdays, they will not interfere with
your job. You believe that the course definitely makes a graduate
more knowledgeable in the management field, thereby increasing his
or her worth to the insurance company where you work. Some of the
topics you foresee as particularly valuable to your present job are
management communication, performance appraisals and basic
human motivation. The program over one academic year costs $
1,500; $ 300 is required to be submitted with your application and the
remaining $ 1,200 by September 30. Today is July 14. Enclose your
application with your memo to Mr. James Dawson executive vice
president for his approval.

II. To conserve fuel, because of the current fuel shortage, you, as an

Executive General Manager of an important bank, want to request all
management officers to observe certain simple fuel -saving steps for
fringe cars in service. You ask that all vehicles be shut off when idle.
Examples include when drivers are on lunch breaks or any other
break. Also, you want that operators run machines in such a manner
as to conserve fuel without loss of efficiency. Excessive speed where
it is not necessary consumes more fuel. You believe that cooperation
of all employees could result in a 5 to 10 percent savings. Mention in
your memo that you will make personal inspections periodically. Plan
an attractive, easy-to-read format for your requests.

III Translate into English

A. Vă rugăm să revedeţi prevederile Codului de Conduită privind ţinuta şi luaţi
măsurile corespunzătoare. Angajaţii îmbrăcaţi neadecvat vor fi imediat trimişi
acasă şi nu vor fi plătiţi pentru ziua respectivă.
Tinuta
Ca reprezentanţi ai băncii, angajaţii trebuie să poarte haine potrivite locului de
muncă. Toţi angajaţii trebuie să fie totdeauna îmbrăcaţi adecvat.
Imbrăcămintea sport , extravagantă, şocantă, provocatoare nu este acceptată
în mediul de afaceri. Atenţia clienţilor nu trebuie distrasă de modul în care
suntem îmbrăcaţi şi ţinuta noastră trebuie să le pară decentă.
Doamne:
să poarte haine care se potrivesc cu mediul de lucru, preferabil fustă şi jachetă
în culori închise, cu cămaşă de culori deschise
- pantalonii pot fi purtaţi numai în combinaţie cu sacou
- bluzele sau rochiile cu bretele sau fără mâneci nu sunt admise
şi nici hainele din materiale sau culori speciale (care s-ar
potrivi mai bine pentru seară sau pentru vacanţă)
- să nu se exgereze cu accesoriile
- părul va avea o culoare uniformă (nu sunt admise şuviţe de
altă culoare)

47
 - machiajul şi manechiura vor fi în culori naturale
- pantofii lustruiţi, nu sunt permise sandale sau cizme
- parfumul în cantităţi controlate

Domni:
- Să poarte costum şi cravată, cu sacou în special în holul băncii
sau în alte zone în care clienţii au acces
- Culorile acceptate sunt:
- - Costume: preferabil albastru închis, gri, negru
- - Cămăşi: cu mânecă lungă preferabil albe sau albastru
deschis
- - şosete: culori închise
- - pantofii: în culori închise, lustruiţi tot timpul
- Este obligatoriu să se bărbierească zilnic

5.2. REPORT
In Great Britain, the adoption of limited liability as the usual system of
corporate organization gave important impetus to the movement in favor of
publication of balance sheet as a report of the activity of the commercial
banks. The tide was running in favor to publicity, the growing strength of
important joint-stock banks that voluntarily published reports on their
activity, helping to turn the fashion. The publication of an Annual Balance
Sheet in no way altered the private character of the Bank, or the
responsibility of the partners to the full extent of their property.
Governments in the European Union set the rule of publishing reports of
the largest businesses according to criteria including revenue, employment
and assets – that should disclose the material social and environmental
impacts on their operations each year, as part of the operating and
financial review in their annual report. This new requirement will be
welcomed as a move towards greater transparency. The growth of such
reporting has been prompted partly by demand from investors – who are
increasingly concerned about the risks attached to the social, ethical and
environmental impacts of businesses. Many companies seem to regard a
sustainability report as primarily, a public relations document, but readers
of the reports say that their purpose is to provide accountability and
transparency. The guidelines give companies a clear template for what to
include in reports, how to go about it and how to make sure that readers
will value and trust the content.
Reports can be about many things: an analysis of a problem, a
summary of a completed job, the progress of a project, the results of an
investigation.
Reports provide information collected for a target specialized audience;
it is made in order to find solutions for the problem it evaluates. They can
be informative reports, providing both information selected carefully and its
interpretation, while recommendation/problem-solving reports
recommend/suggest solutions.
Informative reports can be
- Sales/production reports: numerical lists of sales/production for a
stated period of time

48
 - Accident reports: description and evaluation of the nature and causes
of a work accident
- Audit report: states and evaluates facts revealed by an audit
- make-good/pay-back reports – makes reference to the period of time
at which a capital investment will pay back
- Scouting reports: identify strengths and weaknesses of a newly
employed person or a potential customer/business partner and
recommend/deny them or recommend strategies for getting the best of
them.
- Feasibility report: evaluate alternatives and make recommendations
for a new product/service, a strategical step in business, a promotional
campaign, etc
- Justification report: makes reference to the need of an investment, a
change in procedure/technology/strategy
- credit report: make evaluations of business plans for being granted a
loan
- progress/interim reports - evaluate the work done so far and the still
remaining on to the completion of a project
- trip reports: share information and achievements/shortcomings drawn
out after a visit to a customer/supplier
- closure reports: a research upon feasible conditions for a new
product/service evaluated economically/technologically under current
conditions
Planning and writing reports, making summaries, taking notes are
important skills in business environment. There are several types of reports:
long, short, formal and informal and, according to their way of delivery,
reports may be oral or written (letters, memos, separate documents). They
can be periodic and occasional. Its main parts are the Introduction, the body
of the report and the terminal section. The first one will state the terms of
reference, the objectives, and the procedure required, then the authority to do
it. The body of the document will present a detailed account of what has been
accomplished, and how much remains to be done. The terminal section will
mention future plans and recommendations. As for the technical aspects, it is
recommended for the paragraphs not to be bigger than 100 words, to contain
just one idea, and to be separated by larger spaces. Typographical elements
should be used, such as underlying capital letters, graphics in boxes, italics,
etc. The sentences are recommended to be concise, and clear. Longer reports
may have a summary, a table of contents or perhaps appendices with extra,
non-essential information. Many in-company reports have a standard format
and so the writer does not have to worry about the structure. Here are some
techniques of report writing:
- focus the first drafting of the ideas not on the language and
grammar until the editing and rewriting stage
- keep the briefness of phrases and simplicity of grammatical
structure
- use impersonal style and focus on relevant facts
- balance your points of view showing careful consideration for
arguments
- the report writing style should keep with the target reader: a
report written for a senior manager should be respectful and
polite, with suggestions for the manager to consider. A report

49
 for junior staff is more likely to use a direct style and have
short sentences and statements rather than suggestions.

Report drafting will take into consideration some technical basic steps:
a) statement/definition of the matter
b) selection of the sources and information needed
c) data interpretation
d) presentation of relevant criteria for reorganizing the information
e) report wording and drafting
Reports will be audience oriented to achieve effectiveness. The
message will be clearly stated in a readable document by keeping the
sentences short and simple, using familiar words. Verbs of action should
be used to communicate ideas instead of redundant words. Simplicity
and directness will improve the quality of the document, as a highly
knowledgeable writer will always select the best words to convey plain
and convincing ideas and solutions.
Reports can be exclusively numerical or they can simply provide
information that employees must know and use to solve professional
problems. Reports can be formal or less formal. The formal ones will
have specific format and elements:
- title page/subtitles
- a transmittal
- Table of contents
- Body
- conclusions
- List of illustrations,
figures/drawings/graphics
-
- List of references/
bibliography
- Appendixes
- Abstract
The preparatory elements will personalize the document:
- Name of the author
- Target audience
- Date
- Subject
- Coverage
- Organization
They are numbered by Roman numeral.
Title report will name the report object will provide the name and
position of the author date and the document submission.
Preface or the Letter of transmittal states the purpose of the document,
object and content. It is used when the audience reader is a single
person or a well defined group.
Table of contents: a list of the headings and subheadings of the report
Body: the longest section of the document presenting the detailed
information and messages ordered logically, according to the criteria
selected and considered by the author(s). Heads, sub-heads graphics,
quotations, footnotes should be used.
Conclusions: the ending part will bring forth and summarize the main
ideas, state clearly the solutions or recommendations according to the

50
 type of report.
Abstract: it is a short overview of the most important ideas in the
content of the document. It may consist of few paragraphs to be turned
into an oral presentation, explaining the purpose, the plan and order of
its ideas.
Reports readability and legibility should be reader-oriented as it has a
highly practical use. Here are some drafting techniques:
- a two/three centimeters margin is needed to be kept all around
the document page
- a 2/three centimeter margin is needed on the left hand side if
the document is bound
- a double space between paragraphs is recommended for easy
reading
- headings and subheadings will separate ideas, verbal/numerical
lists, quotations, graphics
- typographical elements should make words, ideas stand out
- bullets or dashes, numbers or letters should be used to
systematize random information
- paragraphs and phrases will be achieved by avoiding redundant
and complex words by using action verbs, familiar words and non
prepositional phrases

Reading the Annual Report

For more complete information about an individual company's financial

health one may want to review the company's annual report. Each listed
company in a security exchange is required to issue its financial report card to
its shareholders. In the report, a shareholder must find detailed information
about the company's economic condition and management policies. Annual
reports help shareholders evaluate their investment and decide how to vote at
the next shareholders' meeting. But they are also helpful to potential investors
- people who are considering buying shares in the company. Here are the key
topics contained in most annual reports:
The Balance Sheet

It is a summary of assets and liabilities that offers a "snapshot" of the

company's financial health at a specific point of time. A balance sheet
compares data from the end of the current year with the data from the
previous year. The first section lists all the company's current assets, or
resources: (assets cash, outstanding bills, inventories, the land owned by the
company, working machines, etc).
The second section lists liabilities, or debts, its accounts payable, unpaid
wages, outstanding loans, taxes, and the dividends it will pay to shareholders.
This section lists the value of the company's preferred and common stock, the
money made from selling stock and the profits that have been reinvested in
the company. The assets side of the ledger must equal the liabilities section,
hence the name balance sheet.
Stockholders' equity is also called the net worth of a company. It is not
a tangible amount of money stored in a bank, but the value of all the
shareholders investment in the company.

51
Statement of Income and Retained Earnings

If the balance sheet is a snapshot of the company's finances at a single

moment, the income statement is more like a movie. It links together several
balance sheets and shows the company's financial performance over the
period of a month, a quarter, or even several years. The income statement
tallies up all income, subtract expenses and show how much money is left to
reinvest in the company. It compares that number over a period of time.

Statement of Changes in Financial Position

This statement deals with working capital - money used on daily

operations of the company. The statement, which may compare several years,
shows how much working capital was available, and how it was spent.

Accountants' Report

Every annual report includes a report from an independent accountant.

The accountant's report usually says that the annual report is a truthful
reflection of the company's finances. It states that the report was compiled in
compliance with normal auditing standards and accounting principles. The
accountant will note if the annual report fails to meet one of these standards.
Understanding a company's financial status will help in making
appropriate investment decisions.
LANGUAGE OF REPORTS
Reports are formal business writing. There are three areas of grammar
useful when more formal, impersonal style is needed:
The passive:
An important decision is to be taken by the end of this month.
In exchange for the flexibility, employees are expected to remain in close
contact with their managers.
It+passive:
It is recommended that the commercial banks should cut down their interest.
It was suggested that we use another carrier.
Compound nouns:
a planning meeting, a production planning meeting; the producers conference;
the summer sales session; insurance documents; transport insurance
documents
Informal language elements, like: contractions (It's; we'll; there's) or
words and phrases like big, OK, nice; no way, fantastic, should not appear in
reports

EXERCISES
I. Match the missing words in the following text: 1. Situation; 2.
Pattern; 3. Insurance; 4. Influence; 5. Area; 6. Investigations; 7.

52
Statements; 8. Current; 9. Increasing; 10. Evidences; 11 conclusion;
12. Circumstances.

Reports are widely used in every economic a) ________ they announce,

explain or recommend a policy drawn as a b) _______ of a specific study.
They can represent a starting point for new approaches, developments of new
methods and operations, or they can be a result of c) _________ of certain
events and evolution. They may be external, called in by a firm reviewing
problems, such as business associates, surveyors’ reports or credit and d)
_______ investigation. Internal sources may lead to the drafting of a report,
when management investigates e) ________ efficiency. Reports follow a
similar f) _____, their length depending on the subject it deals with. Its title is
its content for short: “Evolution of Industrial Structures between 1990-2000”,
“Report on Transport Infrastructure Up-grading and possible foreign
investments”, “Financial Conditional upon Reforms”, etc. As a beginning, the
report may start with its own summary or with the g) ______ and conditions
that determined it. Objectives and limitations may be also stated as reports
must give a background to the subject they study, allowing the reader or the
listener to understand how the h) _____ arose, how it can be corrected,
improved on or changed.
The body of the report itself consists of explaining the existing situation
and offering evidence to support the i) ________ that the writer is making.
Well selected and well presented facts, using visual aids also, are meant to
convince and j) ________ the reader or the listener.
The last part of the report is represented by conclusions formed on the
k) _________, and brought about by objective statements, drawing together
all the
information about the situation. The conclusions draw out recommendations,
suggestions to improve or change the l) ________ situation.

II. Read the following „Auditors’ report” to the members of „BPP

Holdings PLC.” using the dictionary when necessary. Make relevant its
structure according to the following headins:
Parts Elements
Introduction Terms of reference or objectives
Procedure

Body of the report Findings

Terminal section Conclusions

Recommendations if asked for
Appendices

53
AUDITORS’ REPORT

We have audited the accounts that have been prepared under the historical
cost convention as modified by the revaluation of certain land an buildings and
on the basis of the accounting policies set out on pages 26-28.

Respective responsibilities of directors and auditors

The directors are responsible for preparing the Annual Report including,
as described on page 16, the accounts. Our responsibilities, as independent
auditors, are established by statute, The Auditing Practices Board, the Listing
Rules of the London Stock Exchange and by our profession’s ethical guidance.
We report to you our opinion as to whether the accounts give a true and
fair view and are properly prepared in accordance with the Companies Act. We
also report to you, if in our opinion, the directors’ report is not consistent with
the accounts, if the company has not kept proper accounting records, if we
have not received all information and explanations we require for our audit, or
if the information specified by law or the Listing Rules regarding directors’
remuneration and transactions with the company is not disclosed.
We review whether the statement on pages 9 and 10 reflects the
company’s compliance with those provisions of the Combined Code specified for
our review by the Stock Exchange, and we report if it does not. We are not
required to form an opinion of the effectiveness of either the company’s
corporate governance procedures or its internal controls.

Basis of audit opinion

We conducted our audit in accordance with Auditing Standards issued by

the Auditing Practices Board. An auditing includes examination, on a test basis,
of evidence relevant to the amounts and disclosures in the accounts. It also
includes an assessment of the significant estimates and judgments made by
the accounts and whether the accounting policies are appropriate to the
group’s circumstances, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all information and
explanations that we considered necessary in order to provide us with sufficient
evidence to give reasonable assurance that the accounts are free from material
misstatements, whether caused by fraud or by irregularity or error. In forming
our opinion we also evaluated the overall adequacy of the presentation of
information in the accounts.

Opinion

In our opinion the accounts give a true and fair view of the state of
affairs of the company and of the group as at 31 December 1998 and of the
profit of the group for the year then ended and have been properly prepared in
accordance with the Companies Act 1985.

ERNST & YOUNG

Registered Auditor
London
March 4, 1999

54
III. Translate into English:
Raport al Preşedintelui Consiliului de Administraţie si al Directorului General
Banca TDR a confirmat în anul 2000 creşterea conturată în anul
precedent, deşi contextul macroeconomic a rămas dificil, în ciuda anumitor
semne de relansare economică. Rezultatele băncii sunt elocvente: cu un
rezultat net de 1030,8 miliarde lei, care indică o noua îmbunatăţire a
indicatorilor săi financiari, TDR si-a manifestat capacitatea de a depăşi
dificultăţile inerente perioadei de transformari pe care o traversează.
Banca deţine în prezent peste 29% din piaţa creditului pentru persoane
fizice, peste 19% din piaţa creditului pentru societăţi şi ca urmare a încrederii
de care se bucură, a atras un volum de depuneri ale clienţilor mai mare cu
23% decât cel de la sfârşitul anului precedent.
Preocuparea noastră a fost de a întări prestigiul şi imaginea băncii, de a-
i consolida identitatea, ca membra a unui grup internaţional de marcă, de a se
implica în economia ţării, de a crea produse şi servicii noi, de a se adapta
economiei româneşti. In anul 2000 am reuşit să mărim cota de piaţă a băncii
noastre (market quota), calitatea serviciilor, profitul băncii şi deci şi veniturile
acţionarilor, în condiţii de deplină siguranţă a resurselor clientelei noastre.

5.3. MINUTES

A business meeting is considered a gathering of businesspersons where

purposive discourse occurs for exchanging information on a common topic or
problem, for its better understanding or for solving a problem.
Their goals are sorted out, patterns of problem solving are resolved,
personal and authority relationship are clarified. A part of the meeting is
devoted usually to giving information and the other is devoted to problem
solving. Three types of meetings help achieve these objectives:
Informative meetings are held to disseminate information and check on
the understanding of those who attend. The staff learns, ask questions, and
understand. No problem is solved, no recommendations for change, but rather
each person gains an improved understanding of the issue. A usual format is
to have an opening informative speech, by a person highly knowledgeable, on
the topic, followed by a discussion. A suggested-solution meeting is called for
comments on the options and a potential final solution to be discussed, but not
decision is made. This meeting is informative and exploratory but the final
decision may be taken at a second problem-solving meeting.
Sometimes a committee is authorized to call the group together. Then
the secretary of the group is empowered to implement the board's decision,
working with the chairperson to appoint the committee and set out the initial
planning involves: purpose, members, meeting date, and time, place, and
announcements responsibilities.

Minutes are documents that record the talks and decisions taken by the

55
participants to a meting to fulfill a certain goal. The notes are usually taken by
the secretary and then the document is fully drafted after the meeting from
the notes, objectively and factually.
A minute should carry the following type of information:
- names of the participants
- kind of meeting (occasion al, regular)
- date /place of meeting
- time the meeting opens
- action of the group, stating exactly the decision and steps taken, the
person in charge, motions and amendments, the voting results
- the time of adjournment
- the signature of the secretary and of the chairperson

EXERCISES

I. Match the following steps in organizing the meeting and their

content:
1. Consider the problem and determine the purpose; 2. Decide who
should participate; 3. Arrange for meeting date; Time and Place; 4.
Announce the agenda; 5. Physical Arrangements.

a) Generally the better days for meetings are Tuesday through Thursdays.
However, some executives consider a good time for meetings early Monday or
Friday. A poor time is Friday afternoon and immediately after lunch. Good
times are 9 to 11 a.m. and 2 to 4 p.m. psychologically desirable as the
participants work more alertly to help accomplish the goals of the meeting so
that it will end on time. Depending on the audience size and the purpose of
the meeting, the chosen place may be in the executive suite, a company
conference room, an auditorium, a hotel, or a convention center.

b) Most often it is the meeting leader who words the question and prepares
the agenda. The announcement is sent early enough to give the participants
adequate time to prepare their thoughts on the matter.

c) If the purpose of the meeting can be better attained by telephone, memos,

letters, video teleconferencing or electronic mail, the participants should not
be called together for a meeting.
The meeting topic must be genuine, really important and meaningful for
the conferees. It must present a difficulty within the experience of the meeting
attendees. The problem should also be limited adequately in order to have
enough time to solve it within the meeting or decided by the group or about
which recommendations can be made to a higher administrative body.

d) Business committees have a consistent group of attendees. The invitees

should always be those that can have a special contribution to the problem
solving. The more difficult the problem the smaller the group - sometimes five
or fewer people. But a solution discovery meeting can have 10 or 20
participants for a brainstorming session. To review and discuss regular
department activities 30 might be invited. For informational meetings,
hundreds may be interested and gain useful explanations.

f) Most likely the chairperson will arrange the seating, perhaps in a

56
 circle, or around the conference table, or U shape, so the conferees
can easily see one another and the chairperson. Items to consider
are chalk boards, whiteboards, marking pencils, chalk, erasers,
pencils, papers, flip sheets, microphones, projectors, visual aids
(charts, tables, and graphs). Drinking water, glasses and ashtrays (if
smoking is allowed) should be handy. Name cards may be useful if
the participants are not personally acquainted.

II. Methods of solving problems in meeting: There are three ways that
may be used to solve problems in meeting: Intuition (rapid insight
into a problem), rationalization (justification attempts over time) or
scientific, reflexive thinking (logical progression) to come to an
answer. The last one will be the object of this exercise. Match the
solution steps and their description:

1. State the problem in the form of an affirmative question; 2. Collect

facts on the history of the problem 3. Establish criteria for the solution
discovery; 4. List possible solutions; 5. Solution evaluation. 6. Choice
of action.

a) After having taken the final decision, the solution must be implemented. A
precise office or person within the firm is asked to do that and the proposal is
assigned a budget. Setting a time for completing the solution is central to the
action step.

b) All group members and others will judge solutions according to well-
established criteria. Criteria for assessing solutions include workability,
feasibility, acceptability, positive or negative consequences, costs, number of
people impacted, and return of investment.

c) Facts are collected about the problem having in view the following possible
questions:
- The history of the problem
- Symptoms of the problem
- The extent and the seriousness of the problem
- Size of the problem
- Possible causes and effects (management, labor unions, governmental
policy)
- The way other companies handle the problem
- Analyze previous solutions taken without positive results

d) The process of listing as many ideas as possible without judgment from any
group member - even for off-the-wall solutions (brainstorming) is a favored
method. The chairperson and the participants consider several alternative
solutions, ranging from practical to highly innovative. The list is then
shortened, in the light of stated criteria. Several good ideas may thus arise,
and later serve as a list from which the final solution may come.

e) The central issue is phrased in a neutral question form. Affirmative wording

is preferable; because a negatively worded question is confusing and has a
negative impact on the group members. If the issue is clearly set, it follows
that the answer or answers will help to solve the problem. Conciseness,

57
concreteness, clarity should be the criteria to follow when raising the issue of
any meeting.
f) It follows the evaluation of suggestions in light of the stated criteria. The
pros and cons of each solution are weighed, to see one particular solution truly
will solve the problem or will create new ones. The discussion may end by
creating entirely new solutions or combine new parts of several solutions.
III. Use the dictionary and supply definitions for the following:
1. Conference; 2. Colloquy; 3. Symposium; 4. Committee; 5. Panel
forum; 6. Debate.
IV. Follow-up meeting:
After having decided upon the matter discussed in the meeting,
responsible committees, departments or individuals are appointed to
carry out the chosen action. Copies of the minutes the secretary or
assistant prepared should be sent to the meeting attendees soon after
the meeting. They usually include:
Name of the organization
Date, time, place of the meeting
Names of the members present
Names of any other present as invited
Name of the chairperson, rank the recording secretary
Brief summary of the reports, if any, by those listed on the agenda
Highlights of solutions presented and decisions made
Time of adjournment and (if announced) date of the next meeting
Read the following two minutes and mind the differences.
A.

Minute

Of the meeting held at the Head Office of Insuconsult on 7/4/99

Present:
Richard Mandel (Chairman)
Amanda Adam (Designer)
Jonathan Belgrave (Accountant)
Sarah Windmill (bank officer)
Subject:
Project of a new building for Insuconsult

- RM opened the meeting and underlined the importance of reaching a decision on

the project. He pointed out the importance of having a new building for the
company branch for the following reasons:
- the evolution of the new projects in insurance consultancy
- the enhance the company's reputation
- open new markets
- J.B. agreed that the project was viable for the following reasons:
- the bankers were favorable and ready to provide finance
- raw material was to be bought from cheap sources
- Local labor was cheap enough
- A.A. outlined that the design for the new building can be ready within 30 days
and the license for the construction in the same due time.
- RM closed the meeting and announced that the loan contract will be concluded
next week with the TUBank. SW confirmed.

58
B.

MINUTE of the meeting held at the Head Office of Computer Jar Co.
23/3/99

1. Present: Mr. Adam Williamson (chairman)

Sven Taco (secretary)
2. No business remained from the last meeting

3. Subject: Promotion of new banking products on the Internet

Mr. Williamson presented a detailed report about the new ways up-dated
to promote banking products through electronic devices, to challenge the new
markets. He proposed that Publicity and Marketing depts. Should be involved in a
promotion project through their representatives and have short presentations
about the new opportunities. Dead line - 23/4/99
Proposer: Mr. Williamson
Seconder: Ms. Jacqueline Drott
Marketing Dept
Carried unanimously
Other developments: Next year budget report.
Departments concerned are to form a committee to work on this. Mr.
Williamson will chair the committee and he will notify the people concerned.
Since there was nothing further, the meeting was adjourned.

V. Translate into English:

Recomandări privind întocmirea unei convocări pentru o şedinţă eficientă:

1. Specificaţi data, locul ora de începere şi ora de încheiere a întâlnirii.

2. Prezentaţi, în linii generale, scopul întâlnirii. In cel mult doua fraze,
specificaţi motivul pentru care se ţine şedinţa şi ce se urmăreşte.
3. Menţionaţi particitpanţii la şedinţă. Aceştia trebuie să ştie cine va mai lua
parte la şedinţă, în ce departamente lucrează şi care va fi contribuţia lor la
desfăşurarea şedinţei.
4. Enumeraţi subiecte în ordinea în care vor fi abordate.
5. Anunţaţi cât timp alocaţi discutării fiecărui subiect. Atunci când alocati o
limită de timp pentru tratarea fiecărei probleme, aceasta se va stabili în
funcţie de importanţa fiecăreia dintre ele.
6. Specificaţi ce materiale trebuie consultate înainte de şedinţă sau ce se cere
fiecărui participant.
7. Distribuiţi ordinea de zi (agenda) tuturor membrilor grupului, cu cel puţin o
saptămână înaintea şedinţei.

59
5.4. SURVEYS
Question a large group of people called respondents or subjects. The
questions will be drafted under the form of a questionnaire. The questions will
be worded neutrally, avoiding assumptions about the respondents and having
the same meaning to different people.
1. Match the following meanings of the word "survey:
a). look carefully from a distance
b). study/description of the general condition
c). investigate the behaviour, opinion of a group of people
d) act of surveying
1. Of the five hundred householders surveyed, 40% had dishwashers.
2. He surveyed the crowds from the balcony.
3. Surveys show that 75% of people approve on the new law.
4. He hold a speech in which he surveyed the international political situation.

60
 UNIT 6
EXTERNAL FORMAL BUSINESS LETTERS

Objectives:

- students will become familiar with the aspect, structure, language,

attitude and tone of some types of external correspondence: invitation,
inquiries, recommendation and claim letter.

6.1. INVITATION: ACCEPTING and

DECLINING
A formal invitation, usually in the form of a letter or printed card, is
written in the third person. And reply follows in the same style. Other
invitations are written less formaly. Any written invitation should be answered
in writing too, not by phone. Invitations are organized according to the same
three-part plan: main idea, explanation, and action. The main idea in the first
paragraph is the invitation request. It includes as many “w” 's as possible:
who, when, where, why, etc. e.g. it includes all the details that the reader will
appreciate and need. The ending paragraph will state clearly the desired action
of the reader, and makes it easy. When a reply is needed by a certain date,
ask that in this paragraph. Information about the event will also be provided:
to introduce a new product, or service, to celebrate a certain anniversary date,
etc. The writer will state if an extention to a colleague or spouse is available
and if any fee is necesary to be paid. An ask for a dead-line response or
confirmation is needed.
When accepting an invitation an appreciation for the invitation should be
expressed first, and the pleasure to accept it. The date, time, place and
subject or travel and accommodation arrangement and will be confirmed. The
letter will also mention any need for special equipment, hand-outmaterial,
room arrangement.
When declining an invitation an appreciation for the invitation will be
expressed firstly, then the regret for declining it and some reason. The writer
will also wish success for the event.
EXERCISES:
I. Read the following letter of invitation and identify the paragraphs
conveying the following ideas: Request., What?, Who? Where? When?
Details about the program; Easy action; dated; Reader benefit.

61
 HELLENIC BANK ASSOCIATION

No. 131
Mr. Roberto Paviani
Secretary General
Italian Banking Association

2nd International Meeting

on the Cooperation among the Banking Associations,
Athens, October 18-20, 2001

Dear Mr. Paviani,

Further to my previous letter regarding the organization of the 2nd International

Meeting of Secretary Generals of Banking Associations from Balkan, Black Sea
and Mediterranean countries, I would like to inform you that this is to be held
between 18 and 20 October2000 at the Athens Hilton Hotel.

Hoping that you will accept our invitation and that the proposed dates are
convenient for you, I would appreciate it if you could complete and return the
attached Participation form at your earliest convenience and preferably no later
than July 7. 2001. The second attached form Traveling details is expected, if
possible, no later than September 22, 2001. This will enable us to proceed with all
the necessary details.

Also, we would like to remind you that a parallel meeting will be held among
participants, who come from BSEC member countries. The purpose of this
meeting will be, as you are already informed, to explore the possibility of
establishing a Union/Association of BSDEC member-states' Banks.

For the time being we are working on the details of the agenda, which will be sent
to you in due course.

Finally, with the opportunity of this communication, I enclose our latest Annual
Report on the H.B.A. activities during 2000.

Looking forward to receiving your response.

