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Image, impact and making impression 5. The presentation 6. The end of the presentation 2. Meetings 7. Preparation for meetings 8. Participating in meetings 9. Ending the meeting 3. Negotiations 10. Know what you want 11. Getting what you can 12. Not getting what you don’t want Management 13. What is management? 14. Types of managers 15. The management process 16. Management level and skills 4. Companies and organisations 17. Company structure 18. The external environment of organisations Production and products 19. Just-in-time production 20. Products and brands Marketing, advertising, promotion 21. The centrality of marketing 22. How companies advertise 23. The four major promotional tool 5. Market structure and competition 24. Market leaders, challengers and followers 25.Takeovers, mergers and buyouts 26. Profits and social responsibility
6. Money and finance 27. A history of money – what makes the world goes round 28. The profits of labour 29. Accounting and financial statements 30. Exchange Rates 7. Banking and taxation 31. Types of banks 32. Opening an account and means of payment 33. Banking – Key words and sentences 34. Taxation and how to avoid it 8. Stock market 35. Stocks and shares 36. Bonds 37. Futures, options and swaps • Glossary • Cheia exerciţiilor
Extra Readings - Industry Profile and Career Overview from WetFeet.com
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Cotton, David – Keys to management, Longman, 1996 Cotton, David; Robbins, Sue – Business Class, Nelson English Language Teaching, London, 1993 MacKenzie, Ian – English for Business Studies, Cambridge University Press, 2001 Sweeney, Simon – English for Business Communication, Cambridge University Press, 2000 Chiriacescu, Adriana; Mureşan, Laura; Barghiel, Virginia; Hollinger, Alexander – Corespondenţă de afaceri în limbile română şi engleză, Editura Teora, Bucureşti, 1995 Geoghegan, C.G.; Geoghegan, J.Y. – Engleza pentru negocieri, Editura Teora, Bucureşti, 2000 Roland, Marie-Claude; Mast-Grand, Martha – CV în limba engleză, un pas spre angajare, Editura Teora, Bucureşti, 2000
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Dayan, A.; Lindsay, W.H.; Janakiewicz, A.; Marcheteau, M. – Engleza pentru marketing şi publicitate, Editura Teora, Bucureşti, 2000 Bantaş, Andrei; Porţeanu, Rodica – Limba engleză pentru ştiinţă şi tehnică, Editura Niculescu, Bucureşti, 1995 Laun, Flavia E. – Birotics and Telecommunication Explanatory Dictionary, Editura Dacia, Cluj-Napoca, 1996 Mănăilă, D.; Popa, C.; Popa, D.; Popescu, I.M.; Vlad, V.I. – Mic dicţionar poliglot de fizică, tehnică şi matematică, Editura Acora Press, Bucureşti, 1995 Le Divenach, Éloi – Engleza în presă, Editura Teora, Bucureşti, 1999 Marcheteau, Michel – Berman, Jean-Pierre – Savio, Michel, Engleza comercială în 40 de lecţii, Editura Niculescu, Bucureşti, 2001
• Reading The following text is about cultural diversity. Read it through once and decide which of the three statements (A, B or C) given below the extract offers the most accurate summary. 1. The Impact of Culture on Business Take a look at the new breed of international managers, educated according to the most modern management philosophies. They all know that in the SBU, TQM should reign, with products delivered JIT, where CFT’s distribute products while subject to MBO. (SBU = strategic business unit, TQM = total quality management, JIT = just-in-time, CFT = customer first team, MBO = management by objectives.) But just how universal are these management solutions? Are these ‘truths’ about what effective management really is, truths that can be applied anywhere, under any circumstances? Even with experienced international companies, many wellintended ‘universal’ applications of management theory have turned out badly. For example, pay-for-performance has in many instances been a failure on the African continent because there are particular, though unspoken, rules about the sequence and timing of reward and promotions. Similarly, management by objectives schemes have generally failed within subsidiaries of multinationals in southern Europe, because managers have not wanted to conform to the abstract nature of preconceived policy guidelines. Even the notion of human-resource management is difficult to translate to other cultures, coming as it does from a typically AngloSaxon doctrine. It borrows from economics the idea that human beings are ‘resources’ like physical and monetary resources. It tends to assume almost unlimited capacities for individual development. In countries without these beliefs, this concept is hard to grasp and unpopular once it is understood. International managers have it tough. They must operate on a number of different premises at any one time.
These premises arise from their culture of origin, the culture in which they are working, and the culture of the organization which employs them. In every culture in the world such phenomena as authority, bureaucracy, creativity, good fellowship, verification and accountability are experienced in different ways. That we use the same words to describe them tends to make us unaware that our cultural biases and our accustomed conduct may not be appropriate, or shared. SBU = strategic business unit = unitate comercială, economică strategică TQM = total quality management = managementul total al calităţii JIT = just-in-time = livrare exact la momentul potrivit CFT = customer first team = MBO = management by objectives = managementul pe obiective pay-for-performance = plată pentru munca depusă human-resource management = managementul resurselor umane at any one time = în fiecare moment premises = premise, locaţii grasp = a pricepe, a înţelege (în text) accountability = răspundere bias = tendinţă, orientare A. There are certain popular universal truths about management which can successfully be applied in various cultural contexts. B. Cultures are so varied and so different throughout the world that management has to take account of differences rather than simply assume similarities. C. Effective management of human resources is the key to everyone achieving their full potential.
Language Checklist Cultural diversity and socializing Welcoming visitors Welcome to … My name’s …
My name’s … from … I’ve an appointment to see … Sorry – I’m a little late / early. Can I introduce you to … He/she’s our (Project Manager). It’s a pleasure.Arriving Hello. How was your trip? Did you have a good flight / trip / journey? How are things in (London)? How long are you staying in (New York)? I hope you like it. I’d like to introduce you to … Meeting someone and small talk Pleased to meet you. Can we do anything for you? Do you need a hotel / a taxi / any travel information / etc. My plane was delayed… Introducing someone This is … He/she’s my Personal Assistant. Can you recommend a hotel? 8 . Is your hotel comfortable/ Is this your first visit to (the Big Apple)? Offering assistance Can I get you anything? Do you need anything? Would you like a drink? If you need to use a phone or fax.? Asking for assistance There is one thing I need … Could you get me … Could you book me a car / taxi / hotel / …? Could you help me arrange a flight to…? Can you recommend a good restaurant? I’d like to book a room for tomorrow night. please say.
business and private lives are mixed or kept separate • Conventions regarding food and drink. you could find out about their country: • The actual political situation • Cultural and regional differences • Religion(s) • The role of women in business and in society as a whole • Transport and telecommunications systems • The economy • The main companies • The main exports and imports • The market for the industrial sector which interests you • Competitors You might also want to find out: • Which topics are safe for small talk • Which topics are best avoided If you are going to visit another country. 9 . You might also like to find out about: • The weather at the relevant time of the year • Public holidays • The conventions regarding working hours • Leisure interests • Tourism • Dress • Body language • Language.Skills Checklist Cultural diversity and socializing Before meeting business partners and fellow professionals from other countries. find out about: • The conversations regarding socializing • Attitudes towards foreigners • Attitudes towards gifts • The extent to which public.
10 Receptionist Decline – ask if you can use a phone. Thank him/her. Welcome visitor. (a few minutes later) Thank assistant. Offer a drink / refreshments.Practice 1 Make a dialogue based on the following flow chart. Show visitor to the phone. Say yes / Offer fax as well. Accept offer – suggest a time. Offer to take him/her to SB’s office. If you need help. Offer to book one. • About small talk If you ask a question you should comment on the answer or ask a supplementary question. Two miles – ten minutes by taxi. Decline – you only need the phone. Ask how far it is to station. Promise to do that – say that SB is free now. Explain that SB will be along shortly. . Reply – offer any other help. look at the Language Checklist Visitor Introduce yourself Say you have an appointment with Sandra Bates.
With someone you know well: Let’s get down to business. I hope it is not inconvenient. b. you may want to change the subject to business matters. I’m a little early. People are very helpful here. Would you like a cup of coffee? Exercise 2 Ending the small talk If the small talk continues too long. 11 . At a weekly planning meeting with colleagues. Or let’s get started. Which of the sentences could be said by a visitor. Is the weather the same in your country? c. k. You found us without too much difficulty. Here are some ways of doing it. I like your offices. Sorry to keep you waiting. With someone you don’t know well: Perhaps we could talk about the subject of our meeting. It’s good of you to spare the time. and which by the person receiving the visitor? a. c. j. then? i.Exercise 1 First words Often the first words are the most difficult. At your first meeting with the new group auditors. Or Perhaps we could talk about the reason I’m here. Isn’t it cold today? h. A. At a meeting to obtain finance from a bank. d. On my way to meet you… g. On a sales visit to a potential customer. b. It’s kind of you to come all this way. Have you been here long? l. I was rather tied up just now. Which expressions would you use in the following situations? a. I’m pleased to be here. Is this your first visit? What do you think of the city? f. Before making a speech at an office party. e. d. after a trip like that! e. B. Sorry. Did you have a good trip? m. Below are some suggestions for ‘breaking the ice’.
health. However. Questions about the weather. If they say an idea is interesting it may be out of politeness. for a similar reason Japanese. The opposite of this is that plain speakers can seem rude and dominating to subtle speakers. Telephoning across cultures Many people are not very confident about using the telephone in English. One reason for this seems to be that the British use language in a more abstract way than most Americans and continental Europeans. good preparation can make telephoning much easier and more effective. At the end of the call there may well be various 12 . If an Englishman says that an idea is ‘interesting’ you have to deduce from the way he says it whether he means it is a good idea or a bad idea. Remember too that different cultures have different ways of using language. In Britain there are also conventions of politeness and a tendency to avoid showing one’s true feelings. Others are more indirect. Ask for repetition if you think it is necessary. North America. once the call begins. as Americans can sound to the British – or the British to the Japanese. Some speak in a very literal way so it is always quite clear what they mean. while the British have a reputation for not making clear exactly what they mean. Telephoning • Reading 2. Scandinavia. Russian and Arabs – ‘subtle’ countries – sometimes seem vague and devious to the British. Germany and France are ‘explicit’ countries. For example if a Dutchman says an idea is ‘interesting’ he means that it is interesting. Repeat the most important information. speak slowly and clearly and use simple language. laying a foundation for the true purpose of the call. The British have the tendency to engage in small talk at the beginning and end of a telephone conversation. Meanwhile.2. look for confirmation. suggestions and understatement (for example ‘not very good results’ = ‘absolutely disastrous’) to put over their message. using hints. business in general and what one has been doing recently are all part of telephoning. Then. Check that you understand what has been said.
rude b. A sharp. unfriendly c. polite remarks Language Checklist Telephoning (1) Introducing yourself Good morning.pleasantries. clever 6. Hello. 1. Say hello to the family (if you have met them) and Looking forward to seeing you again soon. abstract and complicated 2. request c. less strong way of talking c. Choose the closest definition of the following words from the text. direct and clear b. clever speech 3. reduce b. full of literary style c. Could I have the … Department. Nice talking to you. Aristo. question b. understatement a. literal a. brief style of talking on the phone may appear unfriendly to a British partner. The difficulty on the telephone is that you cannot see the body language to help you. please? Is… there. kind words b. disagree 4. please? 13 . work out c. my name’s … calling from … Saying who you want I’d like to speak to … please. dishonest c. insincere 5. deduce a. unclear b. this is … from … Hello. devious a. Not all nationalities are as keen on small talk as the British! Being aware of these differences can help in understanding people with different cultural traditions. vague a. pleasantries a.
I didn’t understand that. thank you. Skill Checklist Telephoning: Preparation for a call Reading – background information Desk preparation Have the following available: • Relevant documentation / notes • Correspondence received • Computer files on screen 14 . Acknowledging repetition Okay. I see. Offering to help in other ways Can anyone else help you? Can I help you perhaps? Would you like to speak to his assistant? Shall I ask him to call you back? Asking for repetition Sorry. Kyoto) I understand. Sorry. could you repeat your (name. I’ve got that now. Could you spell (that / your name). Leaving and taking messages Could you give him/her a message? Can I leave him/her a message? Please tell him/her … Please ask him/her to ring me on… Can I take a message? If you give me your number I’ll ask him/her to call you later.Saying someone is not available I’m sorry he/she’s not available … Sorry. I didn’t hear that. number. please. I didn’t catch (your name / your number / your company name ) Sorry. Sorry. (Mr.). etc. he/she’s away / not in / in a meeting / in Milan.
have an alternative strategy: • Call back / be called back – when? • Leave a message • Speak to someone else • Write or fax information Do you want to: • Find out information? • Give information? Introduction Do you need to refer to: • A previous call? • A letter. Practice these telephone expressions by completing the following dialogue using the words listed below. order. invoice or fax? • Someone else (who?) • An event (what? When?) Prediction What do you expect the other person to say / ask you? how will you respond? Exercise 1 Making a call A few common expressions are enough for most telephone conversations. can I help you? 15 . Switchboard Conglomerate Group.• Pen and paper • Diary Check time available • How much time do you need? • How much time do you have? Objectives • Who do you want to speak to? • In case of non/availability.
You I’ll expect him to ------. Secretary Oh.------. On speak to back message number call through office can hello hold moment bad put ring speak speaking through Secretary Rang Note: If you do not hear or understand the other person. I’m afraid he’s not in the ------. Could you give me your ----------. Nice to hear from you again.the line a moment. -------.for him? You No thanks. Pardee. please? Secretary IS THAT BETTER? Who’s --------. How nice to hear from you again. Pardee. Mr. I’ll see if he’s in. I don’t understand. then.Mr.I help you? You ------. can you hear me? It’s a -----. Secretary Hello. please? Secretary -------. Secretary Would you like to leave any -------. I’m sorry. That’s London. hello. Thanks. please? You (your name) from (your company). Could you --. Secretary You’re welcome. How are you? You Fine thanks. Secretary Certainly. and I’ll ask him to ------you ---------. Just tell him I --------.me -------. please? Switchboard Putting you -----. Goodbye. It is not polite to say: Please repeat! • DATAFILE: The Telephone 16 .---up.347 8621.line. We haven’t seen you for ages.? You I’m ----.at the -----...to Mr. Pardee’s -----. Could you ------... say: I’m sorry? or I’m sorry.You Could I -----.me this afternoon.
(UK). (UK). (UK). The STD code is … (UK). The number is ex-directory. The receiver Can I help you? Putting you through. 17 . (UK). I’d like to make a transfer charge call. Goodbye. I’m afraid he’s not available at the moment. (US). The number is unlisted. The codebook I’m on a long distance (or international) call. The operator (in the public telephone system) Dial 100 for the operator. Would you like to hold the line? The line is engaged. (US). (UK). You’re welcome. (US). The line He’s on the other line. (UK). The dial Dial 123 for the correct time.This datafile gives you many of the terms and phrases commonly used in making telephone calls. Please try later. (UK). Dial 0 (zero) for the operator. I’ll look up the number in the telephone book. The directory Look up their number in the directory. (UK). I’ll ring information. Listen for the dialling tone. I’m afraid he’s tided up at the moment. The area code is … (US). (US). I’d like to make a collect call. (US). All lines to the country you have dialled are engaged. I’ll ring Directory Enquiries. A message pad Can I tell him who called? Can I give her a message? Let me take down your number. (UK). (UK). I’d like to make a reverse charge call. (US). The line is busy.
’ Introduce yourself. say… “Sorry. Gorliz and Zimmerman.’ 18 . refer to the Language Checklist. a Singaporean exporter plans to send goods from Singapore to Greece. good morning.• Remember If you do not understand. Caller Receptionist ‘Good morning.” Practice 1 Use the following flow chart to make a complete telephone conversation. Confirm the information. If you need to. Ask when you can contact him. End call. Bird to call you. Bird is not in. I didn’t quite catch that. Caller (Computech) Called Person (Intership) ‘Intership. He wants to have a meeting with a Greek shipping company. then practice the dialogue with a colleague. Give your number. Mr. Explain that he is away – offer to take a message. Practice 2 In the following conversation. End call. Repeat your name. Suggest suitable phrases for each step in the conversation. Ask to speak to Mr. You want Mr. Conrad Bird. Intership.
End call / thanks / refer to fax. Suggest beginning of next month. End call. Acknowledge – ask when would be a good time. Ask what it’s about. Suggest 10. Agree.00 a. Ask for appointment with Mr. Offer to book hotel. Agree to fax – hotel booking is not necessary. Reject – Mr. Confirm / correct.Greeting. Introduce yourself. Dionis. Agree. Language Checklist Telephoning (2) Stating reason for a call 19 . Suggest next week. Offer to help. Explain that you want to discuss transport of goods from Singapore to Athens. etc. Suggest Monday 3rd. Dionis is away. Suggest Tuesday. Reject – On Monday Mr. Agree – ask for fax to confirm. Signal end of call. Check name. Dionis is busy all day.m.
I can’t make it then. Changing arrangements We’ve an appointment for next month. but … I’m afraid I can’t come on that day. Skills Checklist Telephoning (2) Voice • Speed 20 . Bye for now. Do call if you need anything else.I’m ringing to … I’d like to … I need some information about … Making arrangements Could we meet some time next month? When would be a good time? Would Thursday at 5 o’clock suit you? What about July 21st? That would be fine. Sorry I’m too busy next week. I think that’ all. Could we fix an alternative? Confirming information So… Can I check that? You said … To confirm that … Can you / can I confirm that by fax? Ending a call Right. No. I look forward to … seeing you / your call / your letter / your fax / our meeting. sorry. Thanks very much for your help. Goodbye and thanks.
emphasis and confirmation • Possible confirmation by fax Style • Formal / informal • Cold call / new contact / established contact • In-company vs.• • Clarity Volume Structure • Background information • Key information • Repetition. Customer / Supplier / Outside agent • Colleague / friend / business associate / public • Company image Structure of a call Beginning Introduce yourself Get who you want Small talk State problem / reason for call Middle Ask questions Get / give information Confirm information End Signal end Thank other person Small talk Refer to next contact Close call Check that there’s nothing else to say 21 .
I’m sure that will be OK. but Monday afternoon is likely to be difficult. Rossi? It’s Jenny Kinsella here. Whitle’s secretary. on Tuesday 13th. Could I suggest Monday instead? Yes.Exercise 2 Changing arrangements It is not always possible to follow your original plans. You. I’m sorry but … To suggest another time. Whitley is rather tied up them. Right. Mr. then suggest a different time on the original day. I understand you have an appointment for 10 a. thank you very much. 22 . Mr.I. Small problem.m. But you do not want to change the order in which you visit them. I’m Mr. I’m afraid that Mr. OK. Just before you leave for Sydney you receive various telephone calls from the people you are going to visit. Here you have their calls: Hello? Mr. From B. Our meeting for Friday is all right. Rossi? Tim Brown. that’s fine. may want to change an appointment. Australia. First apologize for not managing the day they suggest. I’m sorry but my colleagues can’t all make it on Thursday afternoon. say: Could I suggest …? What about …? Perhaps …? Below is the schedule for your week in Sydney. someone is coming to see us who might be a useful outlet for some of your range. Language input To apologize. your agent. Rossi? This is the Australian Chemical Bank.G. perhaps we could change our meeting to Tuesday afternoon? Yes. Could I suggest we meet on Tuesday instead? Er… yes… why not? OK … Well. say: I’m afraid that …. or your contact. Hello. They want to change their appointments.
I. Mr. if that’s all right with you? Right.Hello again. Goodbye. 13 November Morning 10 a. William Lund) Thursday. How about a meeting on Thursday sometime. Lund of Lund and Lund Associates.G. 23 . Mr. Mr. Whitley. but he won’t be able to manage Wednesday afternoon. Rossi? Good morning. Monday. Rossi. 15 November Morning Afternoon 3 p. I forgot. Afternoon 3 p. 14 November Morning Afternoon 2 p. Tim Brown Afternoon flight 390. Thanks a lot. 12 November Morning Arrive Sydney airport 8.m. He’s very sorry.m. Thank you. 16 November Morning 11 a. Tim Brown (agent) at hotel Tuesday.m.m. I think that should be all right.m. I have some other customers visiting on Friday morning. Australian Chemical Bank Afternoon Wednesday. I’m ringing for Mr. Lund & Lund Associates (Mr. Depart Sydney 6 p. Sorry to be difficult.m.30 a. Tim Brown here again. Bye now. I’ll give you a cal this afternoon to confirm.m. Distribution) Jenny Kinsella + colleagues (B. Friday. Could I suggest Friday afternoon instead? Well.
Ask for a promise of delivery date – ASAP.A. Complain – you want despatch now. Express surprise. Express regret – not possible.Practice 3 Use the flow chart below as the basis for a telephone conversation involving a complaint. Agree – apologize. Delays are costing you goodwill – unhappy customers. End call. Greeting. Explain problem. Order HF5618 for 20 printers. 24 . Promise next Monday. This is second time you have received an incomplete delivery. Ask for fax to confirm despatch. Explain stock problems. Tao Loon Company (Sales Office) Answer. Berraondo S. Refer to the Language Checklist if you need to. Agree – say you need the other three printers urgently. Introduce yourself. Suggest possible error in order administration. Only 17 have arrived. Offer to help.
there’s a problem with … I’m ringing to complain about … Explaining the problem There seems to be … We haven’t received… The … doesn’t work. We’ll have to renegotiate the contract. Handling complaints and other problems Asking for details Could you tell me exactly what …? Can you tell me …? What’s the …? 25 . The quality of the work is below standard. This is the (third) time this has happened.Language Checklist Telephoning (3) Stating reason for the call I’m calling about … Unfortunately. The specifications are not in accordance with our order. We’ll contact other suppliers. The consequences could be very serious. Three months ago… We had a meeting about this and you assured us that… Threatening If the problem is not resolved… We’ll have to reconsider our position. Referring to previous problems It’s not the first time we’ve had this problem.
offers to help. Skills Checklist Telephoning (3) If you receive a complaint: • Consider your company’s reputation • Express surprise • Ask for details • Suggest action • Promise to investigate • Make reasonable suggestions. I’m sorry about the problem / delay / mistake… Denying an accusation No.Apologizing I’m sorry to hear that. I’m afraid that’s not quite right. I’m sorry but I think you’re mistaken. Consider your customer and: • Show polite understanding • Use active listening • Reassure customer. If you make a complaint: • Prepare for the call • Be sure of the facts • Have documentation available • Decide what you require to resolve the problem – at least partially – or completely. Who is to blame? Who is responsible? Are you talking to the right person? Was your order or your specifications correct? 26 . I’m afraid that can’t be true. I don’t think that can be right.
transport? Does responsibility actually lie elsewhere. If you are talking to people who are also speaking English as a foreign language. Such instant familiarity is much less acceptable in the rest of Europe and Asia where even business partners and colleagues of many years’ acquaintance address each other by the equivalent of Mr.g. or Mrs.Were you partly responsible for arrangements which went wrong. they are likely to leave gaps and silences while they search for words or try to make sense of what you have just said. even in a letter of fax or telephone call. Above all. one should remember that people do not usually mind if their own codes are broken by foreigners as long as they sense 27 . For example it is common for Anglo-Saxons to use first names very quickly. And the last name or job title. On the other hand. In some countries. In other countries there is a higher value placed on listening – it is not only impolite to break in but listeners will consider what has been said in silence before responding. Every country has its own codes of etiquette. Finland and Japan are examples. keep a good relationship • Express disappointment – not anger • Don’t use threats – unless you have to! • Read the text. like Italy and Britain. i. conversation is a form of entertainment. with a third party? If you do not get what you want: • Keep control – state what you need calmly • Do you need to continue to do business with the other side? • If you do. e. if business partners with an AngloSaxon background get on to first name terms straightaway. Don’t interpret the other person’s formality as stiffness or unfriendliness. So stick to last names unless you specifically agree to do otherwise. then mark the sentences that follow as True (T) or False (F). as you would hope they would be patient with you. don’t be surprised. There is an endless flow and if you break the flow for a second someone else will pick it up.e. So be patient and try not to interrupt.
c. Planning and preparation Language Checklist Structure (1) The introduction to a presentation Greeting Good morning / afternoon ladies and gentlemen. Etiquette is the critical point in telephoning between different cultures. a. A special importance is attached to listening in Japanese and Finnish cultures. 28 . (Ladies and) Gentlemen … Subject I plan to say a few words about … I’m going to talk about … The subject of my talk is … The theme of my presentation is … I’d like to give you an overview of … Structure I’ve divided my talk into (three) parts. b. f. It is unusual for Americans and British to use first names early in a business relationship. e. This is much more important than a set of rules of etiquette. It doesn’t matter if you break certain social rules if it is clear that you are sensitive to other people. 3.consideration and goodwill. Presentations 3. For the British and the Italians it is normal to interrupt the other speaker during the conversation. One should interrupt and try to help speakers who may have difficulty in saying what they want to say. d.
Skills Checklist Effective presentations – planning and preparation Audience • Expectations • Technical knowledge • Size • Questions and / or discussion Speaker’s competence • Knowledge • Presentation technique Content • What to include • Length / depth (technical details) • Number of key ideas Structure • Sequence 29 . Policy on questions / discussion Please interrupt if you have any question.My talk will be in (three) part. We’ll stop for lunch at 12 o’clock. After my talk there’ll be time for a discussion and any questions. The presentation will take about two hours … but there’ll be a twentyminute break in the middle. I’m going to divide … First … Second … Third … In the first part … Then in the second part… Finally… Timing My talk will take about ten minutes.
summarizing Delivery • Style Formal / informal Enthusiasm / confidence • Voice Variety / speed Pauses • Body language Eye contact Gesture / movement Posture Visual aids • Type / design / clarity • Relevance Practice • Tape recorder • Script or notes Room • Size / seating • Equipment (does it work?) • Sound quality Language • Simple / clear • Spelling • Sentence length • Structure signals 30 . middle.• beginning. end Repetition.
etc. A staff meeting to discuss a charity event for earthquake victims. What are the audience’s expectations in terms of technical detail. Will your talk be formal or informal? b. expertise. What is the audience’s probable level of specialist knowledge? Are they experts or non-experts? d. Imagine you have to give a brief presentation in two of the above situations. How will you help the audience to remember what you tell them? 31 . An internal meeting of administrative staff to discuss a new accounting procedure. The Purchasing and Product Manager of a Taiwanese company interested in buying some production equipment from your company. half an hour. twenty minutes.? c. A medical congress in Tokyo with papers on new techniques in open heart surgery.Practice 1 Look at the following situations. How long will your talk be: five minutes. or longer? e. What is your policy on questions? Will the audience interrupt or will they ask questions afterwards? Will there be any discussion? f. Make brief notes on the following: a.
Certainly some things are essential in an introduction and others are useful. Here is a list of what could be included in an introduction. Image. three warnings about using visual aids 4. Mark them according to how necessary they are using the following scale: Essential 1 Useful 3 Not necessary 5 2 4 Subject / title of talk. your interpretation. your explanation. Reference to the programme for the day. impact and making an impression Dinckel and Parnham (1985) say that ‘The great danger (in using visual aids) is that presenters place the major emphasis on visual aids and relegate themselves to the minor role of narrator or technician. job title. An outline of the structure of your talk. eight advantages of using visual aids b. The scope of your talk: what is and is not included.Practice 2 In any presentation the beginning is crucial. etc. The visual aid needs you. Reference to how long you are going to speak for. Reading Read the text below and find: a. Reference to questions and / or discussion. A summary of the conclusions.’ 32 . Introduction to oneself. Reference to the visual aids you plan to use. your conviction and your justification. You are central to the presentation.
There are many advantages to the correct use of visual aids. However.) diapositives (Am.Visual aids can make information more memorable and they help the speaker. they bring variety and therefore increase the audience’s attention.E. they must literally support what the speaker says and not simply replace the spoken information. Relegate = a retrograda. They cause the audience to employ another sense to receive information.) slide (Am. It is also not enough to just read the text from a visual aid. They can show information which is not easily expressed in words or they can highlight information. a degrada Language Checklist Using visuals Types of visual support Visual: film / video / picture / diagram / chart / pie chart / plan / map Table graph x axis / horizontal axis y axis / vertical axis left hand / right hand axis Line graph solid line dotted line broken line Equipment (slide) projector slides (B. They save time and they clarify complex information.E.E.E.) flip chart whiteboard metaplan board Introducing a visual 33 .) overhead projector (OHP) transparency (B.
I’d like to show you … Have a look at this … This (graph) shows / represents … Here we can see … Let’s look at this … Here you see the trend in … Comparisons This compares x with y Let’s compare the … Here you see a comparison between … Pie chart = diagramă circulară (rotundă. “plăcintă”) Flow chart = schema procesului tehnologic / organigramă Diagram = diagramă Bar graph = diagramă cu bare Table graph = grafic stil tabel Line graph = grafic cu linii overhead projector = proiector transparency / slide = slide-uri (slide) projector = dia-proiector slides / diapositives = diapozitive flip chart = panou cu foi de hârtie detaşabile whiteboard = panou alb din material sintetic Describing the speed of change A dramatic A marked A significant A slight dramatically markedly significantly slightly increase / fall To increase / fall Describing trends To go up To increase To rise an increase a rise 34 To go down To decrease To fall a decrease a fall .
Transparencies / OHT’s / slides (Am.E.) • Slide projector .To climb a climb To improve an improvement To recover a recovery To get better an upturn To level out a leveling out To stabilize To stay the same To reach a peak a peak To reach a maximum To peak To undulate an undulation To fluctuate a fluctuation To decline To deteriorate To get worse a decline a deterioration a downturn To reach a low point To hit bottom a trough Skills Checklist Using visual supports Visual must be: • well prepared • well chosen • clear Available media Use media which suit the room and audience size. Never show a visual until you want to talk about it. 35 .E.Slides / diapositives (Am. Do not use too many visuals – guide is one per minute. Use pauses – give audience time to comprehend picture. Second show structure of talk – main headings.) • Video / computer graphics / flip chart / whiteboard Use of visual aids Combination of OHP and flip chart with pens often good. Keep text to minimum – never just read text from visuals. First visual should give the title of talk. • Overhead projector (OHP) .
Use gesture. equipment. dotted or broken lines (or colours) to make the picture clear. etc. You in relation to your audience Decide appropriate level of formality. Use different colours if colour improves clarity of message (e. unless restricted by a podium. Move around. etc.Remove visual once finished talking about it. microphones. Switch off equipment not in use. Use solid. If possible.g. Check organization of room. white writing on blue / green is good. Check order of your slides / OHT’s. pie charts. Keep eye contact at least 80% of the time. If possible draw the picture on an overhead transparency. 5. Use appropriate colour combination: yellow and pink are weak colours on white backgrounds. 36 .). Have a good supply of pens. real or imagined. dress accordingly. Your description should last no more than one minute. Choose any situation or subject. Use of room and machinery Check equipment in advance. seating. construct a graph that makes comparisons possible. Use a pointer on the screen (not your hand). Then present the graph as you would in a presentation. Practice 3 Draw a line graph for use in a presentation. The presentation • Reading Read the following passage and identify at least six recommendations about speaking technique which can help to make the message in a presentation clear. Use of colour For slides. Use available space.
After that. This usually follows a logical order. later. how many speakers really hold an audience’s attention? What is the secret for those who do? First. For example: There are three types of price that we have to think about: economic price. This is based on production costs and the need to make a profit … and the speaker goes on to describe this type of price. The speaker then says what the three things are and talks about each one at the required level of detail. with phrases like That’s all I want to say about the development of the product. including those who are mainly interested in one part only. find out about the audience and what they need to know. Now let’s turn to the actual marketing plan. A good speaker uses various signals to help hold the audience’s attention and make the information clear. However. he goes on to talk about the market price and so on. Say where one part of the talk finishes and another starts. Let’s look at each of these in more detail. Plan what you’re going to say and say it clearly and concisely. perhaps based on time. a well organized presentation usually contains different parts and progression from one part to the next must be clear. Still another technique which helps to emphasize key points is careful repetition. This technique is very helpful to the audience. So a project may be described in terms of the background. Another signaling technique is to give a link between parts of the presentation. Any presentation requires a clear strategy or plan to help you reach your objectives. First. after that. clear signals: the secrets of presentation success. then. next.You’re lost if you lose your audience Clear objectives. market price and psychological price. at the end. etc. economic price. The aim is not to pass away twenty minutes talking non-stop and showing a lot of nice pictures. Key words in sequencing information are first. Examples are As I’ve already said. the present situation and the future. finally. It is to convey a message that is worth hearing to an audience who want to hear it. Another type of signaling is sequencing of information. One type of signal is to introduce a list with a phrase like There are three things we have to consider. clear plan. For example. there is no 37 .
each with a main heading. but every speaker needs to think about exactly how much information of a particular type a specific audience is likely to absorb and to plan accordingly. a recommendation on one way to divide the main body of the talk. Clear structure doesn’t just help the audience! In many presentations the main body can be usefully divided into different parts.alternative but to increase production by 100 per cent or I’d like to emphasize the main benefit of the new design – it achieves twice as much power with half as much fuel. Read the following text and identify the following: a. are referred to in the Introduction. Clearly there are many ways to divide the main body of presentation and often different parts will themselves be divided into smaller sections of information: Introduction Main body of information First part Second part 38 Third part . The main parts. All the above techniques are especially useful in making the main body easily understood. Any such calculations are probably not very reliable. Some say that seven is the maximum number of any length of presentation. audiences should not be overburdened with technical details or given too many facts to remember. Furthermore. A final point concerns timing and quantity of information. They help the audience to follow the information and to remember it. Psychologists have suggested that concentration is reduced after about twenty minutes without a break or a change in activity. The main body of the presentation contains the details of the subject or themes described in the introduction. It is claimed that to ask people to remember more than three things in a five-minute talk is too much. the relationship between the main body of the presentation and the introduction b. They also help the speaker to keep to the planned structure and to know exactly what stage has been reached at all times during the presentation.
with the brand name Cheri. Use the notes to give a presentation of about 5 minutes using listing. etc. displays. merchandising free samples on-pack targeted e. I’ll talk first about… ‘ Vocabulary Merchandising: Any direct efforts to encourage sales of a product. He is talking to a marketing team set up to promote the new range. such as television. I’d like to talk about the advertising mix for the new Cheri range of beauty products. radio and newspaper.g. shop displays.g. linking and sequencing where necessary. joint promotions Begin as follow: ‘ Good morning. increase consumer awareness. etc. such as packaging. We are planning two categories of advertising. above-the-line and below-the-line. Below-the-line advertising: Forms of advertising at the point of sale or directly on the product. mailing coupons.Practice 4 The information below is part of a Product Manager’s notes for a presentation on an advertising mix for a new range of beauty products. Advertising mix for Cheri beauty products Above-the-line advertising television commercials newspaper advertising magazines youth magazines women’s magazines Below-the-line advertising in-store e. Above-the-line advertising: Mass media advertising. competitions. 39 . everyone.
First … Second … Linking: Beginning a new part Let’s move to (the next part which is) … So now we come to … Now I want to describe … Sequencing There are (seven) different stages to the process First / then / next / after that / then (x) / after x there’s y. Skills Checklist Structure (2) The main body 40 . First the background. First. which is about … So. then the present situation. later. last … There are two steps involved. finally … I’ll describe the development of the idea. and then the prospects for the future. advantages. then.Language Checklist Structure (2) The main body Signaling different parts in a presentation: Ending the introduction So that concludes the introduction. First … Second … Third … There are two kinds of … The first is … The second is … We can see four advantages and two disadvantages. Beginning the main body Now let’s move to the first part of my talk. The first step is … The second step is … There are four stages to project. the two disadvantages. first … To begin with … Listing There are three things to consider. That’s all for the introduction. One is … Another is … A third advantage is … Finally … On the other hand. At the beginning.
a potential problem at the end of a presentation. iii. • Link different parts. a. b. i.e. 6. 41 . b. a.present -. • Clear development. b. i. ii. background -. Subsections a. • Sequential description of processes. Internal structure of the main body of a complex presentation Signaling the structure • Use listing techniques. Signaling the structure … • Makes the organization of the talk clear • Helps the audience to follow • Helps you to follow the development of your talk. b. • Chronological order of events.Organization of presentation • Logical progression of ideas and/or parts of presentation. ii. a. b. c. • Use sequencing language. three ways to avoid the problem.future Topic Main parts A B Sections i ii. C i.The end of the presentation • Reading Read the following text and identify: a.
This often breaks the ice and starts discussion. Not a word. Now tell me what are your impressions. Another way to avoid the nightmare of utter silence is to end with an instruction to the audience. it is probably in their interests to offer some information and begin discussion. we need to know more about the way you work. tell me what in particular may interest you … . Ask something which you know the audience will have to answer. vicepresidents. tell me about your particular situation. He/she can end with: ‘Right! I’ve told you what we can offer. what are your priorities and what else do you need to know now?' Another option is for the speaker to have a question prepared. the Training Manager has outlined recommendations and explained what is available. This should ensure immediate audience response.’ This places a responsibility on the audience to respond – unless of course they have a completely negative view of both the presenter and the message! Assuming they are well-disposed towards the potential supplier. a cough … how can this be avoided? A possible answer is that if the presentation has been good and the audience is clearly interested.Open for questions: The silent disaster A nightmare scenario is as follows: the speaker finishes his talk with the words ‘Any questions?’ This is met by total silence. or potential trainees. For example. Now for us to do that. Giving an instruction is often useful in sales presentations and where the audience has special requirements. Then an embarrassed shuffling. someone will have something to say. It may be possible to 42 . A training manager Speaking to an audience of Department Managers. the speaker wants the audience to explain their needs and says: ‘Okay – I’ve told you about the ways Snappo can help companies like yours. A sales presentation After talking about his or her products or services.
Don’t say anything you’ll regret later. What would you say in these situations? If you need to. Agree with someone’s suggestions. In fact. 5. A member of the audience suggests that you said that many small retail outlets. but suggest other factors. you said this process has been going on for a long time. At the end of your presentation. Check understanding if necessary by paraphrasing. 2.single out an individual who is most likely to have a question to ask you or a comment to make. • • Handling questions is thought by many speakers to be the most difficult part of a presentation. 1. refer to the Language Checklist. Why do you think this is? Here you have a list of the pieces of advice you need in handling questions: Be polite. Tell the truth (most of the time!) Practice 5 Imagine that you have given a talk on Marketing in Japan at a conference on business trends. Ask the audience for comments on why this has happened. move to comments / discussion / questions. ask if in the USA or Europe that could not happen. 43 . small shops. 3. 4. A member of the audience says the following: ‘I … understand that a report showed that 700 new drinks came out in Japan in 1990 and one year later 90 % had failed. Politely correct the other person. One is the increasing number of take-overs of smaller companies. Listen very carefully. Ask for repetition or clarification. or it may be apparent from earlier contact perhaps during the reception or coffee break. but… Keep calm. that a particular individual has something to say or to ask. Agree partially before giving own opinions: Yes. That’s a pretty amazing figure …’ Paraphrasing this. had actually closed down in recent years.
• Some conclusions / recommendations. but say the situation is changing. That’s all I want to say for now on … Beginning the summary and/or conclusion I’d like to end by emphasizing the main point(s).6. • Some observations based on what I’ve said. now I’d be very interested to hear your comments. Right. Concluding There are two conclusions / recommendations. I’d like to finish with … • A summary of the main points. A speaker says something you don’t understand. What do you say? Language Checklist The end of presentation Ending the main body of the presentation Right. What we need is … I think we have to … I think we have seen that we should … Inviting questions and/or introducing discussion That concludes (the formal part of) my talk. Now. Now we have (half an hour) for questions and discussion. • A brief conclusion. any question or comments? So. that ends (the third part of) my talk. Someone suggests that in Japan there has always been an emphasis on quality and on products. In the West market research has been more developed. 7. Agree. 44 . (Thanks for listening) … Now I’d like to invite your comments.
I’m not sure I’ve understood. Could you repeat? Are you asking if …? Do you mean …? I didn’t catch (the last part of) your question. • Contains no new information. If I were you I’d discuss that with … I’ll have to come to that later. Holmes) can help … • I don’t have much experience in that field … Understood but irrelevant or impossible to answer in the time available I’m afraid that’s outside the scope of my talk / this session. Not understood Sorry. 45 . Perhaps (Mr. • Restates what the audience must understand and remember. perhaps during the break as we’re short of time. If I understood you correctly. you mean …? Is that right? Checking that your answer is sufficient Does that answer your question? Is that okay? Skills Checklist Structure (3) Ending the presentation A summary • Restates main point(s).Handling Questions Understood but difficult or impossible to answer That’s a difficult question to answer in a few words. • it could be … • in my experience … • I would say … • I don’t think I’m the right person to answer that.
• Ask for repetition or clarification if necessary. watch the time. • Give yourself time to think – perhaps by paraphrasing the question. • Check that the questioner is happy with your answer: eye contact and a pause is often sufficient. • Beware of the ‘nightmare scenario’ – total silence! Have one or two prepared questions to ask the audience. • Check that the question is relevant. • Keep control. • Often contains recommendations. Handling questions • Listen very carefully. • Keep control. Inviting discussion and questions • Offer the best solution. Discussion • Inviting discussion gives the impression that the audience have useful experience. If not. so is often more ‘diplomatic’. A conclusion • States the logical consequences of what has been said. limit long contributions. 46 . • Don’t allow one or two people to dominate. • You still need to control the discussion. Questions • Inviting questions implies that the audience is less expert than the speaker. • Refer questioner to another person if you can’t answer. • Paraphrase the question to check you understand it. • Keep control of the meeting. • Suggest you’ll answer a question later if you prefer. don’t answer if you don’t want to. • Is short. • May contain new and important information.• Is short.
Signal when time is running out – ‘Time for one last question’. I’m going to list some of the main selling points that we should emphasize in the advertising and sales campaign. the market research indicated that more and more consumers are using soft drinks as mixers with alcohol. market and not the traditional consumer of old-fashioned lemonade. high-income. as you all know. Exercise 1 The new product Read Mr. Winding-up. we haven’t all met before so I’d better introduce myself. Delivering the message. I’m a little out of practice… Anyway. At this point we must consider the importance of packaging and design. I’m going to be talking this morning about a new product which we are planning to launch in two months’ time. but we stopped producing lemonade two years ago. and it’s a lemon-flavoured drink… Well. I’m Luis Lopez from the development department of Citrus Incorporated… I should say before we start that I hope you’ll excuse my English. thank the audience. and if you look at the video 47 .• • • Be polite. we have been manufacturing mixed-fruit drinks and orange drinks for the last ten years. Preparing the audience Good morning ladies and gentlemen. I’ll start with the background to the product launch. Lopez’ presentation and try to match the titles (used in his rough plan) of the different parts of his presentation to the right text body. Introducing yourself. that’s K-O-O-L dash O-U-T. At the end. we’ll leave questions to the end… Now firstly. it’s called KOOL-OUT. and then move on to a description of the product itself. we had a gap in our soft-drink product range for the last two years. This brings me to my next point which is that we have rather new customer-profile in mind. so in other words. I think we all agreed that there was room on the market for a completely new lemon-flavoured drink … Secondly. I think if you don’t mind. I must emphasize that this product is aimed at the young-professional. the market itself has expanded.
. I’d like to summarize my main points again… We have KOOL-OUT. to change the subject for a moment… b. I’d like to run through the main points again… c.. the design is more modern than any of the current rival products. but we’ll have a chance to discuss that aspect later… so … to go back to my earlier point. as you see we are using both the new-size glass bottle and the miniature metal cans. but the improved flavour and the package design should give us a real advantage in today’s market… well. the more sophisticated packaging means a high unit cost. as a soft drink. g. h. d. I’d like to talk about… i. I’ll be happy to answer them… Exercise 2 The product presentation Use the phrases written below to construct a similar presentation to be given to a client. Good afternoon. it’s designed to be consumed on its own. thank you for listening. aimed at a relatively new age and income group.from ---------. 48 . or to be used as a mixer in alcohol-based drinks and cocktails. and this may be a problem in the selling area. a new design concept. I’m ------. you’ll see that we have completely re-vamped the container itself as well as the label and slogan… Now to digress for just a moment.in a moment. k. First. now if there are any questions. In spite of the higher price it will compete well with existing brands. that’s all I have today for the moment. That brings me to the end of my presentation. It comes in both bottle and can and this will mean a slightly higher price than we are used to. Before I finish. and I’ll end with -------. O..K. and incidentally the flavour is more realistic and natural… it’s low calorie. Now. too. To return to the point I made earlier… j. Finally. let me introduce myself. this is a totally new concept as far as Citrus Incorporated are concerned. I want to stress… f. Feel free to interrupt if you have any questions. I’ll begin by describing ---------. let’s look at the major attractions of the product. and then go on to ---------. so just before closing. In conclusion… e. a.
You’re right. Match the reply to the interruption. 5. You haven’t mentioned the price yet! b. 3. I still don’t understand the difference between the de-luxe and economy models! e. 4. m. please! d. n. Thank you for your attention.l. I’ll be coming to that in a moment. At this point we have to bear in mind… Exercise 3 Can I interrupt here? While you were speaking your colleague. but on the other hand our product has a number of unique design features. Your new model seems much heavier than the old one! Replies 1. First of all … Next … Please excuse my rather poor English! I’d like now to turn to… If you have any questions. I’ll be glad to answer them. Here are some examples of how you can anticipate. Exercise 4 Anticipating questions It is a very good policy to try to anticipate questions or problems and to deal with them before your audience raises them. o. You will have to deal with it! Look at the interruptions listed below and some possible replies. I can hear you say: why is this so costly? Anticipates 49 . Your product is more expensive than your competitor’s! c. or your customer may interrupt to make a point. I take your point… but have you taken into account the improved durability? 2. q. Our technical department will be able to give you an answer on that. Let me clarify that for you. p. I’d like the exact specifications. Interruptions a.
b. c. you may well ask.I wonder why it’s so expensive? Now. Let’s start … We’ve received apologies from … Any comments on our previous meeting? 50 . what does the mean by ‘up-market’? Anticipates What’s ‘up-market’? You will have noticed that I haven’t given any figures. Anticipates Does it only come in black? How would you anticipate the following questions? Example: Why is it so heavy? An obvious problem is the weight. Meetings Preparation for the meeting Language Checklist Chairing and leading discussion Opening the meeting Thank you for coming … (It’s ten o’clock). d. Why is the delivery period so long? What’s ‘top quality’ specification? Do the accessories have to be so expensive? Why doesn’t he mention the price? Can he prove what he says with figures? 4. Anticipates Where’s the statistical data? An obvious problem at this stage is the choice of colours. a. e.
So. we can’t talk about that. can we let Magda finish? Er. Henry. Summarising So. Closing the meeting I think we’ve covered everything. Passas on this? I know that you’ve prepared a statement on your Department’s views… Controlling the meeting Sorry Hans. That’s it. The next meeting will be … 51 .Introducing the agenda You’ve all seen the agenda … On the agenda. you’ll see there are three items. the main point is … Moving the discussion on Can we go to think about … Let’s move on to the next point. we’ve decided … I think we can close the meeting now. There is one main item to discuss … Stating objectives We’re here today to hear about plans for … Our objective is to discuss different ideas … What we want to do today is to reach a decision … Introducing discussion The background to the problem is … This issue is about … The point we have to understand is … Calling on a speaker I’d like to ask Mary to tell us about … Can we hear from Mr. what you’re saying is … Can I summarise that? You mean … So.
visual supports. Secretary • Obtain agenda and list of participants. • Speak to participants. • Control discussion. • Ensure that conclusions and decisions are clear and understood. find out team or department views. • Decide time / place / participants / who must attend and who can be notified of decisions. regular or a ‘one off’. • Study subjects for discussion. short or long. equipment. work out preliminary options. • Introduce speakers. • Define actions to be taken and individual responsibilities. • Ensure that key decisions are written down by the secretary. The role of the Chair • Start and end on time. internal / external information giving / discussion / decision making)? • Is a social element required? • Prepare an agenda. Refreshments. • Summarise discussion at key points. agenda. • Anticipate different opinions. travel. • Inform participants and check: Room. ideas. accommodation. paper. materials. • Introduce objectives. • What type of meeting (formal or informal. etc. Participants • Study subjects on agenda. meals.Skills Checklist Preparation for meetings Chair • Decide objectives. • If necessary. • Prepare own contribution. hear all views. 52 . • Define time limits for contributions.
To keep discussion to the relevant issues. To welcome the participants to a meeting. e. write a letter. etc. To thank a speaker for his/her contribution. j.Practice 1 Suggest phrases which could be used by a chairperson in the following situations in a meeting. To state the objectives of the meeting. To introduce another speaker. To summarise certain actions that must be done following the meeting (for example. Your agenda should include the points listed here: Any other business New products Minutes of previous meeting Marketing plans for next year Date of next meeting Review of marketing performance in the current year Personnel changes Chair’s opening address Apologies for absence. To suggest moving to the next topic on the agenda. work out a brief agenda. Practice 2 1. g. k. i. write a report. In groups. a medium-size financial services company. b. for a meeting of the marketing department of Axis Finance Ltd. 53 . To summarise discussion. d. To ask if anyone has anything to add. To prevent an interruption. with an appropriate order. h. To close the meeting. f. c.). m. To introduce the agenda. a. To introduce the first speaker. l. do research. meet again..
may I ask for clarification on this? If I may interrupt. prepare a brief opening statement by the chair to introduce the meeting above: Think about what the opening statement from the chair needs to say Use your agenda as a guide Refer to the Language Checklist Practise in pairs 8.2. but … Do you think so? My impression is … What? That’s impossible. We / I think … 54 . Participating in meetings Language Checklist Discussion in meetings Stating opinion It seems to me … I tend to think … In my view … We think / feel / believe … There’s no alternative to … It’s obvious that … Clearly / obviously … Asking for opinion I’d like to hear from … Could we hear from … ? What’s your view? What do you think about …? Do you have any strong views on … ? Any comments? Interrupting Excuse me. In pairs. could you say … ? Sorry to interrupt.
go ahead. please let me finish … If I may finish this point … Can I come to that later? That’s not really relevant at this stage … Can we leave that to another discussion? Skills Checklist Participating in meetings Types of meeting • Decision making meeting • Information giving meeting • Spontaneous / emergency meeting • Routine meeting • Internal meeting • Customer / client / supplier .first meeting / established relationship Structure of decision making meetings • Study / discuss / analyse the situation • Define the problem • Set an objective • State imperatives and desirables • Generate alternatives • Establish evaluation criteria • Evaluate alternatives • Choose among alternatives The DESC stage of meeting D Describe situation E Express feelings S Suggest solutions C Conclude with decision Goal of decision making meetings Objective: to get a consensus in a time-efficient and cost effective manner 55 . Sorry.Handling interruptions Yes.
Importance of communication • Two-way process • Participants must be aware of others’ needs • Full communication and understanding is essential • Four elements in communication: awareness – understanding – empathy – perception Reaching a consensus • Discussion leads to consensus • Consensus is recognised and verbalised by leader • Decisions checked and confirmed Practice 3 Use the skeleton outline below to recreate the entire dialogue with a partner. ‘The fall in sales is mainly due to the recession affecting world markets. Try to move on to future prospects. Reject interruption: No time / discussed before.’ Interrupt: ask for clarification. UK subsidiary) Interrupt: ask why Anglo was sold. Respond: you disagree. (general fall of 5 % / most product areas / especially oil processing sector / also due to sale of Anglo. Forecast are much better. Polite response. Choose alternative interruptions and ways of handling interruptions. Interrupt: you want to talk about new markets. (the outlook is just good now) Interrupt: disagree. 56 .
and costeffective manner possible is a goal that everyone attending (the meeting) must share. Achieving this in the most time. a. Reject the idea. What structure does the text describe? c. But first … Interrupt: suggest a break. • Reading 1. d. b. but it is to get a consensus that the meeting has been arranged in the first place. if there is an 57 . Read the following extract and answer these questions. The rational decision process includes the following steps: • Study / discuss / analyse the situation • Define the problem • Set an objective • State imperatives and desirables • Generate alternatives • Establish evaluation criteria • Evaluate alternatives • Choose among alternatives. One other aspect of decision making is the necessity for participants in the meeting to be aware of one another’s needs and perceptions. What kind of meeting is the text about? b. If these are not effectively communicated. Marion Haynes (1988) maintains that decision-making meetings need to follow a specific structure. a. Read the text again. Do you agree with: The first sentence? Give reasons for your answer. What key points is made about communication? 2.Promise to discuss this later. c. Hayne’s suggestions for the steps involved in decision making? The view that communication must be a two-way process? What the writer says about consensus in the final paragraph? The reason for having a meeting is to make a decision. Information may be given in a presentation followed by questions or discussion.
consider other options h. then an acceptable conclusion is unlikely to be reached. Handling interruptions: Promise to come back to a point later Politely disagree with an interruption Say the interruption is not relevant or that time is short 58 . understanding. There are four essential elements in decision-making: awareness. what one would like to have g. 3. what one must have f. Interruptions can have different intentions: To ask for clarification To add opinion To ask for more details To change direction of the discussion To disagree. express through speaking. will become genuinely successful and effective. Find words or phrases in the text which mean the same as the following: a. fix a goal e. way of seeing things i. It is only when we accept that communications are a two-way process that any form of communication. Frequently the discussion can evolve into a consensus which can be recognised and verbalised by the leader without the need to ‘put things to the vote’. including decision making. empathy and perception.insufficient degree of understanding of one another’s requirements. Decision-making is not always an identifiable activity. seeing things as others see them j. aim d. develop k. common agreement b. economical use of resources c.
what should happen after a meeting. Inform appropriate people who did not attend the meeting about essential decisions made. A brief memorandum of conclusions should be written and distributed. After the meeting. Regardless of the type of meeting (information or decision making). Ending the meeting • Reading Read the following text and identify: a. it is important to close with a restatement of objective. Finally.Politely accept the interruption and respond to it before continuing Reject a suggestion 9. Future meetings should be improved by soliciting evaluations and deciding what action is required to conduct better meetings. a summary of what was accomplished. it is essential to follow up with action. Language Checklist Ending the meeting Asking for clarification Could you be more specific? Can you explain that (in more detail)? What do you mean by …? Clarifying This means … What I mean is … What I want to say is … To explain this in more detail … 59 . each meeting should be viewed as learning experience. three recommendations on how a meeting should end b. and a list of agreed action that needs to be taken.
Checking that the clarification is sufficient Is that okay? / is that clearer now? Referring to other speakers As Peter has already told us … I’m sure Mr. Kowski knows about this … Later we’ll hear a report from Neil on … Professor Gilberto is certainly aware of … Delaying decisions I think we need more time to consider this. I think we should postpone a decision … Can we leave this until another date? It would be wrong to make a final decision … Ending the meeting • Summarising I think we should end there. Just to summarise … We’ve covered everything, so I’d like to go over the decisions we’ve taken … So, to conclude … we’ve agreed … • Confirming action We’ll contact … John will … We’ve got to … We need to look at … • Referring to next contact We’ll meet again next month … We look forward to hearing from you … It’s been a pleasure to see you today and I look forward to our next meeting … Skills Checklist Ending meetings Two general rules Meeting should end on time! Decision making meetings should end with decisions!
The Chair should close the meeting with: • A restatement of the objectives • A summary of decisions taken • A summary of the action now required • Reference to any individual responsibilities. After the meeting • A memorandum should be sent to all participants summarising the decisions taken and the action required. • The memorandum should be sent to any interested individuals who were unable to attend. • The Chair should seek feedback on the meetings to try to improve future meetings. Improving meetings • Motivation to change • Gather information on present situation • Identify specific areas needing improvement • Identify alternative courses of action • Practise new techniques • Improvement model.
Practice 4 You are at an internal meeting to discuss increases in the price of your products. With a partner, use these prompts to make a dialogue. Try to use new language from this unit. Participant A Ask if the meeting can reach a decision on this. Respond that we need more information. Ask for clarification. Participant B
Say we need to know more about the effects of a price increase. Suggest doing market research. Agree. Suggest contacting a friend who knows about market consultancy firms. Suggest first looking at previous experience of price rises – then later going to a Marketing Consultancy. Ask for general agreement. Move to next item for discussion.
Practice 5 In pairs use the outline below to create a chair’s closing remarks for a meeting. To make this more realistic, add names and other details as required. Practice your closing remarks together. Indicate that the meeting is almost over. Check that no one has anything else to say. Restate the purpose of the meeting. Introduce a summary of the decisions taken. Ask if everyone is happy with your summary. Indicate that a colleague will organise a presentation next week. Fix a date for a new meeting. Thank people for coming.
10. Know what you want Language Checklist Negotiations (1) Making an opening statement Welcoming Welcome to … I’m sure we will have a useful and productive meeting … First meeting We see this as a preparatory meeting … We would like to reach agreement on … One of a series of meetings Following previous meetings we have agreed on some important issues. Today we have to think about … We have reached an important stage … Stating your aims and objectives I’d like to begin with a few words about our general expectations … May I outline our principle aims and objectives today … We want to clarify our positions … We have a formal agenda … We don’t have a formal agenda, but we hope to reach agreement on … There are three specific areas we would like to discuss. These are … We have to decide … Stating shared aims and objectives Together we want to develop a good relationship … We agree that … It is important for both of us that we agree on … Handing over I’d like to finish there and give you the opportunity to reply to this. I’d like to hand over to my colleague …, who has something to say about …
Skills Checklist Negotiations (1) Planning and preparation Type of negotiation • Towards agreement Both teams try to suit joint interests • Independent advantage Each team aims to get best deal • Conflict A team aims to win and make the other team lose Purpose of negotiation • Exploratory (possible areas of interest) • Conciliatory (resolving differences) Targets • Scale (e.g. 1-10) • Decide realistic maximum and minimum acceptable scores Facts and figures • Prepare statistical data • Know facts • Prepare visuals Strengths and weaknesses • List your bargaining strengths • Know your possible weaknesses • Calculate your bargaining position Possible concessions • Plan your bargaining strategy • List essential conditions Impossible to concede • List possible concessions
(Establish beginnings of a partnership / learn about supply systems / price variations and supply costs. • Welcome the other side. Each team thinks only about its own interests. but on gaining the best deal possible for your side. Types of negotiation: • Agreement-based negotiation or win-win negotiation Proposals and counter proposals (propuneri contrare) are discussed until agreement is reached. • Explain general aim or purpose of the meeting. • Develop small talk (trip. Both sides hopes for repeat business. Suggest phrases for each of the following at the start of a negotiation.Opening statements • State general objectives • State priorities • State independent (not joint) objectives • Be brief Practice 1 1. weather). (preliminary / exploratory) • Say what your side wants from the meeting. Try to bring all the phrases above together in a single opening statement.) 2. Two parties have a shared objective: to work together in a way which is mutually beneficial. • Mention plans for lunch – make your visitors feel welcome (see city centre / local restaurant). • Introduce a colleague. Win–lose negotiation 65 • • . • Suggest you start talking about the main subject of your meeting. Independent advantage negotiation This type of negotiation is less based on mutual benefit.
Prepare your negotiation position – know your aims and objectives. Know your role as part of a team. Decide what concessions you could make. helps you to know the market. 2.This type is the negotiation to resolve conflict. Preparing an opening statement iv. it is possible that each party regards the other as an opponent and seeks to win the argument. creates reasonable and other materials expectations. Here. Prepare your opening statement. Know your own strengths and weaknesses. Knowing your aims i. for example in a contractual dispute. Preparing any figures. the context in which you want to work. 66 . b. helps clear thinking and weaknesses purpose. A typical structure of a negotiation: Suggestion Counter suggestion Agreement Confirmation Practice 2 1. c. Mark the seven points below (how to prepare a negotiation) in the right order. 1 Prepare any figures. means you can support your and objectives argument. d. Identify your minimum requirements. calculations iii. Knowing your own strengths and ii. a. any calculations and any support materials you may need. The first is already marked as an example.Match each of the four aspects of good preparation on the left with why they are important on the right.
Effective negotiation requires clear thinking and a constructive approach It is necessary to have a clear understanding of what for you are the most important issues and at the same time what for you are less important. are these statements about negotiating true (T) or false (F): a. Read the following extract. d. then the options in the next round are: • To make a new offer • To seek a new offer from the other party 67 . If there are problems. Try to identify aspects in the second category where the other side will be very happy to gain concessions. or they won’t like your speculation. According to the writer. one at a time. Getting what you can • Reading 1. Make concessions and get a concession in return. Deal with issues in isolation. c. you have to accept or reject what is on offer. consider two or three at once – aim for an agreement to a package. Avoid being forced into considering one issue alone. to reject. g. Try to guess what the other side thinks. f. If there are big differences between the two parties. you have a choice of these options: to accept. Ask how important items are and look for flexibility.11. you have to do the following: Check every item of what the other side wants. or to carry on negotiating. Note the other side’s answers. e. Tough bargaining can combine with a spirit of cooperation. b. Decide on the most important and less important issues. If you decide to carry on. Give what is not so important for you. but don’t immediately say what you think. but is valuable for the other side. • • • • To do this. Do not guess their opinions or motives – you could be wrong. Note answers to the questions you ask.