Best Regards,

Andreas Paskalis
General Manager

1, Massalias Street, Athens, Greece. Tel. 88564320.E-mail: jmanos@jba.gr

URL: http://www.lba.gr

III. Read the following declining semi formal letter of invitation:

62
Alice Arnaud, 10-14 Beauchamp Street, London W1

Dear Mrs. Arnaud,

Dr. Backbone, Chairman of the Bell Group, thanks you very much for the
invitation to a dinner party at the Ambassador Hotel on 12 th September, in
honour of ther senior management of the American Telephone and Telegraph
Company. He would be delighted to accept, but as he has already made
arrangements to attend another important meeting which cannot be cancelled,
Dr. Backbone unfortunately will not be able to attend the dinner.
Dr Backbone has asked me to extend his cordial greetings to you, Mr
Schneider, Mr. Bronson, and Mr. Templer.
Yours sincererly,

Secretary to Dr B. Backbone

II. As Administrative Assistant to the president of Romanian Savings

Association, write a letter inviting customers and their families to be
your special guests at a grand opening of your new quarters on
Thursday, Friday, and Saturday, the last three days of this month.
There will be handsome gifts for both ladies and gentlemen, special
door prizes with drawings every two hours, and refreshments.
Children will receive balloons. Also, each current passbook holder will
receive a special present. Your new building is graciously furnished
with a number of authentic period antiques. A "SPECIAL GUEST"
nametag, which you will enclose with your invitation letter, entitles
customers to their gifts.

III. As customer relations director of Executive Services, you now

have the pleasure of announcing your firm, individually addressed to
local and regional directors of banks that have supervisors and
assistant managers in customer service department. Make clear that
from each bank one or more of these managers may attend. Enclose
with your announcement a formal seminar folder, giving the cost and
the detailed program. Make clear in your letter the place, dates and
highlights of the training sessions and create a pleasant, goodwill-
building tone.

IV. Write a letter of invitation to which you have the following reply:

Ross Consulting

Chartered Accountants
Ross Consulting
Stonecutter Court
1, Stonecutter Street
London EC4A 4TR

Rinaldi Loren
Secretary General of Italian Banking Association
143, Dominicani Str. Rome

63
 Our Ref: /mls12ac

Dear Mr. Rinaldi,

I would like to thank you for your help in arranging the meeting In Rome last
month to discuss the Technical Report prepared by Ross Consulting as a part of
the EC PHARE project on technical assistance to Italy in the field of Money
Laundering. The meeting was, for us, a very successful one and we have taken
into account the opinions made at the meeting.

The final version of the Technical Report has now been approved by the EC and
we will be distributing it the next few weeks.

I also passed on to the EC the request made at the meeting for further
assistance; however I have not yet received a reply from them on this matter.

I have enclosed with this letter a Ross Consulting publication on International

Treasury Management. It was produced for treasurers of both banks and
corporations, and I thought it might be a useful material for you. In addition, if
you have any specific requirements for information and I can be of assistance,
please do not hesitate to contact me.

Finally please pass on my thanks and best wishes for the future for those
members of the Association who have attended the meeting with us and
therefore contributed to the project.

Yours sincerely,

Malcolm Moore
Ross Consulting

V. Translate in English the following invitation:

Conducerea
Bancii Veracruz Madrid
Si conducerea
Bancii Veracruz Romania
Au placerea sa va invite (request the pleasure of your presence) la receptia de
inaugurare a
Subsidiarei
Banca Veracruz Romania
Care va avea loc in Bucuresti,
Marti 22 septembrie 2000, ora 18.00
In sala de Marmura a Casei Centrale a Armatei,
Str. Constantin Mile nr 1

64
6.2. STATUS INQUIRY
Bankers maintain strict secrecy about the affairs of their customers, but
they are allowed to provide an opinion about their financial standing, in
response to a request from another business or bank, as knowledge about
their integrity, financial standing and creditworthiness is needed. The
customers may supply goods or services on credit and will naturally want to
know whether it is safe to do so.
If a business person proposes to enter into a business agreement, the
other party may require a reference, preferably a banker, to give an opinion
concerning the customer's financial standing. The other party asks his own
bankers to follow up this reference. They write to the bankers named, asking
for an opinion in confidence as to the respectability and truthfulness of the
customer concerned, in the way of business to the extent of a certain amount
of money, the price of the business. The reply will contain a general indication
of the creditworthiness of the customer, without giving any specific detail of
the account. A usual form of an opinion is: "respectable and considered good
for your figures".
Banks take every possible care to protect their own business and their
customers, and the practice of providing a status opinion about a customer,
without that customer's express authority, does not harm at all. Usually, when
the creditworthiness of a customer is a subject of an enquiry, he does not
even know that any enquiry has been made.
EXERCISES
I. Match the following missing words with the gaps:
a) departments; b) meet; c) arrangements; d) references; e) worthiness.

When preparing credit 1) _________ even an insurance cover,

customers will supply references, i.e. names of concerns or companies to
assess his reputation and credit-worthiness. Banks usually supply this kind of
information, but only in a general form as the company’s capital or its capacity
to 2) _________ its obligations. Trade organizations, representing the
profession of the customers, can also supply trading 3) ________. Another
source of information should be the customers’ business associates or
partners, commercial 4) __________ of embassies or credit enquiry agencies.
These one can give much more details against a fee about a firm’s activity as
it can research its financial activity, standing, credit 5) ________ and capacity
to repay loans or fulfill obligations.

II. Inquiries requesting information are usually written when facts are
needed about a company, or a person. The way the questions are
ordered, organized, drafted, whether they are written under the form
of a memo, letter, or long survey questionnaire, makes it a clear and
effective document. Mind the following suggestions and arrange them
into a convenient and logical order:

a) Cover only one topic in each question.

65
b) Word your questions to get more than “yes” or “no” answers if you need a
detailed opinion or description, such as: “What kind of duties requiring
responsibility did the applicant perform especially well?”
c) If you wish the respondent to rate a person, product or service, it may be
better to define each category on your rating scale.

ﾍ ﾍ ﾍ
egotistical approachable exceptionally
unfriendly likeable agreeable
tactless somehow will easily
pleasant attract
neutral friends
team-worker
tactful

d) Make your suggestions specific. Include specific characteristics of the

product or service you want information about. A single, and general question
will probably bring a reply so general that it will be almost useless.
e) Number the questions if you have more than one.
f) Use a separate paragraph for each main question.
g) Word your questions in a neutral way so you will not influence the answer.
h) Questions must be carefully arranged starting with the ones that are easier to answer.

III. Read the following letters of status inquiry and draft a reply to
each of them.

X Commercial Bank
234, Strasbourg Bd.
International Division
web site: http:// www.trd.fr e-mail: rof@trd.fr
phone: 40- 2- 2110657; fax: 40 – 2110656

Vienna, December,19th, 2001

To:.......
Fax:.......

For the kind attention of............

Dear sir/ Madam,

We have been recently contacted by a company named Commercial Trans ltd

which has been presented itself as importer-exporter of computers proposing us

66
a co-operation in this field.

As we are not in the possession of any data regarding this entity, we would very
much appreciate providing us with relevant information, as well as your opinion
on the mentioned company.

Please, rest assured that information offered will be confidentially treated and for
our professional use only.

We thank you in advance for your valuable assistance and hope to have the
opportunity to reciprocate to you on similar occasions in the future.

Hoping to hear from you soon, we remain

Yours truly,

..............

K Commercial Bank
253, Bouquinistes Bd. Rouen
International Division
web site: http://www.k.fr.; e-mail: somebody@k.fr
phone: 40-1-3220864; fax:40-1-322928

Rouen, May 28th 2001

To:.............
Fax:.................
For the kind attention of Mr. Thorndike Deputy Manager

Dear Sir,

We hereby take liberty to approach with the kind request of assisting us in

obtaining a complete report on one of our customers, Larex Co. Ltd., address
23, Noiret St. account no. 22.1.354 located/headquartered in BTR Commercial
Bank in Brazil.

We would highly appreciate, Dear Sir, providing us with data regarding their
shareholders, activities, financial standing for the last two years (if possible),
and also your opinion on their reliability in relationship with your good bank and
business partners.

We assure you that this information will be confidentially treated, strictly for our
own professional use.
Please note that we will be ready to reciprocate by render similar services to

67
 you at any time your institution will request us to do so.

Thanking you in advance for your prompt, kind assistance, we are looking
forward to hearing from you soon we remain,

Yours sincerely,

IV. Read the following memo and right an appropriate letter:

8 pm
Friday, 25
October 2004
KRK,
I've sent part of the New Art Order –all the block boards and 3,ooo
pine planks. We can't send the over 2.000until Monday when they
arrive from Mill Zetter. Explain that to them. I don't have time to ask
Betty to type the invoice.
V. Translate into English:
Don
A). Stimaţi domni,
Am primit o comandă în valoare de €..... pentru roşii, castraveţi şi ardei
gras de seră de la clienţii dvs Messrs X & Sons pentru care intenţionăm să
tragem o trată la 3 luni. Având în vedere că nu cunoaştem situaţia financiară a
acestei societăţi, v-am rămâne îndatoraţi dacă ne-aţi sfătui în această privinţă.
Informaţiile pe care ni le veţi furniza vor rămâne confidenţiale şi contaţi pe
servicii similare din partea noastră la nevoie. Vă mulţumim pentru înţelegere şi
colaborare.
Al dvs,

B). Stimaţi domni,

Ca răspuns la scrisoarea dvs prin care ne solicitaţi informaţii în privinţa
societăţii X, ne face plăcere să vă confirmăm că această firmă este bine cotată
pe piaţa noastră şi are reputaţia de soliditate şi solvabilitate financiară. In ceea
ce priveşte creditul comercial pe care intenţionaţi să-l acordaţi acestei firme,
considerăm că îşi va putea achita la termen obligaţiile pe care le va angaja
faţă de societatea dvs.
Vă rugăm să consideraţi aceste informaţii ca strict confideţiale şi
neangajatoare.

6.3. RECOMMENDATION
Any progressive organization replies to reasonable requests courteously,
helpfully, and promptly. Such a message will always start with the best news
-information that is useful to the reader, emphasizing the positive aspects.
Among the most frequent inquiries are the request for information about
personnel and credit applicants.

68
 Pertinent information about an applicant's qualifications, character, and
general conduct in a message should be preferably addressed to the specific
person interested, instead of "To whom it may concern". A letter of
recommendation must be fair to the applicant, to the inquirers (prospective
employer, creditor, landlord, or whomever) to the writer's conscience and
reputation for integrity. The writer must abide by civil rights laws and be
aware of possible legal problems.
Favorable or neutral confidential recommendation letters (or even
phone calls) are based on some main ideas:
- the full name of the subject will be stated and the type of relationship he or
she had with the writer - employee, customer, friend, business partner. The
dates, length of time, type of job, credit, or whatever is pertinent, using only
facts.
- an expression of pleasure, if sincere, will be present in the statement of
purpose for the letter, replying confidentially to a request. A subject line can
cover a part of the item: "Confidential report by request on James Thorndale
as a credit applicant"
- the letter will answer to all questions - direct or implied unless doing so
would be legally risky. They will be arranged in the best psychological order,
depending on facts.
- the statements of evaluation (excellent, outstanding, and so on), will be
backed by specific facts about performance record.
- mention specific duties performed by the applicant
- mention work habits showing personality characteristics
- negative material will be treated honestly and fairly.
- a candid statement of the writer's opinion will be included about the
applicant's probable fitness for the position, lease, credit, membership, etc

EXERCISES
I. Identify the main ideas and their order in the in the following:

Academy of Economic Studies-Liverpool

Faculty of Finance, Banks Stock Exchange and Insurance

Dear Sirs,

I had the opportunity to know Mrs. Amelia Warren when she attended my
Financial Management of the Enterprise course during the Academic year 1997-
1998.

In this capacity I observed her high intellectual potential. As the course required,
she developed analytical, quantitative and reasoning skills. She proved to be very
motivated for individual work, a very hardworking and devoted person.

A special mention should be made with respect to her deep insights on topics
such as Evaluation Models of Options. This I can assess based on the discussions
that I had with her in preparing a presentation on this topic.

For all the above reasons, it is my opinion that she can easily face the

69
international competition at high standards of your institution. Therefore, I
strongly recommend her to be granted the scholarship she is applying for.

Yours sincerely,
Professor John Doe
Dean of the Faculty
Finance, Banking, Stock Exchanges and Insurance

II. Translate the following letter of recommendation:

Firma «TAREX», prin obiectul său de activitate şi profesionalismul,

seriozitatea şi priceperea personalului calificat, a demonstrat practic avantajele
tehnologiilor moderne de curăţare, întreţinere, igienizare pentru mochete,
marmură, gresie, faianţă, geamuri şi pereţi cortina (curtain walls).
De aceea, recomandăm călduros serviciile oferite de firma «TAREX».

70
6.4. INQUIRY for GOODS and SERVICES
An inquiry (also spelt enquiry) is sent when a businessman wants some
information about:
- the supply of goods
- leaflets or catalogues
- quotations or prices
- terms and dicounts
- availability of goods
- delivery times and deadlines
- method of transport
- insurance
If a prospectrive supplier approaches suppliers for the first time, it is
useful that he tell them something about his own business, the kind of goods
he needs and for what purpose they are required. In the case of customers of
long standing or repeat orders, the inquiry may be very simple.Often a phone
call will do.
The reply to an enquiry will be polite, direct, and prompt. It will start
with the expression of gratitude for the enquiry and will end with the
expression of interest in the addressee requirements.

WBP WORLDWIDE BICYCLE PRODUCTION

The Bradbury Cycle Works
P.O. Box 328
Sydney June, 14, 2004

Dear Sirs,
We are open to consider quotations for an export of 10,000 bicycles in India, Sri Lanka
and Nepal.
You will be very helpful to inform us the quantities that you are able to deliver at regular
intervals, quoting your best terms f.o.b., Brisbane. We shall handle export formalities, but would
ask you to calculate container transport to Brisbane for onward shipment
Yours faithfully,

Nicholas Milton
Export Manager

Specific vocabulary:
- We are retailers/importers/wholesalers in the ........trade and wolud like to
get in touch with suppliers/ manufactrurers of...........
- We are in the market
- We are interested in importing...
- We know about your products from...
- Please send us prices and samples of......

71
- We would like to send us a firm offer for..../your current catalogue
showing.....
- We read your advertisement and we
require ...for immediate delivery of ...........
are interested in buying.............................
and would like to have further details about..............
and would like to know if you can provide us with.........
- Would you kindly quote us your best/lowest prices and terms of payment
for....
- What qualities /quantities are you able to supply from the stock
- If your prices are competitive/ if the qualkity of the goods comes up with our
expectation/If the samples meet our customers' agreement we can probably
place regular orders with you
- We look forward to receiving your quotation/prices/reply by return/as soon
as possible
- Thank you for the information you can provide to us.
- An early reply would be appreciated.
- We usually settle accounts/make payments by...........
- Payment will be made by.......
- Please send us a pro-forma invoice for customs purposes.

EXERCISES
I. Fill in the blanks the missing words in the following letter of inquiry
for goods:
1. quote; 2. place; 3. business
Dear Sirs,
We are in the a)................... of seasonal fruits and we are interested in
importing for our developing market. We kindly ask you to b)................ us
your best prices, qualities and terms of delivery and payment for bananas,
mangoes, oranges and figs. We can c)................ large and regular orders if
the quality, prices and terms are convenient for us.
II. Mind the the structure of a) the inquiry and b) the reply to the
enquiry. Use then the reference sentences to write the corresponding
inquiry and reply letters.:
a). Inquiry: 1. How did you get in contact
2. Some information about your company, and the reasons for
which you decided to write the letter
3. General request for information
4. Specific questions
5. Close, perhaps some reference to a future successful business.
b). Reply: ...1. Thank-you line and reference to the inquiry for goods
2. Reference to the attachment to the letter if any.
3. Highlight several key points.
4. Answer any specific questions
5. Close the letter with the promisse to supply any further
information.

a) We are a distributor of bathroom furniture.

b) We are attaching our current catalogue and price list.
c) We look forward to an early reply, as we are sure that there is a market
for your products in Romania.

72
 d) Could you also provide details of your delivery times, and whether there
is any minimum order?

e) Thank you for your email of 14 June inquiring about our products.
f) You will note that our line of Magic mirror wardrobes is a special offer.
g) Please send us information about your product range, including a price
list.
h) We met last Thursady on our stand at the Bucharest Trade Fair.
i) If you need any further information, please do not hesitate to contact
us.
j) We dispatch the goods within 24 hours of a firm order, and for first-time
customers our minimum order is €5,000.
k) We are intgerested in trading your products on our market
III. Translate into English the following:
Stimaţi domni,
Ne face plăcere să vă informăm că aţi fost recomandaţi de firma X...ca
fiind cei mai eficienţi pe piaţa de materiale de construcţie. Firma noastră a
cîştigat câteva licitaţii pentru restaurări de imobile din patrimoniul naţional de
artă şi, din acest motiv, suntem interesaţi în achiziţionarea de materiale de
construcţie de bună calitate dar la preţuri rezonabile şi condiţii de plată
convenabile.
Vă rugăm să ne transmiteţi cataloagele dumneavoastră şi lista de
preţuri aferetă în cel mai scurt timp posibil. Având în vedere posibilitatea unor
comenzi substanţiale pe o durată îndelungată, colaborarea noastră poate
devină strânsă şi benefică de ambele părţi. Aşteptăm cu interes oferta
dumneavoastră,

6.5. OFFERS/QUOTATIONS
Offers are sent without a preceding inquiry when a supplier wants to
draw the attention of customers and new customers to a special product or
range of goods. A firm offer is a subject to certain conditions, a deadline for
the receipt of orders, or a special price for certain quantities.
The quotations in reply to an inquiry may be a simple one, containing
simply the prices and other information asked for. The sales businessman will
take the opportunity to stimulate his correspondent's interest in the goods or
services by including a sales message and the assurance that the customer
will receive personal attention.
EXERCISES
I. Mind the information provided in thefollowing offer and the way
they are presented:

73
VETMELLAS ROMANIA SRL
Animal Health Products, Feed Additives, Breeding Material

Dear Mr. Kalderimis,

We want to present you our offer of premix with vitamins of different
compositions that are created in accordance with the recommendations of the hybrid
producing companies. The concentration of the premixes may vary from 400 g to 2 kg for
one tone of final feed.
The premix with minerals is the same for all the hybrids. Our offer includes premixes with
both minerals and choline or with minerals only.
The prices that we propose to you are negotiable and they depend of the means of
payment, the quantity ordered, the duration of the contract, etc.
The prices are in Euro and include the transportation to your warehouse and they refer to
the quantity of vitamins and minerals needed for one tone of final feed.
Premix with vitamins Cobb up to 28 days 14, 8
Premix with vitamins Ross up to 28 days 12, 6
Premix with vitamins with Arbor up to 28 days 11, 5
Premix with vitamins Cobb 29 days to slaughter 10, 5
Premix with vitamins Ross " 9, 3
Premix with vitamins Arbor " 8, 9
Premix with minerals from birth to slaughter 9, 3

We look forward to your answer.

Best regards,

George Ruskin

II. Mind the phrases use in quotations and offers:

Phrases:
- Thank you for your interest/inquiry in/about...........
- We are pleased to submit our lowest prices/to enclose our latest price/for the
goods you inquired about.
- We can make a firm offer for.............
- This offer is firm subject to acceptance by ..............
- Kindly remember: this offer expires on.....
- Subject for prior sale
- Prices subject to change wuthout notice.
- The goods you inquired about are sold out, but we can offer you a substitute.
- Please let us have your order as soon as possible, since supplies are limited.
- While stocks last.
- We look forward to receiving a trial order from you.

Discounts
- For a quantity of 6o or more we allow you a special discount of 20% on the
prices quoted.
- The quantity discounts vary according to the size of the order.
- Your initial order is subject to a special discount of......

74
- We can grant you % discount on orders exceeding €...in value /on repeat
orders.
- We quoted special prices, a,d therefore the offer is not subject to the usual
discounts.

Terms of payment
- Cash in advance.
- Cash on delivery (c.o.d.)
- Cash with order (c.w.o.)
- Our usual terms are cash against documents (c.a.d.)/pro-forma invoice
- We can allow you three months' credit for future orders
- As our prices are so favourable, our terms of payment are 30 days net.

Delivery terms
- c.i.f./C.I.F. (cost insurance and freight)
- c&f/CF (cost and freight)
- f.o.b./FOB (fre on board)
- f.a.s./FAS (free alongside ship)
- franco domicile, free (buyer's address)
- ex works/ex factory.
- Prices are ex warehouse.
- Freight and insurance to be paid by buyer/you.
- Delivery can be made from stock/is not incliuded in the price.
- Delivery will be made within two months of receipt of your order.

Offers for hotel accommodation

- We are able to accommodate all the members of your group in single and
double rooms.
- The rooms at the back of the hotel are very quiet.
- There is an extra charge of £ for private bathrooms.
- Please let us know your expected date of arrival and the duration of your
stay.
- We shall reserve accommodation for you accordingly.

III. Add the following spare parts to the following letter:

Dear Sirs,
As a reply to your letter of 21st of February, we have the pleasure to
enclose the quotation for women dresses and trouser suits. You can obtain all
the models you saw at our fashion show, except trouser suits in red which the
smaller and medium sizes are out of stock for the moment. They will be
available again in September. All other models can be supplied by the middle
of July 2004, subject to our receiving your firm order by 15th April. Our c.i.f.
prices are understood to be for sea/land transport to Bucharest. If you would
prefer the goods to be sent by air freight, this will be charged extra at cost.

a) We hope you agree that our pieces are very competitive for these
quality clothes.
b) We look forward to receiving your unitial order.
c) Payment: irrevocable letter of credit

75
 d) Trouser suits sizes 8-16 in white, yellow, pink, turquoise, navy blue,
black per 100 $2,650.oo
e)
f) Prices: valid until 30 April
g) Delivery: c.i.f. Bucharest
h) You will be receiving cuttings of our materials and color chart.
i) Transport: sea freight
j) Yours faithfully,

R. Brown
Fashionland
Export Department

IV. Draft a corresponding letter of inquiry following the quotas offered

for a hotel accommodation:

RCA
HOTEL
hot JL Kebun Karet 16
Jakarta
el Indonesia
Mr. Joseph Turner
10 Gresham St., Glasgow

Dear Mr. Turner,

Thank you for your letter of 5th June asking for hotel accommodation for the
participans in the conference organised by the World Banking Federation in our
town. We are pleased that you selected again RCA HOTEL. Our terms are as
follows:
Bed and breakfast Room and full board
Up to two nights
Per person, single room £60 £75
2 persons, double room £8o £120

three nights or more £45 £70

per person, single room £75 £115
2 persons, double room

Accomodation is still available for September, but we are almost booked up for July.
Would you therefore let us know your wishes as soon as possible, so that we can
reserve the rooms you need.
We look forward to the pleasure of seeing you here again soon.

V. Translate into English the following offer:

A). Stimaţi domni,
Ca urmare a solicitării dumneavoastră prin scrisoarea nr....... din data......,
dorim să vă propunem oferta noastră de mobilă pentru birouri. Piesele sunt
executate după cele mai înalte standarde de calitate, din materiale uşoare şi
rezistente, alcătuite din module uşor de manevrat şi asamblat în forme diferite
şi într-o gamă largă de culori, după dorinţa clientului. Preţurile şi termenele de
livrare şi vânzare sunt prezentate în catalogul anexat prezentei oferte. In

76
situaţia în care se fac comenzi mai mari, acestea se pot modifica în funcţie de
cantitatea şi calitatea solicitate.
Vă invităm la sediul nostru din strada..............pentru a vă convinge şi a
negocia cele mai convenabile preţuri.
In speranţa unui răspuns favorabil care să ne conducă la bune afaceri
împreună, rămânem ai dumneavoastră,
B). Urmare cererii dvs de ofertă nr 26 din 14.Sept. 2004 alăturat vă
transmitem următoarea ofertă a "Circuitului a la carte" în Jogjakarta,
Indonezia.
4 zile/3 nopţi
Leagănul civilizaţiei javaineze unde puteţi descoperi vestigiile şi urmele unei
culturi milenare. De semnalat în primul rând Borobudur, capodoperă a
arhitecturii religioase.
Ziua 1:
Sosirea la Jogjakarta. Primirea la aeroport şi transferul la hotel. Vizita
oraşului: palatul sultanului, Kraton, muzeul Sonobudoyo, atelierele pentru
baticurile musulmane şi de argintărie.
Ziua a 2-a:
dimineaţa se vizitează templul Borobudur, temple budiste din secolul VIII şi
IX. Considerat ca cel mai mare din lume, cele 9 nivele simbolizează accesul
către Nirvana. După-amiaza, excursie la templele hinduiste de la Pranbanam.
Din luna mai până în octombrie se poate participa la faimosul festival
Ramayana care se desfăşoară în nopţile cu lună plină (excursie facultativă).
Ziua a 3-a:
Jogiakarta. Zi liberă. Posiblitatea organizării unei excursii în Dieng, un
interesant şi pitoresc oraşel de provincie, în inima Javei.
Ziua a 4-a
Jogiakarta. Zi liberă până la ora trasferului la aeroport. (2 până la 6 persoane)
Preţ: $ 350 /persoană: cazare cu mic dejun inclus; transferurile de la şi la
aeroport; excursiile prezentate în program; ghid vorbitor de limbă
engleză/franceză /germană
- nu sunt incluse: zborul până la Jogjkarta; taxele de aeroport
Orice modificare de program sau itinerariu aduce cu sine modificări ale
preţului. Vă rugăm să ne confirmaţi, în termen de 30 zile numărul de turişti
pentru care doriţi organizarea acestui sejur.

Director general
6.6. ORDERS. ORDER ACKNOLEDGEMENTS
An order is a piece of business correspondence by which a purchasing
department or a buyer asks for the goods or services that he intends to be
provided with. Although orders are usually ordinary forms to be filled in, it is
preferable that a letter is written and certain points are made clear. There
could be some import regulations which makes it necessary to complete

77
formalities or delivery instructions or other matters that might be underlined
better in a letter. The supplier usually sends an order acknowlwdgement and
thanks his customer for the order. If any terms are changed, or if the goods
are no longer available,
the customer is notified in due time. Ordinary expressions used in cover letters
for orders and acknowledgement of orders:
Placing orders:
- Please supply/send/reserve us the undermentioned goods/ number of
rooms.
- With reference to your qoutation, we enclose our order for prompt
delivery of...
- We accept your offer on these terms, and are pleased to place an
order for.....
- As the goods are urgently required, we should be grateful for delivery
by....
- Please confirm that you can supply this quantity by the required date.
Acknowledgement of orders
- By the present we let you know that the delivery will be made
immediately on receipt of your cheque/remittance of credit
- We trust that this initial order lead to further dealings between our
companies.
- By the present we confirm that the delivery will be made according to
your instructions
- Your order is already being carried out/executed/processed, and
delivery will be made by January, 15, as requested.
Refusal of Orders
- By the present we inform you that the goods ordered are out of stock
for the moment/no longer available. We can offer you a substitute which is the
same price and of similar quality.

I. Match the words or expressions with the definitions:

1. to order a) official request for goods to be supplied
2. order b) to ask for goods to be supplied
3. to fulfill an order c) supplying items which have been ordered
4. order fulfilment d) to supply items which have been ordered
5. cash with order e) ordered but not delivered
6. on order f) the goods will be delivered only if payment
in cash is made at the same time as the order is
placed
7. order back g) official paper which places an order for
something
8. order picking h) record of orders
9. purchase order i) collecting various items in a warehouse to
make up an order to be sent to a customer
10. delivery order j) instructions given by the customer to the
person holding his goods, telling him to deliver
them

II. Write a cover letter for an order according to the following

instructions ofthe memo you received from your office manager, the
information provided in the order form you sent previously and the

78
swatch catalogue of the supplier by which a discount of 10% and 12%
is alowed for orders of over €60,000 and € 80,ooo respectively.
Calculate the total price. Is there any higher discount possible? Use
the spare parts the cover letter of the order as a reply to the following
memo.

MEMO:

To: Supplies Officer

From: Office Manager
Date: Thrusday, 12, June
Could you please make some alterations to the order nr 36/10. June that we
discussed recently within the board?
Please, order two more drawer filling cabinets over the 4 ones that we already
ordered.. We also need 20 fax rolls and 10 computers, two shredders and two binders. We
do not need a postal scale, so please deleate it entirely, but we need one overhead projector
– please check the items code in the catalogue. Please specify that the 100 chairs we
ordered for the conference room should be dark blue, the filling cabinets should be grey
and the wall clock must be grey too. Should it bring us to over €5,000 to be entitled to ask
for a discount and free delivery?
Office Manager
Geffrey Austen

ORDER FORM
ITEM CODE: DESCRIPTION QUANTITY UNIT PRICE
J24 drawer cabinets 4 € 236
K30 chairs 80 € 40
128 MNP M1 FAX 6 € 65
DG 445 Fax rolls 30 € 12
X136 MNP Computers 50 € 1,100,00
20XCL Binders 25 € 199
7.38.GH Postal scale 1 € 225
10 FY Shredder 1 € 110
97OP Wall clock 2 € 50
12 S 8734 Flip chart 3 €239
===========================================================================
TOTAL: €6,271,500
DISCOUNT: 5%
DELIVERY CHARGE: €350
TOTAL: €5,993,80

III. Translate into English:

Stimaţi domni,
Ne face o deosebită plăcere să vă comunicăm că rezultatele testelor
efectuate asupra eşantioanelor pe care le-am primit de la dumneavoastră sunt
satisfăcătoare. In consecinţă, suntem gata să comandăm 25 tone de ciment cu

79
preţul de € 250/tonă, conform ofertei pe care ne-aţi trimis-o în data de 23
Martie, 2004, în condiţiile în care livrarea se poate face până la data 15 Aprilie
anul curent. (inst)
Inţelegem de asemenea, că plata până la 60 zile beneficiază de o
reducere de 2,5%. De asemenea, ne rezervăm dreptul de a refuza orice
cantitate de
ciment care nu corespunde eşantioanelor pe care ni le-aţi pus la dispoziţie şi
pe care noi le-am testat.
Având convingerea că derularea contractului se va face în bune
condiţiuni, sperăm într-o colaborare mănoasă şi de lungă durată.