This approach is mot likely to move the negotiation towards a settlement that both sides feel is to their advantage.• • To change the shape of the deal (vary the quantity or the quality. When the time comes for compromise. c. In preparing. or bring in third parties) Begin bargaining. you must identify the issues. each party will concede on one issue if they win a concession on another. As for the package. The final principle is to be positive and constructive. b. where you need most in return. Three ways to change a deal. think about the whole package. 2. You need: • An essential conditions list – issues where you cannot concede anything • A concessions list – issues where you can make concessions • To grade the concessions from the easiest to the most difficult. even during difficult bargaining. you must look for agreement in principle on a broad front (zonă cu elemente diferite). How to respond to what the other side wants. Your bargaining should be governed by three principles: be prepared. You should be fair and cooperative. Three actions to prepare for bargaining Language Checklist Negotiations (2) Bargaining We can agree to that if … On condition that … So long as … That’s not acceptable unless … 68 . Read the text again. and be constructive. and prepare your bargaining position. Identify the following: a.
Confirming Can we run through what we’ve agreed? I’d like to check what we’ve said / confirm I think this is a good moment to repeat what we’ve agreed so far. That seems acceptable. can we ask you to …? Before the next meeting we’ll … We need to draw up a formal contract. Can we summarise the proposal in a few words? Looking ahead So. That’s probably all right. In our next meeting we need to … So.Without … Making concessions It you could … we could consider … So long as … we could agree to … On condition that we agree on … then we could … Let’s think about the issue of … We could offer you … Would you be interested in …? Could we tie this agreement to …? Accepting We agree. the next step is … We need to meet again soon. So. I’ll summarise the important points of our offer. Skills Checklist Negotiations (2) – Bargaining in negotiations Concessions rules ‘A key principle in negotiation is to give a little and get a little at the same time.’ 69 . Summarising I’d like to run through the main points that we’ve talked about.
• Be clear.But don’t make concessions for your main speaker. • Listen. During the negotiation Main speaker • Create a joint.Add forgotten points (‘And we must remember …’) . public and flexible agenda. a. Practice 3 Make sentences which include concessions based on the prompts below. • Build on common ground. • Follow the concession rules. 70 . a better warranty / quicker payment terms We could offer a better warranty if you would agree to quicker payment terms. • Support your main speaker . The first is done for you as an example.Agree (nod. • Explore alternatives ‘What if …?’ • Be clear.• • • • • Ask for concessions All concessions are conditional Conditions first ‘If … then …’ ‘It’s a package’ Give what’s cheap to you and valuable to them. • Question needs and preferences. brief and firm. . brief and firm. Support speaker • Wait till the Chair or your main speaker brings you in. • Don’t talk too much.Emphasise (‘This point is very important’) .Listen. ‘That’s right …’) . • Don’t fill silences. • Follow concession rules. .Don’t fill silences.
f. e. 000 compensation / agreement not to go to law promise to improve safety for staff / agreement on new contracts better working conditions / shorter breaks Practice 4 You and a partner are representatives of Beck Instruments and Ojanpera Inc. Practice 5 The following letter is from Gibson Trust Ltd. Ojanpera Offer to buy the machine if BI can give a good price.. Agree. g. Enclosed developed specified examined excluded signed 71 Beck Instruments Say that your prices are very competitive. Say a discount could be possible if Ojanpera agrees to pay for shipping costs. . d. Use the flow chart below to negotiate some aspects of an agreement for the sale of the BI 25. unless Ojanpera pays for the installation. Agree. you can’t agree. Ask for 6 % discount. Offer 4 % discount. Complete the spaces in the letter with appropriate words given below. Confirm your agreement. the BI 25. To the Ministry of Urban Development summarising the points agreed in the negotiation between them and outlining the next steps. free delivery / large order free on-site training / small increase in price 5 % discount / payment on delivery extra £ 50. Unfortunately. if the discount is attractive. Ask for a discount. Ojanpera is in discussion with Beck Instruments to buy a machine. a machine tool maker.b. c.
Re: Meeting in Bristol. April 30 --. The remaining land will be (f) _________ by Gibson Trust and later sold off separately. 72 .144 Whitehall London WCI 4RF May 2 200— Dear Neil. The development is intended to be for commercial and residential use. held to discuss the sale of government owned railway land to Gibson Trust Limited.Agreed drawn up confirm included GIBSON TRUST LIMITED Units 9-12 East Side Monks Cross Industrial Estate BRISTOL BSI4 6TR Telephone 01272 547777 Fax 01272 547701 Neil Finch Ministry of Urban Development 140. the offices to the west and the warehouse alongside the traks. The government-owned housing on the north side of the railway lines is (e) _______ . We would like to confirm through this letter and the (c) ________ drawings that the property (d) ______ in the above sale consists of the land presently occupied by the station buildings and also the former car parks to the east of the station.‘Railway Land Sale’ I am writing to (a) _______ points (b) _______ in the above meeting.000 per year to Gibson Trust. The eventual use of the land should be (g) _______ in the contract. We also agree that the station will be renovated by the Transport Department and that the government will be responsible for running an eventual museum and paying a rent of £ 100.
2.. You think that … a) part of the available time must be spent socialising and getting to know the other side.Our next meeting will be on May 15 at 10 a. Your aim in a negotiation is … a) to find the greatest area of agreement in the joint interests of both parties. Thank you once again for a very constructive meeting and we look forward to seeing you again on May 15. (I) 12. 3. Jill Kearne Chief Negotiator Encs. Do contact us if you have any comments or alterations you would like to make to this summary. Soon after this. Then we will need time to consider the contracts but hopefully they will be (j) ______ by the end of September. b) To win and to make the other side lose. When the other side is talking you … a) use the information you are hearing to identify weaknesses in the other party. b) Plan what you are going to say next. at which development plans will be (h) ______. 73 . c) To find the best deal for your side. contracts will be (I) ______ . Not getting what you don’t want • What type of negotiator are you? 1.m. Your sincerely. c) Listen with maximum attention.
If the other side disagree with you. b) Make carefully considered statements in a calm. c) Ridicule it with sarcasm. 7-10 you are a fighter! Less than 7 you should get a gun licence! • Reading Match each of the following to a phrase in the text with a similar meaning: a. c) Are occasionally forceful and inflexible. 1 a)3 b)2 c)2 4 a)1 b)3 c)2 2 a)1 b)2 c)3 5 a)3 b)1 c)2 3 a)3 b)2 c)1 6 a)3 b)2 c)1 If you score 15 or more you are a creative negotiator. b) Ask for clarification and explanation. When you speak in a negotiation you … a) make bold and forceful statements.b) Goodwill is important but the speed of the meeting should be quick and businesslike. you … a) tentatively suggest an alternative. highlight the disadvantages of failing to reach a deal b. take a break to consider positions 74 . 5. c) Reshape your offer without fundamental changes. b) Repeat your demands and will not concede – your objective is to make the other side give in. alter parts of what is on offer d. c) The meeting should get down to business as soon as possible and reach quick decisions. think of new benefits for both sides c. you … a) try hard to find a creative position by modifying your position. If the other side state an opinion you disagree with. possibly banging the table. 11-14 you negotiate to independent advantage. controlled voice. 6. 4.
have the negotiation in a different place change the individuals involved ask an independent person to come and help you reach agreement have an informal meeting to talk things over. Practice 6 In pairs. In many cases this is better than agreeing to something which would be against the interests of the people concerned. h. When conflict arises.e. use the given prompts to suggest a response to the statements. 75 . a suspenda) to think and reflect • Fix an off-the-record meeting (întâlnire neoficială) • Change location • Change negotiator (personal chemistry?) • Bring in a third party (mediator?) • Consider walking away. Dealing with conflict Conflict may sometimes be an unavoidable step on the road towards agreement. Situation 1 The problem is that we have never offered the kind of warranty you are looking for. there are several possible actions which may help to resolve conflict in a negotiation: • Leave the problem. g. f. go on to a different topic and return later to the point at issue • Summarise progress and areas of agreement • Emphasise the benefits available to both sides • Emphasise the loss to both sides of not reaching agreement • Restate the issue and wait for a response • Change the package • Invent new options for mutual gain • Offer conditional concessions • Adjourn (a amâna. However. in some cases conflict leads to the break down of negotiations as one or both sides realise that agreement is not possible.
d. i. Practice 7 Below are four offers or request. If you agree to buy 100 units every month for the next twelve months. Suggest advantages of reaching agreement: more global influence. c. Below are five strategies in dealing with conflict. Reject each one. training for technical staff. Use them in making statements. using the information in the prompts. You don’t know how many units you will need in six and twelve months. Situation 4 There are several problems.e. better prospects for the future.Suggest leaving the point and returning to it later after discussing other issues. Situation 1 Let me make a suggestion. Leave the problem. It might be more or less. e. Adjourn to think and reflect. Emphasise the loss to both sides of not reaching agreement. Send a signal that you could offer better payment terms. Situation 2 There’s a number of issues on the table. • a. We think there is quite a lot of negotiation ahead before we can agree on a common strategy. we’ll agree a 10 % discount. Situation 3 The price you are asking is rather high. Offer a conditional concession. shipment costs. Situation 2 76 . come back later to the problem. We seem to be a long way from an agreement. Suggest changing the package on offer (variables include price. Summarise progress and areas of agreement. quite a lot higher than we were expecting. b. discuss something else. payment terms).
Situation 4 Now.The price we are offering excludes installation costs but does include a twelve month’s guarantee. Situation 3 A colleague has asked you to cooperate on a project. You cannot spend more than your budget. the plant is working at capacity. Situation 4 You want to repeat an order with a supplier but they are trying to increase prices by 20 %. Right now you are sending us 350 boxes a month. End your discussion. Situation 3 I think the absolute minimum investment in advertising must be $40. It is important that you continue to work together in the other areas. but after long discussion you feel you cannot participate because of fundamental disagreement. Other suppliers offer free installation and a two year parts and labour warranty. otherwise we cannot reach enough of our market. demand is very high … Your order books are full.000. Practice 8 Suggest what you could say in the following situations. Situation 2 Your efforts to reach agreement have been unsuccessful. It is late. It’s not much to ask for. You cannot agree to this. some excellent news: we’d like to increase our order. We need at least 500. Situation 1 After a long negotiation. you have reached agreement and now plan a meal in a local restaurant with the other party in the negotiation. End the negotiation but offer some hope that in the future you might manage some cooperation with the other side. 77 .
Situation 5 A customer is asking you to supply goods in a month. not so much at individual areas of difficulty. Language Checklist Negotiations (3) Dealing with conflict I think we should look at the points we agree on … We should focus on the positive aspects … We should look at the benefits for both sides … It is in your interests to resolve the issue … What do you think is a fair way to resolve this problem? We hope you can see our point of view … Let us explain our position … Could you tell us why you feel like that? I think we should look at the whole package. the next step is … What we need to do now is … It’s been a very useful and productive meeting. Perhaps we could adjourn for a little while. 78 . I think we need to consider some fresh ideas … Rejecting I’m afraid we can’t … Before agreeing to that we would need … Unfortunately … I don’t think it would be sensible for us to … I think if you consider our position. End the discussion. can we summarise the progress we’ve made? Can we go through the points we’ve agreed? Perhaps if I can check the main points … So. you’ll see that … Ending negotiations So. This is physically impossible. We look forward to a successful partnership.
I’m sorry. Unfortunately we appear unable to settle our differences.Breaking off negotiations I think we’ve gone as far as we can. but I don’t think we’re going to agree a deal. It’s a pity we couldn’t reach agreement this time. It would be better if we looked for some independent arbitrator. Skills Checklist Negotiations (3) Dealing with conflict • Show understanding of the other side’s position • Highlight advantages of agreement Don’t … • Be sarcastic • Attack • Criticise • Threaten • Blame Types of negotiators Hard Negotiates to win Makes demands Principled Looks for common benefits Makes offers Soft Looks for agreement Accepts what’s on offer Fighter Win-lose Rejecting 79 Do … ask questions listen summarise build on common ground explain your feelings Independent advantage win-win Creative negotiator looks for agreement .
000 units 5 % for each month of delay 50 % charge if cancelled less than six weeks beforehand sole rights over all East Coast states 3 % of turnover on licensed goods 5 % on sales in the territory -2 % if paid within 20 days first option for 12 months after contract 80 Conditions Unit price Minimum quantity Credit period Delivery date Bulk discount Penalty clause Cancellation clause Exclusivity Royalty on sales under licence Commission Early settlement discount Option period . • Examine the process of the negotiation: The planning – the strategy – team roles – the issues.• • • • Ask for an adjournment.000 units 30 days after invoice 20 June 2003 -2 % if over 10.50 per unit at least 10. reject the proposal on offer. After the negotiation • Compare the result with your objectives. • Negotiating Conditions Examples $8. Remember your limits. or suggest alternatives. • Build on success: Recognise success Praise people Develop teamwork and partnership. Decide if your interests are being met: if not. • Learn from failure: What went wrong and why? Identify weaknesses and errors Discuss and plan ahead. targets and limits. Discuss options.
/ shorten delivery. Refusing to move (5) I’m afraid I can’t agree to / that. I’m afraid it’s not enough. We think the following is reasonable/appropriate.Method of payment Warranty period • DATAFILE: Negotiation irrevocable letter of credit 18 months warranty from completion Below are the stages of negotiation and some expressions which you may find useful at each stage: Conversation (1) I’m sure/confident we can reach agreement. This is how we see it. Our approach is this. / lower the price. 81 . Questioning the other’s position (3) How do you/ explain your attitude? / justify …? Account for…? Arrive at…? Why do you want…? Why such a / high charge? / long delivery period? / low discount? Refusing to accept (4) I’m sorry. I can’t accept 2 %. (optimistic) I’m sure there’s room for negotiation. Let’s see how we get on. (cautious) Presenting your position (2) This is our position. I’m afraid. Other firms offer more than 2 %. / increase the rate. You’ll have to do better than that. We have a lot to discuss.
Exercise 1 Your turn to negotiate! Now you have the opportunity to negotiate.We’ve done our best for you. You know. but that would be very difficult. You see we have a lot of orders to handle at present. You (3: long delivery period) Supplier Well. these are in fact the usual periods. with this delivery problem I’m sure there’s room for negotiation. if I can promise you delivery in eight weeks. and moving just one of these machines is a major operation. I have my instructions. and install it four weeks after that. You 82 . You (1: cautious) Supplier Right. 4 weeks installation) Supplier I see what you mean. Supplier Well. Let’s summarize the conditions. Now that is really a very short deadline in this business. Look. Suggesting a compromise (6) May I make a suggestion? If you … then we may be able to… We may be able to… but only if you… Unless you … there is no question of our being able to… Reaching agreement (7) Let’s just go through the terms. Did you expect we could deliver any quicker? You (2: 6 weeks maximum delivery. To help you with each answer you are given some information in the script below and a number which refers back to the Datafile. We can deliver the first machine in ten weeks. does that help? You (4: too late) Supplier Ah-ha! Well. look… er… You want the machine in six weeks. let’s get started. well this is how we see it. It’s pretty normal in this kind of operation. We have maintain a policy.
said that you couldn’t take it any later, but couldn’t your engineers find a way to re-schedule just a little, say another week? You (5: refuse) Supplier Well, you really are asking us for something that is very difficult. I’ve already offered you seven weeks. I’ll have to consult with my colleagues and come back to you, but I can’t see what we can do. You (6: if deliver in 6 weeks perhaps talk about further order) Supplier Well, on that basis I suppose we might be able to look at some kind of arrangement. In fact, if you can promise another order I think we could accept your terms. You (7: 6 weeks delivery; 4 weeks installation; decision on next order by 26th of this month) Supplier Exactly. If you could confirm this in writing I … Exercise 2 Ten rules for negotiating Dr Ed Zap is holding a two-day seminar on negotiating techniques. At the end of the first morning he gives the group his ten rules for negotiating. Here they are. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Find out how many points are to be negotiated. Start from an extreme position. Assume the other person owes you a concession. Never concede without exchange. Never give what you can sell. Exaggerate the value of your concessions, minimize the value of his. If he insists on ‘principle’, expect a concession in return. Only threaten what you are prepared to carry out. Don’t show disrespect to your opponent. If you’re happy with the result, don’t shout ‘I’ve won!’
Read Dr Zap’s rules and then look at the remarks in list A. These remarks are not good for negotiating. Instead, use phrases from list B. which one would you use in each case? A. a. You see? I knew I’d win!
1. If you increase the order, then we may be able to reduce the price. b. I know what you want to discuss, so let’s start. 2. Very well, but if you can’t give discounts I’m sure you can extend… c. I can reduce the price. Does that help? 3. If you can’t accept this, I may have to reconsider my position. d. Delivery? That’s no problem; no extra charge. 4. I think we can agree on these terms. f. It’s against your policy to give discounts? OK. 5. I’m afraid that will not be possible. g. What a ridiculous idea! Don’t be stupid! 6. May we go through the points to be discussed before we begin? h. Another half per cent? Yes, that’s very generous offer you’re making. 7. Half per cent is very small amount i. This is my final offer. If you refuse, I’ll cancel everything. 8. Delivery? Well it may be possible but only if… Exercise 3 When things get difficult In their negotiation exercises the managers on Dr Zap’s seminar sometimes find themselves in difficult situations. As they are all from English-speaking countries they know what to say. Could you give me a moment to do some calculations? Certainly! Would you excuse me a minute? Would you like me to go through that again? I’m sorry, could you go through that again? I don’t think we’re talking about the same thing. That’s right! We’re talking at cross-purposes. Can we say it’s agreed, here and now? I’ll have to come back to you on this. Where does the January figure come from? I’m just looking. Could you bear with me a moment? So what is the basis of calculation? I’m sorry, I don’t have the figures to hand.
Which expression would you use in the following cases? a. The other person does not seem to understand your explanation of the payment schedules. b. He wants you to agree a definite price today, but you need to consult your boss at the office before committing yourself. c. He suddenly asks you what discount you would make for a very large order indeed. You need a minute to work it out. d. You are rather surprised at the high charge for transport. e. He suddenly asks the price of similar products in the range. You have the price list in your briefcase – somewhere. f. You think he has just made up the figure for installation costs! g. He has already explained the commission system twice but you are still not really clear about it. • Understanding contracts
Exercise 4 Vocabulary for contracts The words below are often used in connection with contracts. Use some of them to complete the sentences which follow. You may need to put certain words in the plural. Terminate clause draw up condition binding Section party provide for compromise comply with/abide by Litigation out of court breach court term void agreement arbitration valid
a. A contract is an ---------- between two ----------- . It is divided into ---------- , ------------ , and ------------ . b. The contract --------- ---------- any problems between the two parties. The conditions of the contract are --------- on both parties. If one party does not ----------- ----------- the clauses, this is called a --------- of contract. c. In the case of a dispute, many contracts provide for ----------, but in some cases the dispute results in ---------- . Most parties reach a
--------- without going to --------- , and the dispute is settled ------------- ---------- . d. Some contracts are for a fixed period, or --------- ; also, there are ways in which the parties can end, or ---------, the contract. Exercise 5 Licensing terms You have asked a US firm if you could make one of its products under licence, in your own country. Here is part of their answer. But what do the legal terms really mean? Replace the underlined terms with the phrases listed below. We’ve checked with our legal department. Yes, we are the patent holders for the XT7. We are prepared, in fact, to grant you a licence to make it in your own territory on these conditions: there would be a fee on agreement and then a royalty of 5 % with a minimum annual royalty of $50,000. The term would be four years, with the possibility of renewal on expiry. And, of course, in the event of any infringement, as our licensee you would have to apply for an injunction on the infringer’s production. Let you have yearly bottom limit illegal copying Official manufacturer have the legal rights over copier’s Further years period country Ask for a ban when it ended permission An immediate payment 5 % to pay
13. What is management? • Discussion
What do you think makes a good manager? Which four of the following qualities do you think are the most important? A being decisive: able to make quick decisions B being efficient: doing things quickly, not leaving tasks unfinished, having a tidy desk, and so on C being friendly and sociable D being able to communicate with people E being logical, rational and analytical F being able to motivate and inspire and lead people G being authoritative: able to give orders H being competent: knowing one’s job perfectly, as well as the work of one’s subordinates I being persuasive: able to convince people to do things J having good ideas • Reading This text summarizes some of Peter Drucker’s views on management. As you read about his description of the work of a manger, decide whether the five different functions he mentions require the four qualities you selected in your discussion, or others you did not choose. Peter Drucker, the well-known American business professor and consultant, suggests that the work of a manager can be divided into planning (setting objectives), organizing, integrating (motivating and communicating), measuring, and developing people. First of all, managers (especially senior managers such as company chairmen – and women – and directors) set objectives, and decide how their organization can achieve them. This involves developing strategies, plans and precise tactics, and allocating resources of people and money. Secondly, managers organize. They analyse and classify the activities of the organization and the relations among them. They divide the work into manageable activities and then into individual jobs. They select people to manage these units and perform the jobs. Thirdly, managers practice the social skills of motivation and communication. They also have to communicate objectives to the people responsible for attaining them. They have to make the people
who are responsible for performing individual jobs form teams. They make decisions about pay and promotion. As well as organizing and supervising the work of their subordinates, they have to work with people in other areas and functions. Fourthly, managers have to measure the performance of their staff, to see whether the objectives set for the organization as a whole and for each individual member of it are being achieved. Lastly, managers develop people – both their subordinates and themselves. Obviously, objectives occasionally have to be modified or changed. It is generally the job of a company’s top managers to consider the needs of the future, and to take responsibility for innovation, without which any organization can only expect a limited life. Top managers also have to manage a business’s relations with customers, suppliers, distributors, bankers, investors, neighbouring communities, public authorities, and so on, as well as deal with any major crises which arise. Top managers are appointed and supervised and advised (and dismissed) by a company’s board of directors. Although the tasks of a manager can be analyzed and classified in this fashion, management is not entirely scientific. It is human skill. Business professors obviously believe that intuition and ‘instinct’ are not enough; there are management skills that have to be learnt. Drucker, for example, wrote over 20 years ago that ‘ Altogether this entire book is based on the proposition that the days of the “intuitive” manager are numbered’, meaning that they were coming to an end. But some people are clearly good at management, and others are not. Some people will be unable to put management techniques into practice. Others will have lots of technique, but few good ideas. Outstanding managers are rather rare. • Vocabulary a. Complete the following sentences with these words. Achieved Resources board of directors communicate manageable performance setting supervise innovations
1 Managers have to decide how best to allocate the human, physical and capital …….. available to them. 2 Managers – logically – have to make sure that the jobs and tasks given to their subordinates are …….. . 3 There is no point in ……. objectives if you don’t ……… them to your staff. 4 Managers have to ……. their subordinates, and to measure, and try to improve, their ……… . 5 Managers have to check whether objectives and targets are being ……. . 6 A top manager whose performance is unsatisfactory can be dismissed by the company’s ………. . 7 Top managers are responsible for the ………. that will allow a company to adapt to a changing world. b. The text contains a number of common verb-noun partnerships (e.g. achieve objectives, deal with crises, and so on). Match up these verb and nouns to make common collocations. Allocate decisions Communicate information Develop jobs Make objectives Measure people Motivate performance Perform resources Set strategies Supervise subordinates 14. Types of Managers We have been using the term manager to mean anyone who is responsible for subordinates and other organizational resources. There are many different types of managers, with diverse tasks and responsibilities. Managers can be classified in two ways: by their level in the organization – so-called first-line, middle, and top managers –
Examples of first-line managers are the “foreman” (maistru) or production supervisor (şef de producţie) in a manufacturing plant.and by the range of organizational activities for which they are responsible – so-called functional and general managers. top management is responsible for the overall management of the organization. Typical titles of top managers are “chief executive officer”. Composed of a comparatively small group of executives. the technical supervisor (şef de echipă) in a research department. First-level mangers are often called “supervisors. 90 . such as production. The lowest level in an organization at which individuals are responsible for the work of others is called first-line or first-level management. “president” and “senior vice-president”. Top Managers. and the clerical supervisor (şef de birou) in a large office. Middle managers’ principal responsibilities are to direct the activities that implement their organizations’ policies and to balance the demands of their superiors with the capacities of their subordinates. they do not supervise other managers. First-line managers direct operating employees only. Functional and General Managers The other major classification of managers depends on the scope of the activities they manage. It establishes operating policies and guides the organization’s interactions with its environment. sales. Functional Managers. marketing. Middle managers direct the activities of lower-level managers and sometimes also those of operating employees. Management Levels First-Line Managers. The term middle management can include to more than one level in an organization.” Middle Managers. Actual titles vary from one organization to another and are not always a reliable guide to membership in the highest management classification. The functional manager is responsible for only one organizational activity.
such as its production. a refrigerated-products division. and progress toward the objectives is monitored and measured. Then objectives are established for the subunits of the organization – its divisions. and so on.or finance. chief executive officer = director executiv senior vice-president = vice-preşedinte senior (mai important decât cel Junior) president = preşedinte executive vice-president – vice-preşedinte executiv chief executive = director sau administator al unei firme 15. General Managers. a subsidiary. and finance. or an independent operating division. In a large food company. departments. The Management Process Planning Plans give the organization its objectives and set up the best procedures for reaching them. members of the organization carry on activities consistent with (concordant cu) the chosen objectives and procedures. for example. sales. A small company may have only one general manager – its president or executive vice-president – but a large organization may have several. plans become the guides by which the organization obtains and commits (a angaja) the resources required to reach its objectives. oversees (a supraveghea) a complex unit. Once the 91 . so that corrective action can be taken if progress is unsatisfactory. and a frozen-food-products division. with a different general manager responsible for each. such as a company. on the other hand. In addition. The first step in planning is the selection of goals for the organization. Like the chief executive of a small company. He or she is responsible for all the activities of that unit. there might be a grocery-production division. The people and activities headed (a conduce) by a functional manager are engaged in a common set of activities. each of these divisional heads would be responsible for all the activities of the unit. marketing. each at the head of a relatively independent division. The general manager.
Organizing Once managers have established objectives and developed plans or programs to reach them. Plans made by top management for the organization as a whole may cover periods as long as five or ten years. It is clear. 92 . For example. And they must have the ability to develop (and later to lead) that type of organization. Although they must interact effectively. then. motivating. that managers must have the ability to determine what type of organization will be needed to accomplish a given set of objectives. an organization that aims to develop computer software will have to be far different from one that wants to manufacture blue jeans. those plans may involve commitments (angajamente) of billions of dollars. actuating (impulsionare. by middle or first-line managers. Planning at the lower levels. the structure of the organization has been determined. Leading After plans have been made. Of course. In a large organization. covers much shorter periods. Producing a standardized product like blue jeans requires efficient assembly-line techniques. this function involves getting the members of the organization to perform in ways that will help it achieve its established objectives. the manager considers their feasibility and whether will be acceptable to the organization’s managers and employees. software engineers. Different objectives will require different kinds of organizations. in selecting objectives and developing programs. programs are established for achieving them in a systematic manner. they must design and staff an organization able to carry out those programs successfully. directing. or for a two-hour meeting to take place in a week. such people cannot be organized on an assembly-line basis. the next step is to arrange for movement toward the organization’s defined objectives. and operators. Such plans may be for the next day’s work. such as a multinational energy corporation. and the staff has been recruited and trained. and others.objectives are determined. This function can be called by various names: leading. for example. whereas writing computer programs requires teams of professionals – systems analysts. stimulare). But whatever the name used to identify it.
it involves working directly with people. and it involves four main elements: Establishing standards of performance. 16. some on the type of job the manager holds. than do directors of large hospitals. Other differences in the ways managers spend their time depend upon their levels in the organizational hierarchy. the manager must ensure that the actions of the organization’s members do in fact move the organization toward its stated goals. • Detecting deviations from standard goals in order to make corrections before a sequence (succesiune. and control. But they differ in the amount of time devoted to each of these activities. organize. 93 . • Taking action to correct performance that does not meet those standards. Yet both are first-line managers. the activity of leading is very concrete. keeping it from straying (a se depărata. and less time actually managing. Robert L. • Through the controlling function. a se abate) from its specified goals. spend their time quite differently from the way the heads of large research hospitals spend theirs: Managers of clinics spend comparatively more time practicing medicine. The technical supervisor of research physicists at AT&T Bell Labs will have a job that in some respects is quite different from that of a production supervisor on a General Motors assembly line. Some of these differences depend on the kind of organization in which the manager works. And yet there will also be important similarities in the jobs of all these managers. • Measuring current performance and comparing it against the established standards. for example. Controlling Finally. lead. This is the controlling function of management. Managers of small private clinics. Management Level and Skills Managers at every level plan. şir) of activities is completed.Whereas planning and organizing deal with the more abstract aspects of the management process. the manager can keep the organization on its chosen track.
g. 7. as individuals or in groups. production. human. the importance of conceptual skill increases as one rises through the ranks of a management system based on hierarchical principles of authority and responsibility. to understand how its parts depend on one another. a aborda) the technical skills of their subordinates is more important than their own technical skills. techniques. Technical skill is most important in the lower levels. and motivate other people. their ability to tap (a capta. engineers. able to take decisions without consulting a higher authority 94 . by contrast. Technical skill is the ability to use the procedures. a teacher and business executive. musicians. Conceptual skill is the ability to coordinate and integrate all of an organization’s interests and activities. and accountants all have technical skills in their respective fields. one above the other B a specific activity in a company. marketing. It involves the manager’s ability to see the organization as a whole. Surgeons. understand. e.Kats. and conceptual. is important for managers at every level: because they must get their work done primarily through others. finance C independent. Kats suggests that although all three of these skills are essential to a manager. Finally. Every manager needs all three. Human skill. and to anticipate how a change in any of its parts will affect the whole. their relative importance depends mainly on the manager’s rank in the organization. and knowledge of a specialized field. has identified three basic kinds of skills: technical. Companies and Organizations 17. Company structure • Vocabulary Match up the words on the left with the definitions on the right 1 autonomous 2 decentralization 3 function A a system of authority with different levels. Human skill is the ability to work with. It depends mainly on the manager’s rank in the organization.
This is a clear line or chain of command running down the pyramid. and who their immediate subordinates are (to whom they can give instructions). C. and an increasing number of people below them at each successive level..……………….4 hierarchy 5 line authority 6 report to 7 subordinates D people working under someone else in a hierarchy E dividing an organization into decisionmaking units that are not centrally controlled F the power to give instructions to people at the level below in the chain of command G to be responsible to someone and to take instructions from him or her • Reading Read the text below. who their superior (or boss) is (to whom they report). 95 .…………………. D………………. with one person or a group of people at the top. Most organizations have hierarchical or pyramidal structure. and then label the diagrams. according to which of these they illustrate: Line structure / functional structure / matrix structure / staff structure A.……………… B. All the people in the organization know what decisions they are able to make. about different ways of organizing companies.
who divided General Motors into separate operating divisions in 1920. Consequently. the activities of most companies are too complicated to be organized in a single hierarchy. Each division had its own engineering. including (among others) production. setting up divisions that deal with each other using internally determined transfer prices.Some people in an organization have colleagues who help them: for example. production and sales departments. so there are permanent battles between. for example. which have incompatible goals. who is number two in the marketing department. or marketing and production. but there are two standard criticisms. This is known as a staff position: its holder has no line authority. have established commercial. Firstly. Shortly before the First World War. for a large organization manufacturing a range of products. and was expected to make a profit. but have to pass on responsibility to their boss. finance. for example. following the model of Alfred Sloan. and personnel or staff departments. unlike. having a single production department is generally inefficient. the Assistant Marketing Manager. An inherent problem of hierarchies is that people at lower levels are unable to make important decisions. finance and marketing. Yet. He is generally credited with inventing functional organization. private banking. One solution to this is matrix management. Yet. separating functions is unlikely to encourage innovation. Functional organization is efficient. made a different category of car (but with some overlap (suprapunere. This means. corporate. there might be an Assistant to the Marketing Manager. Business that cannot be divided into autonomous divisions with their own markets can simulate decentralization. a 96 . most large manufacturing organizations have a functional structure. Many banks. Today. to encourage internal competition). Secondly. marketing. for example. that the production and marketing departments cannot take financial decision without consulting the finance department. întrepătrundere). in which people report to more than one superior. and is not integrated into the chain of command. international and investment divisions. sales. most large companies are decentralized. people are usually more concerned with the success of their department than that of the company. For example. the French industrialist Henry Fayol organized his coal-mining business according to the functions that it had to carry out. for example.
sales and productions. a se împărţi) as soon as it is successfully completed. as well as the managers responsible for the traditional functions of finance. In fact. unless they are small and have a lot of self-discipline. in their wellknown book In Search of Excellence. Teams are often not very good for decision-making. • Describing company structure The most common verbs for describing structure are: Consists of contains includes Is composed of is made up of is divided into e.g. The company consists of five main departments.product manager with an idea might be able to deal directly with managers responsible for a certain market segment and for a geographical region. temporary groups or teams that are responsible for an entire project.g. and they run the risk or relational problems. Other verbs frequently used to describe company organization include: To be in charge of to be responsible for To support or to be supported by to assist or to be assisted by To be accountable to e. Thomas Peters and Robert Waterman. they still require a definite leader. and are split up (a se diviza. A further possibility is to have wholly autonomous. on whom their success probably depends. but they argue that one element – probably the product – must have priority. but it is not necessarily a very efficient one. insist on the necessity of pushing authority and autonomy down the line. four-dimensional matrices are far too complex. The five department heads are accountable to the Managing Director. This is one way of keeping authority at lower levels. The marketing department is in charge of the sales force. The marketing department is made up of three units. This is an example of part of a company organization chart: 97 .
special interest groups. and the board of directors. consumer and environmental advocates. and competitors. Internal stakeholders include employees. External stakeholders include customers. or a company you know. financial institutions. labor unions. The direct-action component of the environment consists of the organization’s stakeholders – that is. shareholders. The External Environment of Organizations The many rapid changes taking place in the external environment of organization require increasing attention from managers. in about 100-150 words. the media. 98 . 18. governments. suppliers. the groups with direct impact on the organization’s activities.Board of Directors with a Chairman (GB) or President (US) Managing Director (GB) or Chief Executive Officer (US) Production Marketing Finance Research & Development Financial Management Personnel Accounting Market Sales Research Northern Region Advertising Promotions Southern Region Now write a description of either the organization chart above.
Not only do these factors create a climate to which the organization must adjust. They may be able to use the network of relationships among the stakeholders and the organization to influence stakeholders individually. Greater international competition has made the U. 99 . Individual stakeholders may also hold conflicting stakes (interes. Technological advances in communication and transportation have made the international environment increasingly important. Demographic and lifestyle variables mold (a forma. a rămâne în urmă) in competitiveness critical. They may use strategic planning and organizational design to adjust to the environment. a face uz de influenţă) the organization. and industrialorganization models provide alternative views of the relationship between organizations and the environment. organizations must devote more of their resources to monitoring the environment.Managers must balance the interests of the various stakeholders for the good of the organization as a whole. The natural-selection. For their part. political. economic. In turbulent environments. The indirect-action component of the environment consists of their factors that influence the organization indirectly. participare) in an organization. The environment determines the extent to which (gradul în care) organizations face uncertainty and to which they are dependent on others for vital resources. In addition. Managers – especially at higher levels – must monitor the external environment and try to forecast changes that will affect the organization. a modela)an organization’s labor supply and customer base. Managers must distinguish between and adjust to structural and cyclical changes in the economy. they must contend with (a lupta cu) the growing influence of special interest groups in politics. and changes in values are at heart of every other social. but they have the potential to move into the direct-action environment. and technological change. stakeholders may unite in coalitions to exert over (a exercita.S. and has also blurred (a întuneca. a pune în ceaţă) the distinction between the private and public sectors. lag (a întârzia. and technological developments also fuel the competition between organizations. resource-dependence.
equipment and other facilities used in the production process 6. Match up these words with the definitions which follow. any of the pieces or parts that make up a product. Capacity Location component inventory lead time plant subcontractor outsourcing or contracting out 1. operations managers have to decide where to manufacture the different products. the geographical situation of a factory or other facility 7. the stock of any item or resource used in an organization (including raw materials. machines. how much productive capacity their factories and plants should have. supplies. to manufacture or deliver something) b. After it has been decided what to manufacture. Production and products • Vocabulary a. any company that provides goods or services for another one 2. A The consequences of insufficient capacity B The consequences of excess capacity C The advantages of large facilities D The disadvantages of large facilities E The advantages of having a large inventory F The disadvantages of having a large inventory 100 . buying products or processed materials from other companies rather than manufacturing them 4. parts. Read the 15 sentences below. 3. machine.e. work in process and finished products) 8.8. the buildings. Some sentences may fall under two headings. the time needed to perform an activity (i. etc. the (maximum) rate of output that can be achieved from a production process 5. and classify them under the following six headings. and how much inventory to maintain.
2. 4. The working environment might worsen and industrial relations deteriorate. You may have to reduce prices to stimulate demand. handling. giving economies of scale. You can be more flexible in product scheduling. 11. 14. 7. 8. 3. etc. You may be under-utilizing your work force. and so on. breakage. the opportunity cost of capital. 10. some customers may go to other suppliers. Just-in-time production • Read the text below. You may be forced to produce additional less profitable products. 19. Finding staff and coordinating material flow become expensive and difficult. insurance. depreciation. 15. they use (as well as for every 101 . There are costs of storage. and so on. incorrect or defective shipments. lost orders. Lost sales and market share are usually permanent. You have protection against variation in raw material delivery time (due to shortages.) 13. You can meet variation in product demand. and have longer lead times and lower cost operation through larger production runs with fewer set-ups. and insert the eight words defined in vocabulary a) in the spaces. 9. component outsourcing inventory plants lead time subcontractor Capacity Location Manufacturing companies are faced with a ‘make-or-buy decision’ for every item or (1) ………. There is always a risk of obsolescence. 6.1. You can take advantage of quantity discounts in purchasing. 5. Average fixed cost per unit drops as volume increases because each succeeding unit absorbs part of the fixed costs. A long lead time may allow competitors to enter the market. If lead time increases. theft. 12. strikes.
This avoids all the waiting and moving time involved in sending half-finished item from one department to another. . Any quality problems or product defects should be noticed more quickly. specialized production (6)…. very small production runs (etape de producţie) are possible. and should ensure that there is no waste from overproduction. all the machines required for a certain job are grouped together. The JIT system is usually credited to Taiichi Ohno. but the Japanese industrial system relies on mutual trust and long-term relationships. and buy from a (2) ………? If a company assembles products supplied by a large number of subcontractors (furnizor intermediar). stockless production. which are regarded negatively. rather than as assets. who was vicepresident for manufacturing with Toyota in Japan in the early 1950s – although he stated that he got the idea from American supermarkets! JIT is wholly contrary to the European and American logic of encouraging greater productivity. Do they make it themselves or do they outsource (a contracta lucrări în afara companiei). the whole production process is sabotaged. 102 . and stocking extras in case of the future problems.…… with a limited (7)……. JIT thus greatly reduces transportation and inventory costs. The large Japanese manufacturing companies have long practised (4)…………. Of course. they face the problem of how much (3) ……. although it often requires flexible.process and service). or by distributors or customers. Small suppliers often attempt to situate their facilities close to the (5). JIT minimizes the cost of holding inventories. Each section of the production process makes the necessary quantity of the necessary units at the necessary time – which is when it is required by the next stage of the manufacturing process. If factories are equipped so that set-up times are short. or from idle workers waiting for parts. they require. It allows increased productivity because of shortened throughput time (timpul de prelucrare a materialelor). The Japanese also prefer small. as avoidable costs.. wherever possible.……… of a larger company with which they work. in which. and welcoming production that exceeds the agreed schedule or quota. and generally use extensive networks of small subcontractors. if a single subcontractor fails to deliver a component on time. In Just-In-Time (JIT) production – also called lean production. and continuous flow manufacture – nothing is bought or produced until it is needed. multi-skilled employees.
are famous for their multibrand strategy. 20. a company’s items. often distinguished by brand names. which allows them to compete in various market segments. and the firm can react more rapidly to demand changes. 1 ……………………………… Marketing theorists tend to give the word product a very broad meaning. Several different items (different sizes or models) may share the same brand name. Philips.g. maintenance. or of tooth-pastes. can be considered as products. as well as physical objects offered for sale by retailers. 3 ……………………………… Most manufactures produce a large number of products. colleges. Others. and ideas. Most product lines consist of several products. people (politicians. Colgate. Together. delivery. organizations (hospitals. athletes. The major producers of soap powders. market various products under individual brand names. and so on. using it to refer to anything capable of satisfying a need or want. and write a brief heading for each paragraph. a creşte) by benefits such as customer advice. a range of soap powders. a warranty or guarantee. Thus services.production (8)……… (timpul de conducere a producţiei) are reduced. Physical products can usually be augmented (a spori. brands and products constitute its product mix. Products and brands Read the following text. activities. e. often divided into product lines. for example. e. credit facilities. with the result that many customers are unfamiliar with the name of the manufacturing company.g. Yamaha. thereby leaving less room for competitors. film stars). aftersales service. including Unilever and Procter & Gamble. political parties). and to fill shelf space in shops. 2 ……………………………… Some manufactures use their name (the ‘family name’) for all their products. It also gives them a greater chance of getting some of the custom of brand-switchers (cei care schimbă mărcile pe care le cumpără). places (holiday resorts). Since different 103 .
to enter growing or more profitable market segments. i. i. most product lines have a tendency to lengthen over time. and because markets. making items of higher or lower quality. while a company at the bottom of a range may not convince dealers and customers that it can produce quality products for the high end. Additions to product lines can be the result of either upmarket or down-market. to react to competitors’ initiatives. 1 the possibility of paying for a product over an extended period 2 a promise by a manufacturer or seller to repair or replace defective goods during a certain period of time 3 a surface in a store on which goods are displayed 4 consumers who buy various competing products rather than being loyal to a particular brand 5 the standard pattern of sales of a product over the period that is marketed 6 the extend to which an activity provides financial gain 7 possibilities of filling unsatisfied needs in sectors in which the company can produce goods or services effectively 8 the sales of a company expressed as a percentage of total sales in a given market 104 . a large number of items. companies are always looking to the future. Line-filling – adding further items in that part of a products range which a line already covers – might be done in order to compete in competitors’ niches (nişă). with growing. Companies whose objective is high profitability will have shorter lines. and re-evaluating their product mix. • Vocabulary Find words or expressions in the text which mean the following. and so on. as companies produce variations on existing items. opportunities and resources are in constant evolution. or add additional items to cover further market segments. stable or declining sales and profitability. including only profitable items. 4 ………………………………… Companies whose objectives include market share and market growth generally have long product lines. Yet.products are always at different stages of their cycles. such moves may cause image problems: moving to the lower end of the market dilutes (a slăbi.e. a dilua) a company’s image for quality. or simply to utilize excess production capacity.e. This can be carried out in order to reach new customers. Yet.
reliability. etc. stores. kiosks. D dividing a market into distinct groups of buyers who have different requirements or buying habits E places where goods are sold to the public – shops. market stalls. Advertising. price. but profitable segment of a market 9. specialized. F possibilities of filling unsatisfied needs in sectors in which a company can profitably produce goods or services G someone who contacts existing and potential customers. which is tested with target consumers before the actual product is developed C attributes or characteristics of a product: quality. 1 distribution channel A all the companies or individuals involved in moving a particular good or service from the producer to the consumer B an idea for a new product. etc. Marketing.9 the set of beliefs that the public at large holds of an organization 10 a small. analysing and reporting data relevant to a specific marketing situation (such as a proposed new product) 2 to launch a product 3 market opportunities 4 market research 5 market segmentation 6 packaging 7 points of sale 8 product concept 105 . Promotion • Vocabulary Match up the words or expressions on the left with the definitions on the right. and tries to persuade them to buy goods or services H collecting.
a company has to decide what goods or service to offer. Market opportunities are generally isolated by market segmentation. Once a target market has been identified. The centrality of marketing Look quickly through the following text and decide which paragraphs are about these subjects: . on the contrary. As well as satisfying existing needs.9 product features 10 sales representative I to introduce a new product onto the market J wrappers and containers in which products are sold 21. personal computers. This means that much of the work of marketing has been done before the final product or service comes into existence. Marketers are consequently always looking for market opportunities – profitable possibilities of filling unsatisfied needs or creating new ones in areas in which the company is likely to enjoy a differential advantage. you make what will be bought.g. In other words. assumes that the producer’s task is to find wants and fill them. to choose some recent examples. you don’t sell what you make. in the production department of a manufacturing company as much as in the marketing department itself. The ‘selling concept’ assumes that resisting consumers have to be persuaded by vigorous hard-selling techniques to buy non-essential goods or services. The ‘marketing concept’. e. video games. were largely created rather than identified. The company must also take account of 106 . Products are sold rather than bought. due to its distinctive competencies (the things it does particularly well).company-to-company marketing .the selling and marketing concepts . and genetic engineering. The markets for the Walkman.identifying market opportunities .the importance of market research Most management and marketing writers now distinguish between selling and marketing.the marketing mix . It also means that the marketing concept has to be understood throughout the company. marketers can also anticipate and create new ones.
manufactured parts and components that go into consumer goods. and the amount of effort that a company can expend on them in order to influence the target market. promotion and price. since it contains all the raw materials. Promotion groups together advertising. consisting of all the individuals and organizations that acquire goods and services that are used in the production of other goods. They collect and analyze information about the size of a potential market. possible credit terms. most companies undertake market research (GB) or marketing research (US). who always have to be identified. all of which have to be marked. The best-known classification of these elements is the ‘4Ps’: product.e. e. supplies such as energy and pens and paper. sales promotion. i. the company has to think about the marketing mix. style.the existence of competitors. Once the basic offer. There is consequently more industrial than consumer marketing. It must be remembered that quite apart from consumer markets (in which people buy products for direct consumption) there exists an enormous producer or industrial or business market. monitored and defeated in the search for loyal customers. Aspects to be considered in marketing products include quality. locations of points of sale. or in the supply of services to others. packaging. has been established. and services ranging from cleaning to management consulting. brand name. Place in a marketing mix includes such factors as distribution channels. features (standard and optional). are another important source of information. all the various elements of a marketing program. plus capital equipment such as building and machines. inventory size. Rather than risk launching a product or service solely on the basis of intuition or guesswork. and personal selling. size. transport. Few consumers realize that the producer market is actually larger than the consumer market. It is the job of a product manager or a brand manager to look for ways to increase sales by changing the marketing mix. who also talk to customers. • Comprehension 107 .g. the length of the payment period. services and guarantee. etc. and so on. and so on. even though ordinary consumers are seldom exposed to it. their integration. a product concept. publicity. place. while price includes the basic list price. Sales representatives. discounts. about consumers’ reactions to particular product or service features.
virtually no providers of goods or services rely on this alone. write their own advertisements. and buy media space themselves. which occurs when people tell their friends about the benefits of products or services that they have purchased.. many organizations also use institutional or prestige advertising. It is also easier 108 ..Look at the following diagrams from Marketing Management by Philip Kotler. Yet. The best form of advertising is probably word-of-word advertising. they tend to use the services of large advertising agencies. and attempts to persuade them to buy them. which is designed to build up their reputation rather than to sell particular products. The most talented advertising people generally prefer to work for agencies rather then individual companies as this gives them the chance to work on a variety of advertising accounts (contracts to advertise products or services). (3) ……………. Fill in the four spaces with the following words or expressions: □ Coordinated marketing □ Market □ Customer needs □ Profits through customer satisfaction Starting point Factory Focus Products Means Ends Selling & promoting Profits through sales volume a. These are likely to have more resources. Although large companies could easily set up their own advertising departments. 1 The first diagram contrasts the selling and the marketing concepts. and more knowledge about all aspects of advertising and advertising media than a single company. Indeed. (2) …………… . The marketing concept 5 How companies advertise Advertising informs consumers about the existence and benefits of products and services. The selling concept (1) …………. (4) …………… b. but use paid advertising instead.
ads are often known as commercials. and develops a media plan specifying which media – newspapers. And once the most promising prospective customers have been reached.000). a neglija) the fact that increased ad spending or counter-cyclical advertising (reclamă anticiclică) can increase current sales. The timing of advertising campaigns depends on factors such as purchasing frequently and buyer turnover (new buyers entering the market). a statement of the objectives of the advertising campaign. How much to spend on advertising is always problematic. 109 . The client company generally gives the advertising agency an agreed budget. in different parts of a country before a final choice is made prior to a national campaign. Others set their ad budget at a certain percentage of current sales revenue. or begin to find them irritating. The choice of advertising media is generally strongly influenced by the comparative cost of reaching 1. – will be used and in which proportions. The agency creates advertisements (the word is often abbreviated to adverts or ads). an ever-smaller increase in sales in relation to increased advertising spending. (On television and radio. thereby avoiding advertising wars. The agency’s media planners have to decide what percentage of the target market they want to reach (how many people will be exposed to the ads) and the number of times they are likely to see them. the cost per thousand (often abbreviated to CPM. television stations. and an overall advertising strategy concerning the message to be communicated to the target customers. But both these methods disregard (a nu ţine seama. i. etc.000 members of the target audience. there are diminishing returns. On the other hand.) Agencies often produce alternative ads or commercials that are pre-tested in newspapers. excessive advertising is counter-productive (antiproductivă) because after too many exposures people tend to stop noticing ads.e. using the Roman numeral for 1. known as a brief. etc. posters. Some companies use the comparative-parity method (metoda comparativ-analogică) – they simply match their competitors’ spending. Advertising people talk about frequency or ‘OTS’ (opportunities to see) and the threshold effect (efectul de pronire) – the point at which advertising becomes effective. magazines. television. radio.for a dissatisfied company to give its account to another agency than it would be to fire its own advertising staff. mail. cinema.
6. when satisfied customers recommend products to their friends. 110 . A large reduction of advertising would decrease sales. 3. 5. Advertising often persuades people to buy things they don’t want. 2. 4. Advertising is essential for business. in order to reach the right customers 10 the fact that a certain amount of advertising is necessary to attract a prospective customer’s attention 11 choosing to spend the same amount on advertising as one’s competitors 12 advertising during periods or seasons when sales are normally relatively poor • Discussion Which of the following claims do you agree with? 1. Advertising often persuades people to buy things they don’t need.• Vocabulary Find the terms in the text which mean the following. 2 advertising that mentions a company’s name but not specific products 3 companies that handle advertising for clients 4 a contract with a company to produce its advertising 5 the amount of money a company plans to spend in developing its advertising and buying media time or space 6 the statement of objectives of an advertising campaign that a client works out with an advertising agency 7 the advertising of a particular product or service during a particular period of time 8 a defined set of customers whose needs a company plans to satisfy 9 the people who choose where to advertise. 1 free advertising. Advertising lowers the public’s taste. especially for launching new consumer products. Advertising raises prices.
in any (3)………. viewed or heard by a company’s customers or potential customers. . According to the well-known ‘Four Ps’ formulation of the marketing mix (product. its features. or personal selling – to use. Many 111 . and so on.e. Customers. The survey produced some unexpected results.700 senior business managers whether they agree with these statements. Since budgets are always limited. and so on) has to develop product or brand (2)………. Which of the following percentages do you think go with which of the statements above? 41% 49% 51% 57% 60% 72% 5 The four major promotional tools Insert the following words in the text below. the Harvard Business Review asked 2. aimed at assisting sales. Advertising has a bad influence on children. promotion and price). Advertising does not present a true picture of products. sales promotion. During the introduction and growth stages of the standard product life cycle. 8. place. this is clearly a matter of promotion. Advertising Maturity aimed awareness channel loyalty medium tactics target trial 85% 90% The basic idea behind the ‘marketing concept’ – that you make what you can sell rather than sell what you make – does not mean that your product will sell all by itself. attractivelypriced product that clearly satisfies a need has to be made known to its (1)………. marketers usually have to decide which tools – advertising. improving or protecting the image of a company or product. i. and in what proportion. In a well-known survey. its advantages. inform potential customers (and distributors.7. The most important element of PR is publicity which (as opposed to advertising) is any mention of company’s products that is not paid for. the producer (or importer. dealers and retailers) about the product’s existence. : read. Even a good. public relations. Public relations (often abbreviated to PR) is concerned with maintaining.
Reduced-price packs in supermarkets. they are an extremely important (10)………… of information. and so on.. As well as prospecting for customers. are temporary (4)……….. coupons. as a complement to (9)………. salespeople have another important function. which bring customers into the shop where they will also buy other goods. or at least. Free samples. or to encourage off-season buying. (combined with extensive advertising). They might equally be designed to strengthen brand (8)………. Stores also often reduce prices of specific item as loss leader. and assisting customers with possible technical problems. encouraging them to increase their activities in selling a particular product. not without an enormous cost. and. During this time. This may last many years.g. Of a new product. Sales promotions such as free samples. It has been calculated that the majority of new product ideas come from customers via sales representatives. to encourage them to stock new items or larger quantities. for example. dealer and retailers. Among retailers. or to gain entry to new markets. can be used to attract price-conscious brand-switchers. stage of the life cycle. spreading information about a company’s products and services. Sales promotions can also be aimed at the sales force. or the stocking of items related to an existing product. price reductions. at distributors. . Publicity can have a huge impact on public awareness that could not be achieved by advertising. e. to counter (a contracara) a promotion by a competitor. A lot of research has shown that people are more likely to read and believe publicity than advertising. also. But the majority of products available at any given time are of course in the (6)…………. may generate the initial (5)……….. until the product begins to be replaced by new ones and enters the decline stage. Personal selling is the most expensive promotional tool. selling these products and services. 112 . competitions. Sales promotions can also be (7)………. marketers can try out a number of promotional strategies and tactics. and is generally only used sparingly. for example. Since they are often the only person from a company that customers see. Designed to stimulate either earlier or stronger sales of a product. • Summarizing Complete the following sentences to summarize the text above.companies attempt to place stories or information in news media to attract attention to a product or service.
and why? 1 advertising – competitors – publicity – sales promotion 2 advertising agency – advertising campaign – media plan – word-ofmouth advertising 3 advertising manager – brand-switcher – marketing manager – sales rep 4 after-sales service – guarantee – optional features – points of sale 5 brand awareness – brand loyalty – brand name – brand preference 6 competitions – coupons – free samples – line-stretching 7 credit terms – discount – list price – packaging 8 decline – growth – introduction – product improvement 9 focus group interviews – internal research – media plan – questionnaire 10 packaging – place – product – promotion 113 .1 When a new product is launched. ….. 2 Promotion is one of the four …. sales promotions are one of the four different ……. the producer has to …. . 7 Apart from selling a company’s products. 4 The four stages of the standard product life cycle (excluding the prelaunched development stage) are ….. 3 The advantages of publicity include …. Which is the odd one out. • Discussion What kind of sales promotions are you receptive to? ■ coupons giving a price reduction? ■ free samples? ■ discounts for buying a large quantity? ■ price reductions in shops? ■ packets offering ‘20% Extra’? ■ competitions? • Vocabulary There is a logical connection among three of the four words in each of the following groups. 6 Sales promotions need not only be aimed at customers. 5 Reasons to offer temporary price reductions include …. sales representatives ….
One way to do this is to try to find ways to increase the size of the entire market. 2 ……………………………… Market leaders usually want to increase their market share even further. Market leaders. with the second-largest market share. one in the car. The market leader is frequently able to lead other firms in the introduction of new products. there is often also a distinct market challenger. and so on. or at least the first to have succeeded in it. In many markets. 4 …………………………. is seldom an advantage: competitors expand markets and find new uses and users for products. but perhaps one in each room. which present no threat to the leader. in the level or intensity of promotions. This is often the first company to have entered the field. Many market 114 . In most markets there is a definite market leader: the firm with the largest market share. the challenger actually advertises this fact: for many years Avis used the slogan ‘We’re number two. Contrary to a common belief. many households no longer have only one radio or cassette player. or having a monopoly. or to increase their market share by attacking various market followers. or at least to protect their current market share. The majority of companies in any industry are merely market followers. A market can also be expanded by stimulating more usage: for example.. 3 …………………………. challengers and followers Read the following text and write short headings for each paragraph. 1 ………………………………….10. plus a Walkman or two. We try harder. which enriches everyone in the field. Market structure and competition 24. wholly dominating a market. In the car hire business. but the market leader more than its competitors.’ Market challengers can either attempt to attack the leader.. in price changes.