6.7. COMPLAINTS
There is a fly in my software – A computer program

A software called Custom has been founded by the employment department's

learning technologies unit, and is designed to help hotel and catering trainees
to cope with customers complaints taht can usually make or break a business.
The idea of such a program grew out of an unpleasant evening when its
maker and
his wife had a hotel. The couple were left standing in the hotel lobby while the
receptionist continued making a personal phone call. During the meal they
were ignored by the waiter and had thei drinks at the bar and carry them back
to the table. The couple complained to the manager who sympathises but said
it was difficult train staff in customer care. Hence the computer based training
package. The first part analyses how complaints arise. The complaints included
those from the few customers who go to a restaurant determined to make a
fuss, perhaps in the hope of a free meal.
The program includes ways of spotting those complaints, and the one
that can arise because of previous bad experience that somebody had before
entering the restaurant. The program also identify the complaints that can
occasionally arise merely from customer boredom. Somebody may have
decided he cannot stand his dining companion and takers his unhappiness out
on the food or the unfortunate waiter. The computer asks the waiter-trainee to
make a profile of the customer according to the way he is dressed – shabby,
average or immaculate, to his accent – a local or a non local, the way he
speaks English, if he belongs to a group or he is alone, or how much alcohol
he seems to have drunk. Then the computer suggests successful ways of
tackling the customer. In the second part of the program the computer
becomes less friendly. The trainee-waiter or recptionist takes part in arole play
game with the complaining client. The computer is programmed to be angry,
rude, reasonable or rambliong. The trainee's task is to recognize the warning
signs and calm down the situation. At the end of a sesion, trainees are told
how many attempts it has taken to reach the correct response. The results are
saved for the course tutor to read.
But although the program uses graphics and text to good efect, it
cannot yet convey complex factors such as the ciustomers 's tone of the voice,
body posture, or facial expression. However, the program producers say that

80
there are no plans to incorporate a robot arm that grabs the user by the
lapels.

1. Who is the software program going to help?

2. What are the three causes of complaint that have nothing
to do with the quality of service of food. What are they?
3. What questions does the computer ask in order to
construct a customer profile?
4. Which factors decide how a customer will react during a
complaint?

5. Do you believe in the efectiveness of this kind of training?

Give arguments.

XV. Listen to the following conversation between a guest and a

receptionist.
Make a list of the things the guest complains about. What is the
outcome of the conversation? What attitude do you suggest the
receptionist should have?

XVI. Match each document type on the left with a definition on the
right:
1. an enquiry...............a) a request to supply (sent by the customer)
2. a quotation..............b) a request for information sent by the customer
3. an estimate..............c) an approximate calculation of the cost of something
4. a counter-proposal....d) the price given for goods or a piece of work
5. an order...................e) a letter where the customer tries to get better
terms
6. an invoice................f) a document that proves you have paid for some
goods
7. a reminder..............g) a list of amounts paid and still owed, sent every
month
9. a receipt..................h) a bill for goods or work done
9. a statement..............i) a letter to customer about an unpaid invoice
10. a complaint.............j) a letter saying you are not satisfied about
something

XVII. Complete the sequence 1-15 with following business

documents:
Enquiry; complaint; counter-proposal; Order, with a cover letter; receipt;
quotation; statement; reply to an enquiry; reminder reply to a complaint
Customer sends: Supplier sends:
1........................................................2.......................
2. request for a quotation 4.......................

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5. ......................................................6..........................
7.....................................................................................
Goods are dispatched
8 invoice
Goods arrived but there is a problem
9.........................................................10........................
The problem is solved
11
12. Payment......................................13..............................
The customer starts to place regular orders
14
15. Further payments

XVIII. Work in pairs. You are going to exchange correspondence with

your partner because you are interested in each other's products.
A.
Student A worksheet: Your company manufactures and supplies office
furniture. Your address is 89 Cannon Street, Redford Notts, QT, Your partner
company sells computers.
1. Enquiry. Write a letter to the Sales Manager of Voltec Computer to ask for
general information about their computers. Use the full layout of a business
letter.
2. Reply to an enquiry. Reply to Voltec 's letter enclosing some brochures,
price list, etc.
3. Request for a quotation. Write an e-mail to Voltec asking for a quotation
for some specific products.
4. Quotation. Write a fax to Voltec. Give them a quotation. State your terms
of sale: price, any discounts (e.g. prompt payment), delivery time. Deal with
any other questions in Voltec's last e-mail.
5. Counter-proposal. Send an e-mail to Voltec. , making a counter-proposal.
For example, you may want a better price, a larger discount or a shorter
delivery time.
6. Reply to a counterproposal. Reply by e-mail. Begin by apologizing for
the delay in replying. Tell them that you can't accept their counter-proposal.
However, you are prepared to offer something (less than they want).
7. Order. Their reply is acceptable and you want to make an order. Write a
short letter to Voltec to send with your order form.
8. Dispatch advice. Write an e-mail to Voltec. Thank them for their order and
tell them that the goods were sent this morning.
9. Complaint: The computers have arrived! However, one of them has a
small fault. Also, there is a mistake on the invoice. Write an e-mail to Voltec.
10. Reply to a complaint: Reply by e-mail. Apologize for the damaged
furniture. Ask Voltec to return the piece, and say you will send a replacement

82
immediately. Apologize and give a reason for the mistake in the invoice – say
you will send a new one.
Student B worksheet. Your company supplies office computers. Your
address is Springtime Road, Milton Keynes, TQ8 5KP.

1. Enquiry. Write a letter to the Sales Director of Easilife Office Furniture to

ask for general information about their office furniture. Use the full layout of a
business letter.
2. Reply to an enquiry. Reply to Easilife's letter, enclosing some brochures,
price list, etc. You know the name of their Sales Director, so use it.
3. Request for a quotation. Write an e-mail to Easilife, asking for a
quotation for some specific products (four executive desks, and four executive
armchairs). You may think of other questions.
4. Quotation. Write a fax to Easilife. Give them a quotation. State your terms
of sale: price, any discounts (e.g. prompt payment), delivery time. Deal with
any other questions in Easilife's last e-mail.
5. Counter-proposal: Send an e-mail to Easilife, making a counter-proposal.
For example, you may want a better price, a larger discount or a shorter
delivery time.
6. Reply to a counter-proposal: Reply by e-mail. Begin by apologizing for
the delay in replying, then tell them that you can't accept their counter-
proposal. However, you are prepared to offer something (less than they want)
7. Order: Their reply is acceptable and you now want to make an order. Write
a short letter to Easilife to send with your order form.
8. Dispatch advice: Write an e-mail. To Easilife. Thank them for their order
and tell them that the goods were sent this morning.
9. Complaint: The office furniture has arrived! However, one piece is
damaged. Also, there is a mistake on the invoice. Write an e-mail to Easilife.
10. Reply to a complaint: Reply by e-mail. Apologize for the faulty
computer. Ask Easilife to return it, and say you will send a replacement
immediately. Apologize and give a reason for the mistake in the invoice – say
you will send a new one.
XIX. Pair work. The directors of a travel agency, "Treasures of the
countryside" and an agro-countryside residence "Green Horse"
exchange some business correspondence.

A) Worksheet: Student A: the Director of "Treasures of the

countryside.
1. Write a letter to "Green Horse" residence
- you enclose the latest cheque and apologize for its delay
- provide the details about the following group of tourists coming from
Paris Charles De Gaule to Bucharest – Henry Coandă. You will have probably
11 people. Ask for a quotation for 5 double rooms and a single
- ask diplomatically, for some information about "The Green Horse''
residence's financial situation, mentioning that you read some rumors in the

83
newspapers
2. Reply to the Director of "Green Horse" residence
- refer to "Green Horse" 's letter and mention that you hope they
received your cheque
- make a counter-offer as you do not agree to the new terms
- inform Green Horse that your company in good financial situation.
3. Reply by e-mail to "Green Horse"
- refer to the "Green Horse" letter; you accept the quotation but not the
new terms
- a meeting is a good idea – suggest a time
- you ask for a copy of "Green Horse" 's last annual accounts before the
meeting
4. Reply by e-mail
- thank for the "Green Horse's e-mail. You consider that the meeting will
be useful
- you do not agree to the extra-charge due to the re-modeling of the
residence, as you can't recover it from your customers – in your catalogue it is
written that there will be no hidden extra-costs. Suggest you talk about that in
the meeting
You have some bad news – two of your customers have cancelled their
holiday at the last moment and now you only need 4 double rooms and a
single
B). Worksheet. Student B: The director of "Green Horse"
residence; Your companies have been doing good business together for
several years
1. Write a letter to your partner "Treasures of the Countryside"
- remind your partner that payment of your last invoice is overdue
- explain your decision that you started a new financial policy: to
improve cash-flow: all clients must pay a deposit of 50% two months before
the check-in day and 5o% one month after
2. Reply to the Director of "Treasures of the Countryside"
- make reference to Treasures' letter and thank them for the cheque
- give them a quotation for the accommodation: €60 for a double and
€40 for a single. You would like a 50% deposit now, as mentioned in the last
letter. This will guarantee the availability of the rooms.
- let Treasures know that your company is in good financial situation.
- suggest a meeting to discuss the matter in detail. When would be
convenient to "Treasures..."
3. Reply by e-mail to Treasures' letter
- Treasures' counter-proposal is not acceptable. You need to discuss this
in the meeting. You express your confidence in a compromise to acceptable on
both sides
- you have some bad news – the government has raised a 6% tax for
small business and so, your previous quote will have to go up
4. Reply by e-mail
- thank Treasures for their e-mail. The time they suggest for the
meeting is convenient.
- confirm that the 4 double rooms and 1 single are available in the
residence. You will discuss the new terms at the meeting, but you still need
the deposit now to guarantee the availability of the rooms

84
 - Your annual accounts are confidential and cannot be shown to the
clients. However, you are prepared to answer any questions in the meeting.

B) Meet your partner to negotiate all the issues

XX. Translate into English:

A) Imaginaţi-vă următorul scenariu: Primiţi o reclamaţie de la un client

nemulţumit. Dvs îi scrieţi imediat şi reuşiţi să-l mulţumiţi cu răspunsul dat.
Inseamnă că i-ati scris clientului o scrisoare bună. Dar dacă reuşiţi să-l
trasformaţi, prin această scrisoare, dintr-un client ocazional, într-unul fidel,
atunci este o scrisoare aducătoare de profit.
Indiferent dacă trimiteţi un fax sau o scrisoare, în ziua de azi, cu
concurenţa mereu crescândă, este foarte important ca toată corespondenţa
dvs. să aibe efecte maxime. Pentru dvs. ca om de afaceri, efecte maxime
înseamnă afaceri profitabile, înseamnă bani în cont.
B. Vă mulţumim pentru oferta dvs din data de ... pentru costume bărbăteşti
din stofă. Considerăm, însă, că raportul preţ/calitate din catalogul nu este
satisfăcător, mai ales în condiţiile unor comenzi permanente şi substanţiale pe
care intenţionăm să le facem. Având în vedere exigenţele pieţei Uniunii
Europene, vă sugerăm o reducere cu 10% a preţurilor oferite, cu plata la 30
zile de la expedierea mărfii. Pentru discutarea şi a altor detalii, considerăm
bine venită o întâlnire între reprezentanţii firmei lor dvs într-o perioadă pe care
lăsăm la latitudinea dvs. Aşteptăm cu interes răspunsul dvs cât mai curând.

C. Stimaţi domni,
Regretăm să vă informăm că, deşi aţi respectat termenul de livrare al celor
două loturi de margarină, nu aţi ţinut cont de specificaţiile comenzii noastre.
Acestea prevedeau un ambalaj corespunzător transportului cu tir frigorific care
să protejeze marfa atât împotriva temperaturilor exterioare ridicate cât şi a
celor joase din interiorul mijlocului de transport. Având în vedere cele de mai
sus, vă facem cunoscut că ambalajul s-a degradat pe timpul transportului în
proporţie de 40%, ceea ce a determinat şi perderea unei cantităţi însemnate a
conţinutului şi deteriorarea calităţii acesteia.
In consecinţă, ne considerăm îndreptăţiţi să vă solicităm daunele
aferente pierderilor suferite ca urmare a nerespectării instrucţiunilor de
ambalaj stipulate în contract. Considerăm binevenită o întâlnire a
reprezentanţilor firmelor noatre pentru negociere la data de 25.Octombrie
2004.
Vă rugăm să ne comunicaţi în cel mai scurt timp decizia dumneavoastră
în această privinţă.

85
 PART II
BUSINESS RELATIONSHIP

86
 UNIT 1
BUSINESS CONVENTIONS

Objectives:
- familiarize with specific terminology and concepts
of different business agreements
- acquisition of specific vocabulary
- train ability of drafting different contract clauses

Contracts are agreements between two parties as a result of an "offer"

and "acceptance". Other requirements must also be met for an agreement to
become legally binding. The two parties must have full and legal capacity to
enter into a legal agreement, i.e. they must be competent, so that the
agreement should not be considered void either by law, statutory rule or an
inherent defect. The setting of a valid contract does not require any particular
formality, as it can be concluded in an oral or in a written form or even implied
from conduct. However, certain contracts are valid only if made by deed:
transfers of shares, certain types of lease, hire-purchase agreements, bills of
exchange, promissory note. There are some different types of contracts :

- Hire-purchase contract (HP) by which goods are

passed in the possession of the purchaser as soon
as he has paid an initial installment of the price. A
hire purchase agreement often involves a finance
company as a third party. The owner of the goods
sells them outright to a finance company entering
a hire-purchase agreement with the hirer.
- Franchising agreement by which a licence is
granted by the franchisor to the franchisee to
enable him to manufacture, or sell a product or
service in a particular area or stated period. He
pays a royalty on sales to his franchisor.
- Contract of employment (service) by which an
employer and a employee set an agreement. It
stipulates the job title, salary, payday, holiday
entitlement, sick pay, pension, notice
requirements, and disciplinary procedures. Larger
organizations provide a company handbook giving
a detailed account of company policies,
disciplinary rules and any other relevant matters.
- Loan Agreement is the type of a contract by
which the creditor undertakes to provide financing
to a debtor who obliges himself to pay back the
amount within a stated period of time together
with an interest.

87
 - Contract of licence: the licensor grants the
licensee the right to sell, to produce or render a
service under the name of the former. The
licensor provides the latter with all the necessary
technical
- documentation and information needed to
exercise the right under the contract while he is
bound to keep the confidentiality of this
information against a third party.
- Mandate agreement: the mandatory undertakes
to arrange business matters in the name of a
mandator at his request against the payment of a
certain amount of money for the service rendered
called a commission.
- Silent partnership agreement: the silent partner
provides an investment to an entrepreneur that
will pay him back an amount deriving from the
profits obtained in the entrepreneur's business
results.
- Leasing contract: the lessor undertakes to allow
the lessee the temporary use of equipment,
means of transportation, buildings for a stipulated
period of time and the lessee undertakes to pay
the lessor a hire-pay as remuneration.
- Security Brokerage Contract: a Brokerage
company undertakes execute buy/sell orders on
the behalf of a natural/legal person as a Client.
- Insurance Policy: an Insurance company
undertakes to cover the different types of risks:
transportation, damages, fire, floods, accidents,
life, etc.
- Charter Party: a ship-owner agrees to place his
ship, or part of it, at the disposal of a charterer
against a certain freight on the cargo to be
carried.
A. Sales Contract
The Hire/Purchase contract has the object of transfer of the ownership
from the seller to the buyer for an amount of money or for any other
consideration. The seller undertakes to deliver the assets sold or hired and the
buyer/purchaser undertakes to pay the purchase price according to the
clauses negotiated and stipulated din the contract.
The main parts of the contractare:
Preamble of the contract that will include information about the number
of the contract, date and place of conclusion, the seller and the buyer, their
legal address, logoes, telephone number, bank account number. If the seller

88
and buyer are legal persons they will always be represented by natural
persons that will be identified by the data in their identity card
Terms or Clauses of the contract:
- Object of the contract: goods or assets sold or hired named)
- Quantity of the goods/assets that make the object of the contract
- Quality accoording to the nature of the goods/assets
- Packing
- Marking
- Unit/Total Price and Terms of Payment
- Sales/Hire Terms of delivery
-Transportation
-Insurance
- Jurtisdiction and Arbitration
- Contingencies. Claims and Penalties
- Other clauses: guarantee, technical documentation, taxes, customs
duties, amendments, cancellation, stamps
- signatures of the two parties
B. Franchising Agreement:
The two main parties of the franchising contract are the franchisor that
licenses the franchesee (a manufacturer, a distributor, trader, etc) to
manufacture or sell a product or render a service on his behalf for a stated
period of time. The franchesee, i.e the holder of the licence pays the grantor
of the licence (franchisor) a royalty on sales, often as a lump amount as an
advance against royalties. The franchisor undertakes to supply the franchesee
with finance and technical expertise.
C. Employement Contract
This type of contract is concluded between the employer and the
emploee for a determined or undetermined period of time. The clauses are
negotiated and stipulated in the contract and guaranteed by the two parties
who undertake their rights and responsibilities that become binding under
their signatures.
D. Credit Facility Convention

In order to execute a loan, banks need paid-in capital that is earned

from financial activities, borrowed funds, and from customers' deposits. The
source for lending is always the money deposited with the bank by the bank's
customers, whether in a demand or time account. This will always limit
considerations in the degree of risk that the commercial bank will take. It
cannot jeopardize the safety of the depositors. The domestic and the
international bank will always obtain certain basic information that usually is
forthcoming in a meeting with the potential borrower. It will learn how much
money is being sought, the purpose of the loan, how long it is needed for, and
how it will be repaid.

89
 Banks make loans for worthwhile purposes: financing trade, expanding
businesses, house building, and so on. They need evaluate the three C's of
credit: character, capacity, and capital. That is the integrity of the borrower,
his capacity to repay the loan, and the soundness of his financial position.
Sometime the loan applicant's ability to repay the loan is pendant on
the purpose of the loan itself. Loans can be self-liquidation, when the source of
repayment is from the sale of imported merchandise, or capital-expansion,
when the source of repayment is from increased sales.
The financial statement of the borrower represents the financial position
of the borrower and it usually consists of a detailed balance sheet and a profit
and loss account statement. An audited financial statement requested by the
credit officer will cover a certain period of the customer's activity.
In international banking activity, the credit officer will consider the
economic and political outlook of the foreign country before loaning money to
a foreign borrower, its balance of payments being an important source of
information. The bank's prior experience with the borrower and the nature of
his
business represents a subjective factor in the decision-taking process. When
the loan is granted, the bank will also decide upon the interest rate to charge.
That will depend on the cost of money to the bank. This includes the average
interest rate the bank is paying to its depositors, the bank's operating costs,
the return that the bank expects. The bank must also take into account
possible losses and provide dividends to the bank's shareholders.
There are also other considerations to take into account when a bank
decides to allow a loan. If it is about a term loan, that is a second rate
borrowing, the risk is greater and it must be compensated through a higher
interest rate against the prime-rate borrowings that are short-term loans.
The appropriate credit instrument is to be decided upon for the repayment of
the loan too. The promissory note is the most customary that can be payable
"on demand" of the bank. The banker's acceptance can be used for loans
involving international trade. It is saleable to investors so that the bank
merely commits itself to pay on maturity. The bank does not have to commit
its own funds. Credit extension may involve advances, discounting of accounts
receivable, overdrafts, or advances against collections. A loan can be secured
by collateral assigned to the bank, such as securities or precious metals, or
guaranteed. When an agreement is reached, the borrower signs the necessary
documents and the amounts are disbursed to him.
For large loans, banks often form a syndicate each of them disbursing a
portion of the loan. One bank puts the deal together and carries the
administrative burden during the life of the loan, being the "lead bank". A
syndicate is sometimes desirable because of the legal lending limits on banks,
the general relationship of the total demand for credit compared to the supply
of loanable funds, or the prudent banker's desire to spread the risk.
E. Contract of Licence
The agreement is concluded between the licensor who grants a licence
to the licencee to sell a certain product, manufacture a preoduct, render a
service, run a business. The licensor is entitled to continue performance of his
rights but may also grant the same object of the contract to other persons.
The licencee is not entitlerd to transfer the rights and obligations undertaken
by the licence contract to another person without the consent of the licensor.
The contract will also provide the providing of the technical documentation and

90
the information needed to the licencee to perform his undertaken obligations.
The latter is bound to keep confidential both the documentation and the
information provided under the contract, against a third person.
F. Mandate Agreement
The two parties of the Mandate contract are the mandatory who
undertakes to set certain business matters by taking legal steps in the name
and for the account of the mandator, while the mandator undertakes to pay
him a certain amount of money – a commission. The mandatory will perform
his obligations undertaken by the contract in accordance to the mandator's
instructions and interests and keep him informed on the matter.
G. Silent Partnership
The silent/sleeping partner will participate into a business managed by
an entrepreneur by providing him investment. The entrepreneur undertakes to
pay a certain amount or percentage of the profits arising form the silent
partnership. The object of the business will be passed to the entrepreneur to
be used for a
certain period of time in business activities. The silent partner is entitled to
check the books of the business regarding its activity. The silent partner is not
bound to give back his profit share in case of loss. The contract ends when the
stipulated time elapses.
H. Leasing contract

Almost any asset can be purchased through leasing, from aircraft to

zithers. Even renting a car for a few days is being considered a convenient
short-term lease. Corporations lease both short-term and long-term as a
method of financing property, plant, and equipment. Every leasing contract
has two parties: the lessee – the user and the lessor – the owner. When the
lessee decides on the asset needed, he negotiates a lease contract with a
lessor. From the lessee's standpoint of view, long term leasing is compared to
a form of financing with a secured loan. The principal benefit of long-term
leasing is the tax reduction. If the corporate income tax were repealed, long
term, leasing would virtually disappear. The contract is called lease by which
the lessee has the right to use an asset and in return must make periodic
payments to the lessor, the owner of the asset. The lessor is either the asset's
manufacturer or an independent leasing company that has to buy the asset
from the manufacturer, and then the lessor delivers the asset to the lessee:
the lease goes into effect. If the lessor is an independent leasing company who
purchase s the assets from a manufacturer, leases contracts that it concludes
are called direct leases. It issues both debt and equity to finance the purchase.
But of course, a manufacturer could lease its own merchandise. This type of
lease contract is called sales-type leases. The most interesting feature of an
operating lease is the cancellation option. This gives the lessee the right to
cancel the lease contract before the expiration date. If the cancellation option
is exercised, the lessee must return the equipment to the lessor. The value of
a cancellation clause depends on whether future technological and /or
economic conditions are likely to make the value of the asset to the lessee less
than the value of the future lease payments under the lease.
There are different types of lease agreements as it follows:

91
 - financial lease does not provide for maintenance
or service by the lessor and it is fully amortized;
the lessee, in this case, has the right to renew the
contract on expiration, but never to cancel it. In
other words, the lessee must make all payments
or face the risk of bankruptcy. Two special types
of financial lease are the sale and lease-back
arrangement and the leveraged lease.
- sale and lease-back occurs when a company sells an asset it
owns to another firm and immediately leases it back. In this case the
lessee receives cash from the sale of the asset, and the lessee makes
periodic lease payments, thereby retaining use of the asset.
- leveraged lease is a three-sided arrangement among the lessee,
the lessor and the lender by which the lessor purchases the assets,
delivers them to the lessee, and collects the lease payments from the
lessee. The lessor puts up no more than 40-50 per cent of the purchase
price, while the lender supply the remaining financing and receives the
interest payment from the lessor. The arrangement would be a
leveraged lease if the bulk of the financing was supplied by creditors.

Manufacturer
of the asset

Lessor Lessee (firm U)

owns the asset uses asset
Does not use the asset does not own asset

Equity Creditors

I. Security Brokerage Contract

A member of the public wishing to buy or sell shares can only do so
through a broker. Finding a broker is most commonly done by personal
recommendation, but otherwise the Stock Exchange provides, on request, a
list of brokers willing to deal, and all a prospective client has to do is approach
one of the firms and ask them to act for him. The person becoming the client
of a broker has to complete a Security Brokerage agreement, which sets out
the terms and conditions under which business shall be done. The broker
usually wants to know details of his new client’s financial position and his
investment objectives.

J. Insurance Policy

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 Insurance is based on the principle of paying a relatively small amount
of money, called a premium that is to cover against the risk of accidents,
damage, theft, which could determine financial loss. When deciding to take out
insurance, a broker or an underwriter can give advise on the specific type of
insurance that cover certain requirements. The third party insurance type is
compulsory when driving a motor vehicle, as the owner of a write-off car may
lose a lot of money in case of an accident. The most advantageous insurance
type is the all-in which enables the insured party to claim for any damage that
might occur to his car. The insured party fills in a notice of claims when the
damage, loss or theft occur and lodges it with the insurer and an independent
surveyor assesses the compensation claimed. Properties can also be insured
against fire, floods or burglary. But because of depreciation, little
compensation is usually paid. Life insurance called assurance is more and
more convenient for the people retiring
as the state pension funds are lower and lower as they provide an additional
source for them. Their premiums are calculated according to actuaries. Trade
is also covered by insurance policies.
K. Charter Party
Foreign shipping is backed by Charter Party contract that is an
undertaking of a ship owner to place his ship or a part of it, at the disposal of
a charterer, the latter agreeing to pay the corresponding freight on the cargo
to be carried. The
contracting parties are the ship-owner and charterer.

EXERCISES:

I. Translate into English:

Deşi nu poate fi definit exact, leasing-ul operaţional este
caracterizat de unele trăsături importante:
- echipamentele achiziţionate în leasing operaţional
nu sunt de regulă amortizate integral pe perioada
contractului. De aceea, plăţile prevăzute în
contractul de leasing nu sunt suficiente pentru ca
locatorul să recupereze întregul cost al bunului
care face obiectul contractului. Aceasta se
întâmplă deoarece durata contractului de leasing
operaţional e de regulă mai mică decât durata de
viaţă a bunului. Astfel, locatorul se aşteaptă să
recupereze costurile activului prin reânoirea
contractului de leasing sau prin vânzarea bunului
la valoarea lui reziduală. (residual value)
- caracterisitica cea mai interesantă a leasing-ului
operaţional este opţiunea de anulare. Utilizatorul
are dreptul de anulare a contractului înainte de
data expirării acestuia. In acest caz utilizatorul
trebuie să înapoieze echipamentul locatorului.
Valoarea clauzei de anulare depinde de valoarea
activului care trebuie să fie sub valoarea plăţilor
prevăzute în contractul de leasing.

93
 Contractul este un acord, o înţelegere între două sau mai multe părţi
contractante, sub formă scrisă sau verbală. De obicei, pentru aceste contracte
societăţile, instituţiile, organizaţiile au pregătite contracte tip pe care le
completează atunci când este nevoie. Unele clauze, cu variaţii nesemnificative
de conţinut, se găsesc în toate tipurile de contracte, cum ar fi: obiectul
contractului, notificări, forţă majoră, cesiunea, încetarea contractului.
Convenţiile scrise permit determinarea clară a obligaţiile şi drepturile părţilor.
Dacă acestea nu pot ajunge la consens deplin în ceea ce priveşte fiecare
termen în contract, aceasta nu trebuie să împiedice semnarea contractului
totuşi atunci când majoritatea condiţiilor au fost îndeplinite şi tranzacţia este
destul de importantă.
Orice notificare/comunicare ulterioară semnării contractului devine
valabilă pentru înţelegerea între părţi numai dacă va fi transmisă prin
scrisoare, fax sau telex confirmat. Aceleaşi comunicări nu pot deveni parte
integrantă din contract dacă ele nu capătă o forma scrisă şi confirmată de
către cealaltă parte contractantă.

II. Fill in the blanks using the following words:

1. installments; 2. security; 3. amount; 4. money; 5. paid; 6.
statement; 7. agreement; 8. default.

When a person borrows a) ____________ or sells goods on credit, the

lender wants a guarantee to cover the loan. If the borrower does not pay back
the borrowed b) ___________, the lender may sell the goods which were
given
to him as a guarantee and may also use the guarantee amount in order to
cover the loan. Such a contract is called a "loan c) __________". On the basis
of this contract, the borrower obliges himself to pay back the loan at a certain
date, or in several equal d) _____________ at periods established throughout
a month or a year. If the borrower does not pay back at required date, makes
any false e) _____________ to lender, dies, becomes insolvent or terminates
his business by all reason, the payment of the loan is "accelerated" and the
borrower or his successors must pay immediately the whole amount which
remained unpaid. When a f) ____________ and loan agreement is drawn up,
the identity of the parts, the total amount of the loan, the interest rate and the
date the loan must be paid back must be taken into consideration. The
contract will stipulate the description of the goods which secures the loan, and
the date on which the installment is to be g) __________ back. It will also
mention the lender's obligation not to sell or destroy the good and the right of
the lender in case of the borrower's h) ___________ on his obligations.