Furthermore. in most established industries. they are vulnerable in a recession when. Takeovers. jeans. • Vocabulary Find words in the text which mean the following. 5 …………………………… A market follower. there is only room for two or three major companies: think of soft drinks. which does not establish its own niche is in a vulnerable position: if its product does not have a ‘unique selling proposition’ there is no reason for anyone to buy it. largely for psychological reasons. their narrow range of customers causes problematic fluctuations in turnover and profit. well-known suppliers. 1 a company’s sales expressed as a percentage of the total market 2 short-term tactics designed to stimulate stronger sales of a product 3 the situation in which there is only one seller of a product 4 companies offering similar goods or services to the same set of customers 5 a short and easily memorized phrase used in advertising 6 the division of a market into submarkets according to the needs or buying habits of different groups of potential customers 7 a small and specific market segment 8 a factor which makes you superior to competitors in a certain respect 9 a business’s total sales revenue 10 a period during which an economy is working below its potential 25. and so on. Although small companies are generally flexible. soap and washing powders. deosebit) advantage because of its specific competencies. distributors.followers concentrate on market segmentation: finding a profitable niche in the market that is not satisfied by other goods or services. 115 . In fact. mergers and buyouts • Vocabulary Match up these words with the definitions below. retailers and customers all prefer to buy from big. and that offers growth potential or gives the company a differential (distinctiv. and can quickly respond to market conditions. sports shoes.
buy badly116 . at a particular price during a particular period. so as to acquire a company 6 to merge with or take over other firms producing the same type of goods or services 7 joining with other firms in other stages of the production or sale of a product 8 a merger with or the acquisition of one’s suppliers 9 a merger with or the acquisition of one’s marketing outlets 10 combined production that is greater than the sum of the separate parts • Reading Leveraged buyouts One indication that the people who warn against takeovers might be right is the existence of leveraged buyouts. integrate or join together 4 buying another company’s shares on the stock exchange. Their assets were worth more than the companies’ market value. raiders (persoană agresivă. amalgamate. The individual companies might have been more efficient if liberated from central management. acaparatoare) were able to borrow money.Backward integration to diversify (diversification) synergy Forward integration horizontal integration to merge (a merger) to innovate (innovation) a raid a takeover bid vertical integration 1 designing new products and bringing them to the market 2 to expand into new fields 3 to unite. combine. Consequently. there were many large companies on the US stock market with good earnings but low stock prices. a big wave of takeovers in the US created conglomerates – collections of unrelated businesses combined into a single corporate structure. It later became clear that many of these conglomerates consisted of too many companies and not enough synergy. Such conglomerates were clearly not maximizing stockholder value. hoping to persuade enough other shareholders to sell to take control of the company 5 a public offer to a company’s shareholders to buy their shares. After the recession of the early 1980s. In the 1960s.
managed.) Raiders and their supporters argue that the permanent threat of takeovers is a challenge to company managers and directors to do their jobs better. we talk of a management buyout or MBO. acte penale). as the rate of default (rata neonorării plăţii) was lower than might be expected. profitabil). such as food and tobacco. as the debts incurred (datoriile făcute) were guaranteed by the companies’ assets.) Much of the money for LBOs was provided by the American investment bank Drexel Burnham Lambert. Takeovers using borrowed money are called ‘leveraged buyouts’ or ‘LBOs’. the permanent threat of a takeover or a buyout is clearly a disincentive (mijloc de intimidare) 117 . Leverage (raportul dintre creanţe şi capital) means having a large proportion of debt compared to equity capital. Asset-stripping – selling off the assets of poorly performing or under-valued companies – proved to be highly lucrative (avantajos. Conventional financial theory argues that stock markets are efficient. cut costs. (Millken was later arrested and charged (a fi acuzat) with 98 different felonies (crime. and then restructure them. buildings and pension funds. On the other hand. a unei persoane angajate în respectiva firmă). or companies with successful subsidiaries that could be sold to repay the principal. Theoretically. He created a huge and liquid market of up to 300 billion dollars for ‘junk bonds’ (obligaţiuni cu risc). it was highly inefficient in valuing assets. inefficient and under-priced corporations. or companies in fields that are not sensitive to a recession. Although the market could understand data concerning companies’ earnings. including land. there was little risk of making a loss with a buyout. where Michael Millken was able to convince investors that the high returns on debt issued by risky enterprises more than compensated for their riskiness. and increase shareholder value. and Drexel Burnham Lambert went bankrupt (a da faliment) in 1990. The threat of raids forces companies to put capital to productive use. split them up. Raiders in the 1980s discovered that this was quite simply untrue. Fat or lazy companies that fail to do this will be taken over by raiders who will use assets more efficiently. including a lot of insider dealing (operaţiuni ale unui iniţiat. The ideal targets for such buyouts were companies with huge cash reserves that enabled the buyer to pay the interest on the debt. and that well-run businesses that are not undervalues are at little risk. (Where a company is bought by its existing managers. meaning that all relevant information about companies is built into their share prices. and resell them at a profit.
on a wide scale. Workers in these companies are considered to be at least as important as shareholders. German and Japanese managers and financiers. life insurance schemes. and gave money to charities (acte filantropice). churches. many large American corporations began. unemployment compensation funds. where business tends to concentrate on long-term goals rather than seek instant stock market profits. The idea of a Japanese manager restructuring a company. Neil J. is unthinkable. was that large corporations had a legitimacy 118 . Hostile takeovers and buyouts are almost unknown in these two countries. 1 The fact that many large conglomerates’ assets were worth more than their stock market valuation demonstrated that … 2 Raiders bought conglomerates in order to … 3 Raiders showed that the stock market did not … 4 Raiders were particularly interested in … 5 Investors were prepared to lend money to finance LBOs because … 6 Raiders argue that the possibility of a buyout … 26. and getting a huge pay rise (as frequently happens in Britain and the US). to establish pension funds. provided medical and legal services. as a company will lose its investment if a raider tries to break it up as soon as its share price falls below expectations. and high wages. most of which clearly did not bring immediate cash benefits. seem to be largely an American phenomenon. limitations on working hours. Profits and social responsibility In the 1920s. Since this is fairly surprising behavior for business corporations. Lay-offs in Japan are instead a cause for shame for which managers are expected to apologize. laying off (a concedia temporar) a large number of workers.to long-term capital investment. which summarize the text above. employee stock ownership. LBOs. for example. • Summarizing Complete the following sentences. seem to consider companies as places where people work. rather than as assets to be bought and sold. Mitchell argues that the reason for many of these actions. They built houses. In the Generous Corporations. however. schools and libraries. there must be a good explanation.
in John Kenneth Galbraith’s book. or workers from ethnic minorities suffering from discrimination. and the local community. pure free market theorists disapprove of welfare capitalism. Rational capitalists starting with Henry Ford. According to his approach. In a newspaper article titled ‘The social responsibility of business is to increase its profits’. Of course. He has direct responsibility to his employers. Consequently large corporations introduced ‘welfare capitalism’ (capitalism social) as a way of creating favorable public opinion. and that a better educated work force would be a more efficient one. and all actions inspired by ‘social responsibility’ rather than the attempt to maximize profits. These will include suppliers. That responsibility is to conduct the business in accordance with their desires. and for threatening the survival not only of individual corporations but also the general vitality of capitalism. Thus executives should not make expenditures on reducing pollution beyond the amount that is required by law or that is the best interest of the firm. as well as the stockholders.problem. Nor should they deliberately hire less-qualified. The existence of large corporations showed the classical economic theory of perfect competition to be inadequate. for example. which generally will be to make as much money as possible. customers. a corporate executive is an employee of the owners of the business. employees. private-property system. and would be able to buy more goods and services. long-term unemployed workers. An alternative view to the stockholder model exemplified by Friedman’s article is the stakeholder (cei care deţin un interes) model. A 119 . outlined. while of course confirming to the basic rules of the society. Since the benefits of such initiatives are not confined to (a se limita la) those who bear the costs. Friedman does not consider the possibility that stockholders might prefer to receive lower dividends but live in a society with less pollution or less unemployment and fewer social problems. business managers have responsibilities to all the groups of people with a stake in or an interest in or a claim on the firm. To do so is to be guilty of spending the stockholders’ (or the customers’ or the employees’) money. he argued that: In a free enterprise. also realized that a better paid work force would be more loyal. both those embodied in law and those embodied in ethical custom. The New Industrial State. Milton Friedman has criticized them for being unbusinesslike.
customers. Money and Finance 27. energy. form a business. Money is anything that is generally accepted as payment for goods and 120 . etc. and so on 4 a condition of general well-being (and government spending designed to achieve this) 5 menacing. Money makes the world go round. but what’s it? It’s a store of value or a measure of wealth. or close down a factory employing several hundred people in a small town with no other significant employers. • Vocabulary Find words or expressions in the text which mean the following. pollute the area around its factories. health. it rustles in your wallet and it clinks in your piggy-bank. Proponents of the stakeholder approach suggest that suppliers. and relocate production elsewhere in order to make small financial savings.firm which is managed for the benefit of all its stakeholders. people who argue in favour of something 11. according to law or public opinion 3 the situation when there are a large number of sellers and buyers. employees. 1 institutions or organizations that provide help for people in need 2 acceptability. will not. for example. endangering 6 liveliness. strength 7 an economic system in which anyone can attempt to raise capital.) 9 expressed. and offer goods or services 8 complying with or following (rules. A history of money – what makes the world go round Money – it jingles in your pocket. freedom to enter and leave markets. given a material form 10 supporters. a complete flow of information. and members of the local community should be strongly represented on a company’s board of directors.
silver and copper. are all the chickens of the same size? If I’ve only got five chickens.services. over the centuries. But. in particular gold. cigarettes may become a medium of exchange – but they’re easy to break and quickly dry up. over the course of history. This is a wide definition and. people would swap (schimba) goods and services in a process known as bartering – “I’ll swap you ten chickens for your goat”. Jingle = a zornăi Rustle = a foşni Clink = a zăngăni Piggy-bank = puşculiţă Cowrie = scoică. Four Essential Qualities For money to be practical and efficient it should possess these qualities: Durability – in prison. it doesn’t really matter what shape or size the money takes. This kind of exchange does not really encourage trade. as all sorts of problems arise. of course. ghioc Beads = mărgele. Bartering (troc) Before metal money become the usual means of exchange. cowrie shells in ancient China. can I buy half a cow? Obviously. huge stone discs on a South Pacific Island or beads (Wampum) for the North American Indians. money has predominantly been associated with metals. in other words. 121 . as long as everyone recognises it and accepts it in payment. money has appeared in all shapes and sizes. they don’t last. mătănii Wampum = colier de scoici From Chickens to Plastic At the end of the day. precious metals are a practical alternative to payment in kind (în natură).
then tobacco. Their coins were of equal weight and therefore of equal value. Stamping a design onto the coins is called “minting”. To get round this problem. The practice was frowned upon and eventually 122 . but if money isn’t easy to carry. The first paper money issue was by the Massachusetts Bay Colony in 1690. simplifying trade. rice and whisky or brandy – not exactly the most practical solution. Mint = a bate monedă Debase = a devaloriza Debasement = devalorizare Clipped = retezat. scurtat Shaved = redus Paper Money Bank notes were first introduced by the Chinese in the 10 th century. the Colonists often found themselves short of coinage. The English colonies in North America made important strides in the use of bank notes. Coins however. with the economic pressure of the Punic wars. Alexander the Great introduced the practice of stamping a picture of the sovereign’s head on the coins. for example.Portability – in some parts of Africa your wealth is measured in cattle. For various political and economic reasons. The Romans. they used first wampum. began a long process of debasement. They were later used by governments in dire financial straits (în dificultăţi mari financiare) – caused by things like having to finance a war. This is fine if you’re trading locally. an idea that was soon copied. otherwise it won’t inspire confidence. were not always as valuable as they seemed – they were often clipped or shaved by unscrupulous individuals or debased by the state. so that the intrinsic value of the coin was far lower than the marked face value. Coins We first read of coins in the Kingdom of Lydia in the 7th century BC. mixing more and more copper in with the silver. how can trade develop? Divisibility – small units make life much easier – imagine trying to buy a hot dog in New York if the $100 bill was the lowest unit of currency! Intrinsic value – money should have some worth in itself.
Strides = progrese. a scoate în afara legii Frown upon = a nu fi de acord cu ceva Redeem = a compensa. paşi Short of coinage = lipsă de monezi Ban = a interzice.banned by the mother country. Research into the cards of the future continues. If only earning the damn stuff was so easy! MONEY TALK – the language of cash Money is so central to our lives that it has spawned (a prolifera) a wealth of specific terminology. governments are elected on the strength of how they plan to manage it. during the 19th century. but the inventive money-making instincts of the new United States of America meant that. most of the money used was in the form of paper dollars. At first. The first fully printed note in England was issued in 1855 – until that time the cashier had to write the name of the payee and sign each note individually. empires rise and fall because of it. cash to be used across the Internet – you’ll be able to spend money from the comfort of your armchair. răscumpăra Plastic money Nowadays many transactions are carried out with “plastic money” such as credit cards. The Root of All Evil 123 . Britain left the gold standard in 1931 and thus the notes are no longer backed by gold. Great thinkers in all ages have had something to say about it. The newest are called “smart cards” and carry small silicon chips that can record every transaction on the card. but the latest development is e-cash. idioms and sayings. bank notes were redeemable for gold – on Bank of England notes you will see written “I promise to pay the bearer on demand the sum of…” If you took a ten-pound note to the Bank they used to have to give you ten pounds in gold coin.
in which case you’re as poor as a church mouse! If. or stinking rich or rolling in it – perhaps you had some good business ideas and put your money where your mouth is or cashed in on a golden business opportunity and managed to get rich quick. so don’t live beyond your means! If you do go ahead and buy that jacket. and you would be the first to remind them that a fool and his money are soon parted. money burns a hole in their pocket. now that you know its power. such as bread. in other words. you’ve got plenty of money then you’re filthy rich. (în slang: lovele. or even flat broke. Of course your attitude to money depends.Money is so important to us – people even say it makes the world go round – that it has acquired many nicknames. You may like it so much you insist that money’s no object – but don’t forget: money doesn’t grow on trees. mazuma. Small amounts of it are chickenfeed or peanuts. biştari. 124 . or. In this case. your friends will tell you that you might as well flush it (the money) down the toilet. You may be experiencing a liquidity problem or a cashflow problem at the moment. on the other hand. rhino. you look after the pennies. on the other hand. I see. buy the cheapo version: you can bet your bottom dollar that nobody will be able to tell the difference. dinero. I’m afraid. You’ve got money to burn. you don’t have a red cent and you haven’t got a bean. spondulicks. gravy. Perhaps you don’t have a dollar to your name. you like the look of that new jacket – it’ll cost you an arm and a leg. you’ll have to pay through the nose for it. If. in the US you’d be called a tightwad (calic. on how well off you are. dosh. So. parale. lucre or simply the necessary. to a certain extend. you’re strapped for cash. You might reply that money doesn’t grow on trees – but then others might say that you can’t take it with you (when you die) and so they spend money as if it were going out of fashion. you believe what people say – money talks! In spite of this. dough. avar). so now you’re laughing all the way to the bank. if you can’t afford it. you’re earning megabucks and. câştig) So what are you thinking about now? A penny for your thoughts! Oh. to put it another way. you might be so careful with money that people think you’re mean or stingy (zgârcit). broke. then the pounds will look after themselves. Perhaps they’ll call you a miser behind your back. bani.
If you work more than your normal hours. If you pay money for your retirement then your company runs a pension scheme. sooner rather then later. This is in lieu of money. They may be for tax and also.The profits of labor Roman soldiers were given part of their pay in salt. you may get a bonus. National Insurance. so it doesn’t lose out either. your employees may call you a fat cat. or a paypacket in the UK. in the US these deductions are known as deducks or ducks. that is it is deducted at source. All the expenses the company incurs on your behalf are also tax deductible for the company. in the UK. when you started to work for the company you were given a golden hello and. If you’re one of the bosses of a newly-privatised monopoly. then you receive wages on payday. regardless of the company’s performance. Perhaps you’re the kind of boss that never stops complaining about your employees. If you receive your pay every week. and means that you have a high standard of living without having to declare hundreds of thousands of pounds at the end of the tax year. then you’re paid overtime. you may decide to take your company pension in a lump sum – and finally you can go on that world cruise! 125 . as it was so valuable – at least that’s the excuse the Senate gave! At the time it was called their salario. and it is for this reason that we still use the word salary to describe the regular monthly payment made to employees – especially white-collars workers. for the lucky few who can choose early retirement. you will be given a golden handshake when you leave. When the time comes to retire. which means that your takehome pay may be a lot less than you expected! Those who are unlucky enough not to have a job will be on the dole – receiving unemployment benefit in the UK or on welfare in the US. house and even private education for your children. You may find that some of your money is taken from you before you even see it. and part of your pay may take the form of share options. If your company has been doing well. in the form of a paycheck in the US. if so remember: if you pay peanuts you get monkeys! You and your fellow top-managers are likely to enjoy a range of fringe benefits or perks – like a free car.
you should look at the Annual Percentage Rate which takes into account the various charges which will be included in your repayments. then you may end up being unable to make the repayments. or by using the facilities offered by a credit card. If you’re buying a house. defaulting on the repayments will probably lead to a visit from the dreaded repo (repossesssion) man. Your debt may be sold to a debt collector or you may receive a visit from the bailiffs in the UK. If you’re being gouged in this way. The simplest way to borrow is with an overdraft. For any loan. Modern counterfeit notes can be extremely difficult to spot and new 126 . tras pe sfoară Bailiff = inspector Dreaded = de temut Forgery With the invention of money came forgery. Borrowing from a loan shark can involve exorbitant interest rates. then you’ll want a mortgage. plată unică Borrowing Many of us go to the bank at some point to ask for a loan – it is often said that a bank manager is someone who lends you an umbrella when the sun is shining and who asks for it back when it starts to rain.White-collars workers = funcţionari On the dole = ajutor de şomaj. If you’ve been buying something in instalments or on a hire purchase (HP) scheme. a crea Lump sum = sumă globală / unică. but to borrow large sums you’ll probably negotiate a loan with your bank. Gouged = escrocat. subvenţie de la stat On welfare = ajutor social Share options = Fringe benefit / perks = beneficiu suplimentar In lieu of money = în loc de bani Incur = a face. you can either borrow a fixed amount or agree a credit limit. If the bank refuses to lend you money. you might resort to borrowing from a finance company or even the local loan shark to pay off your IOUs (I Owe You).
The thread: all genuine notes have a thread embedded in the paper. you might say that you have to watch every dime. you might justify the expense by telling people that you’ve got enough saved up. The watermark: you shouldn’t be able to notice it until you hold the note up to the light. your money or your pennies. a distinge Counterfeit notes = bancnote contrafăcute Forgers = falsificatori Crisp = fragil Embedded = introdus IDIOMS Hard Times If you’ve fallen on hard times. on the other hand. a şterpeli 127 . If. that you’ve been saving for a rainy day or that you’re lucky enough to have a nest egg that you’ve finally decided to use. Perhaps your bank account is in the red. Almost certainly you will have to cut the frills (unneccessary expenditure).developments in the production of notes are soon copied by the forgers. well-defined lines. trim (reduce) the budget and go back to basics. budgeting your money. If an unexpected expense comes up that you have to meet. Recent notes have a “windowed” thread which does not appear as a continuous line until the note is held up to the light. In the States. tightening your belt and saving your pennies. you splash out on something extravagant. or scrounge the money somehow. Spot = a identifica. so you decide to control your spending and keep track of your expenses more closely. clear colours and sharp. Quality of printing: pure. Here’s a quick guide to recognizing a counterfeit Bank of England note: The feel of the paper: it should be crisp and slightly rough in the heavily printed areas. This will certainly involve cutting down on expenses in general. lucruri care nu sunt necesare Scrounge = a şaprli. you might decide to dip into your savings. Frills = fasoane. you might tell people that you need to watch your spending. then you can see a picture of the Queen.
Tax accounting E inspection and evaluation of accounts by a second set of accountants – audit 6. Bookkeeping A calculating an individual’s or a company’s liability for tax – 2. ‘creative accounting’ G working out the unit cost of products. recording income and expenditure. Managerial accounting C keeping financial records. Match up these words with the definitions below 1. Accounting and financial statements • Vocabulary a. Accounting B writing down the details of transactions (debits and credits) 3. including materials. Match up the terms on the left with the definitions on the right. Depreciation B all the money received by a company during a given period 128 . and so on 4. Cost accounting D preparing budgets and other financial reports necessary for management 5. 1. labour and all other expenses b. Assets A a company’s owners 2. valuing assets and liabilities.Splash out = a se arunca 29. Auditing F using all available accounting procedures and tricks to disguise the true financial position of a company 7.
Liabilities C all the money that a company will have to pay to someone else in the future. which records (1) ………… at their original purchase price. Stock (GB) inventory (US) J the various expenses of operating a business that cannot be charged to any one product. process or department • Reading Insert the words in vocabulary b) in the gaps in the text below. including taxes. work in progress. Consequently. and interest and mortgage payments 4. Overheads (GB) overhead (US) G sums of money owed by customers for goods or services purchased on credit 8. Creditors (GB) accounts payable (US) E anything owned by a business (cash investments. In times of inflation. this understates the value of appreciating assets such as land. as they are not for sale. Turnover D the amount of business done by a company over a year 5.e. which means that the current market value of its assets is irrelevant. machines. but overstates profits as it does not record the 129 . Shareholders (GB) stockholders (US) I (the value of) raw materials. that it will continue indefinitely into the future. minus accumulated depreciation charges. Accounting and financial statements In accounting it is always assumed that a business is a ‘going concern’. i.3. Debtors (GB) accounts receivable (US) F the reduction in value of a fixed asset during the years it is in use (charged against profits) 7. the most common accounting system is historical cost accounting. and so on) that can be used to produce goods or pay liabilities 6. buildings. and finished products stored ready for sale 10. debt. Revenue or earnings or income H sums of money owed to suppliers for purchases made on credit 9.
A business’s assets include (9) ……… as it is assumed that these will be paid. Part of the profit goes to the government in taxation. part is usually distributed to shareholders (stockholders) as dividend.. are usually enclosed in brackets.e. share premium (GB) or paid-in surplus (US) (any money realised by selling shares at above their nominal value). which values assets (and related expenses like depreciation) at the price that would have to be paid to replace them (or to buy a more modern equivalent) today.replacement cost of plant or (2) ……… . Sources of funds include 130 . It lists the company’s assets. It usually gives figures for total sales or (6) ………. The profit and loss account (GB) or income statement (US) shows (5) ………. and part is retained by the company. and the company’s reserves. This can be rewritten as Assets – Liabilities = Owners’ Equity or Net Assets. Companies generally include three financial statements in their annual reports. the basic accounting equation is Assets = Liabilities + Owner’s (or Shares’) Equity. In accordance with the principle of double-entry bookkeeping (that all transactions are entered as credit in one account and as debit in another). such as creditors. Negative items on financial statements. its (8) ………… .e. The value of a business’s assets under historical cost accounting – purchase price minus (3) ……. because net assets do not record items such as goodwill. taxation. generally the last day of the financial year. This shows the flow of cash in and out of the business between balance sheet dates. This includes share capital (money received from the issue of shares). Company law specifies that (4) ………. Shareholders’ equity or net assets are generally less than a company’s market capitalisation (the total value of its shares at any given moment. The balance sheet shows a company’s financial situation on a particular date. the number of shares times their market price). The third financial statement has various names including the source and application of funds statement. there should be a profit.. Countries with persistently high inflation often prefer to use current cost or replacement cost accounting. as these will have to be paid. and the statement of changes in financial position. The first figure should obviously be higher than the second. Must be given certain financial information. Liabilities include (10) ……… . including the year’s retained profits. and dividends paid. i. and expenditure. And costs and (7) ……… . i. and shareholders’ (stockholders) funds. – is known as its net book value.
decide where the following headings should appear: Called-up share capital cash in hand and at bank Corporation tax debtors depreciation turnover Freehold properties historical cost net assets overheads The Arsenal Football Club PLC Profit and Loss Account for the Year Ended 31st May 1994 1994 ₤ [1 ……………………. vad Source and application of funds statement / the statement of changes in financial position – situaţia surselor şi a aplicării fondurilor / situaţia schimbărilor din situaţia financiară • Vocabulary There are ten gaps in the two statements which follow. and – in a bad year – trading losses. According to the information in the previous text. Applications of funds include purchases of fixed or financial assets.471. depreciation provisions.trading profits. sales of assets.689 21. payment of dividends. The profit and loss account (GB) or income statement (US) – calculul rezultatelor.680 . al pierderilor şi a profitului The balance sheet – bilanţul contabil Net Assets – activul net Share capital – capitalul acţinilor Share premium (GB) or paid-in surplus (US) – primă suplimentară din acţiuni Company’s reserves – rezervele firmei The year’s retained profits – profitul păstrat dintr-un an Goodwill – clientela.341. fondurile comerciale. and the issuing of shares. repayment of loans. borrowing.] (income from football and related 131 1993 ₤ 15.
607.491) .519.538) 6.588) 5.991.982.129 2.355 (1.]. other income includes Interest Receivable) Profit on Ordinary Activities before Transfer Fees Transfer fees payable Profit on Ordinary Activities before Taxation Taxation Profit after Taxation Retained for The Financial Year (14. less other income (costs include salaries.]. broadcasting. and motor vehicles.088 (9. [3 …………………].478.151 (54.592 7.482.737) (12.457) (8. ground advertisements. and [7 …………….034. auditors’ remuneration.226) 4.943 (889.259) 2.951. (including [6 ………….732.863.892 Arsenal Football Club PLC – Balance Sheet 31st May 1994 1994 ₤ 28. and lease payments.] Creditors Amounts falling due within one year (including [8 …………….931 Fixed Assets (including [4 ………………. leasehold properties.922 1993 ₤ 18.630.] and social security) 132 9. all recorded at [5 ……………] minus depreciation) Current Assets Stocks. plant and equipment.000) 1.804. prize money) Costs and [2 ………………………]. Instalments on executive boxes).892 (750.596.537.activities: gate receipts.755.
decide which paragraph could be given the following headings.201 846.428 56.000 237.557 6.295. defined in terms of gold and the US dollar.000 5.557 56.223.227 6. overvalued 133 .893.] Capital and Reserves [10 ………………………] Share premium account Building reserve Profit and loss account (year’s profit added to previous balance) Shareholders’ Funds 28. the Treasury had to exchange the note for 1/35th of an ounce of gold.923.100) 10.201 846. stabilizat după) the US dollar.329.190.295..500) (11.156. Floating exchange rates Intervention and managed floating exchange rates Supporters of fixed and floating rates The abolition of exchange controls The period of gold convertibility The power of speculators and the collapse of the EMS Why many business people would prefer a single currency The Bretton Woods agreement of 1944 established fixed exchange rates. i.428 30.528 (17. Exchange rates While reading the text. many currencies were pegged against (fixat.329. a US dollar was a promissory note issued by the United States Treasury. In this period. Between 1944 and 1971.057 18. If anybody requested it.000 237.Total Assets less Current Liabilities Long Term Liabilities Amounts falling due after more than One year (including debenture Subscriptions) [9 ……………………….e. Under this system.218. their parties with the US dollar were fixed.000 9.356 10.
and the fact that companies and investors frequently follow short-term money market trends even if these are contrary to their own long-term interests. such as Milton Friedman. the Federal Reserve did not have enough gold to guarantee the American currency. with its ERM (Exchange Rate Mechanism). because following inflation. Banks make a profit from the spread (marjă) between a currency’s buying and selling prices. they underestimated the impact of speculation. The Bretton Woods system of gold convertibility and pegging against the dollar was abandoned in 1971. and abolished all exchange controls. (Today. most Western European governments joined the EMS (European Monetary System). Yet. Few governments. the American. chasing high interest rates or capital gains. the US dollar – the unofficial world currency – is merely a piece of paper on which is written ‘In God We Trust. which would reflect economic realities more precisely than calculations by central bank officials. In London alone. however. over $300 billion worth of currency is traded on an average day – the equivalent of about 30% of the value of the goods Britain procedures each year. exchange rates should reflect purchasing power parity – the cost of a given selection of goods and services in different countries. Proponents of floating exchange rates. as investors – including rich individuals. in the absence of speculation. Enormous amounts of money move round the world. Such adjustments are called devaluations and revaluations. Managed (or dirty) floating exchange rates are more common than freely floating ones. In 1979. Most of them attempt to influence the level of their currency when necessary. In the late 1970s and early 1980s.or undervalued currencies could only be adjusted with the agreement of the International Monetary Fund. Gold convertibility was replaced by a system of floating exchange rates. This 134 . British and other governments deregulated their financial systems. This has led to the current situation in which 95% of the world’s currency transactions are unrelated to transactions in goods but are purely speculative. not gold!) a freely (or clean) floating exchange rate is determined purely by supply and demand. companies and pension funds – seek to maximize the value of their assets. Residents in these countries are now able to exchange any amount of their currency for any other convertible currency. Theoretically.’ God. leave exchange rates wholly at the mercy of market forces. argued that currencies would automatically establish stable exchange rates.
(Since exchange controls were abolished.) Other supporters of fixed exchange rates or a single currency include extreme conservatives who want to return to something like the gold standard. Although it is possible to some extend to hedge against (a se asigura împotriva) currency fluctuations by way of futures contracts. In August 1993. currencies including the US$ and the pound sterling have in turn appreciated by up to 100% and then depreciated by more than 50% against the currencies of major trading partners. For example.established parties between member currencies. as everyone except the British Government believed that ever since it joined the ERM in 1990. buying or selling in order to increase or decrease the value of their currency. or a single currency. For weeks. as well as people on the left who believe that speculators have too much power. When the British central bank ran out of reserves and could no longer buy pounds. the European Monetary System was more or less suspended. If the rate diverged by more than this amount from the central parity. on a single day in September 1992 the Bank of England lost five billion pounds in a hopeless attempt to support the pound sterling. Yet. Supporters of flexible rates include monetarists who want countries to follow strict monetary rules. These are both rather surprising alliances. the Danish krone and the Spanish peseta. as well as Keynesians who want to be free to devalue in the attempt to reduce unemployment. Many manufacturers are in favour of fixed exchange rates. speculators attacked the French franc. and a margin of plus or minus 2 ¼ %. The next year. forward planning is difficult when the price of raw materials bought from abroad. government policy can easily be defeated by the combined action of international speculators. instantly losing about 15% of its value against the D-mark. which put into doubt the planned timetable for the introduction of a Single European Currency. all the world’s financial institutions and rich individuals had been selling their pounds. 135 . governments and central banks had to intervene in exchange markets. or the price of your products in export markets. can rise or fall by 50% in only a few months. the Belgian franc. the currency was withdrawn from the ERM and allowed to float. the pound had been seriously overvalued.
5 Central banks sometimes attempt to decrease the value of their currency. 3 Only a pegged currency can be devalued or revalued. Speculators buy or sell currencies in order to D. 6. 4 A floating currency can either appreciate or be devalued.• Comprehension Are the following statements True or False? 1 Gold convertibility was abandoned because there was too much gold. to hedge is to try to avoid risks. fix its value in relation to it. Which six of these verbs are defined below? 136 . 6 The EMS was designed to stabilize exchange rates. To ‘peg’ a currency against something means to A. ‘Market forces’ means E. 3. Match up the half-sentences below. 4. make a profit by making capital gains or by investing at higher interest rates. 1. • Vocabulary 1. 7 To speculate is to take risks. 2. A clean floating exchange rate B. the determination of price by supply and demand (the quantity available and the quantity bought and sold). trying to insure against unfavourable price movements by way of futures contract. 5. is determined by supply and demand. 2. Exchange controls used to limit C. ‘Hedging’ means F. currencies can depreciate 100% in a short time. 2 It is now impossible to exchange dollars for gold. 8 Under the system of floating exchange rates. the amount of a country’s money that residents were able to change into foreign currencies.
check their balance.Abolish Establish adjust appreciate fluctuate peg convert suspend diverge revalue 1 to make changes to something 2 to change something into something else 3 to end something permanently 4 to end something temporarily 5 to go up or down (in quantity. Cash card cash dispenser credit card home banking Loan mortgage overdraft standing order Current account (GB) or checking account (US) Deposit account (GB) or time or notice account (US) 1 an arrangement by which a customer can withdraw more from a bank account than has been deposited in it. who pays back the bank or finance company at a later date 3 a computerized machine that allows bank customers to withdraw money. and usually for a specific purpose 137 . interest on the debt is calculated daily 2 a card which guarantees payment for goods and services purchased by the cardholder. value. etc. up to an agreed limit. Banking and taxation • Vocabulary Match up these terms with the definitions below. and so on 4 a fixed sum of money on which interest is paid.) 6 to move away from what is considered normal 12. lent for a fixed period.
usually to buy property. which serves as a security for the loan 7 a plastic card issued to bank customers for use in cash dispensers 8 doing banking transactions by telephone or from one’s own personal computer. or to settle debts). but allows the holder to withdraw his or her cash without any restrictions 10 one that pays interest.. lend money. They make a profit from the difference (known as a spread or a margin) between the interest rates they pay to lenders or depositors and those they charge to borrowers. linked to the bank via a network 9 one that generally pays little or no interest. and in this way transferred to another bank account – often by way of a bank transfer or a cheque (check) rather than the use of notes or coins – from where it can be lent to another borrower. When lending money. from their deposits. and issue government bonds. but they can only act as 138 . but usually cannot be used for paying cheques (GB) or checks (US). Investment banks in the USA are similar. offer investment advice. They also generally offer stockbroking and portfolio management services to rich corporate and individual clients. Commercial or retail banks are businesses that trade in money. and so on. because the money they lend. and between liquidity and different maturities. and on which notice is often required to withdraw money 31. They receive and hold deposits. Types of banks Read the text below and write short headings (one or two words) for each paragraph 5 ……………………………. pay money according to customers’ instructions. Banks also create credit. issue and underwrite securities. is generally spent (either on goods or services. and so on.5 an instruction to a bank to pay fixed sums of money to certain people or organizations at stated times 6 a loan. deal with takeovers and mergers. exchange foreign currencies. 5 …………………………… Merchant bank in Britain raise funds for industry on the various financial markets. finance international trade. bankers have to find a balance between yield and risk.