94
 UNIT 2
ORDINARY CLAUSES in BUSINESS
CONVENTIONS

2.1 Quantity
Quantity and quality clause is present in any business contract
according to its object and nature. The seller, hirer, franchisor, licensor,
mandator, the silent partner, lessor, broker, insurer or the ship-owner will
make reference to the quantity and the quality of the object of the contract
in the quantity and quality clause. They are both established according to
the type of contract, nature of assets/goods/services and international
trade usage. Different measurement units are used to determine the
different quantities.
Length............................... .....GB/US
Centimetre 0,394 inch (in)
Metre 49.4 inches or 1.094 yards
(yd)
Kilometre (km).................................... ......0.6214 mile
Surface .................................. .GB/US
Square metre (m2).............1 are (a) 0.025 acre
Ares .................................1 hectare (ha) 2.471 acres
2
Hectares ............................1 square kilometre (Km ) 0.386 square miles
Weight GB/US Metric
1 grain o.065 gram (g)
437 grains 1 ounce (oz) 28.33 grams
16 drams (dr) 1 ounce 28.35 grams
16 ounces 1 pound (lb) 0.454 kilogram (kg)
14 pounds 1 stone (st) 6.356 kilograms
2 stone 1 quarter 12.7 kilograms
4 quarters 1 hundredweight (cwt) 50.8 kilograms
112 pounds 1 hundredweight 5o.8 kilograms
100 pounds 1 short hundredweight 45.5 kilograms
(US)
20 hundredweight 1 ton 1016.o4 kilograms
2000 pounds 1 short ton 0.907 tonne
2240 pounds 1 long ton 1.016 tonnes

95
 Linear Measure
G&B Metric
1 inch (in) 25.4 milimetres (mm)
12 inches 1 foot (ft) 30.48 centrimentres
(cm)
3 feet 1 yard (yd) 0.914 metre (m)
5 yards 1 rod, pole or perch 5.029 metres
22 yards 1 chain (cn) 20.17 metres
220 yards 1 furlong (fur) 201.17 metres
8 furlongs 1 mile 1.609 kilometres
1760 yards 1 mile 2.609 kilometres
3 miles 1 league 4.828 kilometres
Square Measures
GB/US
1 square (sq) inch 6.452 sq centimetres
144 sq inches 1 sq foot 929.03 sq centimetres
9 sq feet 1sq yard 0.836 sq metres
484 sq yards 1 sq chain 404.62 sq metres
4840 sq yards 1 acre 0.405 hectare
..40 sq rods 1 rood 10.1168 ares
4 roods 1 acre 0.405 hectare
640 acres 1 sq mile 2.59 kilometres or 259
hectares
Cubic Measure
GB/US
1 cubic (cu) inch 16.39 cu centimetres
1728 cu inches 1 cu foot 0.028 cu metre
27 cu feet 1 cu yard 0.765 cu metre
There are numerous standard measurement units used in international trade :
o barrel for crude oil
o bale for cotton, wool or paper
o bag (70 kos)
o sack (100 kos)
o bushel for grains
o drum, demijohn, carboy, can, for
chemicals

96
 o sets for china, glass

Allowances are also used for fungible goods. The time,

the place and the way of ascertaining the weight will
also be mentioned in the quantity clause. The contract
will always mention whether gross or net weight is
understood.
• The documents needed to ascertain the quantity
are:
- the B/L (Bill of Lading) for the sea transportation
- the Way Bill or Air Consignment Note for river
transportation, land and air
- the mail receipt for mail transportation
Mind also the ways various products are prepared and packed for sale:
A string of bretzels; a bar of soap; a tube of tooth paste; a sample of
packet of hair conditioner; a loaf of bread; a cartoon of beer; a 400 g tin of
baked peas; a packet of cornflakes; a bunch of grapes, a pack of different
soup vegetables; a few sheets of paper; a pair of shoes.

2.2. Quality
Quality clause refers to the quality of the goods, services that make the
object of the contract. It may involve detailed description from physical,
chemical, biological point of view, or the goods state (solid, gaseous, liquid) ,
shape, colour, size, content, place of origin, crop year for wines. The technical
specification is enclosed to the contract making detailed reference to the
specific characteristics of the merchandise that makes the object of the
contract.
- material that the product is made of
- power consumption
- output per time unit
- operation speed
- operation /use instructions, etc
Before concluding the contract the content of the quality clause will be
established according to samples, specimens, patterns that will represent
references for the goods delivered. In certain situations the brand name
/trade mark will be mentioned. Catalogues are also means of confronting the
quality of the products offered to those ones delivered.
Roman trade rules and principles are mentioned till nowadays by the
expressions: "tale quale" or "tel quel" when the product is taken delivery of
and paid by the buyer as it is. He takes the risk of any subsequent damage.
Products can also be qualified by specific expressions: Fine (F), finest (FF),
super fine (FFF) or fair, good, extra, waste, rejects, f.o.q. (fair average
quality), g.o.b. (good ordinary brand).

97
 The quality checking will be confirmed by a specialized document:
Works Test Certificate (WTC) which guarantees the quality of the goods for a
limited period of time

98
 UNIT 3
SPECIFIC CLAUSES in BUSINESS
CONVENTIONS

99
 UNIT 4.
PAYMENT METHODS

Objectives:

- Get familiarized with specific terminology in

written formal documents
- Improve correct use of specific vocabulary in
writing

Nations, companies and individuals have engaged in trade for centuries

and from the beginning have searched for the best financing alternative.
Financing the flows of goods and services has become a key component of
maximizing profit from trade. Today sellers have different alternatives to get
paid for the goods shipped or services rendered. But each alternative
addresses certain risks for the buyer and the seller. Trade payment methods
have been used effectively to expand markets for goods and services and to
facilitate a variety of financial transactions, either as a method of payment or
as a credit enhancement, within as well as across the borders of sovereign
states. They provide powerful leverage for importing and exporting customers.
Trade solutions are customized to the customers' needs, integrating different
methods of payment to form a truly end-to-end trade proposition.
If one of the following payment methods is selected by the business
partners, documents covering shipment of the merchandise are handled
outside banking channels. The banking system is involved only in the
remittance of funds.
1. Cash in advance: the seller receives cash from
the buyer prior to shipment. The seller ships the
goods when convenient while using the buyer's
funds. The buyer has no control over the goods,
as the seller may refuse to ship them.
2. Open account: Goods are shipped to the buyer
and payment is made on terms negotiated in
advance with the seller. The buyer has full control
over the goods and can pay when convenient,
even refuse.
3. On consignment: The seller ships goods to the
buyer, but retains ownership. Payment is made if
and when the buyer sells the goods, i.e. payment
is contingent upon sale of goods.

However, if the seller selects payment under a Collection or a Letter of

Credit, a bank adds its service and documentary expertise on behalf of either
the buyer, the seller or both.

100
 4. Collection: the goods are shipped to the buyer.
The seller's draft and documents covering the shipment are presented through
the buyer's bank for payment, so the title documents are in control of the
bank, although the buyer may refuse to pay or accept the draft.
Trade involves buyers and sellers seeking to exchange goods or services
despite their differences in language, national custom, credit procedures and
accounting practices. Historically, merchants have sought ways of minimizing
these differences and facilitating trade. The special protection and
opportunities offered by Letters of Credit apply to both domestic and
international trade.
4. Letter of Credit. If the contract of sale establishes
Letter of Credit as method of payment, the buyer
must apply to its bank for a Letter of Credit in
favor of the seller. The application and the
agreement with the bank is separate and distinct
from the underlying contract of sale between the
buyer and the seller. The contract between the
buyer (as Applicant) and its bank evidences the
buyer's reimbursement obligation and
responsibility to its bank and sets forth the terms
and conditions to be included in the Letter of
Credit. The Applicant is obligated to the bank for
any amount paid under the Letter of Credit.
Therefore, the Applicant must use sound business
judgement when entering into a contract with a
party in whose favor the Letter of Credit will be
issued. The buyer's bank (Issuing bank)
undertakes to the Beneficiary (seller) and
provides a specialized service. The seller
presenting the documents must comply strictly
with the terms of the Letter of Credit to have the
right to receive payment from the bank. This
right is not contingent upon the seller's actual
compliance with the underlying contract of sale
but rather upon the bank's determination of
complying documents. By the Letter of Credit the
seller may be requested to present quality and
quantity certificates of the goods (laboratory
testing certificates, inspection certificates) along
with other documents. The buyer and the seller
must agree beforehand on the responsibility for
payment of these services, as the buyer's and
seller's integrity are paramount in any exchange
of goods or services regardless of payment
methods.
The parties to the Letter of Credit are:
- Applicant: the party that makes the application for the Letter
of Credit to the Issuing bank, usually the buyer or the
importer

101
 - Beneficiary the party in whose favor the Letter of Credit is
opened, usually the seller or the exporter
- Issuing Bank – the Applicant's bank, the bank that undertakes
to the Beneficiary to issue the Letter of Credit

- Paying Bank – the bank entitled to make the payment to the

Beneficiary
- Negotiating Bank – the bank entitled to negotiate against
strictly complying documents by the terms and conditions of
the Letter of Credit
- Confirming bank – the bank that can add its own undertaking
to that of the issuing bank, on request In most of the
transactions, there are at least two banks involved – a bank in
the country of the buyer and another one in the country of the
seller. A bank may play several roles in a single transaction. If
the Issuing bank sends the Letter of Credit to the Beneficiary,
payable at its own counters, then the bank is playing the role
of both Advising Bank and Paying Bank.
The formal language used in the Letter of Credit depends on the type of
the document, so it is important to understand them.
Letters of Credit may be issued under the form of "revocable" or
"irrevocable" and either "confirmed" or "unconfirmed". A Revocable Letter of
Credit may be amended or canceled by the issuing Bank at any time or
without prior notice to, or agreement of, the Beneficiary, An Irrevocable Letter
of Credit cannot be amended or canceled without the agreement of the Issuing
Bank, the Confirming Bank and the Beneficiary. An Irrevocable Letter of credit
is a definite undertaking by the Issuing Bank to pay, provided the Beneficiary
complies strictly with the Letter of Credit. Once the payment is made by the
Paying Bank the authority to pay becomes an irrevocable obligation on the
part of the Issuing Bank to reimburse the Paying Bank. The paying Bank is
thus protected and will receive funds from the issuing Bank in accordance with
the Letter of Credit.
Beneficiaries do not always rely on the stability of an Issuing Bank,
particularly when that bank is in another country or is unknown to the
Beneficiary. Consequently, a Beneficiary may request that the Applicant
instruct the Issuing bank to have its Irrevocable Letter of Credit confirmed by
a Bank in the Beneficiary's country. A Confirming Bank is the bank which, at
the request or with the consent of the Issuing bank, adds its own irrevocable
undertaking to that of the Issuing Bank. The Confirming Bank must be
satisfied with the Issuing Bank's financial stability and with the political
stability of the country in which the bank resides. This is mandatory, since
failure of the Issuing Bank to fulfill its irrevocable obligation (because of
political restraint, war, insolvency or other reasons) will not relieve the
Confirming Bank of its irrevocable obligation to pay the Beneficiary.
If the Letter of Credit is issued in negotiable form, the Beneficiary can
present the draft and documents either directly or through a local bank to the
Paying Bank, in order to obtain funds before actual payment. When

102
negotiations are made with recourse, the Beneficiary receives funds either for
full or partial value of the drafts drawn on the Paying Bank, i.e. similarly to
cashing a check at a bank other than the bank on which it is drawn.
Letters of Credit sometimes provide for negotiation without recourse.
Under such instructions, the Negotiation bank has no recourse to the
Beneficiary after it has honored the Beneficiary's draft.
Many different types of Letters of Credit were developed to meet the
needs and requirements of buyers and sellers throughout the world.
- Revolving Letter of Credit is more efficient and cost effective
when the Applicant and the Beneficiary agree to ship goods on
a continuing basis. A special Letter of Credit for handling
multiple shipments, renewable over an extended period of
time, a Revolving one, may operate automatically
- Installment Letter of Credit incorporates a schedule for
shipment or drawings. If the Beneficiary fails to present
strictly complying documents for a scheduled shipment or
drawing, the Beneficiary will not be entitled to draw under the
Letter of Credit for that or any future shipment or drawing.
- Red Clause Letter of Credit is used when an Applicant wants to
advance cash to the Beneficiary to purchase the goods or
effect shipment under the Letter of Credit. It restricts
negotiation or payment to a specific bank. It is referred to as a
"red clause" simply because the clause is sometimes printed
or typed because the clause is sometimes printed in red ink. A
"red clause" is typically used when there is a close business
relationship between the Applicant and the Beneficiary.
- Back-to back Letter of Credit – is used when the Beneficiary of
an Irrevocable Letter of Credit seeks to use the instrument
issued in its favor as a basis for requesting a bank to issue a
companion Irrevocable Letter of Credit in favor of the
manufacturer or supplier of those goods needed for shipment
under the fist Letter of Credit. The Beneficiary of the
Irrevocable Letter of Credit (a broker or a middleman) will
become the Applicant of the second Letter of Credit using the
first as collateral for the issuance of the second Letter of
Credit. The two Letters of credit used jointly to facilitate the
purchase of the same goods are called Back to back Letters of
credit.
- Transferable Letter of Credit – is used by the beneficiary to
request it to be available to one or more partners, named
transferee, but only once. If partial shipments are not
prohibited, portions of the Transferable Letter of Credit may
be transferred separately, but the amount transferred cannot
exceed the amount of the original Letter of Credit (Master).
Exercises:
I. Fill in the blanks the missing word in the following Letter of Credit
1. installment; 2. schedule, 3. law; 4. statement; 5. expiration

103
 World Development Bank
56-70 Wall Street, New York, 1002
March, 3, 2005
Irrevocable Standby Letter of Credit
Refine Realty Corp.
230 May, South Drive
Chicago, Il, 12003

Sirs:
By order of our client Hotel Macedonia Corporation, New York we hereby issue
our Irrevocable le Standby Letter of Credit nr 825 in your favor, for an amount
not exceeding in the aggregate U.S.$2,ooo,ooo effective immediately and
expiring at our office on September 30, 2006.

Funds under this letter of Credit are available to you against draft(s) drawn on
us, mentioning thereon our Letter of Credit no 825, in accordance with the
following a)................ of payments:

1. U.S. $1,000,000 beginning on 1 May 2005 and up to an including May 30,

2006 accompanied by your signed b)................. that "the amount of said
draft represents the first installment for the purchase of the hotel "New
California", Los Angeles.
2. U.S. $1,000,000 beginning on June 1, 2005 and up to an including June 25,
2006, accompanied by your signed statement that "the amount of said draft
represents the final c).................. for the purchase of the hotel "New
California", Los Angeles.

We hereby undertake with you to honor each draft drawn under and in
compliance with the terms of this Letter of Credit, if duly presented together
with the documents specified at this office on or before the stated
d)................. date.

Except as may be otherwise stated, this Letter of Credit is subject to the

International Chamber of Commerce's Uniform Customs and Practice for
Documentary credits in effect on the date this Letter of Credit is issued and is
subject to and governed by New York State and U.S. Federal e)..........,
without, regard to principles of conflicts of law.

104
 PART III
BUSINESS MANAGEMENT

105
 UNIT 1
MANAGEMENT OF BUSINESS
ORGANIZATIONS

Objectives:
- supply information and legal terminology
- firm documents, management terminology and concepts
- different departments in a firm

1.1. Legal personality

In any legal system individuals or companies may be regarded as
having rights and duties enforceable at law. A company can sue a partner for
breach of a contract in virtue of its legal personality. Without it institutions and
groups cannot operate, for they need to be able maintain and enforce claims.
Individuals, limited companies and public corporations are recognized as
possessing a distinct legal personality, the terms of which are circumscribed
by the relevant legislation. It is the law which is the foundation of legal
personality for it will determine the scope and nature of personality. Legal
personality involves concepts such as status, capacity, competence as well as
the nature and extent of particular rights and duties. The whole process
operates within the confines of relevant legal system which circumscribes
personality, its nature and definition. Legal personality is crucial. Without it
institutions and groups cannot operate, for they need to be able to maintain
and enforce claims. Individuals, limited companies and public corporations are
recognized as each possessing a distinct legal personality, the terms of which
are circumscribed by the relevant legislation. It is the law which is the
foundation of legal personality for it will determine the scope and nature of
personality. The status of a particular entity may well be determinative of
certain powers and obligations, while capacities will link together the status of
a person with particular rights and duties. This is particularly true in
international law. In international law, personality needs consideration of the
inter-relationship between rights and duties afforded under the international
system and capacity to enforce claims. One of the distinguishing
characteristics of contemporary international law has been the wide range of
participants performing on the international scene. These include states,
international organizations, regional organizations, non-governmental
organizations, public companies, private companies and individuals.
Public companies, which may be known by a variety of names, for
example, multinational public enterprises or international bodies corporate, is
characterized in general by an international agreement for cooperation
between governmental and private enterprises. Such enterprises may vary
widely in constitutional nature and in competences.
They can have an intergovernmental structure and operate in a global
commercial activity. The personality question will depend upon the differences
between municipal and international personality. If the entity is given a range
of powers and is distanced sufficiently from the municipal law, an international

106
person may be involved, but it will require careful consideration of the
circumstances.
Transnational or multinational enterprises are also subject of
international legal personality. They constitute private business organizations
comprising several legal entities linked together by parent corporations and
are distinguished by size and multinational spread.

There are different legal forms in which entrepreneurship may be

organized according to the size of the firm and according to the way of raising
capital.
For working or short-term capital a firm can find help in a variety of
ways, most usually through the commercial banks, but also by hiring buildings
and sometimes machinery, buying factors, obtaining the customary trade
credit terms and taking deposits in advance from customers.
The sole-proprietor or one-man firm is the oldest form of
entrepreneurial organization. Such one-man firms range from the rag and
bone man, chimney-sweeper and window-cleaner working on his own account
to the farmer, shopkeeper and small factory-owner who employs other
workers and may even own many separate units. Nevertheless, these
businesses all have the same characteristic of being owned and controlled by a
single person. It is the person's task to make all decisions regarding the policy
of the firm and it is he alone who takes the profit and bears any losses made.
This makes for energy, efficiency, a careful attention to detail and close
relationship between employer and employee.
The sole proprietor, however, suffers from the main disadvantage. First,
the development of such a firm must proceed slowly because the sources of
capital are limited. The success of the venture, especially in its early stages,
depends on the person in charge, and nobody is likely to provide capital for
the business unless he has that confidence in the proprietor, which comes
from personal contact. Hence, the main source of capital is the personal
savings of the owner himself, together with such additional sums, as he may
be able to borrow from the relatives or close friends. Expansion of the
business may take place by ploughing back profits, but this will probably be an
extremely slow process and such firms generally remain comparatively small.
In the event of failure, not only the assets of the business, but also the
private assets of the proprietor can be claimed against creditors, meaning that
there is no limited liability. It is typical for agriculture and retailing where
management requirements make the small technical unit desirable.
A larger amount of capital is available when persons combine in a
partnership. Each partner provides a part of the capital required and shares
the profit on an agreed basis. Yet, the amount of capital that can be raised
this way is still inadequate for large-scale production. The result is that the
partnership remains relatively small, particularly suitable to certain types of
business, such as retailing, and certain professions (doctors, dentists,
consulting engineers and lawyers). The risk inherent in unlimited liability is
increased because all partners are liable for the firm's operations, irrespective
of the amount of capital that they have individually invested, and their private
fortunes may be called upon to meet the demands of creditors. Any action
taken by one colleague is legally binding on the others. Hence not only must
each partner have complete confidence in the others, but the risk of unlimited
liability increases. Finally, by giving notice to the others, one partner may
terminate the partnership at any time, while it is automatically dissolved upon

107
the death or bankruptcy of any one partner. This means that surviving
partners have to either buy his share or find a purchaser
acceptable to everyone. In such circumstances, therefore, the continuation of
the
business may involve great trouble and expense.
In Great Britain, the joint stock company type first developed in Tudor
times when foreign trade began to expand. The government, wishing to foster
such trade, often granted the promoters a charter, which enabled them to
form a company and to carry on trade in various parts of the world, usually in
a free form of competition. Two such companies were the East India Company
and the Hudson's Bay Company, still existing today.
Nevertheless, until the middle of the nineteenth century, people were
reluctant to take shares in such companies, as they enjoyed no limited
liabilities. But the industrial revolution made it essential that more capital
should be available to industry. Hence, in order to induce more savers to
invest, the privilege of limited liability was granted by statute in 1855.
The advantages that the most important form of a business organization
enjoys over the partnership are chiefly that there is limited liability, a larger
amount of capital can be raised, since investors can spread their risk and sell
their shares easily, and, should the need arise, expansion is much easier.
Against the advantages, however, certain disadvantages have to be
considered. The company's corporation tax could be more than the income tax
that would have been paid had the business remained as a sole partnership.
Furthermore, any assets of the company that have been built up over the
years will increase the value of the original shares (usually owned by a
family). When the time comes to wind up the company, e.g. owing to
retirement, any increase in the value of the shares will be subject to capital
gains tax.

1.1.1. Private Company

This type of a company organization allows the business to be privately
owned and managed. It is thus particularly suitable for a medium-sized either
commercial or industrial organization not requiring finance from the public or
for a speculative venture where a small group of people wishes to try out an
idea and is prepared to back it financially to a definite limit before floating a
public company.
While they are considerably more numerous than public companies,
they are much smaller. They encounter difficulties when they want to expand
as neither their shares nor debentures can be offered for sale to the public.
Thus, in order to find additional investors, it is usually necessary to convert
the business into a public company with its shares quoted on a Stock
Exchange. But before embarking on such an issue, the company must have a
fairly substantial size and arrange for a life insurance company or an
investment trust to purchase shares or debentures; help may be obtained
from the new-issue market, where both issuing houses and merchant banks
may help firms to raise capital. But in order to obtain a loan, it has to pass
first a searching investigation regarding its present financial position and
business prospects.
1.1.2. Public Limited Company
It carries the letters PLC after its name is the largest of all types, and at
least two shareholders own it, but most of them have hundreds or even

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thousands of shareholders.
Its shares can be issued to the public and can be sold through the Stock
Exchange. A private company can "go public" and apply to the Stock Exchange
to be listed or quoted in order to become a public limited company. The
company will have to satisfy the council of the Stock Exchange that is soundly
based and a
reasonable investment for the public.
It is controlled by the Board of Directors, which is elected by the
shareholders. The Board manages the running of the firm that is obliged to
hold an Annual General Meeting to report to shareholders and elect directors.
The company uses its profits (after deduction of dividends) to finance
future investments. Capital may also be obtained by further share issues,
borrowing (often from international banking consortia) and from Government
granting loans.
1.1.3. Holding
The optimum technical unit of a business may be much smaller than the
optimum financial unit. The financial economies of scale can be achieved by
organizing a group of firms through a single "holding company", leaving the
individual subsidiaries to continue working in their own name as separate
technical units and retaining a great deal of independence of action.
Furthermore, having subsidiaries with diverse interests may secure a risk-
bearing economy.
However, while this theoretical justification for the formation of a
holding company may be valid, in practice such companies have been formed
in order to obtain controlling interests, often for monopoly purposes.
1.1.4. Joint Stock Company
This type of a company is organized on the agreement of two or more
parties to work on a project together. Frequently, it is formed when companies
with complementary technology wish to create a product or service that takes
advantage of the strengths of the participants. It is usually limited to a
project, differs from a partnership, which forms the basis for cooperation on
many projects.
1.2. Setting a company
Setting up of a company begins with lodging a Memorandum of
Association and the Charter of the company or Articles of Association with the
Registrar of Companies.
The Memorandum generally contains the following clauses stating:
- the name of the company and its logo; the company is free to choose its
name, within certain bounds. The Department of Trade will not allow a name
which is too similar to that used by an existing company, especially one in the
same type of business.
- the country in which the registered office (where the premises is situated)
- limitation clause: it shows whether the company is limited by shares or by
guarantee, as commercial companies are limited by shares, or non-profit
bodies, such as professional associations, are limited by guarantee.
- the objects for which the company was constituted; this states the type of
business that the company will undertake. This is to protect investors from
putting their money into a company which would then use it in a different
manner.

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- capital clause: it gives details about the amount of the authorized capital and
its division into shares and the different categories of shares
-association clause: includes the names of the founder members and the
number of shares they each subscribed
Lodged together with the Memorandum, The Articles of Association are
a contract between the company and its members comprising rules and
regulations for the internal activity of the company and specifying such things
as :
- the voting power of its members,-
- the appointment of directors,-
- the distribution of the profits, etc.
After the Memorandum and the Articles have been registered and the
necessary fees have been paid, the Registrar issues the Certificate of
Incorporation and the company can start doing business.
Here are the Governmental institutions that a company should be
registered with:
Notary Office
The Court of Commerce
The Registrar of Commerce
Tax/Fiscal Office
The Gazette
1.2.1. Structure of a business
In a small business, the few employees know their role as there is a
direct contact between the employer and the staff. As the business grows
larger, the need for formal written structure tends to emerge. The
organizational chart is drawn showing people in authority and those under
their supervision. Here you have an illustration of a company framework:
Board of
Directors

Managing
Director

1 Buying and
2
Marketing 3
Executive

Registrar

Personnel Deputy Deputy

4
Officer Accountant Accountant

Section
6
Leaders
5

7 Audit
110 Credit Credit 8
Control Control
 Financial decisions are crucial. The secret of success in financial
management is to increase value. The problem is how to do it. The financial
manager has two broad responsibilities: What investment should the firm
make? How should it pay those investments? The first involves spending
money; the second involves raising it.
Companies need an almost endless variety of real assets: tangible
(machinery, factories, offices): intangible, (technical expertise, trade marks,
patents). To obtain the necessary money, the company sells financial assets or
securities. Their value consists in their claim on the firm's real assets and the
cash they produce. If the company borrows money from the bank, the bank
has a financial asset that gives it a claim to a stream of interest payments and
to repayment of the loan. The company's real assets need to produce enough
cash to satisfy these claims. Financial assets include not only bank loans, but
also shares of stock, bonds, lease financing obligations, and so on.
The financial manager stands between the firm's operations and the
financial markets, referred at as sources where the investors hold the financial
assets issued by firms. He traces the flow of cash from investors to their firm
and back to investors again. The flow starts when securities are issued to raise
cash to purchase real assets to generate cash inflows later, to repay the initial
investment. The cash is then either reinvested or returned to the investors
who purchased the original security issue.
The shareholders are made better off by any financing decision of the
financial management that increases the value of their stake in the firm. A
good capital budgeting decision is one that results in the purchase of a real
asset that
makes a net contribution to value.
Financial decisions cannot be separated from financial markets either.
The financial manager must know whether the value of the firm would
increase through an issue of shares to stockholders. He must have considered
the interest rate on the loan and concluded that it was not too high. He must
also cope with time and uncertainty. The investment, if undertaken, may have
to be financed by debt that cannot be fully repaid for many years. The
financial manager has to decide whether the opportunity is worth more than
its costs and whether the debt burden can be safely borne.
The financial manager is anyone responsible for a significant corporate
investment or financing decision. But usually responsibility is spread out
throughout the firm. The engineer who designs a new production facility, the
marketing manager who commits to a major advertising campaign, but also
the top manager is, of course, continuously involved in financial decisions.
Nevertheless, there are managers specialized in finance: the treasurer -
the most directly responsible for obtaining financing, managing the firm's cash
accounts and its relationship with banks and often financial institutions in the
financial market, and making sure the firm meets its obligations to the
investors holding its securities.
Larger companies usually have a controller who checks that the money
is used efficiently. He manages budgeting, accounting, auditing. There can be
a chief financial officer appointed to oversee both the treasurer' and the
controller's work. He is involved in financial policy making and corporate
planning but he also can have managerial responsibilities beyond strictly
financial issues and may also be a member of the Board of Directors.
But the ultimate decision often rests by law or by custom with the Board
of Directors. Only the Board has the legal power to declare a dividend or to

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sanction a public issue of securities. Boards usually delegate decision-making
authority for
small or medium sized investment outlays, but the authority to approve large
investment is almost never delegated.

Financial
Firm's
markets
operation
Financial (investors
(a bundle
Manager holding
of real
financial
assets)
assets)

1.2.2. The role of commodity exchange

A commodity exchange is the market where commodities are traded.
The main terminal markets in commodities of the world are in London and
New York, but in some commodities there are markets in the country of origin.
Some commodities are dealt with at auctions (e.g. tea, grains) each lot being
sold having been examined by dealers, but most dealers deal with goods that
have been classified according to established quality standards. In these
commodities both actuals and futures contracts are traded on commodities
exchanges, often with daily callovers, in which dealers are represented by
commodity brokers. Many commodity exchanges offer option dealing in
futures, and settlement of differences on futures through a clearing house. As
commodity prices fluctuate widely, commodity exchanges provide users and
producers with hedging facilities with outside speculators and investors helping
to make an active market, although amateurs are advised not to gamble on
commodity exchanges.
The fluctuations in commodity prices have caused considerable
problems in developing countries, from which many commodities originate, as
they are often important sources of foreign currency, upon which the
economic welfare of the country depends. Various measures have been used
to restrict price fluctuations but none have been completely successful.

1.2.2. Stocks
Shares are products that enable their holders to participate in the
company's activities and benefit from its success or failure. The conditions for
ownership of shares can differ according to the rights they give the
shareholders. The risk involved in buying shares is linked to how the company
is expected to behave and, in particular, what its net profits are expected to
be.
Indicators have been created to relate predictions of the company's
behavior - the market price, by which we can assess the market's appraisal of
the company.
Shares are securities representing a public limited company's share
capital.
Each share represents a part of the company in the hands of the
shareholders. All shares represent equal parts into which the company's
capital is divided. All shares have the same par value. Shares are not divisible,

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though they can be issued in blocks of number of shares (5, 10, 50, 100, etc).
When a company is formed, i.e. when the Articles of Association and the
Memorandum of Association are drawn up, they define the classes of share
that can be issued.
The different classes of shares differ with regard to the rights they
confer on their holder. The main class in the generic type of share is the one
of ordinary shares.
Ordinary shares (normally referred to as just "shares") confer the right
to call a shareholders' meeting; to vote at the meetings, to elect and to be
elected to the company's bodies. The company's Articles of Association may,
however, establish the number of preferred shares a shareholder must have to
be entitled to vote. He receives new shares in the event of capitalization of
reserves and they are preferred in subscribing new shares when they are
issued to raise capital or in subscribing convertible bonds. Each shareholder is
entitled to subscribe the same number of shares as he already holds.
However, the shareholders' meeting that decides on the issue may limit or
suppress this right to preference. He is also free to transfer shares or to sell
his shares at will. This right is one of the ways of obtaining a return of the
investment, i.e. a gain from the favorable difference between the selling and
buying price.
The dividend is the return on shares. It represents a part of the
distributable profit that is paid on each share. This return is variable as it
depends on whether there are profits in each financial year and on whether
the Annual General Meeting agrees to their distribution (as proposed by the
Board of
Directors).
A company's dividend policy is represented by the percentage of the
profits generated by the company in a particular financial year that it decides
to
distribute to the shareholders.
The dividend is important because it represents a source of income for
the investor and it is an important indicator to current or potential investors of
the company's future profitability. It gives information on the company's
projected growth, thus influencing share prices.
The validity of ordinary shares is indefinite, i.e. it is not established in
advance. The shares exist as long as the company that issues them exists.
The secondary market is the only way shareholders have of getting back the
capital they invested, as they cannot demand a refund of their investment.
This is the main reason why shares are quoted on the stock exchange.

1.2.3. Bonds
Historically, bonds are institutionalized borrowings by governments or
business, with the date of repayment, and the annual rate of interest to be
paid meanwhile, fixed at the time of issue. There are irredeemable
government and corporate bonds, where the interest rate is fixed but no date
for repayment. There are floating rate bonds, where the interest rate paid is
related to the changing rate in the market. There are also zero coupon bonds
which pay no interest at all but which are issued at a price very much lower
than the repayment due on a particular date, so that income effectively takes
the form of capital gains. There are index-linked bonds, which pay a small or
no rate of interest but whose repayment, at some fixed date, includes

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compensation for the interim rise in the cost of living. There are convertible
bonds, which carry the
right of conversion into corporate equities.
The new economy based on the Internet should be called the "nude
economy" because the Internet makes it more transparent and exposed. The
Internet makes it easier for buyers and sellers to compare prices. It cuts out
the middleman between firms and customers and it reduces transactions
costs. That's why more than 25% of American share market now take place
via Internet. Yet the e-bond market hasn't reached such an extent. The
potential for electronic bonds trading seems to be less than in on-line futures
and options. A reason for this might be that individual investors aren't as
interested in bonds as they are on shares, because unlike some share prices,
bond prices rarely double in 12 months. Moreover, bonds are much less liquid
than shares. Investors, such as insurance companies that hold them to
maturity, often buy them. However, these things can change. There is a
serious talk that the bond market may soon become as automated and real as
that for equities. This change is possible because of the innovation that will
soon activate the 1st "Bond Connect" trading system. This will allow the
institutional investors that dominate the bond equity to trade directly with
each other through a sophisticated order-matching system operated under the
auspices of a Stock Exchange. The institution will be able to put large black
trade orders into the system safe in the knowledge that no information about
their intention will leak into the market before the order has been executed.
This should allow them to get a much better price.
Many recent issues of e-bonds allow brokers to trade more efficiently
with each other but do not provide access to their customers. Electronic
trading has the potential greatly to enhance the efficiency on the bond market.
1.3. Money Matter, Banking and Financial
Markets
For thousands of years, gold was the ultimate money. It could buy
anything including hearts. It was wealth and power to be sure, but it was also
enchantment, with a special luster and reassuring weight and feel. The lure of
gold drove ships across stormy seas and explorers across rugged mountains to
places as remote as Canada's Klondike region near the Arctic Circle.
Gold isn't used as money any more. It still glitters, but it's treated more
like soybeans or pork bellies than a ransom fit for a king.
Money didn't exist in ancient times, so people had to trade with each
other - or barter - to obtain the items they wanted. The first trades were
probably animal skins for grain, or cotton for livestock.
But these exchanges were cumbersome, and some common
commodities, such as grains, started to assume the role of money. In early
Egypt, for example, barley, an important source of food, became the accepted
means of payment for goods and services.
By 700 B.C., though, the Egyptians had abandoned barley and adopted
gold as their primary instrument of exchange. A rare and beautiful metal, gold
had become the universal symbol of wealth and power. And, being portable
and durable, it was an ideal form of money.
By the 15th century trade and commerce had expanded tremendously.
When King Croesus of ancient Lydia (now Western Turkey) had gained control

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of Asia's richest gold mines for the Persian Empire, he wanted others to
recognize his newfound power and ordered the first gold coin to be made.
Bearing the image of a lion and a bull, the coin became the standard of
exchange for all trade and commerce.
A need appeared for a new, less cumbersome system of making
payments. The goldsmiths met this need. Their system worked this way:
people would deposit their gold coins at their local goldsmith's. In return, the
goldsmiths would give them a receipt. Eventually, the receipt began to
circulate as money because they could always be redeemed for the gold itself.
Gradually, countries came to adopt a form of the goldsmith's system.
Their governments printed currency and backed it up with gold they held in
official reserves. And so the "gold standard" for currencies was born. One of
the first countries to adopt the gold standard was Great Britain in 1916. It
made its currency the pound, equal in value to an ounce of gold. Then Coinage
Act of 1792 first put the young American nation on a "bimetallic standard",
backing the dollar, which was a coin at the time, with both gold and silver.
With the world at war, for the first time, people were seeking security,
and thus started exchanging their currency for gold. But governments soon
saw their reserves run seriously low, as a result. By 1914 most countries,
except the United States, abandoned the gold standard to protect their
reserves.
By the mid 1930's, practically all the major nations had abandoned the
gold exchange standard. Governments would accumulate dollars that they
could redeem for gold at the U.S. Treasury.
Of course, gold will always be the metal of choice for the jet-set, who
like to adorn their homes with gold-leaf sinks, bathrooms and picture frames.
Today, gold can be bought and sold in several different forms: coins,
bullion or perhaps just as paper claim to the metal.
There are two types of gold coins: bullion coins and numismatic.
Countries produce the bullion coins as legal tender, which means they can be
spent as money. Prices are based on the local gold price in London (The
"London Fix").
Numismatic gold coins no longer circulate as money. Their value derives
more from their condition and rarity than their actual gold content.
Many investors hold paper claims to gold in the form of future contracts.
These contracts are nothing more than a commitment to buy or sell gold at a
future time at a pre-agreed price. Typically, the buyer and seller meet at a
commodity exchange to work out future contracts.
Today gold has assumed the role of a commodity such as wheat or
cotton. And like any other commodity, its price is determined in a free market
by the forces of supply and demand.
What will make money what it is? Partly we will determine it by statutes
declaring that certain pieces of paper and metal produced by government will
be money. These notes and coins we call will be "legal tender" and you'll have
to accept them as payment in full for any transaction.
However, part of what we regard as money will be determined by
custom. If you think about how much money (as distinct from wealth) you
have, you won't consider only your holdings or cash and coin - you'll include
deposits you have in your bank.
Whether it's cash or bank deposits, money is an asset for you and
simultaneously a debt for either the bank or the government. That's why credit
cards will be not considered money, but tangible proof that you've been

115
granted a line of credit (a loan up to a predetermined amount which you can
decide to activate). Because they represent a debt for, not an asset they will
never be money.
Since January 1st, 1999 the euro has been operating as a recognized
currency on the world markets and has been widely used, especially by
commercial banks and other companies, in non-cash payment transactions. On
January 2002 the euro banknotes and coin will be put into circulation. Their
design and production was, from the outset, planned as a cooperative venture
of the European Union. The graphic symbol of the euro was inspired by the
Greek letter epsilon and refers to the first letter of the word Europe. The
parallel lines represent the stability of the euro. The official abbreviation for
the euro has been
registered with the International Organization for Standardization ISO.
The euro banknotes depict the architectural styles of seven periods in
European cultural history Classical, Romanesque, Gothic, Renaissance,
Baroque and Rococo, the age of iron and glass architecture, and the modern
20th century architecture and emphasize three main architectural elements -
windows, gateways, and bridges. The windows and gateways on the front of
each banknote symbolize the spirit of openness and cooperation in Europe.
The 12 stars of the European Union are also featured, representing the
dynamism and harmony of the contemporary Europe. The reverse of each
banknote features a bridge typical of the respective age of European cultural
development. These bridges range from early constructions to the
sophisticated suspension bridges on the modern era and are used as a
metaphor for communication among the people of Europe as well as between
Europe and the rest of the world.
The European System of Central Banks became operational and is
responsible for framing and implementing the single monetary and exchange
rate policy (setting short-term interest rates in euro). The participating
national currencies will no longer be listed on the foreign exchange markets.
As far as banks and large firms are concerned, the transition to the
single currency began chiefly via the single monetary and exchange rate
policy, the capital and the associated settlement systems. Banks draw up their
customers' account statements in both euro and national currency. They take
advantage of the time available in order to inform their customers of the
consequences of the switch to the single currency for their financial
transactions. They step up their staff training efforts to prepare for the
changeover and can also offer certain products in euro, legal and technical
constraints permitting.
Consumers continue to use chiefly their own national currency because
euro banknotes and coins are not yet available. Public demand can, however,
swiftly prompt some banks or firms to offer services in euro.
The gradual introduction of dual pricing of goods and services enables
consumers to get used to the single currency. By developing a "feel" for prices
in the single currency and learning to convert national currencies into euro at
a fixed rate, they thus realize that they do not stand to lose from the
introduction of the single currency.

1. He explains that the balance sheet will be the main document showing the
estate of our business.
2. He says that the new service will enable customers to make payments from
their accounts by credit transfer.

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3. He learns that the process of globalization that enables investment in
financial markets will be carried out on an international basis.
4. They are sure that the goodwill of their company will become a saleable
asset.
5. He declares that he will calculate again his gross income.
6. The shop assistant assures us that he will bring any items made of gold,
silver or platinum, stamped with hallmark.
7 The general manager promises to keep a house journal for all the employees
to inform them about the policy of the company.
8. He explained that the wages of the employees would reflect partly a return
of the human capital for the future.
9. The wholesaler pretends that he will be allowed goods according to the
import license.
10. The politicians pretend that indexation policy will mitigate the effects of
inflation.
1.3.1. Functions of money
The use of money as a medium of exchange makes possible a great
extension of the principle of specialization. In an advanced society the use of
money allows to exchange hours of labor for an amazing variety of goods and
services: two weeks' labor for a holiday abroad just as easily as we can
exchange it for a piece of furniture or a year's rent on a flat. Such exchanges
are taken for granted yet they would be inconceivable without the use of
money.
The first step in the use of money was probably the adoption of some
commodity as a unit of account or measure of value. Money, most likely, came
into use within the barter system as a means whereby the values of different
goods could be compared. The direct exchange of goods for goods raise all
sorts of problems regarding valuation: "How many bushels of corn are equal in
volume to one sheep, if twenty sheep exchange for three cows and one cow
exchanges for ten bushels of corn? This problem of exchange rates is easily
solved when all other commodities are valued in terms of a single commodity
which then acts as a standard of value. Money now serves as such a standard
and when all economic goods are given money values (i.e. prices), we know
immediately, the value of one commodity in terms of any other commodity.
Once a commodity becomes universally acceptable, in exchange for
goods and services, it is possible to store wealth by holding stock of this
commodity. It is a great convenience to hold wealth in the form of money.
Consider the problems of holding wealth in the form of some other
commodity, say wheat. It may deteriorate, it is costly to store, it must be
insured, and there will be significant handling costs in accumulating and
distributing it. In addition, its money value may fall while it is being stored.
The form of money has become very apparent in recent years - during periods
of inflation when the exchange value falls.
An important function of money in the modern world, where so much
business is concluded on the basis of credit, is to serve as a means of deferred
payment. When goods are supplied on credit, the buyer has immediate use of
the goods, but she does not have to make an immediate payment. He can pay
for them, 3, or perhaps 6 months after delivery. In the case of hire purchase
contracts, the buyer takes immediate delivery but pays by means of
installments spread over 1, 2, or 3 years.
A complex trading organization based on a system of credit can only

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operate in a monetary economy. A seller would be most unlikely to accept any
promise to pay in the future that was expressed in terms of a commodity
other than money. It will have no idea how much of that commodity it will
need in the future and if it does not want it, it will be faced with the trouble
and risks involved in selling it. It is prepared to accept promises to pay in
terms of money, because, whatever the patterns of the future be, they can be
satisfied if it has money.
1.3.2. Banking
Commercial banks borrow money from the public, crediting them with
deposits of money. The deposit is a liability of the bank that is money owned
to depositors. In turn, banks lend money to firms, households or governments
wishing to borrow.

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 UNIT 2.
PRODUCTS, SERVICES, TRADE MARKS and
BRANDS

Objectives:
- get familiarized with specific terminology and concepts

In economics, market is defined as being the place for all potential

customers to share for a particular need or want. Marketing is the process of
developing, pricing, distributing and promoting the goods or services that
meet the needs or wants of the customers. When the activity of market
research, new product development, distribution advertising, promotion,
product improvement and so on, are combined successfully the product almost
sells itself. This happens only when the product or service is better that those
of the competitors.
Marketing opportunities are generally isolated by market segmentation
according to customers’ needs and requirements, or buying habits. But the
producers or service providers must take into account the existence of
competitors when they identify a target market. The marketers have then to
design their marketing strategies and plan their marketing programmes and
then organize, implement and control the marketing effort. That can be
considered classified as the 4 P’s: Product, Price, Promotion, and Place. There
are several elements to be considered in marketing a product: quality,
features, style, trade mark, brand name, size, packaging, services and
guarantees; as for price, it includes price list, discounts, the length of the
payment period, possible credit term. Promotion groups together advertising,
publicity, sales promotion and personal selling; while place is an integrated
concept of distribution channels, coverage of the market, location of points of
sale, inventory size; another marketing plan step is to create long term
demand on the market by changing the particular features of the product to
meet the customer needs or market conditions.
Marketing can also influence or even change consumers’ needs or
wants, by regulating the level, timing and character of demand.

In the end of the Second World War, a new economic era began. The
production systems of the countries that had been at war had been destroyed,
and in 1945 they began an enormous effort to recover.
Today we can see the development of a wave of social change – the
third wave – which at the end of the war set in motion. Change is happening
so fast that all organizations, and especially companies, have to adapt
constantly. The improvement in people’s standard of living, the development
of new technology and the growing pressure of demand are a challenge which
must be met.
Thus, no company can look-in on itself as companies used to do in the
past. A company cannot ignore the world around: it must become an open
system in constant intercourse with the society. In order to survive, then, the
company must adopt a strategy of openness towards society in which it
operates. This strategy will determine the existence of exchanges (flows) with

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a variety of entities. Of course, this opening to the outside requires a type of
management which will always be aware of the large variety of exchanges
generated: adaptive management that opens the company to the outside and
uses the so-called “instrumental cycle” as an important technique.
The instrumental cycle defines three sequential and interactive aspects
of decision-making:
- Planning, which consists of identifying the means the company has at
its disposal, looking for the best opportunities and the best way to take
advantage of them. –
- Organization which consists of the means by which the company puts
its planning process into practice.
- Control which makes it possible to assess the results obtained and
compare them with the results required.
Historically speaking, however, this change has taken place gradually.
Company slowly began to realise the need to open up to the market. This
evolution is normally considered to have four stages:
- production
- sales
- marketing
- social marketing
At the beginning of the century there was the first major explosion of
demand. This increase in demand naturally caused companies to expand a
great deal. It was the age in which mass production reached its height. As
demand was high, the entrepreneur made decision on the basis of the
company’s interests and internal information. No one was concerned with the
market as any product sold as long it was reasonably priced and of minimum
quality. So the main concern was production.
In October 1929, a deep crisis beset the economy of the USA. This crisis
had repercussions all over the world. The thirties began under the shadow of
economic depression. Faced with difficulties from the point of view of demand,
companies had to try a new course of action. It was no longer enough just to
produce; production had to be sold as well; the customer had to be pushed
into buying.
What had to be done to increase sales?
Well, companies improved their manufacturing process, tried to
reach new markets and included psychology in the training of salesmen.
Competition increased and, with it, efforts were now begun to analyze the
market and set up distribution systems.
Around the fifties, after the end of the Second World War, a new
company consciousness began to develop. While in the preceding period
attention was paid mainly to the company’s need to sell, in this stage they
began thought to the customer’s needs. This is the so called “marketing
attitude”. For the first time, there was market research and studies,
production planning, concern about determining prices, advertising campaign.
The emphasis was now on identifying the market’s needs and values and
adapting the company to them to ensure its success.
More recently, the social outlook of the company has to led
marketing to concern itself with the more profound interests of the consumer
and society. Concern of an ethical nature has begun to appear.
Products and services are not an end to themselves but a means to
towards satisfying the customers’ wants and needs. That leads to the
marketing concept that is a programme to be completed. To achieve this, the

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concept is accompanied by two of its basic components: integrated marketing
and marketing management.
The first one is merely the transmission of the marketing concept to the
whole company. At a bank, for example, it means that all the departments
recognize the effects of their actions on attracting and keeping customers.
Marketing management is the analysis, planning, activation and control of the
programme, designed to find out to satisfy the wants and needs of the
markets in question, while bearing in mind the company; and marketing
management is the development of the work needed to put it into practice.

XII. Listen to the cassette, fill in the blanks, then translate and learn
the unknown words:

There is nothing particularly unusual about Place Dumon, a ________

square in suburban Brussels, ringed by _________ shops. Until, that is, you
notice how the locals purchase their ___________. For they are paying for
________ spaces, picking up newspapers at the Gavilan newsagent,
_________ to the Antoine's bakery for a __________ and even buying babies'
_________ at the Minou's boutique, all without reaching a single note or coin.
The reason is PROTON, Belgium's experiment in __________ cash.
Proton is one of the several "electronic ____________", being tested around
the world. The e-purse is a chip-based, or "____________" card that stores
digital money which, its fans hope, may one day, replace ___________ notes
and fiddly coins in small purchases.
A smart card is ____________, thanks to the sealed-in high security
chip. It stores one's personal data as individually and characteristically as if it
were one's ___________ Encrypted with one's personal, absolutely singular
code, it makes every _____________ as secure as if it were in a bank vault.
Any attempt to crack this safe causes the chip to self-destruct, automatically
__________ the card.
A smart card is ______________. Everything it knows remains strictly
confidential. The chip makes sure of that - with sophisticated identification
procedures and ___________ that protects one's confidential data against
unauthorized access. A smart card offers complete security, which makes it
predestined for universal __________: it can be used as an electronic wallet
to pay for purchases, taxi _________ or hotel bills.
The chip cards now include a debit-card _________. Eventually a single
card may combine the e-purse with credit, debit and ________ cards. It is
also developing special telephones that would allow customers to _________
their cards at home. If a banknote is lost, tough ________; if however, a
plastic card is misplaced or broken, the ________ on it can be reimbursed
because all debits are logged centrally. Central _________ has disadvantages
too. Many customers may prefer to move _______ cash around without their
every transfer being logged. In addition, centralized schemes may prove more
costly to operate, making small transactions, including the purchase of small
bits of information and __________ over the Internet, uneconomic. Proton
also faces complaints about parochialism, as its chip can hold just one
currency, while Mondex and Visa cards can store value in up to five different
_________ and it can present inter-operability. An _________ payment
system will allow, say, a Belgium customer to spend his e-cash in Switzerland.
Most pundits think that important banking institutions will have to pair up in
big payment ________.The two bank-owned groups - Visa and Master Card -

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are already around busy buying up purse around the world, by taking
controlling stakes in the domain, or absorbing e-cash technologies.
But if the history of credit cards is a guide, no more than two or three of
the smart-card schemes are ________ to win global acceptance.

stroll; newsagent; unique; signature; encryption; cobble; function; doughnut;

discrete; parking; smart; confidential; luck; digital; employment; software;
currency; fare; loyalty; accounting; virtual; crumple; outfit; quaint; balance;
wares; reload; bit; void; network; provider; integrate; likely.

Forms of money:
Choose the correct word to complete the sentences:

1. The pound, the dollar and the leu are called _________
a) cash; b) monies; c) reserves.
2) The currency that is used in a foreign country is called _______
a) money; b) cash; c) foreign currency.
3) Money that you borrow from a commercial bank is called ________
a) capital; b) loan; c) subsidy.
4. Money in notes and coins is called _________
a) monies; b) capital; c) cash.
5) The whole amount of money received by a company or a person is called
_________
a) income; b) wages; c) salary.
6. The money that you have to receive back when the price is lower than the
denomination of the banknote you give to the shop assistant is called
___________
a) cash; b) compensation; c) change.
7. Money earned by someone for a month's (professional) work is called
_________
a) income; b)wages; c) salary.
8) A manual worker receives __________
a) income; b) wages; c) salary.
9). Retired persons receive ____________
a) pension; b) aid; c) subsidy.
10) When setting a new company you need ___________
a) loan; b) fund; c) capital.
11) You pay a loan to a bank regularly in _____________
a) a) fee; b) income; c) installment.
12. You pay a ___________ to doctors, lawyers, private schools
a) revenue; b) fee; c) capital.
13) Producers are sometimes helped to sell cheaper through ________
a) loans; b) reserves; c) subsidy.
14) A person can have a part of a business called _________
a) deposit; b) budget; c) stake.
15) Money kept in a ____________ for paying pensions is called _______
a) fund; b) deposit; c) budget.

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EXERCISES
I. Choose the best alternative to complete each sentence:
1. You must keep staff _________ especially when things get difficult.
a) generated; b) motivated; c) frustrated; d) electrified
2. Weigh up the _________of each alternative before deciding.
a) checks and balance b) assets c) pros and cons; d) profits
3. A good manager must be able to handle _________situations.
a) sensible b) impressive c) touching d) touchy
4. De decided to let things_________so he dropped the subject until later.
a) freeze b) ice over c) cool down d) flare up
5. She ______creating a better atmosphere amongst the staff.
a) set about b) set off c) set out d) set down
6) We need to have ___________arrangements in case things don’t work out.
a) container b) contingency c) consolidated d) consecutive
7) In a meeting you must stop people talking at __________purposes
a) opposite b) angry c) cross d) opposing
8. Why doesn’t he stick to the point? He’s always going off___________
a) at an angle b) at a tangent c) by the way d) on the side
9. It’s always difficult when a team is working________a deadline.
a) in b) at c) to d) opposite
10. Try to ensure that each employee’s _________is not too great.
a) workload b) working practice d) work-to-rule d) working party
11. Those who can’t manage their time efficiently always have high
stress______
a) grades b) standards c) performances d) levels
12. The more responsibilities she _________, the more mistakes she made.
a) took off b) took on c) took down d) took out
13. I hope the project continues to run as__________ as it has so far.
a) calmly b) confidently c) smoothly d) wisely
14. After _______ many unforeseen obstacles they just managed to meet
their deadline
a) overtaking b) overcoming c) overwhelming d) overriding
15. What can you do to improve__________in this department?
a) morale b) mortality c) moral d) temperament

II. Make the family words starting from the following:

competitive; consumer; investment; leadership; production; supplier;
beneficiary; advertising; management; business;

III. Fill in the blanks the following missing words: 1. money; 2. rules,
3. competition; 4. need; 5. share; 6. abundance; 7. amount; 8. specific;
9. demanding; 10. effectively; 11. marketing
Marketing begins with the consumer a)_________need. Something is
produced in response to that need. In a marketing society, the consumer
b)__________. Marketing societies have produced a great c)_________ and
variety of consumer goods. They have done this by means of d)_________.
Each producer competes with every other producer for a e)_________ of the
market. The market is people who have f)_________ and are ready to spend.
But consumers have a finite g)________ of money to spend. They will buy
only what they want and need. As a nation becomes more developed,
consumers become more h)___________. Their needs become more

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i)_________specific, and they want products that satisfy their changing
needs. Only those producers who compete j)___________ will sell their
products and survive. Successful producers are guided by the k)__________
concept: respond to consumers’ needs and wants.

IV. Match the following words with their definition:1. consumer; 2.

merchandising; 3. store-count-distribution; 4. distribution; 5. product-
life-cycle; 6. brand awareness; 7. brand loyalty; 8. motive.
a) consumers’ well established preference for the brand; they continue to
buy it despite possible advantages of competing brands
b) moving goods from one place to another before their sale to consumers
for example, from producer to wholesaler; from wholesaler to retailer.
c) Sales promotion; paid promotion through minor media
d) One member of the market, the user of a product
e) Consumer’s knowledge that the brand exists
f) A desire that moves a consumer to act upon a need. The motive for a
purchasing decision may be conscious or unconscious, rational or
emotional
g) The number of stores that carry a given brand
The four stages that a product typically goes through: introductory,

V. Fill in the blanks the missing words: 1.floor; 2. bids; 3. globalization; 4.

negotiable; 5. events; 6. leader; 7. financial guarantee system; 8.
electronically;
9. exchanges; 10. guarantee; 11. open outcry

The rapid opening of economies in the Central and Eastern European

countries, as well as the rapid a).................... of international markets and
the subsequent opening of commodity markets led to the demand for risk
management tools. As a result, many commodity and derivative
b)..................... were formed as a starting point of a rapid consolidation
process. The Romanian Commodity Exchange became the c).............. in the
national market and has excellent terms with the world's major exchanges. It
is the founder of the Association of Futures Markets and participates in
international professional d)................. RCE shifted from the traditional open
bidding system to the system by which members trade futures contracts
e).................... while at their offices. f) ...............and offers are captured on
a time-priority basis. The margin system means four levels of g)................
which ensures the total safety of trading.
The electronic system operates only for the derivatives market, while
the transactions for spot, forward and auctions market are performed using
the h)............. ............ system. Trading takes place on the Exchange
i).............. and the brokers make bids and offers in the pit, in an open outcry
system. Fees and commissions are i)................... with the brokerage
companies. Investors are protected by a j)............... ........... ..............,
exchange-clearing procedures and the transparency of floor operations.

VI. Translate Into English:

A. BRM tranzacţionează contracte spot şi forward pentru cereale,
produse petroliere, produse metalurgice, deşeuri. De asemenea, BRM
organizează licitaţii interne şi internaţionale pentru mărfuri fungibile şi non-
fungibile. BRM se implică atât în procesele de privatizare, restructurare şi

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lichidare, cât şi în operaţiunile comerciale de vânzare sau achiziţie de bunuri şi
servicii. Licitaţiile se organizează atât pentru societăţi comerciale private cât şi
pentru societăţi la care statul sau o autoritate publică este acţionar.
Tranzacţionarea mărfurilor are loc în ringul bursier prin sistemul strigării
libere. Reprezentanţii vânzătorilor şi ai cumpărătorilor se întâlnesc faţă în faţă
şi negociază liber preţul. Avantajele pieţei fizice organizate în ringul BRM sunt:
transparenţa, tranzacţiilor, corectitudinea acestora, comisioane mici, utilizarea
informaţiilor în timp real.
B. Mecanismul ce oferă posibilitatea transferului de risc la care sunt
supuşi producătorii şi angrosiştii se numeşte în termeni bursieri hedging.
Activitatea de hedging implică decizii importante care necesită participarea la
tranzacţii prin intermediul unui broker. Pentru început, se depune o sumă care
reprezinte o garanţie pentru o execuţie corespunzătoare şi pentru eventualele
pierderi pe piaţa futures. Dacă acţionaţi short (vânzare) poziţia
dumneavoastră se îmbunătăţeşte când preţurile scad sub preţul
dumneavoastră de vânzare şi se înrăutăţeşte atunci când preţul creşte peste
preţul de vânzare. Dacă acţionaţi long (cumpărare) pe piaţa futures, poziţia
dumneavoastră se îmbunătăţeşte cînd preţurile cresc peste preţurile
dumneavoastră de cumpărare şi invers. Short hedge are loc atunci când
planifici să cumperi o marfă şi doreşti să te protejezi împotriva scăderii
preţurilor. Atunci vinzi contracte futures şi când vei fi gata să tranzacţionezi
marfa, vei cumpăra contractele futures şi vei vinde simultan, de exemplu,
cereale. Short hedge protejează vânzătorul împotriva scăderii preţurilor.
Vânzând contracte futures puteţi fixa un preţ pentru marfa dumneavoastră şi
veţi completa operaţiunea prin răscumpărarea contractelor futures şi vânzarea
simultană a mărfii pe piaţa cash.

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 UNIT 3
ADVERTISING

Objectives:
- get familiarised with specific
terminology and concepts
-

Because oral skills developed before reading and writing did, it is only
natural that the earliest advertising medium was the spoken word. There is
evidence that criers and hawkers were shouting their wares as far back as the
days of the early Greeks, Romans and Phoenicians. This primitive advertising
refined over centuries, has carried down to the present day. Although hawkers
do not often roam the streets with their cries, they have entered the home to
make their pleas on radio and television.
Before long, competition and the need for identification necessitated
signs. Signs used identifying shops, with such appropriate illustrations as a
goat (for a diary) or a mule driving a mill (for a baker), were unearthed in the
ruins of Pompeii. (At the door of a schoolmaster there was a sign depicting a
boy receiving a whipping!). There is also evidence of announcements painted
on walls during this period. These included notices for theatrical performances,
sports and gladiatorial exhibitions, advertisements of houses for rent, and
appeals to tourists to visit the local taverns. Perhaps the first written
advertisement, however, was this three-thousand-year-old one inscribed on
papyrus and found by an archeologist in the ruins of Thebes:
“The slave, Shem, having run away from his good master, Hapu the
Weaver, all good citizens of Thebes are asked to help return him. He is Hittite,
5’2” tall, of ruddy complexion and brown eyes. For news of his whereabouts,
half a gold coin is offered. For his return to the shop of Hapu the Weaver,
where the best cloth is woven to your desire, a whole gold coin is offered.
There is no doubt that advertising flourished in this period, but with the
fall of the Roman Empire and the onset of the Dark Ages, advertising
temporarily declined in importance to Western civilization.
Perhaps the oldest relic of advertising among English-speaking people is
family names referring to the various specialized crafts. The earliest of these
designations was Smith. Names like Miller, Weaver, Wright, Tailor and
Carpenter were the earliest means of product identification- the forerunner of
the brand name so essential to modern advertising.
One of the most significant events in the development of advertising
was the invention of a system of casting movable type by the German,
Jonathan Gutenberg, in 1438. Paper had been invented more than a thousand
years earlier by the Chinese and was introduced to Europe by the Turks in the
twelfth century. Now all the necessary components were available for mass
printing. At the same time, literacy was increasing. William Caxton, an early
English printer, made advertising history in 1478 when he printed a handbill
now regarded as the first known printed English advertisement. It advertised a
book he had printed, the Salisburi Pye, rules for the clergy at Easter. The
advertisement read:

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 If it please ony man spirituel or temporel to bye ony pyes of two and
thre comemoracios of Salisburi use enpryntid after the forme of this present
letter whiche ben wel and truly correct, late hym come to Westmonester in the
almonstrye at the reed pale and he shal have them good chepe.
The Latin phrase at the end translates “Let this notice stand”.
“Advertising”, 4th edition, Mandell (Prentice Hall)

ADVERTISING IS COMMUNICATION
Advertisement goals are measurable and limited to a certain length of
time, usually one year. Sales are usually the only measurement of advertising
effectiveness. But sales depend on a lot of other factors. When advertising,
communication are directed to a target audience through information about
the company and the product. The information creates the readiness to buy
the product.
The final goal of all advertising is to have consumers use the goods or
services advertised. In order to reach the advertising goals, there are stages
that precede action of buying.
The consumer must become aware that the product or service exists,
then understand what the product is and its benefits. The last step is to make
him decide to buy and to use the product or the service.
The buyer behavior model uses the language of computers to
summarise the decision process. The consumer admits the need he wants to
meet. The need motivates action, the search for ways to satisfy it. The search
narrows to a specific product. Then the consumer becomes aware of it, but it
lacks information about it. The information and risk of purchasing come under
his consideration. The consumer decides whether to buy the product. If
satisfied, he or she may decide to use it regularly. If not, he begins to search
again.