In some European countries (notably Germany. Investment banks make their profits from the fees and commissions they charge for their services. DM in Japan).g. 5 ……………………………. including the oil-exporting countries’ ‘petrodollars’. Banks lend to blue chip borrowers (very safe large companies) at the base rate or the prime rate. stockbrokers.. This is the discount rate. known as collateral. Borrowers can usually get a lower interest rate if the loan is secured or guaranteed by some kind of asset. Since the US$ is the world’s most important trading currency – and because the US has for many years had a huge trade deficit – there is a market of many billions of Eurodollars. Yet. The first significant Eurocurrency market was for US dollars in Europe. banks are not obliged to deposit any of their Eurocurrency assets at 0% interest with the central bank. which means that they can usually offer better rates to borrowers and depositors than in the home country. Deregulation in the USA and Britain is leading to the creation of ‘financial supermarkets’: conglomerates combining the services previously offered by banks. Although a central bank can determine the minimum lending rate for its national currency it has no control over foreign currencies. In the USA. 5 …………………………… In most financial centres. 139 . 5 ……………………………… A country’s minimum interest rate is usually fixed by the central bank. at which the central bank makes secured loans to commercial banks.intermediaries offering advisory services. all other borrowers pay more. and so on. insurance companies. the distinction between commercial and investment banking has become less clear in recent years. largely doing Eurocurrency business. or creditworthiness): the lender’s estimation of their present and future solvency. and do not offer loans themselves. there are also branches of lots of foreign banks. Austria and Switzerland) there have always been universal banks combining deposit and loan banking with share and bond dealing and investment services. the Glass-Steagall Act of 1934 enforced a strict separation between commercial banks and investment banks or stockbroking firms. yen in the US. depending on their credit standing (or credit rating. but the name is now used for foreign currencies held anywhere in the world (e. Furthermore. A Eurocurrency is any currency held outside its country of origin.
expressed as percentage 4 available cash.The text contains a number of common verb-noun partnerships (e.g. 1 to place money in a bank. operating in different fields. or money placed in a bank 2 the money used in countries other than one’s own 3 how much money a loan pays. to lend money.Commercial / retail bank – bancă comerciale / bancă de depozit Merchant bank / Investment bank – bancă comercială / de investiţii • Vocabulary a. Match up the verbs and nouns below to make common collocations. that have joined together 13 a company considered to be without risk 14 ability to pay liabilities when they become due 15 anything that acts as a security or a guarantee for a loan b. and how easily other assets can be turned into cash 5 the date when a loan becomes repayable 6 to guarantee to buy all the new shares that a company issues. to finance international trade). Charge Do Exchange Issue Make Offer Pay Raise Receive advice bonds business currencies deposits funds interest loans profits 140 . if they cannot be sold to the public 7 when a company buys or acquires another one 8 when a company combines with another one 9 buying and selling stocks or shares for clients 10 taking care of all a client’s investments 11 the ending or relaxing of legal restrictions 12 a group of companies. Find the words or expressions in the text which mean the following.
Bank Clerk – This is quite all right. You can have them cashed at any of our branches. my salary could be paid in at the end of the month. Will this be the only place where I can cash a cheque? Bank Clerk – Oh. Mr. sir. You see. no. So. X – How long will take to open an account? Bank Clerk – Doesn’t take long. your cheque-book will be ready for you on Tuesday. Let me see… Today is Thursday. X – There may be a problem. sir. Mr. I’m a foreign resident. But I don’t want to have to give notice before I can withdraw money. Bank Clerk – It’s obviously a current account you need. But we shall send one out after each transaction if you want us to. sir.Underwrite security issues 32. Do you want to open a current account or a deposit account? Mr. X – Fine. Mr. if you can complete this form today. Bank Clerk – No doubt. X – Good. sir. Bank Clerk – Very well. X – Well. Quite a large number of our clients are foreigners. I’m going to stay and work here for a while. once a month. Here is a form you’ll have to fill in. And what about statements of account? How frequently does one get them? Bank Clerk – Normally. sir. X – I would like to open an account with you. 141 . Mr. Opening an account and means of payment At the Bank – Opening an account Mr. X – There are two questions I’d like to ask. Mr. and I’d like my salary to be paid into my account.
Before the clerk gives you any money. please. Can you change a ten-pound note. she/he will ask: How would you like that? Any preference? Large or small bills (US) notes (UK)? 142 . If you have an account there: I’d like to make a deposit. The cash dispenser won’t give me my card back. I’d like to withdraw some money from my account. please.General Information: When do/are you open? How late do you stay open? When do you close? What are your opening hours? In the US: Does this bank have an ATM (Automatic Teller Machine – bancomat) In the UK: Do you have a cash point/dispenser? The ATM ate/kept my card. Please step down (US). please? I’d like ten dollars’ worth of quarters. If you want to use bank services you may have to queue (UK) or stand in line (US) and wait for the next available teller (US) – or clerk (UK): When their desk is free. If you want to withdraw some money from abroad: I’d like to transfer some money from an overseas bank account. a light will come on: Next. please. I’d like to make a withdrawal. I need a roll of quarters. I’m open over/down here. Queue / stand in line = a sta la coadă Teller / clerk = funcţionar la ghişeu You can then tell him or her what you want: I want/need/would like to cash a check. I’d like to cash these travelers checks.
please. please.5 marks to the dollar. Just tens and twenties. Perhaps you’re withdrawing money with a credit card: Enter your PIN number. May I see some identification? Do you have a bank card with you? I’d like the name and address of your bank. if you’re cashing a check: Could you endorse this (sign it on the back). I’m afraid the rate has gone up today. please? And the reply: The exchange rate is 1. please. Or. No small bills/notes. If you want to transfer some money. If you have foreign currency: Do you handle foreign exchange here? Is there a foreign exchange desk? I’d like to change/buy some foreign currency. I need some ID. tens and three fives. please. please. your account number and your sorting code. please? How many marks to the dollar. You might want to know: Do I have to pay bank charges (comision) on top of that? Is that inclusive of commission? 143 .Your reply: It doesn’t matter (which denomination) All twenties. What’s the current exchange rate. the clerk will say: Are you a customer here? First of all. please (PIN: Personal Identification Number). Five. I’m afraid you’ll have to go to the enquiries desk (biroul de informaţii). please. please. Please fill in this form.
It makes more sense. Means of payment. Delivery is out of the question until the sum has been paid into our account. will you? I’m sure he’ll settle immediately. and by draft for large sums. I’d like to get a safety deposit box (safe de depuneri). insist on payment with the order (plata la comandă). 144 . He’s already had a current account cancelled and has a reputation for being a slow payer. I think that’s all. It’s his first order with us? That’s it. Well. That would be the first time. I’d like to apply for a loan. They were told there were insufficient funds on his account. the reseller (vânzător) who wanted immediate delivery. I’ve had very bad information about B. What sort of a cheque did he make out? I’m looking into his file… Now… It was a giro cheque. please? I’d like to apply for a bank/cheque/credit/cash card. I’d just had a phone call from the bank. If so. I’m surprised. please. Something else. Oh yes! One more thing. Can you remind me of the amount? It’s not a large sum: only 135 pounds. He is not the kind of person to overdraw his account. please. Just give him a ring.Are there any additional expenses? What commission do you charge? Maybe you’re staying in an Anglophone country for more than a year and you want to open a bank account there: I’d like to open a deposit/checking/ savings account. This is all the more surprising. I see who you mean. Key sentences. Usually he pays us by bank cheque for small amounts. They couldn’t cash in D’s cheque. you know. the drafts to be discounted… Means of payment. I’ll do that. What’s the interest rate on this account? Could you explain the service charges on this account? Could I have a new checkbook.
Cred că îmi amintesc. Normally. Am păstrat talonul cecului pe care l-am emis pe 6 martie.3 Pentru retragerile la vedere. Plătiţi suma prin mandat poştal dacă consideraţi că este mai practic. acea plată (vărsământ) ar trebuie să figureze pe ultimul meu extras de cont. What’s his current account number? Care este numărul contului său curent? Charge it to my account. How is it that this cheque has not been endorsed? Cum se face că acest cec nu a fost andosat? I suppose you’d rather be paid in cash? 145 . Normal. Scoateţi suma din contul meu. you simply have to go to counter no. For sight withdrawals. The cheque was made out to his order.3 She will pay us by instalments over six months. Titularul cărţii de credit trebuie să informeze imediat biroul nostru cel mai apropiat în caz de pierdere sau de furt. that payment-in ought to have been recorded on my last statement of account.His account is overdrawn (in the red). Thanks to your credit card. He intends to open a deposit account at one of our branches. you may rent a car without leaving a deposit. Ea ne va plăti în rate eşalonate pe şase luni. Cecul său este descoperit. era un cec la purtător. The holder of the credit card must inform our nearest office in case of loss or theft. Plata ar fi trebuit să fie făcută demult. The settlement is long overdue. I have kept the stub (counterfoil) of the cheque which I issued on March 6th. Cecul era făcut la ordinul său. Datorită cărţii dumneavoastră de credit veţi putea închiria o maşină fără să lăsaţi o garanţie. I think I remember it was a bearer cheque. Settle the amount by money order if you find it more convenient. El are intenţia să deschidă un cont pentru depuneri la una din sucursalele noastre. ajunge să mergeţi la ghişeul nr.
gas or electrical bills. El a fost refuzat din cauza nepotrivirii semnăturii (din cauză că semnătura nu era cea adevărată). banks will operate transactions on the stock exchange for you and give advice on investments. they may consider longer term credit. if your credit rating is good and if you can offer some sort of security.Presupun că preferaţi să fiţi plătiţi cu bani gheaţă. Most of this applies to business discounting of their bills – Bills of 146 . telephone. Banking – Key words and sentences The banks have played a prominent role in the development of modern economy since the very beginning of commercial activities. but also in villages. They also lend money. Valuables or deeds can be left in custody in a bank safe on payment of certain charge. Their branches have become a familiar sight on many city streets. The former will enable a person to use a cheque for payment instead of hard cash. cheques that bounce). Banks offer their services both to private individuals and to businesses. Nu este prima dată când el emite cecuri fără acoperire. Besides. generally on a short term basis: thus they can allow overdraft facilities or personal loans. whereas the latter will bring a small interest. 33. as more and more people now “bank” with any one of the national or local banks. The bank will obtain foreign currencies. Trata ajunge la scadenţă la sfârşitul lunii. People can ask their bank to pay recurring expenses for them. This is not the first time he has issued bad cheques (dud checks. such as subscription. The draft will fall due at the end of the month. One can open a current account or a deposit account with them. rents. issue traveller’s cheques and letter of credit payable at their branches or at correspondent banks. Why haven’t you presented this draft for acceptance yet? De ce nu aţi prezentat încă această trată la acceptare? How long will it take to have the sum transferred to my account? Cât durează să viraţi suma în contul meu? It has been rejected for non-conformity of the signature (because the signature was not true).
S. 2.S. In the field of foreign trade. Depun întotdeauna obiectele mele de valoare şi bijuteriile soţiei la o bancă înainte de a pleca într-o vacanţă de lungă durată. 5. A draft (or bill of exchange) is drawn by the creditor on the debtor and payable to the drawer or to a third party after acceptance by the drawee. – stubs) in your cheque-book. Bank. descoperire de cont Be referred to = a fi îndrumat Definition A cheque is signed by the payer and payable to the payee or to his order. the banks can help by financing or advising their clients. 147 . Recurring expenses = cheltuieli recurente Valuables / deeds = acte. Se percepe dobândă pentru toate serviciile bancare. I always deposit my valuables and my wife’s jewels in a bank safe before leaving for a long holiday. 4.)? Unde pot încasa acest cec? Remember to record all withdrawals on counterfoils (U. An interest is charged on all banks services. valori Overdraft = cont debitor. 1. They can be referred to by either party for status enquiries in business transactions. Un cec este semnat de plătitor şi se plăteşte beneficiarului sau la ordinul său. Ar fi bine să cereţi un descoperit înainte de a vi se epuiza contul. You had better ask for an overdraft before your account is overdrawn (in red). Key sentences.Exchange (drafts). 3. O trată este trasă de creditor asupra debitorului şi se plăteşte trăgătorului sau unei terţe părţi după acceptare de către tras. or even Promissory Notes. Where can I cash this cheque (check – U.
Recently a trader sued his banker after he could no longer have his bills discounted. The clearing-house will centralize all the operations dealing with the exchange of bills and cheques between banks.6. 148 . 14. în timp ce ratele (dobânzii) pe termen lung rămân stabile. one must be careful to avoid any erasure. Când se redactează sau se andosează un cec. [B. Ea a întocmit atâtea cecuri fără acoperire.75% mărind-o cu un sfert de punct. The Prime Rate (fine rate. 15. Camera de decontări/oficiul de cliring va centraliza toate operaţiunile care se referă la schimbul interbancar de efecte de comerţ şi cecuri. S-a confirmat creşterea preţului pentru împrumuturile pe termen scurt. 13. banks to their clients with the highest rating. 10. When writing out or endorsing a cheque. The U.S. 8. blue-chip rate. Don’t forget to have these bills discounted by the end of this month.75%. 11. Nu uitaţi să scontaţi aceste efecte la sfârşitul lunii. trebuie să se evite orice ştersătură. They offered me to refund a 2. Recent. 7. The spell of monetary stability has lasted since the begining of the year. 9. investment banks have just raised their prime rate by ¼ point to 6. Rata de bază reprezintă rata acordată de băncile americane clienţilor care prezintă cel mai mic risc.000 de lire în treizeci de rate lunare.E. She made out so many dud (bad) cheques that no bank will trust her with a cheque-book. Băncile de investiţii americane tocmai au crescut rata de bază (a dobânzii) la 6.S. 12.] base rate) is the rate granted by U. Nu uitaţi să înregistraţi toate retragerile pe talonul carnetului dumneavoastră de cecuri.000 personal loan over a 30-month period. The increase in the price of short-term money has been confirmed whereas longer term rates remain stable. Ei mi-au propus să rambursez un împrumut personal de 2. încât nici o bancă nu-I va mai încredinţa un carnet de cecuri. un comerciant a intentat un proces băncii sale după ce na mai avut posibilitatea să-şi sconteze efectele de comerţ.
My salary is paid into my account every month. The last withdrawal dates back to the 27th of last month. and as the central note-issuing authority. Banking. 8. Salariul meu este vărsat în contul meu în fiecare lună. 18. Contul Dumneavoastră este epuizat. 9. 16. 6.Această perioadă de stabilitate monetară durează de la începutul anului. Should I (must I) endorse the cheque? Trebuie să andosez cecul? 4. The policy of expensive money is meant to fight inflation. Why not endorse the cheque to his (her) name? 149 . 1. Nu sunt sigur că am păstrat talonul. Politica dirijată împotriva creşterii preţurilor este destinată combaterii inflaţiei. 17. Aş vrea să schimb franci francezi în lire. 10. 2. I’m not sure I kept the stub. Ultima retragere este din 27 luna trecută. He has opened a giro account. 7. …dar acest lucru are repercursiuni imediate asupra conturilor de venit şi pierderi ale întreprinderilor. Savings accounts earn an interest. He wanted me to make out a blank cheque. 11. Key sentences. Banca centrală funcţionează în calitate de bancher pentru guvern şi alte bănci şi ca autoritate centrală de emisiune monetară. El voia să facă un cec în alb. 5. 3. The Central Bank acts as banker to the government and to other banks. Your account is in the red (overdrawn). Deţinătorii de astfel de conturi de depuneri trebuie să înştiinţeze (banca) cu şapte zile înainte pentru a-şi retrage banii. …but it has immediate repercussions on corporate income statements. I’d like to change French francs into pounds. El a deschis un cont-cec poştal. Conturile de economii aduc o dobândă. The holders of such deposit accounts must give seven day’s notice before withdrawal.
A tax on wages and salaries or on company profits is a/an Direct tax indirect tax value-added tax 3. A tax levied at a higher rate on higher incomes is called a Progressive tax regressive tax wealth tax 4. (nu mi-a parvenit încă) 20. The tax people pay on their wages and salaries is called Capital transfer tax income tax wealth tax 2. Banca mea o să-mi dea cu împrumut o parte din sumă. A tax paid on property. imports. Why has his (her) overdraft been discontinued ? De ce nu i s-a mai dat descoperitul? 15. 18. Please give me the rest in 5-pounds notes. Taxation and how to avoid it • Vocabulary Which terms do the following sentences define? 1. Ea nu a mai scos din contul său de trei săptămâni.De ce să nu andosez cecul pe numele lui (ei)? 12. Nu ar fi trebuit ca el să împrumute atât. 21. 34. Trebuie să-mi reaprovizionez contul. The statement has still not reached me. 14. This is the 5th bad cheque (dud cheque) we’ve had this month. excluding the alreadytaxed costs from previous stages. 17. Extrasul (de cont) nu a ajuns încă la mine. She hasn’t drawn on her account for 3 weeks. sales transactions. and so on is a/an Direct tax indirect tax value-added tax 5. is called a/an 150 . Daţi-mi restul în hârtii (bancnote) de 5 lire. 16. My bank will lend me part of the sum. Please go to counter 6. 13. He should not have borrowed so much. Vă rog să mergeţi la ghişeul 6. 19. Îi va fi greu să ramburseze împrumutul. Este al cincilea cec fără acoperire care mi se dă luna aceasta. He will find it hard to repay his loan. A tax collected at each stage of production. I have to (I must) replenish my account.
Gifts and inheritances over a certain value are often liable to a Capital gains tax capital transfer tax wealth tax 8. impozitare Tax shelter – protecţie fiscală Tax haven – paradis fiscal Tax-deductible – deductibil fiscal Excise duties – accize. Making false declarations to the tax authorities is called Fiscal policy tax avoidance tax evasion 10.Added-value tax sales tax value-added tax 6. impozit Taxation – impozit. Advantages and disadvantages of different tax systems 151 . The annual tax imposed on people’s fortunes (in some countries) is a/an Added-value tax capital gains tax wealth tax 9. Reducing the amount of tax you pay to a legal minimum is called Creative accounting tax avoidance tax evasion Income tax – impozit pe venit Wealth tax – impozit pe avere Direct tax – impozit direct Indirect tax – impozit indirect Progressive tax – impozit progresiv Regressive tax – impozit regresiv Value-added tax – TVA Sales tax – impozit pe vânzări Capital gains tax – impozit pe plusul de capital Capital transfer tax – impozit pe transferul de capital Fiscal policy – politică fiscală Tax avoidance – evitare fiscală Tax evasion – evaziune fiscală Tax – taxă. Profits made by selling assets are generally liable to a Capital gains tax capital transfer tax wealth tax 7. impozit de fabricare • Reading Read the following text and decide which paragraphs could be given the following headings.
are generally taxed twice: companies pay tax on their profits (corporation tax in Britain. most sales taxes are slightly regressive. but there is a substantial ‘black’ or ‘underground’ economy nearly everywhere. to raise revenue to finance government expenditure. income tax in the USA). can be designed to dissuade (a preveni. The higher the tax rates.- Avoiding tax on profits Avoiding tax on salaries Tax evasion The functions of taxation Taxation (and how to avoid it!) The primary function of taxation is. There is always a lot of debate as to the fairness of tax systems. The problem with progressive taxes is that the marginal rate – the tax people pay on any additional income – is always high. because poorer people need to spend a larger proportion of their income on consumption than the rich. Business profits for example. Governments can also encourage capital investment by permitting various methods of accelerated depreciation accounting that allow companies to deduct more of the cost of investments from their profits. part-time evening jobs (some people call this ‘moonlighting’) with small and medium-sized family firms. a schimba părerea) people from smoking. Lots of people also have undeclared. At the end of the 1986. for example. and consequently reduce their tax bills. the Director of the Italian National Institute of Statistics calculated the 152 . which is generally a disincentive to both working and investing. of course. In Italy. but taxes can also have other purposes. and so on. the more people are tempted to cheat. for example. On the other hand. self-employed people – whose income is more difficult to control than that of company employees – account for more than half of national income. and are one of the ways in which governments can redistribute wealth. Indirect excise duties. on which no one pays any tax or national insurance. drinking alcohol. Income taxes in most countries are progressive. and shareholders pay income tax on dividends.
and added 16. this is known as making a tax loss. Multinational companies often set up their head offices in countries such as Liechtenstein. where taxes are low. machines. and so on) so that at the end of the year all the profits have been used up. To reduce income tax liability. Life insurance policies. 1. such as company cars. and subsidized lunches. • Comprehension According to the text. 3 Progressive taxes may discourage people from working extra hours. Criminal organizations. some employers give highlypaid employees lots of ‘perks’ (short for perquisites) instead of taxable money. ‘Loopholes’ are a common form of tax evasion. 5 The Italian government knows that about one seventh of national income escapes taxation. such countries are known as tax havens. 2 The same amount of money can be taxed more than once. tend to pass money through a series of companies in very complicated transactionsin order to disguise its origin from tax inspectors – and the police. Companies have a variety of ways of avoiding tax on profits. are known as tax shelters. such as these. Legal ways of avoiding tax. free health insurance. They can bring forward capital expenditure (on new factories. Monaco. and the Bahamas. 4 Sales taxes are unfair because poor people spend more than the rich do.7% to Italy’s gross national product (GNP) figure.size of the underground economy. and then claimed that Italy had overtaken Britain to become the world’s fifth largest economy. are the following statements True or False? 1 Taxes can be designed both to discourage and to encourage spending. Donations to charities that can be subtracted from the income on which tax is calculated are described as taxdeductible. 153 . meanwhile. are known as loopholes in tax lows. the Cayman Islands. pension plans and other investments by which individuals can postpone the payment of tax. this is known as laundering money.
on a new factory or equipment. unless they form a limited company. non-financial benefits or advantages of a job 8 a way to delay the payment of tax to a later time 9 an adjective describing expenditure that can be taken away from taxable income or profits 10 a country offering very low tax rates to foreign businesses 13. 8 A company that makes an unusually large profit during a tax year might quickly decide to spend it. • Vocabulary Find words in the text that mean the following. 1 reducing the value of a fixed asset. for example. Stock Market 35. rather than saving it 5 working for yourself. and old-age pensions 4. have unlimited liability for debt. unemployment benefit. If you pay a lot of your income into a pension fund or a life insurance policy you never have to pay tax on it. being your own boss 3. 154 . If the business does badly and cannot pay its debts. by charging it against profits 2 something which discourages an action 3 an adjective describing a tax that is proportionally higher for people with less money 4 spending money to buy things. Stocks and shares Companies Individuals and groups of people doing business as a partnership.2. a tax on incomes that pays for sickness benefit.
Their owners have to put up the capital themselves. such as the Unlisted Securities Market in London or Nasdaq in New York. it is wound up and its assets are liquidated (i. which states the company’s name. and is only liable for the amount of capital that has been invested in it. its purpose. to have their shares traded) on major stock exchanges. if they cannot be sold to the public. containing the year’s trading results and a statement of their financial position. by issuing new shares to 155 . This is known as a rights issue. A successful. turn it into capital. The creditors simply do not get all their money back. which are normally offered first to the existing shareholders at less than their market price. sold) to pay the debts. Companies wishing to raise more money for expansion can sometimes issue new shares. If the assets don’t cover the liabilities or the debts. Very successful businesses can apply to be quoted or listed (i. Newer and smaller companies usually join ‘over-the-counter’ markets. and the amount of authorized share capital. they remain unpaid.any creditor can have it declared bankrupt. which set out the duties of directors and the rights of shareholders (GB) or stockholders (US). They also write Articles of Association (GB) or Bylaws (US). growing company can apply to a stock exchange to become a public limited company (GB) or a listed company (US). i.e. Companies generally use an investment bank to underwrite the issue i. This is why most people doing business form limited companies.e. If a limited company goes bankrupt. Publicly quoted companies have to fulfil a large number of requirements. The act of issuing shares (GB) or stocks (US) for the first time is known as floating a company (making a flotation). its registered office or premises. Most companies begin as private limited companies. They send these documents to the registrar of companies.e. A limited company is a legal entity separate from its owners. The founders have to write a Memorandum of Association (GB) or a Certificate of Incorporation (US). Companies sometimes also choose to capitalize part of their profit. perhaps a bank specializing in venture capital. including sending their shareholders an independently-audited report every year. The unsuccessful business people may have to sell nearly all their possessions in order to pay their debts.e. or borrow from friends or a bank. to guarantee to purchase all the securities at an agreed price on a certain day.
if no one else wants it 12 a proportion of the annual profits of a limited company. Shares generally entitle their owner to vote at a company’s Annual General Meeting (GB) or Annual Meeting of Stockholders (US). shop.shareholders instead of paying dividends. etc. debts. • Vocabulary Find words in the text which mean the following 1 having a responsibility or an obligation to do something. paid to shareholders • Alternative terminology 156 . This is known as a bonus issue. but the market price of a share – the price quoted at any given time on the stock exchange. workshop.) 7 to provide money for a company or other project 8 money invested in a possibly risky new business 9 the people who begin a new company 10 the place in which a company does business: an office. interest and mortgage payments. and so on 5 to sell all the possessions of a bankrupt business 6 money that a company will have to pay to someone else (bills. Buying a share gives its holder part of the ownership of a company. and so on 11 to guarantee to buy an entire new share issue. factory. e. Shareholders can sell their shares on the secondary market at any time. and to receive a proportion of distributed profits in the form of a dividend – or to receive part of the company’s residual value if it goes into liquidation. pay liabilities. which reflects (more or less) how well or badly the company is doing – may differ radically from its nominal value. or as repayment of a loan) 3 to be insolvent: unable to pay debts 4 everything of value owned by a business that can be used to produce goods. taxes. to pay a debt 2 a person or organization to whom money is owed (for goods or services rendered. warehouse.g.
a person who can advise investors and buy and sell shares for them 4. an investor’s selection of securities 3. the use of information not known to the public to make a profit out of buying or selling shares 157 . a stock – in an industry not much affected by cyclical trends – that offers a good return but only a limited chance of rise or decline in price a stock – which usually has a high purchasing price and a low current rate of return – that is expected to appreciate in capital value 6.Americans often talk about corporations rather than companies and about an initial public offering rather than a flotation. a wholesaler in stocks and shares who deals with brokers 7. Blue chip Defensive stock Growth stock Insider share-dealing Institutional investors Mutual fund Market-maker Portfolio Stockbroker 1. Other names for a bonus issue are a scrip issue (short for ‘subscription certificate’) and a capitalization issue. because all the stocks or shares of a company – or at least all those of a particular category – have equal value. • Vocabulary Match up the following words and definitions. Another name for stocks and shares is equities. Two terms for nominal value are face value and par value. and rising) 8. a stock dividend or stock split. a stock in a large company or corporation that is considered to be a secure investment – 5. and in the US. financial organizations such as pension funds and insurance companies which own most of the shares of all leading companies (over 60%. a company that spreads investors’ capital over a variety of securities 2.
although of course their price on the secondary market fluctuates according to the changes in interest rates. Obviously.36. the majority of bonds on the secondary market are traded either above or below par. it is generally considered to be a sign of good health and anticipated higher future profits if a company borrows.e. On the other hand. Most bonds are bearer certificates. i. A bond’s yield at any particular time is thus its coupon (the amount of interest it pays) expressed as a percentage of its price on the secondary market. Bonds Companies finance most of their activities by way of internally generated cash flows. increasing debt increases financial risk: bond interest has to be paid. it may lend money at a lower interest rate. even in a year without any profits from which to deduct it. whereas dividends are paid out of already-taxed profits. a company deducts its interest payments from its profits before paying tax. and C the worst. Bond-issuing companies are rated by private rating companies such as Moody’s and Standard & Poors. Consequently. Thus companies have a debt-equity ratio that is determined by 158 . and the principal has to be repaid when the debt matures. If they need more money they can either sell shares or borrow. the advantage of debt financing over equity financing is that bond interest is tax deductible. and given an ‘investment grade’ according to their financial situation and performance. i.e. Bonds are therefore liquid. because this is often cheaper: the market may be a better judge of the firm’s creditworthiness than a bank. This is evidently not a good thing for the banks. whereas companies are not obliged to pay dividends or repay share capital. Aaa being the best. the lower the interest rate at which a company can borrow. so after being issued (on the primary market). the higher the rating. For companies. usually by issuing bonds. they can be traded on the secondary bond market until they mature. In other words. which now have to lend large amounts of money to borrowers that are much less secure than blue chip companies. More and more companies now issue their own bonds rather than borrow from banks. Apart from this ‘tax shield’. nearly bankrupt.
or simply gilts. paying with newly created money which is put into circulation in this way. Governments. VAT. in Britain. they sell these bills to commercial banks. to increase the money supply they buy them back.balancing tax savings against the risk of being declared bankrupt by creditors. Longterm government bonds are known as gilt-edged securities. unlike companies. venituri Treasury bonds – certificate de trezorerie pe termen lung Treasury bills – certificate de trezorerie pe termen scurt • Vocabulary Match up the words or phrases on the left with the corresponding ones on the right. Rating company – firmă de rating Debt financing – finanţarea debitului Equity financing – finanţarea acţiunilor Investment grade – gradul riscului de investiţie Debt-equity ratio – raţia debit-acţiuni Public spending – chletuieli publice Receipts – încasări. and withdraw the cash received from circulation. and so on. To reduce the money supply. and Treasury Bonds in the US. 1 investors 2 issuing bonds 3 principal 4 maturity 5 pension funds 6 buy-and-hold investors 7 non-payment 8 price appreciation 9 price depreciation A the amount of a loan B borrowing money C date at which the money will be returned D fall in interest rates E keep their bonds till maturity F default G profits on the sale assets H providers of funds I retirement money 159 . do not have the option of issuing equities. Consequently they issue bonds when public spending exceeds receipts from income tax. of course. The British and American central banks also sell and buy short-term (three months) Treasury Bills as a way of regulating the money supply.