ADVERTSING MEDIA
Print media deals with the use of space in newspapers, magazines,
reviews, etc. It has four elements: illustration, headline, copy block (body
copy or text) and logotype. Its main function is to provide news and
information.
Space in printed ads is 60-70% dominated by illustrations, usually with
a single focus. Effective illustrations vary in form and content but they have
several common characteristics meant to catch the attention of a target
audience. Good illustrations should convey the basic relevant idea of
advertisement more directly and dramatically than words.
Photographs are considered more effective by far as they bring realism,
immediacy, they are less expensive to complete and more adaptable. Colour is
usually used to better motivate. Stimulating and warm colours are red, yellow
and orange, while green and blue are cool and relaxing. Some of them have
symbolic meanings according to each nation culture: dark brown is masculine,
pastels are feminine, purple, deep red and gold are royal and express quality,
etc
Illustrations may represent the product itself, the package or the
product in use to demonstrate its benefit. It may also dramatize a situation, or
it may have no content but create a relevant impression.
Headlines are meant to draw the attention of the reader and are usually
printed in larger type letters than the body of the advertisement itself, or
Capital letters. Headlines can also draw the reader’s attention by the use of

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small letters, italics or punctuation marks, such as quotations, question or
exclamatory marks. It is advisable they be short, using only one to six words
in a single line so that the reader can easily grasp the idea at one glance. Its
message should apply to a
specific characteristic of the product or service advertised, not to others in the
same category. It is highly recommended that it should be closely related to
the text and photograph, being active in both form and content.
Specialized research recommend that the Body copy uses less than 20%
of the total add space. Its major function is to satisfy curiosity and stress
instructions in a clear, concise and personal way. In the end it suggests
action: where to find the product or the service advertised its price.
Logo represents the name and the symbol of a company, store, and
brand. It is meant to be recognizable in print advertisements. It uses little
space.
The arrangement of elements on the page is the concern of the person
who makes the design of the print advertisement. They must work together in
content in a logical and aesthetical form. A good design will focus usually on
the illustration or on the headline, giving the reader a starting point and
leading him into the very message of the advertisement. The elements of the
design should follow a natural flow.
Broadcast Media differs substantially from print media because its
message is intangible, it exists in time only. Its major function is to provide
entertainment. A radio or TV station’s number of potential listeners or viewers
is its coverage.
Radio provides ready-made target markets, for local and spot
advertising. A spot is one unit of air time. Radio time is classified by day parts:
two drive times, housewife time, weekend time, and evening time. On radio
advertising interrupts, that is both strength and weakness at the same time,
an attention-getting device but also as a source of irritation. Sound effects and
music are attention-getters too. Radio gave birth to the jingle once, a rhyme
set to music, which is still a common type of radio commercial. The narrative
commercial is usually in the form of a humorous dialogue, under the form of
celebrity testimonials about the value of a specific brand. The celebrity claims
personal use of the product and satisfaction with it.
The interview commercial, either with a legitimate customer, or
humorously, with a pretend one, usually involves listener’s imagination and
support the product concept.
Effective radio advertising must comply with the listener’s
expectations. The commercial has the function of informing the consumers
about the product or service and its benefits but also it entertains him through
music, sound effects and humour.
Repetition of the brand name makes the listener remember it, and
natural, conversational language work best in helping him to visualize the
product and package.

Television combines sight and sound showing real action, being

true to life. One way to buy time is through spot announcements that appear
between programs, not within them; they can run consecutively forming
advertising clutters. Another way to buy time is through sponsorship or
participation. They are extremely expensive but they give the opportunity of
controlling over a certain type of program.

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 The TV advertisers use several tools for making their
advertisements efficient. One of them is the time of the day (time for reach
men is Saturday and Sunday afternoons, children Saturday mornings,
teenagers the late fringe period on Friday and Saturday nights, etc). Another
tool is the selection of certain programs offering opportunities to advertisers
(sports championship, multiepisode dramas, etc). The TV advertisement
guidelines are similar to the
Radio ones: they focus on an idea that is reinforced audioly and visually.
The advantage of showing action, keeps the viewers’ attention alive, and they
feel that they are watching a story: how to do something, or how something
works. The demonstration is a solution which is solved by the use of the
product advertised, involving the consumer in a real life attitude.

EXERCISES:
I. Fill in the blanks the missing words: 1. strategy; 2. similar; 3.
feature; 4. persuasive; 5. reason; 6. potential; 7. brand; 8. form; 9.
objectives, 10. value; 11. consumers; 12. motivation.

The advertising plan leads to adopting an advertising a)__________. Its

b)__________ will highlight the steps to be taken and the strategy will show
the ways to reach them. The advertising strategy is the main idea of the
message that goes to c)__________. Products in the same category are likely
to be very d)________. It is important to underline a difference or a benefit,
that is to capitalize on a e)_________ that will sell the product. Research
should reveal why people like a particular f)________, or what they look for in
that product category. Then advertising can be built on that idea that it should
be strong and g)_________. Other advertisings use h)___________ as a
strategy. They look for the real i) __________ that consumers buy certain
products. Other stress image. still other believe it is the j)________ of the
advertisement itself that provides the best strategy. Some specialists pretend
that advertising doesn’t just inform and persuade, but adds k)_________ to
the product or service. It
supports the advertising objective of turning l)__________ consumers into
actual purchasers.

II Make the following statements True or False after reading the text:
Promotion is one of the four components of any marketing strategy, the
other three being product, place and price. Promotion itself is also considered
to
comprise four elements: advertising, personal selling, sales promotion and
public relations. Industries and organizations vary greatly with respect to the
relative instance they place on the different elements in the promotion mix.
For instance, in the cosmetics world Avon Products Inc. emphasizes personal
selling while Revlon Inc. emphasizes advertising.
In declining whether to buy or make regular use of a product, a
prospective buyer moves through five stages: awareness, interest, evaluation,
trial, and adoption. Promotion seeks to move prospective buyers through this
process by informing, reminding, and persuading customers about an
organization and its products.
It is important to keep in mind that elements in the promotion mix must
be coordinated and linked together in such a way that they will complement
and reinforce each other’s impact on a potential customer. Each of the

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elements can play a particular role in achieving the promotion objective. For
example, advertising may be the best way to create awareness of a new
product, while sales promotions such as free samples may be effective and
encouraging trial of
the product. Answering prospective buyers’ queries, however, requires
personal selling. The relative importance of the promotion mix elements can
vary over and certain forms of advertising or sales promotion may come in
and out of vogue.
1. Marketing strategy comprises promotion, product, place and price. T/F
2. Advertising, personal selling, sales promotion, public relations are
comprised in promotion activity…….…………………………………........................
……………..T/F
3. Awareness, interest, evaluation, trial, adoption are the four stages of
prospective buyer evaluation when declining whether to buy or not...…….T/F
4. Informing, reminding and persuading customers about products they are
aware of, represent an important strategy of advertisement………………..…..T/F
5. Promotion mix will complement and reinforce each other’s impact on
personal selling…………………………………………………………………..........................
………..….T/F
6. Sales promotion may be effective and encouraging to create awareness of a
product…………………………………………………………………............................………..T/F
7. Personal selling is required for answering prospective buyer’s queries……T/F
8. Forms of advertising and promotion may come in and out of vogue…….…T/F

III. Look into the dictionary for the specific terminology: and make
sentences of your own:
A: price-cuts; free gifts; coupons; samples; cash rebates (money-refund
offers) premiums; Consumer contests; consumer sweepstakes, additional
product deals; trading stamps; consumer exhibitions
B. sales meetings; sales contests; point-of-purchase display; trade shows;
store demonstrations; special services; dealer contests and premiums; dealer
salespeople incentives
IV. Choose the best alternative to complete the sentences:
1. The task of the public relations department is to project the
right___________for the company.
a) painting b) image c) picture d) drawing
2. When the product was launched they issued a press _________to all
the news agencies.
a) escape b) issue c) release d) promotion
3.According to the code of practice, a public relations officer should not
knowingly______________false information.
a) disseminate b) dissociate c) dispose d) dissolve
4. Some companies entertain journalists more __________than others.
a) lasciviously b) largely c) leniently d) lvisly
5. The use of such things as logos and colour__________helps to maintain a
corporate identity.
a) schemes b) systems c) styles d) fashions
6. We need to liaise more with politicians and___________ servants if we
want the government to agree to our plans.
a) official b) polite c) civil d) civilian
7. $2000,000 was _____________for the official opening of the new store.
a) set aside b) brought about c) set off d) laid up

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8. Sponsorship can be an effective way of promoting____________towards an
organization.
a) will b) goodwill c) willingness d) goodness
9. At a press reception don’t _____________guests with irrelevant material.
a) overload b) override c) overtake d)
overcompensate
10. The reception must be held at a convenient______________with good
transport and parking facilities.
a) revue b) venue c) view d)
venture
11. When making a presentation to a relatively small ____________an
overhead projector can be invaluable.
a) asistance b) spectator c) audience d) congregation
12. Within a large organisation a well-designed___________-journal is an
effective method of communication.
a) in-house b) home c) household d) plant
13. Participating in local events, such as carnivals, is a good way of developing
__________relations.
a) common b) commonplace c) communal d) community
14. We used every __________of communication to get our message across.
) flow b) stream c) channel d) canal
15. We have to highlight our strengths and __________any weaknesses.
a) play up b) think through c) play down d) talk
back

VI. Match the type of advertising with their description: a) informative;

b) persuasive; c) collective /generic
1. - it involves publicising a type of product rather than a brand. This is often
undertaken by trade associations. The use of collective advertising often
indicates a product for which demand has been falling;
2. it is concerned with giving information, e.g. about timetables, changes in
prices or new Government legislation
3. it aims to get people to buy a product in order to increase sales. Advertising
of goods such as petrol is often included in this category because the
competing products are virtually identical. It is often used to establish and
maintain brand names. The term competitive is sometimes used to describe
advertising, which aims to increase a particular firm’s market share.
VII. Match the specialized terminology with their definitions: 1. full
service advertising agency; 2. communication research; 3. creative
department; 4. copywriter; 5. layout; 6. storyboard; 7. setting; 8.
closing date; 9. coverage; 10 spot; 11. avail, 12. commercial; 13.
fringe; 14. slogan; 15. brand; 16. trademark; 17. market
segmentation.
a) evaluation of advertising effectiveness before and after a campaign
b) the form showing planned placement of elements in a finished
advertisement;
c) layout for TV. It sketches the sequences of events in a commercial
d) the number of potential radio listeners or TV viewers
e) a time slot or availability purchased by a radio advertiser.
f) An agency that handles a wide range of advertising and merchandising
services, often all but personal selling
g) Period before (early fringe) and after (late fringe) prime time

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 h) a unique phrase identified with a company or brand
i) Any word or symbol that identifies the maker of a product. It I
protected by law.
j) A name, a sign, symbol, design, term or combination of these that
differentiate on company’s products from another’s., one
manufacturer’s product, so distinguished from others in the category.
k) The advertising agency department that oversees all work on copy and
illustrations
l) Where a television commercial takes place
m) A person who writes the words for print advertising and broadcast
commercials
n) Dividing the market into homogenous subgroups for the purpose of
o) making marketing more efficient by focusing on appropriate target
markets.
p) The deadline for submitting finished advertising to the media
q) A broadcast advertisement
r) one unit of air time
EXERCISES
I. Match the missing words: 1. finance; 2. future; 3. profit; 4.
securities; 5. allocate; 6. commercial; 7. activity; 8. corporation.

A company must allocate its available funds among various uses based
on financial plans. Such plans assume that the funds spent will produce
sufficient profit in order to pay interest on debt capital and to earn a
satisfactory income on their equity capital. Another task of business finance is
the management of a company’s surplus funds. These are usually invested in
commercial paper or in short-term notes or bills that pay interest. Proper
analysis and planning are necessary to assure that the funds will be available
where they are needed in the business at a future date.
Stock markets or exchanges are associations of brokers and dealers in
securities who conduct business together. They facilitate the financing of
business and government activity by bringing together the buyers and sellers
of stocks and bonds. A corporation creates (“issues”) shares of stock to
represent ownership claims in the corporation. Stockholders know that the
value of their stock will fluctuate with the value of the assets owned by the
corporation and with the business prospects of its operations.

II. The work of the wholesaler consists of buying goods from the
manufacturer and selling them in small quantities to retailers
according to their requirements. The retailer performs the last stage
of the productive process, for it is he who puts the goods in the hands
of the actual consumer. They both perform valuable functions which
justify their existence in the chain of distribution. Separate their
functions:

producer to sell directly to the

a) Since many shops,
especially those stocking a
large variety of goods, order
their suppliers in small
quantities, it is not
economical for each
shop, Such a practice would
mean employing many
salesmen and representatives,
packing many separate parcels
and making numerous
transport journeys.

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b) Manufacturers abroad could
rerely be bothered to ship
small parcels to individual
retailers or to undertake the
foreign currency
transactions involved. These
tasks are left to a wholealer,
the import merchant who is
known and trusted. Often
the import merchant goes
abroad to establish and
develop trade connections.
c) Customers like the
convenience of being able to
obtain a good at a shop just
when they require it. But
such ready service means
holding stocks. Often,
however, the retailer has
neither the facilities nor the
financial reserves to do this.
So he leaves it to the
wholesaler, knowing that,
should there be a sudden
run of good, he can quickly
obtain supplies from him.
d) With many products,
particularly vehicles and
machinery, the
manufacturers insist that
the wholesaler provides an
efficient maintenance
service, such as minor
repairs, periodic overhauls
and carrying a range or
spare parts. In this way
both the manufacturer and
the customer benefit. The
former can guarantee
quality of
e) service and thereby
preserves the reputation of
his product, while the latter
knows that his machines
can be repaired quickly and
efficiently by a local agent.
f) In the course of his main
business, the seller
performs many services for
the convenience of the
customers, all of which help
to build up goodwill. Where
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the good is not in stock, he
will order it, and in other
matters where contact with
the manufacturer is necessary,
the seller will often act for the
customer. Thus goods are
returned to the manufacturer
for repair, or he himslf mai
maintain a repair service.
g) They take the goods to where
it is most convenient for an
easy reach of the customer.
They are congregated together
in the centre of most towns,
though, with goods such as
groceries which are in
everyday use, small shops are
often dotted around rsidential
districts. Where customers are
very dispersed, as in the
country districts, the seller
may have „travelling shop” of
some form or another.
h) He often advises the
manufacturer, particularly as
regards advertising and
marketing the product. He
himself can advertise,
especially if the good is being
imported from abroad.
Moreover, he acts as a channel
of information to and from
retailers.
i) What is the „right good”
depends on the customer, for
different people have different
tastes, and what suits one
may be undesirable to
another. Thus having the
„right good” depends largely
on stocking different varieties
of the good so that each
customer can make his or her
own choice, pay for it, and
take delivery there and then.
j) He maintains close contact
with his customers. From them
he discovers, either through a
chance remark in the course of
converation or by direct
suggestion, how a good could
be improved or what type of
 good people would like. This eventually the modification or
information finds its way to the new good will be
the manufacturer, who will produced.
probably act upon, and

III. Match the following types of retail outlets with their description:
1. independents; 2. Multiples; 3. Supermarkets; 4. Hypermarkets; 5.
Department Stores; 6. Co-operatives; 7. Mail-Order.

a) Urban congestion, lack of adequate parcking space and rising rents

„out-of-town shopping centres to cater for the car-borne weekly
shopper.
b) Can be defined arbitrarily as organizations of ten or more shops. They
can sell a particular sort of goods. Their chief advantages are that they
can obtain the economies of bulk buying and centralised control,
eliminate the wholesaler, invite instant recognition through their
standardised shop fronts and establish a reputation through brand
names.
c) They sell by agency and illustrated catalogues, purchases ususally
being arranged through weekly interests-free payments. Over one-half
of all sales are accounted for by women clothing and household goods.
d) They are mainly small shops with no other branches and they account
for two-fifths of the total sales through shops. Yet, in spite of their
advantages of individual attention to customers, „handy” locations for
quick shopping trips, and the willingness of owners to accept a lower
return of the benefits of being their own boss, they are steadily losing
ground to the larger stores.
e) They may be defined as self-service shops. While organisationally they
would count as multiples, their share of the food trade warrants
separate attention. They accounted for half th grocery trde and a third
of total retail food sales. They secure the benefits of economies of scale,
low labour costs, a clear and attractive display of merchandise and bulk
buying to the extent of their own labelling. As a result they have highly
competitive prices, allowing them to gain ground rapidly.
f) Competition from multiples has forced them to alter somewhat the
traditional picture of separate departments under the control of a buyer
enjoying some degree of autonomy (which led to the epithet „many
stores under one roof”). Instead, a more streamlined approach with an
increasing degree of bulk-buying by central office, more self service and
extended credit facilities, have allowed them to retain an important
percentage of the market.
g) A group starting trading by subscribtion. Profits are distributed to
members in proportion to their purchases. They charge the current
market price for their goods. This type of retailing is chiefly important in
the marketing of agricultural products, where production is carried on
by many small farmers.
IV. Match the following missing words in the text: 1. communicating;
2. wholesaling, 3. transactions; 4. managed; 5. distribution; 6.
exchange; 7. digital; 8. information; 9. environement; 10. corporate;
11. service.
Electronic commerce is not a new concept. Companies and consumers
have been using electronic media to conduct commercial a)___________ for

134
years. To date, electronic commerce has been inhibited by high costs and
complexity and the lack of standard applications for viewing and shareing
b)_________ once connected. The Internet, specifically the World Wide Web,
has changed this scenario radically. Connectivity over the Internet is cheap,
increasingly secure and built on standards which make c)___________ with
anyone a straight forward task. Now, Internet commerce - the
d)_______________ of goods and services for value on Internet – is evolving
into a more cost-effective and powerful way to do business.
Business-to-business-commerce includes online e)__________, where
business sell goods and services to other businesses on the Web. In Internet-
based corporate f)___________, wholesaling merges into a system where
individual employees make purchases of office materials and supplies using
the corporate supply chain trading. Business work closely together via the
Internet to automate and streamline the supply of goods for production and
g)__________.
In business-to-consumer-commerce companies market physical goods
to consumers online in a more personalized, dynamic h)___________.
Business-to-consumers-commerce increasingly includes the delivery of
i)_________ goods - software, electronic media, and information.
Consumers also look more frequently to the Internet for the delivery of
j)_________, including ticketing, reservations and financial services. In short,
Internet commerce – business-to business and business-to-consumer – will
dramatically impact the way goods and
services are k)__________, bought and sold all the way from from
manufacturer to consumer.

V. Match the following specialised words with their definitions:

a) auction; b) access; c) capital; d) annual report; e) charge; f) bar
code; g) agency; h) allowance; i) barter j) cost;
1. to obtain data from or to place data into a computer memory
2. the business carried on by a commercial agent.
3. a tax free amount that may be deducted before a particular tax is
calculated
4. the annual accounts and directors’ report of a company issued to
shareholders
5. method of sale in which goods are sold in public to the highest bidder
6. a bar consisting of an array of parallel rectangular bars and spaces
printed on a package for sale in a retail shop.When a laser scanner is
pased over the bar code at the retailer’s check-out till the price and
description of the goods are displayed on the till screen and the
computer-controlled stock record is simultanously reduced.
7. a method of trading in which goods or services are exchanged without
the use of money
8. the total value of the assets of a person less liabilities
9. a legal or equitable interest in land, securing the payment of money.
10. an expenditure, usually of money, for the purchase of goods or
services

Translate into English:

A.
a) "Hârtii de valoare" este un termen generic pentru înscrisuri - de

135
regulă transmisibile - care atestă că posesorul lor este titularul unui drept
reprezentând o valoare determinată. In sens restrâns, prin hârtii de valoare"
se înţeleg acţiunile şi obligaţiunile.
Obligaţiunile sunt titluri de credit reprezentând o creanţă dintr-un
împrumut pe termen lung consimţit unei persoane juridice emitente a acestor
înscrisuri. Deţinătorul posedă o creanţă de o anumita sumaă pe o durată
stabilită şi remunerată printr-o dobândă determinată, fără a fi legat de
rezultatele financiare ale debitorului. Există şi categorii speciale de astel de
titluri, ca de exemplu obligaţiuni participative - legate de beneficiile
emitentului - sau obligaţiuni convertibile în acţiuni ale acestuia.
Este cunoscut că guverne, organisme internaţionale (ca Banca
Internaţională pentru Reconstrucţie şi Dezvoltare şi bănci regionale), societăţi
industriale şi comerciale, instituţii financiare apelează în prezent pe o scară
largă la acest mijloc de finanţare. Hârtiile de valoare pot fi:
-titluri la putător (titles on bearer) a căror simplă posesiune valorează
titlul. Aceasta este forma cea mai larg răspândită, oferind avantajul
transmiterii (conveyance) directe, necondiţionate.
-titluri nominale, care conferă drepturi numai persoanei pe numele
căreia sunt înscrise în evidenţe speciale, putând fi transmise doar dacă sunt
întrunite anumite condiţii şi se îndeplinesc o serie de formalităţi.
Hârtiile de valore pot fi manipulate direct de deţinător sau se pot
constitui în depozit la firme specializate, care le administrează conform
dispoziţiei titularului. Negocierea acestor înscrisuri se face în general în cadrul
burselor de valori.
B. Sistemul de conducere a activităaţii economice a cunoscut mai multe
etape. La început, proprietarul, detinătorul de capital conducea întreprinderea,
organiza producţia, asigura aprovizionarea tehnico-materială. Managementul
acestei etape se baza în principal pe intuiţie, bun simt, tradiţie şi experienţă,
avea prin urmare un caracter predominant empiric.
Creşterea complexităţii producţiei, a concentrării acesteia conduc la un
proces de dedublare: conducerea laturii tehnico-organizatorice este lăsată tot
mai mult pe seama "functionarilor specializaţi în managementul financiar".
O etapă caracteristică economiei contemporane este concentrarea într-
un grad extrem de înalt al capitalului, dezvoltarea informaticii, caracterul
tehnologiei. Treptat, se dezvoltă instituţia manageriala a cunoscătorilor
profesionişti ai producţiei.
(Ion Petrescu; Erno Domokos-Management General- 1993, Editura
Hyperion)
XI. Translate into English:
A. Compania de Bere România a desemnat o nouă agenţie de publicitate
pentru marca Ursus Focus Publicis. Decizia este rezultatul unei analize
profunde a pieţei de publicitate, pe durata a două luni şi a licitaţiei la care au
participat 8 companii de advertising. Decizia face parte, de asemenea din
politica CBR ca agenţiile cu care colaborează să fie reînnoite după o anumită
perioadă pentru a surprinde mereu consumatorul prin noutate şi originalitate.
B. Două noi branduri de cafea vor fi promovate printr-o campanie de
comunicare integrată care crează atmosfera unică a ţării de origine a
cafelei: o Brazilie autentică, tradiţională. Campania de lansare a lui
Amigo Especial şi Amigo Tradicional a fost concepută şi dezvoltată de
agenţia Tempo Advertizing. Această decizie a fost luată ca urmare a
studiilor de pe piaţa cafelei. Cafeaua măcinată şi ambalată are o

136
pondere de 49% din această piaţă şi de aceea s-a hotărât extinderea
investiţiei pe acest segment.

PART IV
INTERNATIONAL BUSINESS
ISSUES

137
 UNIT 1
EUROPEAN COMMUNITY
and
INTERNATIONAL BODIES and
PROGRAMMES

The two World Wars convinced statesmen that some form of political
unity was desirable, and in 1949 the Council of Europe was created - the
basis, it was hoped, of a European Parliament. But organizations with definite
functions - the Organization for European Economic Co-operation, The North
Atlantic Treaty Organization (1949) and the Western European Union (1954)
proved more fruitful than did the Council of Europe with its broad aim.
Although these organizations involved co-operation, they were merely
voluntary associations, not federal bodies exercising supra-national powers in
the interest of members as a whole. While federation was the ultimate aim of
European statesmen they realized that it could only proceed piecemeal and on
a functional basis. The first supra-national organization, the European Coal
and Steel Community (ECSC) was formed in 1951 to control the whole of the
iron, steel and coal resources of the six member countries - France, West
Germany, Italy, Holland, Belgium and Luxembourg. The old divisions created
by inward-looking national interests were thus broken down.
The success of the ECSC led to the setting up in 1957 of the Atomic
Energy Community (EURATOM), a similar organization for the peaceful use of
atomic energy, and the European Economic Community (EU), an organization
to develop a "common market" between the six member countries.
The 1957 Treaty of Rome set up a "community" whose government and
institutions were developed from those of the old ECSC.
Maastricht Treaty on European Union came into force on 1 November
1993 stating the aim of creating a European Union founded on the previous
Communities. The Treaty of Amsterdam in 1997 had improved policies and
forms of cooperation among the Member states.
The Union is served by a single institutional framework to "ensure the
consistency and the continuity of the activities carried out in order to attain
certain objectives while respecting and building upon the acquis
communautaire" The union autonomous institutions was created by the
Community Treaties in order to make them able issue legislation binding as
law throughout every Member State. A Court was also created to exercise
judicial control over relationship between the community institutions and the
Member States ready to be invoked not only by the states and Community
institutions but also by private individuals against their own governments and
national legislation.
The Member States and the candidates to accede to the European Union
have to be European and their system of government be founded on principles
of democracy, liberty, respect of human rights and fundamental freedom and
the rule of law. The founder members are France, Germany, Italy, the
Netherlands, Belgium and Luxembourg. In 1973 they were joined by the

138
United Kingdom,
Ireland and Denmark (though Greenland are of Denmark left the Community
in 1985), in 1981 by Greece and in 1986 by Spain and Portugal. In 1995,
Austria,
Sweden and Finland acceded to the European Union. As a result of 1994
referendum, Norway decided not to join the Union, but it remained a member,
together with Iceland and Liechtenstein, of the European Economic Area.
(EEA).
These countries participates effectively in the single market of the European
Community concerning the free movement of goods, persons, services and
capital and apply the bulk of EC's economic and social legislation, but they do
not participate directly in the EC's institutional structure as the Maastricht
Treaty introduced the concept of a "two-speed" or "variable geometry"
Community.
The Commission is the most important body of the EU as it is now
called. Its thirteen members act as an independent body in the interests of the
Community as a whole, and not as representatives of the individual
governments that have nominated them.
The Commission is responsible for formulating policy proposals,
promoting the Community interest, trying to reconcile national viewpoints and
implementing Community decisions.
Each member country sends a cabinet minister (usually the Foreign
Secretary) to the Council of Ministers. This is the supreme decision-making
body. Its task is to harmonize the policy of the Commission and the wishes of
the member governments. Thus while the Commission drafts community
policies; they have to be approved by the Council before they can be
implemented. On matters of major importance, which affect vital national
interests, the rule in practice is usually that decisions shall be unanimous. If
the Council becomes deadlocked, the Commission reconsiders the proposal in
order to meet some or all of the demands of the opposing countries.
It consists of ten judges appointed for a six-year term by agreement
among member governments. Its task is to interpret the Rome Treaty and
adjudicate on complaints, whether from the member states, private
enterprises or the institutions themselves. Its rulings are binding on member
countries, community institutions and individuals.
This is a body of 410 elected members that sit according to party
affiliation, not nationality. The Assembly debates Union policies and also
examines its budget.
The over-riding aim of the EU is to integrate the policies of its member
countries. Its economic policy is based on two main principles:
1. Customs union
2. a common market
There is a crucial difference between a free-trade area and a customs
union. The former simply removes tariff barriers between member countries
but allows individual members to impose their own rates of duty against
outsiders. A customs union goes further. While it too has internal free trade, it
also imposes common external tariffs. The EU has a customs union since this
is essential for an integrated common market. Otherwise goods would enter
the market through low-duty countries and be resold in those imposing high
rates.
The common market of the EU envisages moving goods and factors of
production completely freely within the Union through the operation of the

139
price system. Member countries had already developed their own individual
taxes, welfare benefits, monopoly policies, methods of removing balance of
payments, full employment policies and so on. If such differences were
allowed to persist they would tend to disrupt the working of the pricing system
because they would give some members of the Union an advantage over
others. Furthermore, it is
the Commission which is entrusted with the negotiation of international
agreements on behalf of the Union, even if they are ultimately concluded by
the
Council.
But one of the major duties of the Commission is to ensure that the
provisions of the European Community Treaty and the measures taken are
applied. In its unique position of proposer and enforcer of the Community
legislation, the Commission has the opportunity to fulfill this duty in the
legislative process and subsequently in ensuring the observance of the
legislation itself.
The members of the Commission must neither seek nor take any
instructions from any government or from any other body. The bulk of the
legislation of the European Community is not enacted under the provisions of
the Treaties themselves, but under powers delegated to the Commission or to
the Council itself. If the Commission considers that a Member State has failed
to fulfill an obligation under the Treaty, it shall deliver a reasoned opinion on
the matter after giving the State concerned the opportunity to submit its
observations, and the state concerned does not comply with the opinion within
the period laid down by the Commission, it may bring the matter before the
Court of Justice. Under the E. C. Treaty, it is the Court which determines
whether it is a breach.
The interests of the Member States at the Community level are
represented also in the Council of European Union. It consists of a team of the
responsible regional ministries of each Member State. The participants may be
also accompanied by other officials on events. Each delegation may have up to
9 members. There are relatively few provisions allowing the Council to act by a
qualified majority, so the co-decision procedure was added. Qualified
majorities involve a system of weighted voting, approximately related to the
size of the Member State.
The European Parliament is the only directly elected international
institution in the world. The Community legislation does not emanate from the
Parliament, but the co decision procedure, introduced by the Maastricht Treaty
means that legislation is adopted jointly by the Council and the Parliament.
The role of the Parliament appears to have been quite effective: some 6o per
cent of the European Parliament's amendments to proposed legislation are
accepted in the final version. Since 1979 the European Parliament has been
elected directly by the citizens of the Community. The seats are nevertheless
allocated to each Member State. Lately, after the Germany reunification, the
relative representation of the Big Member States has increased as compared
to the smaller ones.
The members of the Parliament group themselves according to political
ideology rather than national origin. The current groups are;
- Party of European Socialists
- European People's Party (Christian Democrats and
Conservatives)
- Group Union for Europe

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 - European Liberal Democratic and Reformist Party
- Confederal Group of the European United Left
- Green Group
- Group of the European Radical Alliance
- Europe of Nations Group
- Non-attached

1.1. Enlargement of the European Union

When considering the background of the enlargement of the European
Union to the countries of Central and Eastern Europe (CEE) it is important to
remember the historical ties which bind Europe together. In a period when
Western Europe enjoyed peace and growing prosperity, Central and Eastern
Europe was locked up behind the "iron curtain". The integration of Europe East
and West before the WWII was not only political and administrative; Europe
was also integrated economically, that can be demonstrated through economic
statistics as well as through the records of individual companies. But the
history of Europe since the Second World War was marked by a forced division
of the continent decided by the Allied leaders meeting in Yalta in 1944,
certainly against the will of their peoples who suffered the consequences of
this division for the next 45 years.
In the 1980's as reforms in the communist centrally-planned systems
became more general (without reforming the basis political one-party system
or giving democratic rights to citizens), it became commonplace in intellectual
circles to argue that the reforming communist system was an acceptable
alternative to the capitalist market economy system. This was the opposite
feeling of that developing to the east where citizens are becoming more and
more aware that the criminal, corrupt and inefficient system of one-party rule
and central-planning, held together by the power of the Soviet army, must be
swept away.
Until 1989, questions of geopolitics had gone completely out of fashion
in Europe. The European architecture was clear and constant: Western Europe,
defended by NATO alliance and gradually integrating economically in the
European Community stood opposite and stretching from the Elbe to the
Barents Sea and from Murmansk to the Black Sea. The scope for the
expansion of either bloc was extremely limited in the shadow as of the nuclear
deterrent.
The changes which have taken place since 1989 have led, in the first
stage at least, to the break-up of the Soviet empire and the freeing of the
states of Central and Eastern Europe from the Soviet occupation. The result
has been, of course, that that the former satellite countries of Central Europe,
having regained their freedom, had looked for their places in the European
Union. "The ten associated countries which have Agreements with the
European Union and all of which have applied for membership do not however,
form the Eastern limits of Europe. Russia, the Ukraine, Belarus and Moldavia
are also clearly European and must be considered in any new geographical
map of Europe."
(Emerson, 1996)
The countries of Central Europe freed themselves from Communism
through their own efforts and with only the moral support of the Member
States of the European Community.

141
 As it became clearer and clearer that integration into the structures of
the European Union became the objective of these countries, more and more
problems raised: the course of the reform and its costs, security and
migration, etc. Overall, however, the policy of the EU has been supportive to
the challenges of the economic and social reform. The Unpreparedness of the
Western countries in the year of the revolution can be evaluated by
considering officials and unofficial documents at the time. At the European
Council in Rhodes in December
1988, the heads of the Member States and governments produced a
declaration of the role of the division of our Continent by some general steps:
develop the
Conference on Security and Cooperation in Europe (CSCE), promote
disarmament in Europe and promote the respect of human rights. At the
Madrid Summit six months later, the Central and Eastern Europe does not
figure amongst the main points of the agenda. There is only a summarily
treated chapter entitled "Political Cooperation" The Summit came after the
Polish elections and after Gyula Horn, the Hungarian Foreign Minister, had
ordered the removal of the border controls between Hungary and Austria.
The first coordinated western response came in the G7 Summit meeting
in Paris in July 1989, which was convened in the follow-up to both the
developments in Poland and Hungary and the human rights violation in China.
The G7 leaders stated that "we offer the countries of the east the opportunity
to develop balanced economic cooperation on a sound commercial basis
consistent with the security interests of each of our countries and with the
general principles of international trade" (G7 Declaration, Summit of the Arch,
Paris – July 1989)
The opening of the inner-German border and the fall of the Berlin Wall
were clearly indicating a major look of further measures to support reforms,
including the creation of the European Bank for Reconstruction and
Development (EBRD) – designed to play a significant role in the transition in
Central and Eastern Europe, and the opening up of Community programmes in
education, training and technology.
At the Summit in Strasbourg in December the European Council
enforced commitment to the coordination of assistance for the newly come
nations in Europe. It followed the creation of PHARE programmes which was
meant to implement economic and aid measures to support the process of
reform in Poland and Hungary, in particular by "financing or participating in
the financing of projects aimed at economic restructuring" (Council Regulation
3906/89). Assistance was extended to the more eastern countries that were
added. Romania had to wait another year before being admitted, owing to the
unclear situation following the 1990 elections and miners movement.
The decision to offer Association Agreements to Romania and Bulgaria
underlined clearly the policy of the Community towards the countries of
Central Europe which set out on the course of the reform.
The question of future enlargement of the Community was extensively
dealt with at the Lisbon European Council in June 1992 and a joining calendar
was proposed.
The Association Agreements became the basic legal instruments of the
relationship between the European Union and the associated countries of
Eastern Europe. They state the responsibilities of the Community and of the
Member States that were ratified by the European Parliament and by the
European Council.

142
 All the Association Agreements with CEE states have the same
structure. The Preamble states the reasons why the parties are making the
agreement, lists past agreements which are taken into consideration and
makes references of general nature. It underlines the common values of the
two parties and the common commitment to strengthening political and
economic freedoms. In the Preamble and the "General principles" are also
brought some conditionality of the full association that is linked with progress
of free trade and complying with the rules of GATT, some references to the
world Trade Organization, to the Partnership for Peace agreement.
The objectives of the agreements cover the most important elements of
any strategy towards the full integration of the countries into the European
Union and provide certain markers against which to measure performance.

The Preamble
Objectives of the agreement
Title I general principles of the agreement
Title II: political dialogue
Title III free movement of goods
- Chapter 1: industrial products
- Chapter 2: agriculture
- Chapter 3: fisheries
- Chapter 4: common provisions (trade protection instruments)
Title IV: movement of workers, establishment, supply of services
- Chapter 1. movement of workers
- Chapter 2: establishment
- Chapter 3: supply of services
- Chapter 4: general provisions
Title V: payments, capital, competition and other economic provisions,
approximation of laws
- Chapter 1: current payments and movement of capital
- Chapter 2:competition and other economic provisions
- Chapter 3: approximation of laws
Title VI: economic cooperation
Title VII: cooperation in the prevention of illegal activities
Title VIII: cultural cooperation
Title IX: financial cooperation
Title X: institutional, general and final provisions

(Alan Mathew, Recreating Europe – The European Union's Policy

towards Central and Eastern Europe; Cambridge University Press, 1998)

They establish that respect for democratic principles and human rights
and of the market economy, lay down economic reform. The transition has the
purpose of legal adaptation in areas where immediate change is not possible
or not desired. Historic arguments are worth considering when about the
enlargement. Most of the countries of Central Europe have suffered
throughout history by being sandwiched between expansionist powers and
Russia and Prussia or Germany. Today, the situation has changed. All
governments in the region feel the need to be bound in to NATO and the
European Union for security reasons as well as the more obvious economic
and political reasons.

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1.1.1 Accession Problems
The most important objective of accession strategy is the transforming
the economies from centrally-planned dictatorship to market economy
democracies. The achievements in the area of the democratic process proved
to be somewhat less difficult and less controversial than economic and social
reforms. In all the associated countries free and fair elections led to normal
changes of the
governments. The one-party system is evolving as different parties gain and
lose their support, leading to shift in alliances and government crises.
In economic area, the progress has been also remarkable. Much of the
dynamism that the economies have shown has been due to the expansion of
an entrepreneurial private sector. The associated countries have all introduced
measures to ensure that legislation is progressively adopted, but legal
problems are considerable, partly because of the shortage of legal experts in
the associated countries and partly because of the relatively restricted
assistance which the Member States of the Community and the Community
institutions can make available.

1.2.2. Accession Strategies

The objectives of the associated countries to accede to the Union under
certain conditions became clear with the European Council at Copenhagen.
Although these conditions could be realistically fulfilled, they rather limited the
enthusiasm of the associated countries.
The Union aimed at helping the associated countries meet their
requirements – namely the existence of a functional market economy, the
ability to understand the competitive pressures inside the Union and the
stability to take on obligations of membership (the acquis communautaire).
The Council at Luxembourg in 1997 decided the countries to start
negotiations for joining the EU and the "Agenda 2000" a complete and rapid
time table. But while the timetable for the opening negotiations is more or less
confirmed, there was no real indication of a date of accession. Clear political
changes in policy in the associated countries could mean delay, if they prove
to be incapable with membership of the Union.
Specific strategies to prepare for accession were set by the applying countries.
Systems have been developed to make sure that new legislation conforms to
EU law, and timetables were drawn up for the adoption of the key pieces of
legislation. But the adoption of the acquis communautaire is likely to be a
complex process, as it is not simply a legal approximation of legislation. It is
changing both the legal framework in which society and economy operates and
revolutionizes the institutions of the state. Each piece of legislation involves a
transition until citizens or economic operations adapt completely to it.
Associated countries need to review their strategies periodically, decoding
more resources to them and tightening up timetables. They are also supposed
to discuss their negotiating position between themselves to make sure that
there is some common position on the macro politics of transition period, even
though different countries need to be considerable lobbying of the Member
States in order to get this positions accepted by the Union. The associated
countries are to develop plans to inform the public of the needs and
implications of accessing to the Union. Certain social groups need particular
attention. The business community in each country needs to be helped to
understand and plan for the changes which will come before and at accession.

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Much of this work falls to the government, due to the weakness of chambers
of commerce and other business organizations.
The first sort of criteria is set in the world of macroeconomic policy.
They concern for objectives of inflation, government deficit, reduction on the
stock of government debts and in certain circumstance, the balance on current
account. Further criteria, of a more macroeconomic type are set relating to
privatization, the degree of state or private monopoly, and the level of state
subsidies. Interim targets are set jointly by the Commission and the country
concerned and the programmes are checked annually. If targets are missed,
joint discussion seek to
analyze the causes and the interim targets for the following year are adjusted
correspondingly.
The second sort of criteria is even more complicated to set and to
monitor. Each year agreed areas of approximation is tackled and the
associated countries themselves are in the control of the agenda, as they
decide the sequencing of priorities, specific for their own. Every piece of
legislation the associated countries take over from the Union is a far-reaching
impact on the reform process, and on economic growth. Giving priority to
economic growth and reform is not only important for the associated
countries. It will be easier for the Union to integrate countries which are
developing quickly and which are rapidly becoming more like the older
Member States in terms of market economy than if the countries are very poor
and reform is beginning to buckle under the weight of poverty and deprivation.
However, the needs of the transformation process in the associated
countries in specific sectors will mean that the transition periods should be as
limited as possible, but most include those policy areas where rapid alignment
would curb investment and economic growth.

1.1.3. Conclusions
Enlargement is a win-win process, as it is a process necessary in order
to complete the reintegration of the European Continent and to ensure peace
and stability on the continent. But it will also bring economic benefit for the
new Member States. Integration is a process which is transforming CEE
countries into normal middle-income European countries after more than 45
years of central planning and separation. The internationalization of the
associated countries must go well beyond their integration into the European
structures. The associated countries have to decide their own political and
economic policies and achievement is done only by accession.
Enlargement to include the CEE countries is meant to lead to the
stronger European Union, with stronger political influence in the world and a
stronger economy. The flexibility beyond the core policies of the Union is also
meant to determine the development of new policies. The centralization of
power to Brussels will be effectively controlled by the growing influence of the
regions and an increase in their own power. The future of the Continent
depends on the success of enlargement and for this reason it must be the
central objective of European policy in the coming decade.

1.2. PHARE Programme

Originally, PHARE Programme was set in 1989 to assist Poland and
Hungary, but extended for the applicant countries of Central and Eastern

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Europe as a pre-accession instrument financed by the European Union. Now it
covers currently the needs ten countries of the recently joining 8 countries the
Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia and
Slovenia and the two countries that are to join the European Union in 2007:
Romania and Bulgaria.
The programme is meant to assist the massive restructuring their
former centrally planned economies and political change. Phare support was
reoriented to the aim of Eastern European countries' membership of European
Union, for their market economy expansion and infrastructure investment.
The pre-accession priorities lighted by the accession Partnership
Agreements represent the National Programmes for the adoption of the Acquis
in
the candidate's country time table. The timing and the costs are evaluated and
the steps implications and financial resources needed are planned. The Phare
objectives set originally in 1989 were further refined in the coming years:
1. strengthening public administration and institutions function
effectively inside the Union
2. adoption of Acquis Communautaire and shorten transition period
3. promotion of economic and social cohesion
New programmes were created: SAPARD and ISPA undertook rural and
agricultural development and transportation. This way it became possible that
PHARE programme focus on its key priorities only. 2003 was the final
programming year for the new 8 Member States although projects have
covered 2005 too, although they have undertaken full responsibility for the
management of PHARE projects through a process of extended
decentralization.
The key requirements for enlargement for the applying countries
are to implement and comply with the Community legislation so far reaching
improvements that are needed for their administration and judiciary based on
professionalism and mentality.
Democratic institution building activities focus on the weaknesses
identified at central, regional and local level, and on the transfer of the know-
how and investment.
The process of transferring "know-how" to develop structures,
strategies, human resources and management skills is needed to strengthen
the applicant countries' economic, social, regulatory and administrative
capacities. 30% of PHARE financing sources are allocated for this purpose and
are mainly deployed and implemented with member states through Twinning
projects.
The instrument of Twinning is based on the priority areas identified by
monitoring and regular reports prepared for enlargement. Twinning projects
provide technical and administrative assistance to newly joining countries and
candidate countries and also help in building wider contacts with practices
inside addresses to improvement cover long and medium term assignments.
The projects provide civil servant expertise from member states for
assignment of up to eight months, with possible but limited extensions.
Around 35% PHARE resources are also allocated for institution building
involving physical investment. Support money is invested in key regulatory
institutions whose equipment or infrastructure needs to be upgraded in order
to monitor and enforce the acquis communautaire. But this sort of investment
is only made on the basis of a clear-cut government strategy and commitment

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on public administration reform, modernization and governance supported as
necessary by Institution Building involving transfer of know-how.
Nation al programmes of the applying countries account for the most of
the PHARE budget as it indicates the priorities and the time table needed to
adopt the acquis or fulfill the accession criteria. This process continues with
Bulgaria and Romania until their accession.
Cross-border assistance of PHARE in the applicant countries is meant to
overcome specific economic and social developments in the countries of
Central and Eastern Europe and within their own national economies. The
programme has been extended to cover Bulgaria with Turkey and the
Bulgarian and
Romanian borders with their adjacent countries – Ukraine, Moldova, Serbia,
Montenegro and the former Yugoslav Republic of Macedonia.
PHARE Multi-country Programmes have increasingly been integrated
into national programmes too. The largest of these have been developed in
co-operation with International Financial Institutions and deal with the
promotion of
small and medium-sized enterprises and intermediary banks are encouraged
to provide finance for the partner countries in the field of Monitoring and
Evaluation, Statistics, Environment and Institution Building in fraud fighting.
Phare Programmes are planned centrally, but implemented in a
decentralized way, i.e. by candidate countries. Decentralization involves
responsibility transfer from the Commission to the Contracting Authority in the
recipient country, which becomes responsible for tendering the contracting as
well as the financial and administrative management of the projects.
Erasmus Programme – is a studentship, exchanger and trainings
programme based on a wide student organization. Its goal is to support and
develop student exchange knowledge and experience for its member states.
Its local sections and over 2500 members in 27 countries work in Higher
Education Institutes (Universities, Polytechnics, and University Colleges).
Erasmus Student Network (ESN) members mainly act and support social and
practical integration of Exchange students, and provides relevant information
about academic exchange programmes and ESN resources. It also makes its
contribution to the celebration of different exchange programmes.
2. INTERNATIONAL INSTITUTIONS
The evolution of modern-nation societies and international order
inevitably gave rise to questions of international cooperation. Diplomatic
representation became more widespread as the system expanded and political
and economic relationships multiplied. But it became evident that only
diplomatic contacts in themselves were unable to cope completely with the
complexity of the international system, so the concept of international
conference appeared and developed as a form of extended diplomacy.
Conferences dealt with problems that at least two or three countries were
interested in and an international treaty or formal peace resulted. The Peace
of West Westphalia was the first major instance of this in 1648 that ended the
thirty-year-old. The wars of Louis XIV and the Napoleonic wars, a century later
were terminated similarly by international agreements of interested powers.
The Congress of Vienna in 1815 is considered as a significant turning point as
it marked the first systematic attempt to regulate international affairs by
means of regular international conferences (El Eriam, Legal Organizations, p
58)

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 The Congress system lasted and institutionalized not only the
balance of power approach to politics, but also a semi-formal international
order. Then, world affairs were influenced to a large extent by periodic
conferences held in Europe until the outbreak of the II WW. The conferences
of this period (The Paris conference of 1856, and the Berlin gathering of 1871
– dealt with Balkan problems) led to the establishment of international
institutions.
The 19th century witnessed a considerable growth in international
non-governmental associations such as the International Committee of the
Red Cross founded in 1863 and the International Law Association (1873). They
represented a wide-range committee of interests on specific topics and an
awareness that international corporation must be effective, as they created
the machinery for regular meetings and established permanent bodies. These
organizations work to influencing governmental activities and stimulating
action, and they fulfilled an increasingly felt need for more complex methods
of international co-operation and regulation in an inter-dependent world.
In 1865 the International Telegraphic Union was set up and nine
years later the Universal Postal Union was also created. They combined the
activity of permanent bureaus with periodic conferences with decisions being
taken by majority vote that marked a step forward since unanimity process
was
needed. The nineteenth century was marked by the proliferation of such
public international unions covering transportation, communication, health and
economic co-operation which laid the basis for contemporary international
institutions. But the innovation of the past century has been, of course, the
creation of the global, comprehensive organizations of the League of Nations,
and the United Nations which was the culmination of the pioneering work of
the private and public international unions that required some form of central
co-ordination. The development of the United Nations into a real world
authority has been beneficial in the long run by the gradual increase in its
influence and responsibility in all fields of international peace and security.
The League of Nations created in 1919 sought to promote
international co-operation, peace and security upon the basis of disarmament,
the peaceful resolution of disputes, a guarantee of the sovereignty and
independence of member states and sanctions. But although an international
organization, it never became universal. It stayed to all intends and purposes
a European-centered institution and it was formally dissolved in 1946.
2.1. The United Nations
It arose as an attempt to remedy the defects of the League
organization. The series of war-time declarations and conferences culminated
in the San Francisco conference in 1945 which finally adopted the United
Nations Charter. The newly established international organization has proved
to be one of the major innovations of the 29th century in international
relations, not only in the use of force, but also with regard to wide-ranging
economic and social co-operation among states.
The General Agreement for Tariffs and Trade (GATT) arose out of an
international conference held at Havana in 1947-8 at which was established
the International Trade organization. The arrangements operated on the basis
of bilateral approach to trade negotiations coupled with unconditional
acceptance of the most favored nation principle (the most favorable benefit
obtained by one state are passed on to other states). A series of tariffs and

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trade negotiations rounds were held under its auspices that offered a package
approach to trade negotiation, and a wide variety of tariff reductions was
achieved. The eight rounds, termed the Uruguay round in 1986, concluded
with the signature at Marrakech on 15 April 1994 of a long and complex
agreement covering a range of economic issues, such as agriculture, textiles
and clothing, rules of origin, import licensing procedures, subsidies,
intellectual property rights, and procedures on dispute settlement. The GATT
continued until the end of 1995, when it was effectively subsumed with
changes as GATT within the World Trade Organization.
2.2. Regional Institutions
The proliferation of regional institutions, linking together geographically
and ideologically related states since the end of the Second World War, has
been impressive. The outset of the Cold War stimulated the growth of regional
defense alliances and block politics. NATO and its various linking organizations
covering the Middle and Far East, confronted the Warsaw Pact. Regional
organizations developed to reflect common interests in a superpower
Organization of American States and the Organization of African Unity. But it
was in Europe that regionalism became most constructive and political. The
establishment of the European Economic Community, in particular, was
intended to lay the basis for a resurgent Western Europe with meaningful
economic and political integration.
The North Atlantic Treaty Organization was created in 1949 to counter
possible threats from the East. It associated the United States and Canada
with 14 European powers for the protection, in essence, of Western Europe
(although Greece and Turkey are involved). By the Treaty the parties agreed
to consult where the territorial integrity, political independence or security of
any of them has been threatened and accepted that an armed attack against
one or more of them in Europe or North America should be considered an
attack against all.
The alliance consists of a Council which is the supreme organ and on
which all members are represented and a series of civil and military
committees covering all aspects of security work.
The ending of the Cold War brought about a variety of changes in the
organization. A North Atlantic Co-operation Council (NACC) was established in
1991 with the membership consisting of NATO states and former members of
the Warsaw Pact countries, including the successor states to the USSR. In
1994 a partnership for Peace Programme was inaugurated within the
framework of NACC. Countries participating in the Partnership for Peace signed
Framework Document, affirming their commitment to the preservation of
democratic
societies and the maintenance of the principles of international law, to fulfill in
good faith the obligations of the UN Charter and the principles contained in the
Universal Declaration of Human Rights and to respect the existing borders.
NATO has, in in-cooperation with the Western European Union, helped in
implementing UN sanctions in the former Yugoslavia and currently leads the
multinational implementation force (IFOR) in Bosnia in enforcement of the
Dayton Peace Agreement of 1995.
The Organization for Security and Co-operation in Europe (OSCE) was
originally created in 1975 following the Helsinki Conference of European
Powers (plus US and Canada) that established some basic principles of
behaviour among the participating states: sovereign equality, prohibition of

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threat or use of force, inviolability of frontiers, territorial integrity of states,
peaceful settlement of disputes, non intervention in internal affairs and
respect for human rights. The Final Act is not a binding treaty but a political
document, concerned with three area of "baskets" being security questions in
Europe; co-operation in the fields of economics, science and technology, and
co-operation in humanitarian fields. The diplomatic conference in Helsinki had
regular follow-up meetings, but it was only in the late 1980s that it began to
assume a coherent structure.
The Charter of Paris for a New Europe signed in 1990 provided for the
first standing institutions: the Conflict Prevention Centre in Vienna, the Office
for Free Elections in Warsaw (now renamed the Office for Democratic
Institutions and Human Rights) and the Secretariat based in Prague. Further
institutional steps were taken at the Budapest Summit in 1994 when the
organization was renamed the Organization for Security and Co-operation in
Europe as from January 1995. The organization has established Missions to
assist in dispute settlements. In March 1995 the Conference on the Pact on
Stability in Europe adopted a Final Declaration, which, together with some 100
bilateral and regional cooperation agreements, represents an attempt to
mitigate tensions. The Declaration contains a commitment to act against
intolerance and discrimination which the agreements include dealings with
cross-border co-operation, economic, environmental and minority protection
issues. The pact is supplemented by measures to be taken by the European
Union and is integrated within OSCE system. In the event of difficulties over
observance of the agreements, the states participating in the Pact would rely
on existing OSCE institutions and procedures
for settling disputes peacefully, including the Court of Conciliation and
Arbitration.
The Commonwealth of Independent States (CIS) was established by
Russia, Belarus and Ukraine in 1991 to which eight other former Republics of
USSR adhered so the organization now comprises all the former Soviet
Republics apart from the three Baltic States. The organization is set on respect
of the territorial integrity of member states and upon co-operation particularly
in safeguarding international peace and security and implementing effective
measures for the reduction of armaments. A large number of agreements have
been signed by the member states on a variety of subjects, including
prevention of drug smuggling and terrorism, but many of these agreements
have not been ratified.
After the II WW the Organization of American States emerged and built
on the 1947 Inter-American Treaty of Reciprocal Assistance signed at Rio de
Janeiro, and the 1948 Pact of Bogotá which is the original Charter of OAS
which was amended in 1967 by Buenos Aires Protocol in 1985 by the
Cartagena de Indias Protocol and by the 1992 Washington Protocol and the
1993 Managua Protocol. The organization comprises currently 35 member
states and it is the

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most developed of the regional organizations outside Europe, but without any
of the supranational powers possessed by the European Union.
The Arab League was created in 1944. It encourages regional co-
operation in economic, cultural and social issues. Its headquarters is based in
Tunisia.
The Organization of African Unity was established in 1963 in Ethiopia
dealing with economic, health, defense, educational and scientific matters
amongst others. Its liberation committee is based in Dar es Salaam to assist
the various liberation organizations. The OUA has faced considerable problems
in reconciliation member states' policies that led to Morocco's withdrawal or to
the noticeable unsuccessful mediation attempts in the Chad civil war.
The Eastern European former communist countries had their own
organization such as Warsaw Pact, which mirrored the NATO organization and
Comecon (the Council for Mutual Economic Aid). Both of them have
disintegrated with the collapse of the Soviet system.
The Association of South East Asian Nations (ASEAN) was created in
1967 on both political and economic aims. Its members: Indonesia, Thailand,
Malaysia, Singapore, the Philippines, Brunei and later Vietnam affirmed their
commitment to peace and peaceful settlement of disputes.
2.3. Norms and Legal practice of
international organizations
The different types of international organizations have brought their
contribution to the norms and practice of international law. This is particularly
true as for the United Nations with the universality of membership and
extensive field of activity and interest. It is worth noting the importance of
international legal norms with the operations of these organizations. The
constituent instruments in dealing with international affairs are the treaties
that are particularly relevant.
An important aspect of the role of international organization in the world
order is the possession of international legal personality. Once established, the
organization becomes subject of international law and thus capable of
enforcing laws, rights and duties as distinct from operating merely within the
confines of separate jurisdiction. Legal personality of the organization may be
inferred from the powers or purposes of the organization and its practice. The
attribution of international legal personality to an international organization is
important in establishing that organization as an entity operating directly upon
the
international stage rather than obliging the organization to function
internationally through its member states. Many constituent instruments of
international organizations provide that the organization in question shall have
personality in domestic law so as to enable it, for example, to contract or
acquire or dispose of property or to institute legal proceedings in the local
courts or to have the legal capacity necessary to exercise its functions. This
issue also arises as to whether states that are not parties to the treaty in
question and thus not member states of the particular international
organization are obliged to recognize the personality of such organization. This
can be achieved either directly by entering into an agreement with the
organization and a headquarters agreement permitting the establishment of
the organization within the jurisdiction, or indirectly, by virtue of the rules of
private international law. By virtue of this approach, adopted in most legal
systems, a domestic court will determine the legal status and capacity of a

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legal person by reference to the applicable or proper laws, which will be in the
case of international organizations,
international law. Thus, if the organization had personality under international
law, this would suffice to establish personality under domestic law.
The very nature status and autonomy of international organizations will
depend primarily upon the terms of their constituent instruments or
constitution under which they are established. These are the multilateral
treaties, since they are binding agreements entered into by member states.
They have a special character since they are also methods of creation of new
subjects of international law. However, far-reaching powers are not ascribed
to the international organizations so as not to lead to conflicts with member
states and third parties, as well as not to undermine the internationally
recognized nature and scope of the organization.
The international Institutions are governed by the principle of speciality
and they are invested by the states which created them with powers the limits
of which are a function of the common interests whose promotion those states
entrust to them. Such powers may be expressly laid down in the constituent
instruments or may arise subsidiary as implied powers, being those deemed
necessary for fulfillment of the functions of the particular organization.
An important question is the capacity of international organizations to
conclude treaties which is usually governed by the rules of each international
organization. Responsibility is also a necessary consequence of international
legal personality of the organization, and the resulting possession of
international rights and duties. Such rights and duties may flow from treaties
or from principles of customary international laws. The precise nature of
responsibility will depend upon the circumstances of the case but also
analogies drawn from the laws of state responsibility with regard to the
conditions under which responsibility will be imposed.
International organizations relate to their own legal requirements. They
can be held responsible, inquiry arising out of a breach by the organization of
an international obligation deriving from a treaty provision or principle of
customary international law. Analogies can be also drawn from the general
rules relating to state responsibility with regard to the condition under which
responsibility is imposed.
3. The Nature and Development of the
International Law
Societies have created for themselves a framework of principles within
which to develop. The rights and obligations have all been spelt out within the
consciousness of the communities. Law is that element which binds the
members of the societies together in their adherence to recognized values and
standards.
It attempts to create a framework which can act as a shock-absorber
clarifying and moderating claims and endeavoring to balance interests. Just as
any domestic community must have a background of ideas and hopes to aim,
so the international community must bear in mind its ultimate values. It is
both permissive, in allowing individuals to establish their own legal relation
with rights and duties, and coercitive as it punishes those who infringe its
regulations. Law consists of a series of rules regulating behaviour, and
reflecting the ideas and preoccupations of the society within which it operates.
The subject of International laws is nation-states, not individual citizens. There
are many contrasts between the law between states, international

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organizations and, in certain cases, individuals. International law is divided
into private international law and public international law. The former deals
with the cases within particular legal systems in which foreign elements raise
questions as to the application of foreign law or the role of foreign courts. If an
Italian business man concludes a contract in France, to sell goods, any Italian
court would apply French law as regards the terms of the contract. By
contrast, public international law is but a separate system altogether. The
mistake is to confuse courtesy laws, specific for different nations, or morality
which is a branch of ethics.
International law is generally considered an emanation of a recognized
body to legislate or create laws and implemented by a hierarchy of courts with
compulsory jurisdiction to settle disputes over such laws and an accepted
system of enforcing those laws.
International law has no legislature. The resolutions of United Nations
are not legally binding on anybody save for certain of the organs of the United
Nations for certain purposes. There is no system of international courts,
except the International Court of justice at the Hague, but it can only decide
cases when both sides agree and it cannot ensure that its decisions are
complied with. It is important, but only peripheral to the international
community. Above all, there is no executive or governing entity. The Security
Council of the United Nations, which was intended to have such a role, has at
times been effectively constrained by the veto power of the five permanent
members: USA, now the Russian Federation, China, France, and the United
Kingdom.
International law does not state a unified system of sanctions, but there
are circumstances in which the use of force is regarded as justified and legal.
Within the United Nations system, sanctions may be imposed by the Security
Council upon the determination of a threat to the peace, breach of the peace
or act of aggression. Such sanctions may be economic or even military and the
states themselves decide whether to take action on the extent of their
measures as there is no supreme body to rule on their legality, although
international law does lay down relevant rules. Neither must it be forgotten
that the current trend in international law is to restrict the use of force as far
as possible, thus holding to the absurd result that the more force is controlled
in international society, the less legal international law becomes.
While the legal structure within all but the most primitive societies is
hierarchical and authority is vertical rather like a pyramid with the sovereign
person or unit in a position of supremacy on top, the international law system
is horizontal consisting of over 180 independent states, all equal in legal
theory, and reorganizing no one in authority over them. International law is
primarily formulated by international agreements, which issue rules binding
upon the signatories, and customary rules which are basically state practices
recognized
by the community at large as laying down patterns of conduct that have to be
complied with.
International law can only constitute a neutrally understandable specific
vocabulary and suggest possible solutions which follow to a study of its
principles. The principle of auto-limitation, on self-limitation, states that states
could only be obliged to comply with international rules of they first agreed to
be so obliged. In abroad sense, states accept laws, as without that, no such a
system could possibly operate.