currency. but not the obligation. or a commodity at a fixed price during a certain period of time 2 Options B contracts to buy or sell fixed quantities of commodity.10 capital gains J rise in interest rates • Vocabulary Match up the expressions on the left with the definitions on the right. 1 Futures A contracts giving the right. to buy or sell a security. Futures. a currency. at a price fixed at the time of making the contract 3 Commodities C a general name for all financial instruments whose price depends on the movement of another price 4 Derivatives 160 . 1 equity financing A a security whose owner is not registered with the issuer 2 debt financing B easily sold (turned into cash) 3 bearer certificate C the rate of interest paid by a fixed interest security 4 liquid D the rate of income an investor receives taking into account a security’s current price 5 par E issuing bonds 6 coupon F issuing shares 7 yield G nominal or face value (100%) 37. or financial asset at a future date. options and swaps • Vocabulary Match up the following words and definitions.
six or nine months adead).D buying securities or other assets in the hope of making a capital gain by selling them at a higher price (or selling them in the hope of buying them back at a lower price) 5 Hedging E making contracts to buy or sell a commodity or financial asset at a pre-arranged price in the future as a protection or ‘insurance’ against price changes 5. Yet there are also futures markets on which contracts can be made to buy and sell commodities. 25 tons of copper to be delivered next June 30) are called futures. enormous amounts of commodities. Speculation F raw materials or primary products (metals. and see if you find the words you selected. but with the price fixed at the time of the deal.7 161 . Futures Every weekday. coffee.g.g. individual. 1. Standardized deals for fixed quantities and time periods (e. at a future date (e. Assets beer bush call commodities contracts Copper currencies discount store foodstuffs hedge Liabilities plastic phone raw materials shout Spot market supermarket tea Now read the text. currencies. cereals.g. and various financial assets. currencies and financial securities are traded for immediate delivery at their current price on spot markets. three. etc. ‘over-the’counter’ deals between two parties (e. non-standard.) that are traded on special markets • Reading Select ten or eleven of the following words that you would expect to find in an introductory text about futures and options.
want to buy or sell currencies at a guaranteed future price. there is now a huge futures market in stocks and shares. exchange rates and interest rates have also fluctuated widly. such as the London International Financial Futures Exchange (LIFFE. Options As well as currencies and commodities. interest rates.billion yen to be exchanged for dollars on September 15. tea and orange juice are frequently affected by droughts. the prices of foodstuffs. anticipating currency appreciations or depreciations. hoping to sell this option. When commodity prices are expected to rise. or interest rate movements. Speculators. coffee. future changes in commodity and asset prices. A put option gives the right to sell an asset at a certain price during a certain period of time. For example. at a rate set today) are called forward contracts. maize. Hedging and speculating Futures. especially since financial deregulation. when they are expected to fall they are at a discount on spot prices. and so on. are also active in currency futures markets. For example. A call option gives the right to buy securities (or a currency. or to buy and resell the share at a profit. coca. you can buy a call option giving the right to buy at 100. in order to guarantee next season’s prices. Alternatively. Many businesses. exchange rates. floods and other extreme weather conditions. or a commodity) at a certain price during a certain period of time. One can buy options giving the right – but not the obligation – to buy and sell securities at a fixed price in the future. options and other derivatives exist in order that companies and individuals may attempt to diminish the effects of. future prices are obviously higher than (at a premium on) spot prices. or profit from. These options allow organizations to hedge their equity investments. you can write a put option giving someone else the right to sell the shares at 162 . In recent years. therefore. pronounced ‘life’). Consequently many producers and buyers of raw matrials want to hedge. such as wheat. if you think a share worth 100 will rise.
if you think a share price will fall. a French company that can borrow francs at a preferential rate. but which also needs yen. and you earn the premium. Many companies nowadays also arrange currency swaps and interest rate swaps with other companies or financial institutions. Such currency swaps. can arrange a swap with a Japanese company in the opposite position. 3 Speculators can make money on currency futures if … 4 If you believe that a share price will rise. possible option strategies include … 5 On the contrary. possible option strategies include … 163 . Whether they save or lose money will depend on the movement of interest rates. no one will exercise the option. based on another underlying price. On the contrary. noone will take up the option. are of course open to the risk of exchange rate fluctuations. you could write a call option giving someone else the right to buy the share at 100: if the market price of the underlying security remains below the option’s exercise price or strike price. For example. A company with a lot of fixed interest debt might choose to exchange some of it for another company’s floating rate loans.100: if the market price remains above 100. designed to achieve interest rate savings. Call option – opţiune de achiziţie Put option – opţiune de vânzare Exercise price / strike price – preţ de exerciţiu Swap – schimb • Summarizing Complete the following sentences 1 The difference between futures and forward contracts is …. if you expect the value of a share that you own to fall below its current price of 100. Swaps Options are merely one type of derivative instrument. Alternatively. 2 Producers and buyers often choose to hedge because …. you can buy a put option at 100 (or higher): if the price falls. you can still sell your shares at this price. so you earn the premium.
a estima Assessment. arierate Articles of Association – statutul societăţii Assess. o estimare Assets – activul Auction – o vânzare prin licitaţie Austerity – austeritate Back – a susţine financiar Bad cheque. The risk with currency and interest rate swaps is that … • Vocabulary Find words in the text that are in an obvious sense the opposite of the terms below. dud check – cec fără acoperire Bad debt – o creanţă neplătită Balance of account –un sold de cont Balance of Payments – balanţa de plăţi 164 . to estimate – a evalua. un total Amount to – a se ridica la. acceptor Allow credit – a acorda un credit All-time high – un record de creştere a cursului All-time low – un record de scădere a cursului Amount – o sumă.6. Appreciate Hedging call discount drought spot market strike price floating • Glossary Acceptance – acceptare (trată) Acceptor – tras. restanţe. a ajunge la Arrears – datorii. an estimate – o evaluare.
efecte bancare Bills of Exchange (B. discount) rate – rata scontului Băncii centrale Bank account – cont bancar Bank tellers – casieri (la bancă) Bank wickets – ghişee ale băncii Banking regulation – reglementări bancare Banknotes (A.). bills) – bancnote Bargain – a negocia Barrier – o barieră Barter / counter-trade – troc Base rate / prime rate – taxă preferenţială / rata de bază Be in the black – a fi creditor Be in the red – a fi descoperit/ în deficit Bear – un speculator de bursă (care mizează pe scăderea cursului) Bear an interest – a produce o dobândă Bearer – un purtător Bearer cheque – cec la purtător Benefit – un avantaj Bill. animat Buck – bancnotă sau bancnote de un dolar (A.E.E. shares / stock dividends – acţiuni gratuite. familiară) 165 . a check (US) – o notă de plată Bills – facturi. poliţe.E.Balance of Trade – balanţa comercială Bank clerks – funcţionari bancari Bank (A. a diminua Brisk – activ. drafts – cambii. trate Bite – a avea efect Blank cheque – cec în alb Blue chips – acţiuni ale marilor companii Board of directors – consiliul de administraţie Bond – o obligaţiune Bonus issue. note de plată.E. dividente nominale Boom – un avânt (perioadă de succes) Boost – a relansa Borrow – a lua cu împrumut Borrower – cel care ia cu împrumut Branch – sucursală Brand – o marcă comercială Break even – a echilibra conturile Bring down – a micşora.
bine orientat Buy forward – a cumpăra la termen Bylaw – prevedere regulamentară Cap taxes – a fixa un plafon pentru impozite Cash a cheque – a încasa un cec Cash flow – flux de numerar Cash point – un aparat distribuitor de bancnote Cashier – casier în unităţi economice Ceiling – plafon. cheltuieli Cheque-book – carnet de cecuri Cheque-book (A. gir Collect – a încasa. gaj / garant. girant. contribuţie Convergence criteria – criterii de convergenţă Cost accounting – contabilitate analitică / analiza costurilor Cost effective. care îşi merită preţul Cost of living – costul vieţii Council tax – impozite locale Counter – ghişeu 166 . a face concurenţă cuiva Competitive – competitiv Composite rate – rată compusă Contribution – cotizaţie.E. checkbook) – carnet de cecuri Chief executive officer / managing director – director general Clearance sale – o vânzare la solduri Clearing-house – cameră de compensare/decontare/oficiu cliring Close – închidere Close down – a avea un curs scăzut la închidere Coin money – a bate monedă Coins – monede.Building society – o bancă populară de economii pentru cumpărare de locuinţe Bull – un speculator de bursă (care mizează pe creşterea cursului) Bullion – lingou din metal preţios Buoyant – susţinut. – a concura cu cineva. a percepe (impozite) Commercial / retail bank – bancă comerciale / bancă de depozit Commodity – o marfă (de larg consum) Compete with sb. nivel maxim Central Bank – banca centrală Change francs into pounds – a schimba francii în lire Charge – taxă. bani metalici Collapse – a se prăbuşi Collateral – garanţie.rentabil. preţ.
a face bancnote false Credit a sum to an account – a vira o sumă într-un cont Credit an account – a credita un cont Credit rating – evaluare a solvabilităţii clientelei Credit squeeze – restrângere a creditului Credit standing – situaţie financiară. a falsifica. o scădere Deeds – acte. de depozit Deposit bank – bancă de depuneri Depositor – depunător Depreciation – amortizare. a întârzia Deficit – un deficit Deflation – deflaţie Delay – a amâna. account current – cont curent Custom-made – făcut pe/la comandă Customs – vamă Dabble on the Stock Exchange – a juca la Bursă Deal – o tranzacţie Dealer – un dealer Debit a sum from an account – a debita o sumă dintr-un cont Debit an account by a sum – a debita un cont dintr-o sumă Debt – o datorie Debtor – un debitor Decline – a decădea. depreciere 167 . gradul de solvabilitate Creditor – creditor Crisis – o criză Cross out – a bara Crumble – a se prăbuşi Curb – a frâna. a stăpâni Currencies – devize Current / checking account – cont curent Current account deficit – un deficit al balanţei de plăţi curente Current account. a întârzia Demand – cerere Deposit – a depune Deposit / time / notice account – cont de depunere Deposit account – cont de depunere la scadenţă.Counterfeit – a contraface. contracte Default – a nu onora Default on a payment – a nu onora o plată Defaulter – rău platnic Defer – a amâna.
a se micşora Dull – inactiv Duty –o taxă Earn an interest – a produce o dobândă Earnings – câştiguri. to fall. a descreşte Direct debit – debitare directă Directive – o directivă Discontinue – a înceta (de a mai face ceva). to come down – a scădea. a întrerupe Discount – a sconta (o poliţă) Discount a draft – a sconta o trată Discount bank – bancă de scont Dividends – dividente Downturn. inquiry – cerere de informaţii Equities – acţiuni ordinare Erasure – ştergere. a downswing – un regres Draw on an account – a scoate dintr-un cont. a retrage dintr-un cont Draw on sight – a trage la vedere Draw on someone – a trage (o trată) asupra cuiva Drawee – tras Drawer – trăgător Drop. venituri (salariale) Ease – a se relaxa Encash – a încasa un cec (la bancă) Endorse – a andosa Endorse a cheque – a andosa un cec Endorsement – andosare Enquiry. plăţi Face value – valoarea nominală Fall back – a se replia Fall due – a sosi la scadenţă 168 .Deregulation – dereglementare Devaluate – a devaloriza Devalue – a devaloriza Dip – a scădea. ştersătură Exceed – a depăşi Exchange – schimb Exchange broker – agent de schimb Exchange bureau – birou de schimb Exchange rate – rată de schimb Executive – administrator Expenses – cheltuieli.
a contraface (bancnote.A. documente) Forgery – contrafacere. falsificare. to rise – a creşte. banca centrală a S. a acorda fonduri Financial backing (support) – susţinere financiară.U. mărfuri Grant – a acorda. wares – produse. documente) Free trade – liber schimb Fringe benefit – beneficiu suplimentar (în afara salariului) Futures market – piaţa tranzacţiilor la termen Gain – a câştiga / un câştig.E. a se mări Goods. a fi acceptat la Bursă Go up. sprijin financiar Firm – ferm Flat rate – rată uniformă Float (a currency) – a face/ a lăsa să oscileze o monedă străină Float a company – a lansa o societate Flourish – a prospera Foot the bill – a achita nota de plată Forecast. an outlook – o previziune Foreign / overseas trade – comerţ exterior Foreign resident – rezident străin Forge – a falsifica. a aloca / o alocaţie. o plus-valoare Gilt-edged securities – valori/titluri fără risc (obligaţiuni de stat) Giro – cecuri poştale Giro account – cont-cecuri poştal Give notice – a da un preaviz Globalise – a se extinde la scară mondială Go belly up (US) – a da faliment Go into administration – a fi supus unei proceduri de lichidare juridicară Go into liquidation – a intra în lichidare Go on a welfare – a se înscrie la asistenţă socială Go public – a intra la Bursă. drop in prices – o scădere a preţurilor Federal Reserve Bank (the Fed) (A. to fund – a finanţa.Fall. un ajutor financiar Grant a loan – a acorda un împrumut 169 . to file under chapter 11 (US) – a-şi depune bilanţul. falsuri (bancnote. a cere falimentul Fill in a form – a completa un formular Finance. a urca.) – banca federală de rezerve. Fee – un onorariu Figure – o cifră File for bankruptcy.
M.Grant credit – a acorda un credit Greenbacks – dolari (americanism familiar) Gross Domestic Product – Produsul Intern Brut Gross National Product – Produsul Naţional Brut Hard cash – bani gheaţă Hedge – a se acoperi (risc) Hike prices (US) – a mări. cont de profituri şi pierderi Income tax – impozit pe venit Index – a indexa Index-linked – indexat Inflation – inflaţie Inflationary – inflaţionist Inheritance tax – drepturi de succesiune Interest – dobândă International Monetary Fund (I. descoperit (un cont) Incentive – un stimulent Income statement (A.E.)/operating statement (B.F.M. (construcţia de) locuinţe Home trade – comerţ intern Hot money – bani fierbinţi (capital atras din străinătate de dobânzi ridicate sau de un climat politic sigur) In cash – în numerar In custody – în custodie In real terms – în bani constanţi In the red.) – cont de exploatare.I.) Investment (B.) – Fondul Monetar Internaţional (F. merchant) bank – bancă de investiţii Investments – investiţii Invoice – factură Issue – a emite Jack up – a mări preţuri Jewels – bijuterii Joint account – cont comun Junk bonds – obligaţiuni fără valoare Kickstart the economy – a impulsiona economia 170 . overdrawn – epuizat.E.E. a creşte preţuri Historical cost accounting – contabilitatea costurilor de achiziţie / istorice Holder – titular (carte de credit) Holder of an account. account holder – deţinător al unui cont Home savings plan – plan de economii pt.
unprofitable – nerentabil Lump sum settlement – plată forfetară. curs legal Lend – a da cu împrumut Lending rate – rata de împrumut Level off – a se relaxa Leverage – capacitate de influenţă / raportul dintre creanţe şi capital / creşterea rentabilităţii capitalului unei societăţi ca urmare a contractării de datorii Leveraged buyout – răscumpărarea unei societăţi datorită creşterii rentabilităţii capitalului ca urmare a contractării de datorii Levy – a percepe. a compensa Open up – a avea un curs ridicat la deschidere Opt-out clause – o clauză excepţională Order – o comandă Outlet – un debuşeu. sold debitor Overdraw (an account) – a descoperi.Leave a deposit – a lăsa o garanţie Legal tender – ofertă legală. întârziat (la plată) Overdraft – descoperire în cont. un punct de desfacere Outstanding – neachitat. plată globală Make – o marcă (de fabrică). a epuiza un cont 171 . un impozit) / o taxă Liabilities – pasivul Liquidation – lichidare Listed company – societate pe acţiuni Loan shark – un cămătar Loans – împrumuturi Look up. a impune (o taxă. to pick up – a se redresa Loss – o pierdere Loss-making. fabricaţie Maturity (of a loan) – scadenţa unui împrumut Mercantile Exchange – Bursa de mărfuri Merchant bank – o bancă comercială Merchant bank / Investment bank – bancă comercială / de investiţii Mint – institut britanic de emisiune monetară/ Monetăria Statului Monetary – monetar Monetary supply – masă monetară Money order – mandat poştal Mortgage – ipotecă Mutual Fund – societate de investiţii cu capital variabil Note – bancnotă divizionară Offset – a contrabalansa.
a amâna Premise – locaţie Price index – un indice de preţ Prime rate (A.E. to repay – a rambursa Pay into an account – a vărsa într-un cont Payee – beneficiar Pay-in slip – foaie de depunere sau de vărsământ Payment by installments – plată în rate Payment in cash – plată în numerar Payment-in – virament (într-un cont) Pick up the tab – a achita nota de plată Plough back profits – a reinvesti profiturile Plummet – a merge foarte prost. a se reface 172 . titlu de gaj. bancnote Pawn – a gaja. a-şi reveni.E. cambie. a se întări Recover – a se restabili. fixed costs – cheltuieli fixe Overheat – a supraîncălzi Over-the-counter market – piaţă de titluri fără valoare Pace – beneficiar Paper money – bani de hârtie.) – rată de bază Private limited company – societate cu răspundere limitată Privatise – a privatiza Production. o strategie Portfolio – un portofoliu (de valori) Postpone –a întârzia.Overdue – expirat. o cumpărare Qualified majority – majoritatea calificată Quid (B. output – producţie Profit margin – o marjă de profit Promissory note – bilet de ordin. întârziat. scadent Overheads.) – bancnotă sau bancnote de o liră (familiar) Quota – o cotă-parte Quote – a cota Quoted or listed company – societate cotată la bursă Rally – a se reface. a amaneta Pawnbroker – cămătar Pay (in) cash – a plăti în numerar. a avea greutăţi mari Policy – o politică. obligaţiune Pundit – un expert Purchase – o achiziţie. a plăti cu bani gheaţă Pay as you earn (PAYE) – plata prin prelevare direct de la sursă Pay back.
to pay back – a rambursa Residual value – valoare reziduală Restrict – a impune o restricţie Retail price index – indicele preţurilor cu amănuntul Revalue – a reevalua Revenue – venituri Rights issue – emisiuni rezervate acţionarilor Rise in prices – o creştere a preţurilor Running costs – cheltuieli variabile Safe – casă de bani Savings – economii. o insuficienţă Sight withdrawal – retragere la vedere Single market – o piaţă unică Slacken. a frâna Slash – a reduce radical Slide – a scădea Slow payer – rău platnic Slump – a scădea masiv 173 . recurent Recurring expenses – cheltuieli recurente Reduce.Recurring – care se repetă. o involuţie. un regres Settle – a echilibra un cont. periodic. reglementare Remittance – vărsământ Rents – chirii Repay. a participa împreună Share – o acţiune Shoot up – a creşte vertiginos Short term – pe termen scurt Shortage – o penurie Shortfall – o lipsă. to slow down – a încetini. a subevalua Setback – o cădere. to cut back – a reduce Refund – a rambursa Registrar of companies – registrul de comerţ Regulation – regulament. a plăti Settlement – plată Share – a împărţi. bani economisiţi Savings account – cont de economii Savings Bank – casă de economii Security – titlu de valoare Sell at a premium – a vinde sub preţul pieţei Sell short – a vinde la termen.
a furniza ceva cuiva Survey – un studiu. small sum – sumă mică Solvency – solvabilitate Spending – cheltuieli Spin-off – o schimbare radicală Spot market – piaţa tranzacţiilor cu plata pe loc Spread / Margin – marjă. – ofertă. to prosper – a prospera 174 . o anchetă Swap – swap (operaţie de schimb între două devize prevăzută pentru o anumită perioadă) Target – o ţintă Tariff – un tarif vamal Tax – a impune taxe. titluri Stockbroker – un agent de schimb/bursă Stub.) Subscribe – a subscrie Subscription – abonament Subside –a subvenţiona Sue – a face un proces. cec etc. a impozita Tax allowance – scutire de taxe Tax break – o reducere/ scădere de impozit Tax collector – un perceptor Tax haven – un paradis fiscal Tax relief – degrevare de impozit Taxpayer – un contribuabil Telegraphic money order – mandat telegrafic Thrive. a constrânge Stagflation – stagflaţie. With sth. margine Squeeze – a presa. securities – valori. counter-foil – cotor. interest Standard of living – standardul de viaţă Statement of account – extras de cont bancar Steady – stabil Stimulate – a sitmula Stock Exchange – Bursa de Valori Stock market – o piaţă bursieră Stock. talon.Small amount. (stagnare economică + inflaţie) Stagnate – a stagna Stake – participare. matcă (de chitanţă. a chema în instanţă Sum – o sumă Summit – o întâlnire de vârf Supply / provide sb.
a întocmi un cec Yield – a aduce. a produce venit Yield – randament Yield an interest – a produce o dobândă Cheia exerciţiilor Module 1 • Reading – Summary B is the best. a vira Traveller’s cheques (A.E.Tighten one’s belt – a strânge cureaua Trade – a face comerţ Trade bank – bancă comercială Trade gap – un deficit comercial Transfer – a transfera. according to the text. • Practice 1 – a model version of the dialogue Visitor: Hello. I have an appointment with Sandra Bates. a încredinţa Turnover – volumul afacerilor Underwrite – garantarea subscrierii unei emisiuni Upturn. valori Value added tax – taxă pe valoarea adăugată Venture capital – capital de risc Veto sth. traveler’s checks) – cecuri de călătorie Treasury – tezaurul public Trend – o tendinţă Trust – a avea încredere. febril Wind up – a lichida Withdraw – a retrage Withdrawal – prevelare. retragere Write out (to make out) a cheque – a trage. wrong. 175 . o ascensiune Valuables – obiecte de valoare Valuables / deeds – acte. an upswing – o redresare. The other two are. – a-şi exprima dreptul de veto faţă de ceva Volatile – nervos. my name’s Henrik van der Linden from Amtel.
j. l. Mr Van der Linden. unclear 5 devious b. yes. direct and clear 2 understatement b. less strong way of talking 3 deduce b. Can I get you something to drink? Visitor: No thanks. Welcome to Datalink. d) B. Ms Bates will be along in a few minutes. e) A Module 2 • Reading – find words 1 literal a. Anything… Visitor: Yes. k // the person receiving the visitor: b. d. m • Exercise 2 – Ending the small talk a) B. work out 4 vague a. thank you. yes. g. Thanks. Shall I take you to her office? Visitor: With pleasure. c. please ask. I think Ms Bates is free now. I’ll do that. Can we say four o’clock? Receptionist: Right. Er. h. (dials) Hallo. e. but I wonder if I could use the phone? Receptionist: Yes. She’s just finishing a meeting. Shall I book one? Visitor: Er. c) B.Receptionist: Oh. polite remarks • Exercise 1 – Making a call 176 . of course. I’m fine. Receptionist: Right. i. And anything else… if you need to send a fax or anything… Visitor: No. (click) Thank you very much. f. well you can use this one. b) A. If there’s anything else you need. (fade) (a few minutes later) Visitor: (fade in) Au revoir. • Exercise 1 – First words Visitor: a. just the phone. that would be good. I was wondering how far is it to the station? Receptionist: It’s about two miles – ten minutes by taxi. it’s okay. Oh. Receptionist: Not at all. Visitor: Thanks. dishonest 6 pleasantries c.
Lara Camden. I look forward to hearing from Mr. hold. bad. Gorliz and Zimmerman. er… Camden. office. Intership: Okay. did you say Alex Hall from Computech Arcos? Computech: Yes. Hall? Computech: Well. Er… when do you think I could contact him? Reception: Well. Dionis is away next week. I’d like an appointment with Mr. Bird is not in at the moment. through. He could make it Tuesday 4th. Lara Camden: I see. Mr. sorry! I’ve got that now. speak. I’d like to discuss the transporting of goods from Singapore to Athens. moment. good morning. Bye for now. Bird to call me? My name’s Camden. put. Lara Camden: Thank you. that would be okay. Bird. back. rang. Intership: I see. When would be a good time for you to come here? Computech: May I suggest next week? Intership: I’m sorry. Reception: Oh yes. office. Thanks for calling. how can I help you. my name’s Alex Hall from Computech Arcos in Singapore. Dionis is busy all day on that Monday. that’s a good time for us. Erm… can I ask you to confirm by fax? And would you like us to book you a hotel? 177 . Lara Camden: Hello. perhaps you would ask Mr. How about the beginning of the next month? Computech: Yes. Conrad Bird? Reception: I’m sorry. Reception: It’s a pleasure. Would you like to leave a message? Lara Camden: Yes. message. next week’s not possible – Mr. Shall we say ten a. Intership: Can you tell me what’s about? Computech: Certainly. that’s right. can. on 0181 299 462. C…A…M…D…E…N. Computech: Hello. but Mr. Okay? Lara Camden: Yes. Reception: Right.m. hello. Computech: That’s fine. call • Practice 1 – a model answer Reception: Good morning. that’s Lara Canden on 0181 299 462. • Practice 2 – a model example of the conversation Intership: Intership. Dionis. Could we say Monday 3rd of May? Intership: Er. speaking.(in order): speak to. Please could I speak to Mr. Intership: Sorry. on. number. ring. at the moment he’s away. my name’s Lara Camden from Bulmer Cables Ltd. through. unfortunately Mr.? Intership: Yes.
Date of Meeting: Tuesday 4th May at 10 a. Hall. many thanks. I think that’s everything. Dionis next month.m. Best regards • Exercise 2 – Changing arrangements See language input. Tao Loon: How can I help you. my name’s Luisa Dominguez. Dionis next month. Dionis (Intership S. we look forward to your fax to confirm the meeting. • Practice 3 Tao Loon: Hello. the hotel booking isn’t necessary. Dionis With reference to our phone conversation of this morning I write to confirm my appointment with Mr. Meeting with Mr. A model of a fax message of confirmation: Computech Arcos Lorong One Toa Payoh Singapore 1253 Telephone: ++65 350 574 Fax: ++65 250 552 Fax to: Mr. I look forward to meeting Mr.) Fax Number: 30 1 657677 From: Page 1 of 1 Date: 19 April 19— Re. Goodbye. Subject: Transport of goods from Singapore to Athens.A. I also confirm that I will make my own hotel arrangements. Ms Dominguez? 178 . Luisa: Hello. I’m ringing from Spain – from Berraondo Company. Mr.Computech: I’ll fax – and thank you but no. for now – Intership: Right. Sales Office here. Computech: Bye for now.
f. Tao Loon: Okay. Depends on congress organization – probably questions follow. d. Luisa: Right. Let me give you the order number – it’s HF5618. We need despatch now. goodbye for now. we need the other three printers urgently. Luisa: Well. Use of visual supports with key information. Luisa: Well. False. Luisa: Well. b. And I do apologize for the problem. False Module 3 • Practice 1 Tokyo medical congress a. True. Tao Loon: Right – let me see. It’s – it’s for twenty printers. no. Probably very formal. I’m sorry. at the moment we have some stock problems. plus later publication of Congress Proceedings 179 . a fair amount of detail and clearly a lot of expertise. • Reading a. Luisa: Yes. Tao Loon: Goodbye. that’s not good enough. e. can you give me a delivery date – it’s very urgent. I assure you. d. Now. Depends on congress organization – probably less then an hour. will you please send a fax to confirm that. I’m sure. High level of specialist knowledge – audience are experts. Delays are causing us problem with our customers. er. b.Luisa: The problem concerns a printer order. They are rather unhappy. Luisa: No. High expectations in terms of technical support. The problem is that only seventeen have arrived. I think it was probably an administration mistake. Tao Loon: Of course. f. c. False. True. e. Tao Loon: I’m sorry – that’s not possible. c. I’m afraid it’s the second time we have received and incomplete delivery and nobody told us there would only be seventeen. Tao Loon: Really? I’m surprised to hear that. Tao Loon: Well. But we’ll despatch on Monday. True. We can promise you a despatch next Monday.
b. Interruptions encouraged. 4 180 . even a whole day or a one hour presentation might be enough. Probably interruption are encouraged to make everything clear as the presenter goes along. Internal meeting / administrative staff a. Could be a very long presentation. b. Probably short – thought it might be half a day! e. High level of specialist knowledge – at least the Product Manager will be very expert. etc. f. 2 Reference to the programme for the day. Probably semi-formal. A staff meeting / charity event a. 4 An outline of the structure of your talk. 1 A summary of the conclusions. High expectations in terms of technical support. Probably short – five or ten minutes? e. 4 Reference to how long you are going to speak for. possibly handouts. f. 3 Reference to the visual aids you plan to use. Depends on objectives and on complexity of equipment. Probably illustrations. • Practice 2 Subject / title of talk. Informal. Reasonably high expectations in terms of speaker’s knowledge. 4 Reference to questions and / or discussion. Follow-up documentation will also be available. 5 The scope of your talk: what is and is not included. Informal. d. or the actual machine itself. 1 Introduction to oneself. diagrams. The audience will probably have good background knowledge but have come to learn about a new system. c. photographs. Use of visual support.Purchasing and Product Managers of a Taiwanese company a. d. Interruptions encouraged. f. a fair amount of detail and clearly a lot of expertise. c. Keep to clear simple structure making one or two important points. d. c. The audience have come to hear ideas. e. b. Low expectations. the Purchasing Manager perhaps less so. job title.