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 But the inextricable bonds linking law and politics must be reorganized.
The formulation of policy and the method of enforcement are distinctive within
developed societies in order to prevent a concentration of too much power
within the same branch which makes laws and creates the legal systems. A
number of factors also operate to conceal and lessen the impact of politics
upon the legal process. Foremost amongst these is the psychological element
of tradition and the development of the so called law-habit. The arbiters of the
world order are, in the last resort, the states and they make the rules,
interpret and enforce them.
3.1. International Law Today
In the second half of the 2oth century the complexity of life has
multiplied so international law has developed in many directions. International
law is a result of its environment, as human community has developed certain
specific sets of values, social, economic and political.
There are many instances of how modern developments demand a
constant reappraisal of the structure of international law and its rules. The
regulation of space expeditions, the divisions of ocean floor, protection of
human rights, management of international financial system, preservation of
peace embrace all interests and aims of contemporary international life and
international law. Its determining factor is the characteristic of the
international political system that needs the acknowledgement of the rights of
other: which leads inevitably to a system of their regulation.
International law faced with radical changes in the world structure of
power and had to come to terms with new ideas that could no longer be
ignored.
The Eurocentric character of international law has been weakened in the
late 50 years and the needs of other cultures and civilizations have begun to
play an increasing role in the evolution of world juridical thought. The basic
state-oriented character of the world politics and international law is reflected
by the principles of non intervention in internal affairs, territorial integrity,
non-use of force and equality of voting in the United Nations General
Assembly. But there are also many cut-cross state borders factors that
generate tensions such as economic relationships, human rights, new
technological forces.
The growth of positivism in the 19th century focussed concern of the
international law upon sovereign states. But the new approaches of the 20th
century regarding international relations extended the role played by non-
state entities, such as individuals, multinational firms and international
institutions. The developing concern with human rights is recognition of
individual responsibility under international law without the interposition of the
state. The Universal Declaration of Human Rights adopted by the United
Nations in 1948 lists a series of political and social rights, although it is only a
guide line and not legally binding as such, prior to perestroika that denied that
individuals may have rights as distinct from duties against the state they
belong to. Thus, while states remain the primary subject of international law,
they are now joining by other non-state entities, whose importance is likely to
grow in the future, such as regional organization. They develop a regional
international law sub-system within the original universal framework. The
range of topics covered by international law has expanded with the upsurge in
difficulties faced and the proliferation in the member participants within the
system. The specialized problems of contemporary society have begun to

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represent concerns of the International law: economic development covering
financial matters, environmental despoliation, space exploration, exploitation
of ocean resources and deep sea-bed, bureaucracy of international
institutions, international labor standards, health regulations, communications
controls, etc

EXERCISES
I. Find the key words in the following text and then draft the main
ideas it conveys:

Despite its increased visibility, the International Monetary Fund remains

a mysterious presence on the international scene. Considerable confusion
reigns about why it exists and what it does. Some observers, confusing it with
the World Bank, are under the impression that IMF exists to subsidize
economic development in the poor nations. Others imagine it as an
international central bank controlling the creation of money on a world scale.
Still others regard the IMF as a powerful and disapproving political institution,
imbued with missionary zeal for fiscal rectitude, which somehow compels its
members to tread a path of economic austerity.
The IMF is in fact none of these. It is neither a development bank, nor a
world central bank, not an agency that can or wishes to coerce its members to
certain things. It is rather a cooperative institution that 182 countries have
voluntarily joined because they see the advantage of consulting with one
another in this forum to maintain a more stable system of buying and selling
their currencies so that payments in foreign money can take place between
countries smoothly and without delay.
The IMF is the enemy of surprise. Members of the IMF believe that
keeping other countries informed of their intentions regarding policies that
influence payments by the governments and residents of one country to those
of another, rather than making a secret of such policies, is to everyone's
advantage. They also believe that occasionally modifying those policies (by
reducing export taxes, for instance), when fellow members agree that this is in
the common interest, will help international trade to grow and will create more
and higher-paying jobs in an expanding world economy. The IMF lends money
to members having trouble meeting financial obligations to other members,
but only on condition that they undertake economic reforms to eliminate these
difficulties for their own good and that of the entire membership.
Contrary to the widespread perception, the IMF has no effective
authority over domestic economic policies of its members. It can, and often
does urge members to make the best use of scarce resources by refraining
from unproductive military expenditures or by spending more money on health
and education. There is no question of forcing a member to adopt any policy.
Whatever authority the IMF may possess is confined to requiring the member
to disclose information on its monetary and fiscal policy and to avoid, as far as
possible, putting restrictions on exchanging domestic for foreign currency and
on making payments to other members.
Its members have given the IMF some authority over their payments
policies because these policies are of paramount importance to the flow of
money between nations and because experience has confirmed that without a

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global monitoring agency, the modern system of payment in foreign currency
simply does not work. Changing money is the central point of financial
contracts between nations and the indispensable vehicle of the world trade.
Each currency, be it the dollar, franc or the Gambian dalasi or Haitian gourde,
has a value in terms of other currencies. The relative exchanging values of the
world's major currencies now fluctuate continuously and are reported daily in
the financial columns of the newspapers. Although the operations of the
exchange market, where money (much the same as such commodities as
wheat or apples) is bought or sold, may seem remote from daily life, these
operations deeply affect
us all. Most commonly, we experience the reality of exchange values abruptly
when we travel abroad as tourists and find we must first buy local money
before we can buy anything else. Purchasing foreign currency is a fact of life
not only for tourists, but also for importers, bankers, governments and other
institutions that must acquire foreign currency, often on a very large scale,
before they can do business abroad. No country restricts the exchange of its
national currency into another nation’s money, and this greatly facilitates
international trade.
The current confident expectations that one currency will be converted
into another on demand makes it difficult to imagine circumstances in which
this was not the case. And yet it was largely in reaction to circumstances of
widespread inconvertibility and related exchange problems that the
international community decided over 50 years ago to work out these
problems in a common form that was to become the International Monetary
Fund.
(External Relations Department, Publications Services International Monetary
Fund, Washington DC, USA).
II. Match the words with the gaps in the text:
1. assistance; 2. promote; 3. projects; 4. finance; 5. instrument; 6.
funds; 7. granted; 8. support; 9.debt; 10. backing.

One of the most important banks in the world is the World Bank, its
official name being the International Bank for Reconstruction and
Development. The bank was projected to a) ____ economic development and
reconstruction. It was formed in order to b) __________ the European
countries whose economies were affected by the World War II. The bank was
created on July 1944 and began operations in 1946 and first granted credits to
post World War II economic c) __________. It has as its main goal to lend
assistance to governments or private enterprises with government d)
_________. Many of the loans e) __________ were given so as to assure the
fulfillment of specific projects as: introduction of electric power, water supply
and transportation. But by the late 20th century agricultural development
became its focus of lending and as a result, Poland's agriculture got credits so
as the state to f) ___________________ agriculture in order to help to the
country's economic expansion.
It lent g) ___________ also to Romania whose government received
financial support for the growth of the economy. Many of the loans received
helped Romania build modern roads and ensure the development of some
specific h) _________.
A series of institutions were created to make loans easier to obtain by
nations heavily in i) __________. The World Bank is an j) _________
designed to help the world to have a united economy and to create the spirit

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of community between all countries.

III. Match the words with the definitions:

a) indicator; b) budget; c) investment; d) liability; e) assets; f) equity
capital.

1. claim on the assets of a company or individual – excluding ownership

Equity. It represents a transfer of assets or services at a specified or
determinable date.
2. technical measurement securities market analysis use to forecast the
market’s direction such as investment advisory sentiment, volume of stock
trading direction of interest rate, and buying or selling by corporate insiders.
3. The part of the share capital of a company owned by ordinary shareholders.
4. The purchase of capital goods, such as plant and machinery in a factory in
order to produce goods for future consumption
5. financial plan setting targets for the revenues, expenditures of an
organization for a specified period.
6. any tangible or intangible object, that is of value to its owner. It is either
cash or it can be turned into cash.

I. Translate into English:

Nevoia pentru o organizaţie ca Fondul Monetar Internaţional a devenit

evidentă în timpul Marii Crize care a distrus economia mondială în anii 1930 şi
care a avut un impact foarte puternic asupra tuturor formelor vieţii economice.
Băncile au dat faliment cu miile, preţurile din agricultură au căzut sub preţurile
de productie, fermele abandonate s-au transformat în locuri sălbatice, fabricile
şi-au închis porţile, flotele aşteptau în porturi încărcătura care nu avea să vină,
şi zeci de milioane de muncitori umblau pe străzi în căutarea unei slujbe.
Criza a fost la fel de distrugătoare pentru lumea nevăzută a finanţelor şi
a schimbului monetar. Lipsa de încredere generalizată în banii scripturali
(fiduciary money) a dus la o cerere pentru aur ce nu a putut fi acoperită de
trezoreriile naţionale. Un număr de naţiuni au renunţat la etalonul aur, acest
lucru conducând la complicarea schimburilor comerciale, căuându-se chiar
modalitaţi de plata gen barter (o locomotivă pentru 100 tone cafea), ceea ce
elimina folosirea banilor în totalitate.
Cooperarea internaţională se impunea, prin stabilirea unui sistem
monetar inovativ şi a unei instituţii internaţionale care să-l monitorizeze.
Harry Dexter White din SUA si John Maynard Keynes din Regatul Unit,
propun un asemenea sistem la inceputul anilor '40, sistemul urmând să
încurajeze convertirea nerestricţionată (unrestricted conversion) a unei valute
în alta, să stabilească o valoare clară şi fără echivoc pentru fiecare valută şi să
elimine restricţiile şi practicile gen devalorizare competitivă (competitive
devaluation).
După o perioadă lungă de negocieri în condiţii dificile impuse de război,
comunitatea internaţională a acceptat sistemul şi organizatia care să-l
urmărească: 44 de ţări şi-au trimis delegaţii reuniţi la Bretton Woods, New
Hampshire, SUA, în iulie 1944. FMI şi-a început activitatea la Washington DC
în mai 1946, având 39 de membri.

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 PART V
INFORMATICS TECHNOLOGY

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1. INFORMATICS TECHNOLOGY
From ancient times, people have always needed to count, measure
things of their life. They also have needed tools and techniques to help them
keep records accurately: tapes, slides, rules, sextants, weighting scales,
clocks, etc.
The computer is the latest calculating and recording device in the
mankind history. The amount of work they do is quick and reliable, as the
speed of its work is measured in millions of operations per second. Computer
is becoming smaller faster, cheaper, more reliable and easier to use.
Nowadays it covers the human needs in business, education, health care, art,
design, government and entertainment, being a general purpose machine, as
it can operate over a few hours as a typewriter, desktop publishing studio,
sound and video editor, accounts tracker, e-mail sender, internet browser.
Computer responds to programs that are conceived to make it meet the needs
of human by means of processing the input to obtain the output. Any
information going into a computer is converted into numbers that are added
together in various ways and combinations under the set of rules that is called
software, one of the main components of the computer system; the other one
is the hardware that includes all the physical units that make the computer
work.
Computers fall into a number of different categories. One of the ends of
the spectrum is the mainframe that matches the needs of big corporations as
they run with no interruption, performing extremely complex calculations. The
most well known are the personal computers (PC) that come into various
shapes and sizes. The desktop is the most commonly used. It includes a
system unit, a screen and a keyboard, as separate components. Business
people can use now a laptop or a notebook computer. They have been
provided lately with liquid crystal displays (LDC) or touch screen. Medium size
enterprises can use nowadays minicomputers that offer greater processing
power, storage capacity and reliability. Network computers or (servers) are
the big computers meant to administer, support and protect the security the
computer network.
The system unit is the essential component of the computer. It houses
the processor, various memories, a fan which is designed to keep the whole
unit cool. Nowadays the system unit is designed to stand vertically, on the
floor tower, or it is built underneath the keyboard in a laptop.
The two main types of memory are the Random Access Memory (RAM)
used to carry out given tasks, often called working storage. The main memory
holds the list of instructions currently working on, the input information on
which it is working and the interim output. The measure units for its capacity
are the byte. One byte consists of eight bits. Additional memory can improve
the performance of the computer. The other type of the memory is the Read-
Only-Memory (ROM) where the PC stores its low level programs, particularly
the instructions necessary to start the computer. The main device for storing
information is the hard disc that records it magnetically and keeps it until it is
changed or deleted. It uses a read/write head that detects the polarization of
particles on the disc revolving at a constant high speed, getting or retrieving
information onto it.

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 Documents can be transferred from one computer to another by using a
diskette, the so-called floppy-disk. But nowadays, software is most often
supplied on CD-ROM (Compact Disk Read-Only Memory) that provide more
storage capacity, as programs have added functionality because they may
include graphic and other multimedia elements. A newer type of CD-ROM is
the CD-Rewritable disk, or CD-RW that can be used for writing data to them
more than once. But CD-ROMs are now being overtaken by DVDs (Digital
Versatile Disk) which look similar, but have a great more storage capacity. The
information is encoded on the CDs by using a CD Writer and detected by a
laser beam. The zip-drive is another kind of high capacity removable disk that
uses either magnetic technology or laser technology. All of them are often
referred to as "backing storage" or "secondary storage".
Most of the computer systems use three essential peripherals: the key
board and the mouse (used for input) and the screen (used for output). The
keyboard makes the information and instruction enter the computer. The
programs give continuous feed-back on their progress and display their output
on the screen or the monitor that is the visual display unit (VDU). The
programs are also represented on the screen as Graphical User Interface
(GUI) 〈gooey〉 that includes files, functions as pictures and also a pointer
indicating the intention of the user and making the program responding
accordingly. The mouse represents it as an external device, converting its
moves into the moves of the pointer. The one click or double click moves
make the operation of the computer easy. But besides the mouse, there are
also other, like:
- trackball that is an upside-down mouse used for limited desk
space
- joystick and games controller are also similar to the external
mouse, but used only for games and simulations
- touch pads built in device to the keyboard of laptops for
moving the pointer either as a miniature joystick or a
pressure-sensitive touch pad that transmits the finger
movement
- graphic tablets are used for design applications and feel the
movement of a plastic pen across them
Other essential peripheral devices are also normal parts of the computer
system: printers, modems, loud speakers, scanners, digital cameras,
microphones are increasingly used by the new technology.
Laser printers, inkjet printers, impact printers use slightly different
techniques for printing or making marks on the paper. They are characterized
by the speed of output, colour and cost of consumables.
The modem is a device used to connect computers to the telephone
network for using the internet or for sending faxes.
Any kind of data that can be converted into numbers can be processed
by computer: music, pictures, animated drawings, video, speech. The
multimedia applications have grown up due to this ability, often called
multimedia computer. These applications need also specialized peripherals:

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 - scanner – used to copy photos, drawings, texts into a
computer through a specialized program
- digital camera – records images digitally in a memory, not a
photographic film. The images are transferred to a computer
and printed out using graphic software to edit, archive or e-
mail them.
- Loud speakers are standard peripheral equipment used to play
music and any sounds
- Sound cards are used to control audio output and to upgrade
its quality
- Microphones used for the control of application by speech
commands
Software is the generic sets of instructions gathered in system software
and application software. The former refers to the control and management of
the devices, files and storage; the latter is concerned with various professional
areas, entertainment, and education.
The programs depend on the operating system (OS) that controls the
hardware, the timing of sequences and manages the access data to ensure
security and integrity. When adding a new piece of hardware to the system, a
driver has also to be loaded to make the OS control the hardware, i.e.
recognize input from the keyboard and mouse, send output to the screen,
communicate with printers and other peripherals, and keep track of files. The
operating system is usually presented through a graphical user interface (GUI)
that represents the hardware of the computer: disks, printers, application
programs, data files represented by symbols of icons that can be made
operational by moving the pointer through a mouse click
The application programs enable different programs work: word
processing, spreadsheets, data base management system, electronic mail or
even pre-loaded applications: Netscape Navigator, Microsoft Explorer. There
are also highly specialized and sophisticated applications used according to
particular needs.
Licensed software gives the holder the right to run it and make copies of
the software only for backup purposes. The illegal piracy deprives the
individual developers, companies of their rightful income. Only freeware can
be distributed without charge on disks given away with magazines or
downloaded from internet. Shareware is also widely distributed in much the
same way as freeware, but if you decide to use it, you are supposed to send a
licence fee to the developer, otherwise it will not function but only a typical
period of time of 30 days.
When the software produces incorrect or unexpected results, it has a
bug that can range from minor to major ones. When the computer "freezes" it
ceases to function, i.e. refuses any input and won't produce any output, it
"hangs". A bug can make a whole system crash, so the computer should be
turned off the power for a minute, or to press the Reset button on the system
unit, as a last resort, in order not to lose any work done since the last saved
application.

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 Data are hold in files that can be organized into directories or folders.
They are given names in order to be recognized and operated when needed.
Data can be lost, corrupted, damaged or abused accidentally or deliberately.
The users can protect them by using a system of password or keeping backup
copies of data files, on diskettes or other removable mediums. The operated
data should also be saved at regular intervals on the volatile working storage
RAM.
Viruses are poisonous programs that vary from minor irritation
(messages displayed on the screen), inconveniences (files can be damaged),
or to total disaster (damage of the hardware rendered unusable). Virus
spreading can be avoided by not opening the e-mail attachments, checking
diskettes, hard drives or CDs and by using virus-scanning software that should
be the very latest.
Network
Computers can operate on their own (stand-alone computers) or
they can be connected in networks:
- sharing hardware: two or more computers are connected
through hardware resources: printers, modems, scanners,
platters
- file sharing: information needed by several users is stored on
a single, powerful, permanently switched-on computer called a
file server, and then shared on specific computers.
- E-mail: Computer networks make possible e-communication,
i.e. electronic mail; messages can be exchanged between
users of the computers that are connected to a common
network.
- Data-exchange network: makes possible co-operative work in
a work group
- LAN (Local Area Network) – connects computers located in a small area, such
as an office, a building, or a group of adjoining buildings
- WAN (Wide Area Network – connects computers over a large
area, usually across international boundaries. They can be
restricted to a private access, operated by a transnational
company or government agency or it can have public access
such as the internet. The wide area network uses all
technologies of the telephone network: satellites, microwaves,
optic fibers converting the "analogue" voice signal into the
"digital" computer signal through a "modem". The modem is a
device which is usually built-in the computer communication. .
An alternative to using modems is ISDN (Integrated Service
Digital Network) that is cable which is designed to carry digital
signals. It is used more and more for frequent high-volume
Computer users connected to the Internet can exchange messages by
e-mail. They need e-mail software, a unique address and a password to
prove entitlement to collect the message. E-mail has largely taken over from
the telephone technology used to send and receive written messages. The
fax machine scans printed information and encodes it so that it could be sent

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down the telephone line and decoded by the fax machine of the recipient that
provides a print out.
Internet is a wide-world network of interconnected networks. It is used
to e-mailing and to provide access to the information stored on computers all
around the world. The users – governments, officials, universities,
companies, voluntary organizations, and private individuals can use this huge
resource-opportunity for research, news, entertainment, education,
information, current affairs, shopping, arts, etc
The term world wide web is used to describe documents made available
over the Internet which are in a particular graphic format. The documents
can be linked together, irrespective of where they are physically located in
the world. Their links, named hyperlinks, enable users to pursue a research
topic from the general to the specific, from detail to "big picture", from
graphic to text, from text to sound. The documents built using the hyperlinks
are called "hypertext" or "hypermedia" if sound, graphic or video are
involved.
The documents published on the internet can be contacted through a
browser, i.e. a program that displays the web pages following links from one
web page to another. The search engine is also a program that trawls the
internet looking for documents that contain information of interest to the
users.
E-Commerce
International business markets have been developing lately using
largely the advantages of Internet. Advertisement, placing orders, delivery of
products ordered, rendering services, ticketing have become cheaper and
cheaper due to the Internet service. Comparing prices from different
suppliers, buying directly from the manufacturer or the supplier anywhere in
the world, pricing different offers and opportunities, searching maps,
checking event listings, hiring cars, booking meals in a favourite restaurant,
are the advantages of using the Internets shopping nowadays.

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GLOSSARY
Acceptance – the act of placing the word "accepted" across the face of a
draft, followed by the date and signature of the acceptor
Acceptance draft - A timer draft which has been accepted, thereby bearing
the unconditional obligation of the party upon which it is drawn to pay the
draft at maturity
Accepting bank - the bank upon which the draft is drawn and which
"accepts" the draft (see acceptance)
Advising bank – a bank, usually in the Beneficiary's country which informs
the beneficiary that another bank has issued a Letter of Credit in its favour
Air Waybill – a non negotiable contract of carriage for air transportation
between an air carrier and a shipper, or an air carrier and an air freight
forwarder
Amendment – any change to the terms and conditions of a Letter of Credit
Applicant – the party that arranges for a Letter of Credit to be issued,
typically the buyer in a commercial transaction or the borrower in a financial
transaction
- an individual applying for a job
"at sight" – it indicates thet an instrument is to be paid upon the bank's
determination that the documents comply with the terms and conditions of a
payment document
beneficiary – the person in whose favour a Letter of Credit is issued ,
typically the seller in a commercial transaction, or the creditor in a financial
transaction
Bill of Exchange – see draft
Bill of Lading _ a document, generally issued by a carrier to a shipper that
serves a threefold purpose: 1 receipt for the goods delivered to the carrier for
shipment; 2. a contract of carriage of the goods from the place of receipt to
the place of delivery listed in the bill of lading; and 3. evidence of title to the
goods
Charter party – the person chartering a vessel or part of its freight space for
a particular trip or period of time
Collection – a method of payment for goods. The act of handling documents
on instructions received, by banks, in order to obtain acceptance or, as the
case may be, payment from drawee
Commercial invoice – A bill provided by the seller, addressed to the buyer,
giving a description of the goods or services, price, charges, etc
Commercial Letter of Credit _ a letter of credit by which payment is made
available to the beneficiary against presentation of a draft and stipulated
shipping documents
Consignment - a method of payment for goods where the title to goods
remain with the supplier/manufacturer until they are sold by an agent or third
party

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Demurrage – a charge for exceeding the free time allowed for loading or
unloading at a pier or freight terminal
Dishonor – refusal on the part of the drawee to accept a draft or to pay it
when due
Documents against Acceptance (D/A) – instructions given by a seller to
its bank that the documents attached to a draft for collection are deliverable to
the drawee only against the drawee's payment of the draft
Documents Against Payment (D/P) – instructions given by a seller ti its
bank that the documents attached to a draft for collection are deliverable to
the drawee only against the drawee's payment of the draft
draft – a signed order or Bill of Exchange by one party, the drawer addressed
to another, the drawee, directing the drawee to pay a specified sum of money
to the order of a third person, the payee
drawee – The party on whom a draft is drawn, and from which payment is
expected
drawer – one who signs or "draws" a draft (usually the seller, or Beneficiary
of a Letter of credit)
endorsement – a signature on the back of a negotiable instrument made
primarily for the purpose of transferring the rights of the holder to another
person
evergreen clause – a provision of a letter of Credit which allows the
expiration date to automatically extend for an additional period of time without
requiring an amendment (also known as an Automated Extension Clause)
Foreign exchange risk – the risk resulting from purchasing or selling goods
at a price denominated in a currency other than that of the purchaser or seller
Incoterms 1990 – set of definitions published by the ICC from time to time
for the interpretation of commonly used trade terms which define the
obligations of the parties and when the risk of loss passes from one party to
another
Insurance certificate – written evidence that insurance coverage is in force
Insurance policy – a contract of indemnity by which an insurance company,
in return for payment of a premium, guarantees compensation of the amount
of any loss arising from an insured casualty
International Chamber of Commerce – the body which published the
Uniform Customs and Practice for Documentary Credits, the Uniform Rules for
Collections, the Uniform Rules for Reimbursements, Incoterms 1990 and other
works commonly used in international trade
Irrevocable – a term placed on an instrument to indicate that it cannot be
cancelled or amended or terminated prior to its expiration date without the
consent of each party
Letter of Credit – an instrument issued by a bank in favor of a Beneficiary by
which the bank substitutes its own creditworthiness for that of the Applicant
by promising to honor (pay if the documents specified in the Letter of Credit
are timely presented

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Maturity Date – the date upon which a draft or acceptance becomes due for
payment
Multimodal transport – transportation of gods by more than one mode, for
instance, truck, steamship and rail
Open account – a method of payment for goods and services; a seller ships
merchandise along with the related documents to a buyer with no guarantee
of payment. The buyer then makes on its account in the manner specified in
the invoice.
Negotiable – a term placed on an instrument (draft or other document)
which allows title to be transferred from owner to owner by endorsement,
usually evidenced by the use of the words "order of" or "to order"
Negotiation – the act of purchasing complying documents under a Letter of
Credit usually with recourse to the Beneficiary
Payee – the party to whom a draft or other negotiable instrument is made
payable
Port of discharge – the port at which merchandise is offloaded from the
vessel
Port of entry – the port at which goods are admitted into the receiving
country
Port of loading – the port at which merchandise is loaded aboard a vessel
Presentation – the delivery of one or more documents to the issuing Bank or
Nominated bank for payment, acceptance or negotiation under a Letter of
credit
Promissory note – a written promise committing the signer to pay a sum to
another art a future date, usually with interest
Recourse – a term used on a negotiable instrument to indicate that the
drawer or endorser is liable to subsequent holders for payment at maturity
Red Clause – a provision in a Letter of Credit that provides for the advance of
funds to the Beneficiary prior to the presentation of the shipping documents
Revocable- a term permitting modification or cancellation of a letter of Credit
without the Beneficiary's prior agreement
Tenor – the length of time a draft (bill of exchange) is drawn to run before
presentation for payment
Terms, payment – the terms under which a seller and a buyer agree that the
exchange of goods for payment shall take place. Open account cash in
advance, Letter of Credit, consignment and documentary collection are
examples of common payment terms
Terms, shipping – stating in abbreviation form where the seller's
responsibility for the merchandise ends and where the buyer's begins. Some
examples of common shipping terms are F.O.B., F.A.S., C.I.F. C&F., and Ex-
ship.
with recourse – a term used on an instrument or endorsement to indicate
that the drawer or endorser is liable to subsequent holders form payment at
maturity

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Without recourse – a term use on an instrument or endorsement to indicate
that the drawer or endorser is not liable to subsequent holders for payment at
maturity
"x Days date" – a term used on a draft, bill of exchange, or note. If an
exporter draws a draft and stipulates payment '60days date", the draft is due
60 days after the date on which it was drawn.There fore, the maturitz is fixed
and is not dependent on the date of acceptance by the drawee
"x Days Sight" a term used on a draft, bill of exchange, or note to indicate
that payment is due on a stipulated number of days after the draft has been
sighted (accepted) by the drawee

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BIBLIOGRAPHY
1. Mayhew, Alan: Recreating Europe. The European Union's Policy towards
Central and Eastern Europe Cambridge University Press, 1998
2. Shaw, Malcolm: International Law, Cambridge University Press, 2001
3. Turcu, Fulvia: Engleza pentru afaceri, Pecomex, 1997

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