• Say it clearly and concisely. • Presenters sometimes place the major emphasis on visual aids and relegate themselves to the minor role of narrator or technician • Visuals must support what the speaker says • It is not enough just to read what the visual says • Reading • Find out about the audience. newspapers – newspaper 181 . • Use careful repetition of key information. • Introduce information using lists. • Reading a. There are three kinds: these are television commercials. See figure included in the text. • Plan what you’re going to say. depending on circumstances. • Reading a. b. The main body of the presentation contains the details of what was introduced in the introduction.Note: There are no hard rules about what should be included. above-the-line and below-the-line. • Give a link between parts of the presentation. secondly. • Find out what they need to know. • Provide a logical sequencing of information. We are planing two categories of advertising. • Practice 4 – a model of presentation Good morning. Most suggestions here are open to discussion and variation. everyone. • Don’t give too much information or too many fact. • Visuals make information more memorable • Help the speaker • Show information which is not easily expressed in words • Highlight information • Cause audience to employ another sense to receive information • Bring variety and therefore increase audience’s attention • Save time • Clarify complex information b. I’ll talk first about above-the-line advertising. I’d like to talk about the advertising mix for the new Cheri range of beauty products.
or perhaps you have a question or two? 2. • The speaker can give an instruction to the audience – especially in sales presentations. below-the-line advertising: there are three methods here also: the first is in-store advertising. So. and that sort of thing. So are you saying that in the USA or Europe that could not happen? 182 . That completes the overview of what we can do to launch the product. opening up discussion. so now I’d like to ask you for your comments. in-store advertising: what does it mean? Basically. in fact what I said was this process has been going on for a very long time.advertising. • A truly successful and interesting talk will avoid the problem. Now. So. • Handling questions Difficulties may arise because: 5 questions / discussion is relatively unstructured 5 the speaker has less control 5 speaker has to switch into listen and answer mode 5 it may be difficult to hear. to understand. that concludes what I want to say. I wonder if anyone can suggest why this has happened or if anzone has any comments on it? 4. but can I suggest one or two other factors? One is the increasing number of take-overs of smaller companies… 5. displays in the shop. using a mailing list. There are two basic types we aim at: youth magazines and those aimed specifically at the women’s market. I’m sorry if I was not clear on this point. The third kind is magazines. you’re right. b. The second below-the-line advertising is on-pack promotions – there are many kinds. joint promotions and free samples. merchandising. The last kind of below-the-line advertising is targeted mailing. competitions. No response from the audience. Yes. so… • Reading a. or identify someone whom you know will have something to say. then there’s on-pack promotions and finally targeted mailing. • To have question prepared to ask the audience. Er. 3. • Practice 5 – model answers 1. to answer or to distinguish between an opinion and a question. most obviously things like coupons.
this is a totally new concept as far as Citrus 183 . I’m going to be talking this morning about a new product which we are planning to launch in two months’ time. I’m a little out of practice… Preparing the audience Anyway. the market itself has expanded. high-income. At this point we must consider the importance of packaging and design. I’m Luis Lopez from the development department of Citrus Incorporated… I should say before we start that I hope you’ll excuse my English. as you all know. you’ll see that we have completely re-vamped the container itself as well as the label and slogan… Now to digress for just a moment. that’s K-O-O-L dash O-U-T. I agree. I must emphasize that this product is aimed at the young-professional. but we’ll have a chance to discuss that aspect later… so … to go back to my earlier point. I don’t quite follow you. market and not the traditional consumer of old-fashioned lemonade. I’m going to list some of the main selling points that we should emphasize in the advertising and sales campaign. Yes. Can you say that again … put it another way …? • Exercise 1 – The new product Introducing yourself Good morning ladies and gentlemen. Sorry. we’ll leave questions to the end… Delivering the message Now firstly. but we stopped producing lemonade two years ago. the more sophisticated packaging means a high unit cost. we had a gap in our soft-drink product range for the last two years. 7. I think if you don’t mind. I’ll start with the background to the product launch. the market research indicated that more and more consumers are using soft drinks as mixers with alcohol. so in other words. This brings me to my next point which is that we have rather new customer-profile in mind.6. I think we all agreed that there was room on the market for a completely new lemon-flavoured drink … Secondly. we haven’t all met before so I’d better introduce myself. but the situation is changing. and then move on to a description of the product itself. it’s called KOOL-OUT. we have been manufacturing mixed-fruit drinks and orange drinks for the last ten years. and it’s a lemon-flavoured drink… Well. and this may be a problem in the selling area. and if you look at the video in a moment.
Winding-up O. Thank you for coming. If you don’t mind. so just before closing. I can’t allow us to consider that question just yet…) 184 . everybody.) e. …. I can hear you say… b. You will have noticed that… e. now if there are any questions. the design is more modern than any of the current rival products. but the improved flavour and the package design should give us a real advantage in today’s market… well. Kano is ready to tell us something about … (Can I ask … to open with his remarks. I think Mr. Practice 1 Welcome. and incidentally the flavour is more realistic and natural… it’s low calorie. too. to look at) We have an agenda with three points. b 3. aimed at a relatively new age and income group. Finally. can we let Mr. as you see we are using both the new-size glass bottle and the miniature metal cans. An obvious problem is the cost of the accessories. what does he mean by… c. In spite of the higher price it will compete well with existing brands. I’d like to summarize my main points again… We have KOOL-OUT. a new design concept. it’s designed to be consumed on its own. Now you may well ask.K. d. or to be used as a mixer in alcohol-based drinks and cocktails. b. c 4. Kano finish? (Sorry. We are here today to talk about … (and to decide …. let’s look at the major attractions of the product. (You’ve all seen the agenda. Now you may well ask… Module 4 • a.Incorporated are concerned. thank you for listening. • Exercise 3 – Can I interrupt here? A 2. d 5. e 1 • Exercise 4 – Anticipating questions (suggestions) a. that’s all I have today for the moment. c. as a soft drink. I’ll be happy to answer them… • Exercise 2 – The product presentation See the model presentation and use the words in italics. It comes in both bottle and can and this will mean a slightly higher price than we are used to.) d. I’d like to ask if anyone has any comments on it..
Thank you. Agenda Apologizes for absence Minutes of previous meeting Chair’s opening address Personnel changes Review of marketing performance in the current year New products Marketing plans for next year Any other business Date of next meeting 2. So. Mr Kano will prepare (…) and will then fix a new date. before the next meeting. m. Would anyone like to say anything else on this? (Does anyone have anything to add to that?) k. The first to review is the 185 . 7. 5.f. A model of Agenda Axis Finance Limited Marketing Group: Year-end meeting Time: Place: Participants: Finish: 1. 9. 2. can I ask Ms Perez de Sanchez to tell us her views… h. The chair’s opening statement: a model Okay I think we should begin. Thanks for coming – and as you know – this is … we are here for our annual meeting. I’ll send out a report on this one. (So let me summarize that. • Practice 2 1. 8. You say that …) j. can we try to keep to the topic – I think we have gone away from it a little. some time next month. i. 3. Now. I’d like to sum up the main points. 6. Thank you for that … g. Er. I think we ought to move on to the next topic on the agenda. that’s everything. l. That’s it for today. As you know from the agenda there are four main issues to discuss. 4.
it’s a general fall of around 5 % in sales for most product areas. b. Anyway. specifically in the oil processing sector.personnel changes. so a meting is called to tell people about the decision (an information giving meeting). Decisions may already have been made. but can we talk about new markets later? I have some important information on that. we’ll examine the marketing plans for the next year. a. which is included in the Skills Checklist. then let’s start with item one on the agenda. An alternative description of the structure of decision making is the DESC model. let me tell you … B: Sorry. We discussed that in previous meetings. sales forecasts are much better now. I think Mr. Also. 2. Not all meetings are to make decision – as implied in the first sentence of the text. But first… B: Wait. Then we’ll discuss about new products. • Practice 3 – a model conversation A: The fall in sales is mainly due to the recession affecting world markets. In fact. or is everyone happy with the agenda? Okay. no. I’d prefer to talk about future prospects. Anglo Oils. we’ll look at the marketing performances in the current year. a. any suggestions. A: I’m very surprised you say that. B: Can we talk about the decision to sell Anglo Oils … A: Well. mainly because we sold our UK subsidiary. c. So – any comments. And finally. The structure of decision making: see the bulleted points in the second paragraph. we have much lower sales. The outlook is very good just now… B: What? I’d say things look quite bad. Decision making meetings. Communication has to be a two-way process to be successful. 186 . B: Er. don’t you think we should take a short break – have a coffee? A: Take a break? We’ve only just started! • Reading 1. Smith has prepared a statement on the personnel changes so I’ll hand over to him. b. can you tell us exactly how much sales have gone down? A: Well. I think I’d like to hear more about new markets. I’d rather not go into that. Secondly. A: New markets? Yes.
for example). That’s right. • Practice 4 – a model conversation A: Can we reach a decision on this? B: Well.and cost-effective manner c. commission some market research? B: Yes. consensus b. imperatives f. It is true that often an agreement. In many instances of communication. communication is a two-way process. It seems fair to say that in most cases. time. Meetings should be part of a learning experience. this may be slitting hairs: the point is that in meetings at least an acknowledgement or agreement is expected. goal d. I think we need more information. so future meetings can be improved by asking participants to evaluate meetings. or a consensus. desirables g. However. a. evolve k. evaluate alternatives h. I … I think … er. d. perception i. We could ask Hamid to recommend someone.c. verbalize • Reading a. I feel first of all. – a restatement of objectives 5 a summary of what has been accomplished 5 a summary of what action must be taken after meeting b. set an objective e. er. can be arrived at without a formal vote: it is the leader’s responsibility to make clear what the consensus is and ask if everyone accepts it. we need to know more about the effects of a price increase. 187 . awareness / empathy j. a message is given and it is sufficient that it is comprehended. A: Hmm. without even an acknowledgement (a recorded message. I agree. Can you explain – say exactly what sort of detail you think we need? B: Well. 3. A: Perhaps we should.
• Exercise 1 – Chairing a meeting Chairman I’d like us to reach a decision today about item 1. when… and you know. and the present situation. To summarize. as you know. we’ve almost finished. Does everyone agree with that proposal? All: (murmur of agreement) A: Okay. Does anyone have anything else to say? Well.m. Arnold Sorry to interrupt. Bob My own feeling is this : in years of experience. Walter? Walter I’m not too sure about this .A: Well. And also that Peter is going to identify three possible training organizations. Bob Could I just say something ? The Italian market isn’t as important to us as the Russian orders. Henry will explain the background to this. let’s look at possible courses of action. Peter will organize a presentation for next week. thanks everyone for coming. Well. Chairman Sorry to interrupt you. My own feeling is that if… 188 . on the 14th at 2 p. to confirm our decision. we’ve agreed a $10. That’s it for today. I was in Moscow last week. I’ve often found that.000 budget. • Practice 5 – a model example So. instead of asking your agents to do it. I’d say that the only way to sell in Italy is to go there and see the market for yourself. The issue is falling sales in the Italian market. if I could pass on my experience to the younger people here. What do you think about this. in Italy we’ve always… so that’s how things are at the moment. and learnt some pretty interesting things about the way things are moving out there. let’s move to the next item on the agenda. which is the Italian market. Chairman Thank you. but I’d like to know if the others agree. in many different markets throughout the world. Chairman Let’s keep to the immediate subject. until then. we had to decide on action regarding training courses. I think before that we could look at our own experience of price rises. Henry Thanks. Bob. Now. but if we launch a new advertising campaign in Italy it would cost a fortune! You said yourself that we haven’t enough money to advertise on every television in Europe! Chairman Let’s not jump too far ahead at this stage. Henry. Is everyone happy? Is that okay? Now. Then later we can perhaps ask a marketing consultancy.
shall we make a start? e. Chairman Could you let Walter finish? I’d like to have his view on this . true: 1. d. move. Walter Well. 5 to abstain means to decide no to vote • Exercise 3 – Could I ask you a question? You: I’m afraid I can’t comment at the moment. You: I would rather not answer that question at present. Chairman That’s an interesting point. I’m pleased to be in your country. but I can’t comment at this stage. well. Walter . You: I’m sorry. and Walter suggests that the Trade Fair is important. You: Yes. I hope you had a good trip? Not too long …? Did you get a taxi when you arrives here? c. to begin our discussion with some opening remarks. You: I did not say that at all. to second means to give formal support to the motion for presentation to the board. I’d like to say that for the last two years we haven’t had a stand at the Milan Trade Fair. on b. approve. Module 5 • Practice 1 – a model a. second. carried. I’ve been to Italy so many times recently. from our Marketing Department. welcome to … It’s very good that you could come to see us here. Okay. and a little while ago too? 189 . Well. Bob thinks we depend on the agents too much. b. At lunchtime we’ll be able to show you a little bit of the city – have something to eat in a local restaurant. 6. • Exercise 2 – Formal meetings a. You: A statement will be issued shortly. 4. 2. I think you’ve met James already this morning. address.Bob I don’t know why you don’t ask me. 7 false: 3. You: I can’t tell you anything before the statement is issued. Let’s summarize what we’ve said so far. I understand that the Fair has produced lots of contracts in the past. Well. casting. can I ask Luke Fox.
f. helps you to know the market. c. Firstly.1 Prepare any figures. T d. T b. b. 3 Know your own strengths and weaknesses. b. Check what they say without commenting. in a package. a. g. be constructive. 4 Know your role as part of a team. 6 Prepare your negotiation position – know your aims and objectives. F Issues are best dealt together with other issues. Knowing your own strengths and weaknesses iv. 2 Prepare your opening statement. • Practice 3 190 . Be prepared. or bring in third parties. a. one can keep on talking and find a way round the problem. d. c. the context in which you want to work. helps clear thinking and purpose. Knowing your aims and objectives ii. calculations and other materials 5 means you can support your argument. • Practice 2 1. F No. • Reading 1. at least not immediately. T g. any calculations and any support materials you may need. think about the whole package. Preparing an opening statement iii. We’d like to establish the beginnings of a partnership … It would be particularly interesting for us to learn about your supply systems … about price variations and about supply costs. a. f. F Better not to guess (though privately you might to some extend). 5 2. 2. c. we see this meeting as an exploratory session. Identify your minimum requirements. Vary the quantity or the quality. e. Preparing any figures. T One should usually be prepared to make concessions. 7 Decide what concessions you could make. creates reasonable expectations. I think it’s best for both of us that we look at some general questions.
144 Whitehall London WCI 4RF 191 . • Practice 5 GIBSON TRUST LIMITED Units 9-12 East Side Monks Cross Industrial Estate BRISTOL BSI4 6TR Telephone 01272 547777 Fax 01272 547701 Neil Finch Ministry of Urban Development 140. As you know our prices are very competitive. We can offer you an extra £50. if the discount is a good one.5 We can give you free delivery with a larger order. • Practice 4 Ojanpera: Well. Ojanpera: Even so. e. we can’t manage that unless you pay for the installation.000 compensation in exchange for your agreement not to go to law. Ojanpera: That sounds all right. well a discount could be possible if you agree to pay for the shipping costs. d. I’m sure you can allow us a discount? Beck: Okay. The company will introduce better working conditions if the staff accept shorter breaks. We can give 5 % discount if you agree to payment on delivery. 5 We provide free on-site training for only a small price increase. Beck: I’m sure we can. Beck: How about 4 %? Ojanpera: 6 % would be better. Ojanpera: That sounds okay. we’re happy to buy a machine if you can give us a good price. so to confirm: a 6 % discount but you pay all the shipping and installation costs. We promise to improve safety for staff provided that we reach agreement on new contracts. Ojanpera: Okay. Beck: Okay then. our engineers will take care of that. f. g. Beck: I’m sorry.
Thank you once again for a very constructive meeting and we look forward to seeing you again on May 15. Your sincerely. Do contact us if you have any comments or alterations you would like to make to this summary. the offices to the west and the warehouse alongside the tracks.. Our next meeting will be on May 15 at 10 a. at which development plans will be (h) examined.000 per year to Gibson Trust. April 30 --. The government-owned housing on the north side of the railway lines is (e) excluded . contracts will be (i) drawn up. 192 .‘Railway Land Sale’ I am writing to (a) confirm points (b)agreed in the above meeting. Then we will need time to consider the contracts but hopefully they will be (j) signed by the end of September. The eventual use of the land should be (g) specified in the contract. We also agree that the station will be renovated by the Transport Department and that the government will be responsible for running an eventual museum and paying a rent of £ 100.m. held to discuss the sale of government owned railway land to Gibson Trust Limited.May 2 200— Dear Neil. Soon after this. The remaining land will be (f) developed by Gibson Trust and later sold off separately. We would like to confirm through this letter and the (c) enclosed drawings that the property (d) included in the above sale consists of the land presently occupied by the station buildings and also the former car parks to the east of the station. The development is intended to be for commercial and residential use. Re: Meeting in Bristol.
We seem to be a long way from an agreement. change location f. Perhaps it would be better to leave this point for a while and come back to it later. The benefits of reaching agreement are considerable. change negotiator (personal chemistry?) g. emphasize the benefits available to both sides b. We think there is quite a lot of negotiation ahead before we can agree on a common strategy. we could agree to longer payment terms Situation 4 There are several problems. We will have more global influence and better prospects for the future. • Strategies in dealing with conflict Strategy 1 I think we’re not really making much progress. Well. fix an off-the-record meeting • Practice 6 Situation 1 The problem is that we have never offered the kind of warranty you are looking for.Jill Kearne Chief Negotiator Encs. Since we have a difficulty here. (I) • Reading a. quite a lot higher than we were expecting. but link this with us paying the shipment costs or agreeing to different payment terms? Situation 3 The price you are asking is rather high. bring in a third party (mediator?) h. Can I suggest a lower price. if it would help. Could we talk about a different aspect to the deal. adjourn to think and reflect e. change the package d. perhaps the question of delivery? 193 . invent new options for mutual gain c. may I suggest we leave the problem of the warranty and come back to it later? Perhaps we could talk about training for our technical staff? Situation 2 There’s a number of issues on the table.
Strategy 3 There seem to be a number of problems. I can’t take the risk on such a large order at this stage. Situation 2 The price we are offering excludes installation costs but does include a twelve month’s guarantee. we also agree that the change will depend on the different market conditions which affect our products… These are important points of progress. but I’d like to summarize the positive elements – issues where we have made progress. Third. We can offer you an extra 5 % discount. I’m afraid that’s not really acceptable. we understand how important this is. First. but only if the order is increased by 20 % over the next three years. is quite simple. It could be serious for both of us. Second. • Practice 7 Situation 1 Let me make a suggestion. Unfortunately.Strategy 2 I think it is important to think about what could happen if we do not reach agreement. we’ll agree a 10 % discount. You know that other suppliers offer free installation and two year parts and labour warranty? Situation 3 194 . Strategy 4 Can I suggest we take a short break? I think it will help if we look at some of the issues that are dividing us. The only winners will be our competitors. we agree that we have to settle the dispute between us. The most obvious consequence will be that we will both lose market share. we agree that the terms of our original agreement need to be changed. Strategy 5 The point at issue. Perhaps we will see areas where we can make a fresh offer. Cinis. I can’t say how many we’ll need in six months and certainly not in twelve. Mr. If you agree to buy 100 units every month for the next twelve months.
Situation 4 Now. You’ll have to do better than that. Right now you are sending us 350 boxes a month. Situation 3 Unfortunately I feel it would be better if I don’t join you on this project. Situation 2 I’m sorry our efforts to reach agreement have not been successful. otherwise we cannot reach enough of our market.000. we can’t agree to this. we’d be pleased if you can join us. but no doubt there’ll be plenty of other things we’ll work on. but finally I’m very glad we’re able to reach agreement. I’m afraid. I’m afraid I can’t increase the delivery period any further. We need at least 500. It’s not much to ask for. with four weeks for installation. but I hope that in the future we might work together on something. Sorry we can’t help you. I suggest we stop here. May I make a suggestion? If you can promise delivery in six weeks. We cannot supply goods in so short time. I have my instructions. and the decision about the next order to be taken by the 26th. I’m sorry. Situation 4 I’d like to repeat our order. Agreed? 195 . I think we’ll go elsewhere. but it really is physically impossible. but thanks anyway. Let’s go through the terms: six weeks for delivery and four weeks for installation. then we may be able to talk about further order. I think it would be good if we could go on to a restaurant now. It’s just impossible. demand is very high … Well. but I can’t accept eight weeks. It’s a pity but it’s still more than our budget. and the plant is working at full capacity. I’m glad you’re having a lot of success with our products. Situation 5 I’m sorry. Why such a long delivery period? This is our position. but not on those terms. I can’t go that high. some excellent news: we’d like to increase our order. but the bad news is that our order books are full.I think the absolute minimum investment in advertising must be $40. I’m sorry. We’re a bit stuck I’m afraid • Practice 8 Situation 1 It’s been a long meeting. • Exercise 1 – Your turn to negotiate Suggested replies: Let’s see how we get on. We need delivery of six weeks maximum.
provides for. communicate 4 supervise. • Exercise 5 – Licensing terms (in order): have the legal rights over. f 5. motivate people. yearly bottom limit. communicate information or decisions. • Vocabulary a. I’m sorry. Could you give me a moment to do some calculations? D. parties. copier’s. measure performance. 1 resources 2 manageable 3 setting. Module 6 • Discussion A personal choice of qualities: D. illegal copying. out of court d. The figure for installation costs? What is the basis for calculation? G. perform jobs. could you go through it again? • Exercise 4 – Vocabulary for contracts 5 agreement. I’ll have to come back to you on this. I’m just looking. let you have. 5 % to pay. H. compromise. period. • Exercise 3 – When things get difficult 5 Would you like me to go through that again? B. clauses. term. binding. abide by/comply with. F. C. d 8. set objectives. litigation. permission. 196 . official manufacturer. c 1. further years. when it ended. and supervise subordinates. e 2. an immediate payment. court. What is the basis of calculation for transport? E. g 7. conditions. develop strategies (or people or subordinates). b 6. make decisions. h 3. country. arbitration. performance 5 achieved 6 board of directors 7. Could you bear with me a moment? F. innovations 5 Common collocations include: allocate resources (or people). breach c. terminate. sections.• Exercise 2 – Ten rules for negotiating a 4. b. and J. ask for a ban.
The company is divided into five major departments: Production. Module 8 • Vocabulary a. 1 subcontractor 2 component 3 outsourcing or contracting out 4 capacity 5 plant 6 location 7 inventory 8 lead time b. The chief Executive Officer reports to the President and the Board of Directors. The Finance Department contains both Financial Management and Accounting. the Northern and Southern Regions. 7 D • Reading A functional structure B matrix structure C line structure D staff position • Describing company structure Here is a short description of the organization chart illustrated. 3 B. Research & Development. 4 A. The Marketing Department is subdivided into Market Research.Module 7 • Vocabulary 1 C. 1 A and E 2 C 3D 4 A and E 5 A and E 6D 7F 8E 9F 10 E 11 B 12 E 13 B 14 C and E 15 B and F • Reading 1 component 2 subcontractor 3 inventory 4 outsourcing 197 . and Human Resources. whose heads report to the Sales Manager. who is accountable to the Marketing Manager. Sales consists of two sections. Finance. Sales and Advertising & Promotions. 6 G. 5 F. Marketing. 2 E.
2. Profits through customer satisfaction • Vocabulary 1 word-of-mouth advertising 2 institutional or prestige advertising 3 advertising agencies 4 an account 5 an advertising budget 6 a brief 7 advertising campaign 8 target customers or target market 9 media planners 10 the threshold effect 11 the comparative-parity method 12 counter-cyclical advertising • Discussion The numbers of respodents who agreed with the statements were as follows: 1. Customer needs. • Vocabulary 1 credit facilities 2 warranty or guarantee 3 shelf 4 brand-switchers 5 (product) life cycle 6 profitability 7 opportunities 8 market share 9 image 10 niche Module 9 • Vocabulary 1A 2I 3F 4H 5D 6J 7E 8B 9C 10 G • Reading Paragraph 1 – the selling and marketing concepts Paragraph 2 – identifying market opportunities Paragraph 3 – the importance of market research Paragraph 4 – the marketing mix Paragraph 5 – company-to-company marketing • Comprehension 8. 57% • Reading 1 target 2 awareness 3 medium 4 tactics 5 trial 6 maturity 7 aimed 8 loyalty 9 advertising 198 . What is a product? / The definition of a product. 4. Brand names. Market. 72% 3. 2. Product lines and product mixes. 60% 8. 4. 51% 5. 41% 6. 90% 2. 3. Coordinated marketing. 85% 4.5 location 6 plants 7 capacity 8 lead times • Reading 1. Line-stretching and line-filling. 3. 49% 7.
attracting customers by way of ‘loss leaders’. • Vocabulary 1. sales representatives bring information back to a company from its customers. and. 5 Reasons to offer temporary price reductions include attracting priceconscious brand-switchers. growth. and can have a better impact.10 channel • Summarizing 1 When a new product is launched. dealers and retailers. the producer has to inform customers about its existence and develop brand awareness. and with a company’s sales force. 2 Promotion is one of the four elements of the marketing mix. they can also be used with distributors. Apart from selling a company’s products. 9. maturity and decline. offsetting a promotion by a competitor. for stores. 4 The four stages of the standard product life cycle (excluding the prelaunched development stage) are introduction. because it seems that people are more likely to read and believe publicity than advertising. 3 The advantages of publicity include the fact that it is much cheaper than advertising. Sales promotions need not only be aimed at customers. sales promotions are one of the four different promotional tools. competitors 2 word-of-mouth advertising 3 brand-switchers 4 points of sale 5 brand name 6 line-stretching 7 packaging 8 product improvement 9 media plan 10 packaging Module 10 • Reading 1 Market leaders 2 Expanding markets 3 Market challengers 4 Market followers 5 Establishing a niche / Dangers faced by market followers • Vocabulary 1 market share 2 promotions 3 monopoly 4 competitors 5 slogan 6 market segmentation 7 niche 199 . including ideas for new products. 10.
8 differential advantage 9 turnover 10 recession • Vocabulary 1 to innovate (innovation) 2 to diversify (diversification) 3 to merge (a merger) 4 a raid 5 a takeover bid 6 horizontal integration 7 vertical integration 8 backward integration 9 forward integration 10 synergy • Summarizing 1 The fact that many large conglomerates’ assets were worth more than their stock market valuation demonstrated that they were clearly not maximizing stockholder value.e. companies with successful subsidiaries that could be sold. to restructure them. and to use their capital productively. • Vocabulary 1 charities 2 legitimacy 3 perfect competition 4 welfare 5 threatening 6 vitality 7 free enterprise 8 conforming 9 embodied 10 proponents Module 11 • Vocabulary 1B 2C 3D 4G 5A 6E 7F • Vocabulary 1 shareholders or stockholders 2 earnings or income 3 liabilities 4 turnover 5 assets 6 depreciation or amortization 7 debtors or accounts receivable 8 creditors or accounts payable 9 stock or inventory 10 overheads or overhead 200 . 11. giving their stockholders the maximum possible return on their investment. Raiders argue that the possibility of a buyout forces company managers and directors to do their jobs well.e. 5 Investors were prepared to lend money to finance LBOs because they received a high rate of interest which more than compensated for the risk that the bonds would not be repaid. 3 Raiders showed that the stock market did not necessarily value companies’ assets correctly. buildings and pension funds. 4 Raiders were particularly interested in companies with large cash reserves. and resell the pieces at a profit. 2 Raiders bought conglomerates in order to strip them of their assets. i. especially land. i. split them up. and companies in fields that are not sensitive to a recession.
B Floating exchanges rates. 1B 2D 3A 4C 5F 6E 2. C The abolition of exchange controls. G The introduction of the single European currency. 1 adjust 2 convert 3 abolish 4 suspend 5 fluctuate 6 diverge Module 12 • Vocabulary 1 overdraft 2 credit card 3 cash dispenser or ATM 4 loan 5 standing order or direct debit 6 mortgage 7 cash card 8 home banking 9 current or checking account 10 deposit or time or notice account • Reading 1 Commercial banking 2 Investment banking 201 . E The power of speculators and the collapse of the EMS. D Intervention and managed floating exchange rates. • Comprehension 1 False 2 False 3 True 4 False 5 True 6 True 7 True 8 False • Vocabulary 1.• Reading 1 assets 2 stock or inventory 3 depreciation or amortization 4 shareholders or stockholders 5 earnings or income 6 turnover 7 overheads or overhead 8 liabilities 9 debtors or accounts receivable 10 creditors or accounts payable • Vocabulary – Financial statements 1 turnover 2 overheads 3 depreciation 4 freehold properties 5 historical cost 6 debtors 7 cash in hand and at bank 8 corporation tax 9 net assets 10 called-up share capital • Reading A The period of gold convertibility. F Why many business people would prefer a single currency.
3 Universal banking 4 Interest rates 5 Eurocurrencies • Vocabulary 1. D Avoiding tax on salaries. offer loans. make loans. E Avoiding tax on profits. underwrite security issues • Vocabulary 1B 2A 3A 4B 5C 6A 7B 8C 9C 10 B • Reading A The functions of taxation. C Tax evasion. • Comprehension 1True 2True 3True 4False 5False 6 False 7True • Vocabulary 1 depreciation 2 disincentive 3 regressive 4 consumption 5 self-employed 6 national insurance 7 perks 8 tax shelters 9 tax-deductible 10 tax havens Module 13 • Vocabulary 1 liability 2 creditor 5 to liquidate 6 liabilities 3 bankrupt 4 assets 7 to put up capital 202 . make profits. issue bonds. 1 deposit 2 foreign currencies 3 yield 4 liquidity 5 maturity 6 underwrite 7 takeover 8 merger 9 stockbroking 10 portfolio management 11 deregulation 12 conglomerate 13 blue chip 14 solvency 15 collateral 12. Common collocation include: charge interest. exchange currencies. receive deposits. raise funds. offer advice. B Advantages and disadvantages of different tax systems. do business. pay interest.
and writing (selling) a put. 6 The risk with currency and interest rate swaps is that the exchange and interest rates may change unfavourably. if you think a share price will fall. 5 On the contrary. • Vocabulary Appreciate – depreciate Call – put Discount – premium Drought – flood Floating – fixed Hedging – speculation 203 . 4 If you believe that a share price will rise.8 venture capital 9 founders 10 premises 11 underwrite 12 dividend • Vocabulary 1 mutual fund 2 portfolio 3 stockbroker 4 blue chip 5 defensive stock 6 growth stock 7 market-maker 8 institutional investors 9 inside share-dealing • Vocabulary 1H 2B 3A 4C 5I 6E 7F 8D 9J 10 G • Vocabulary 1F 2E 3A 4B 5G 6C 7D • Vocabulary 1B 2A 3F 4C 5E 6D • Summarizing 1 The difference between futures and forward contracts is that futures are standardized deals and forwards are individual ‘over-the-counter’ agreements between two parties. which will never be exercised. so you earn the premium. so you will be able to sell your shares at above the market price. which will never be exercised. 3 Speculators can make money on currency futures if they correctly anticipate exchange rate appreciations or depreciations or interest rate changes. possible option strategies include buying a put. so you earn the premium. 2 Producers and buyers often choose to hedge because this allows them to guarantee prices for several months. possible option strategies include buying a call. and writing a call. which you will be able to sell at a profit.
Extra Readings (Industry Profile and Career Overview from WetFeet. premium also means the price of an option contract. In fact.com) Advertising & PR Industry Advertising and public relations are like a microwave and a freezer: totally different.Spot market – futures market Strike price – market price The word ‘premium’ is used twice with two different meanings in the text. many 204 . ‘At a premium’ means above the nominal or market price. but they work together really well.
large advertising agencies offer PR services. Strategy involves helping the client make highlevel business decisions. such as political candidates. on the other hand. but what they really sell is intangibles. perhaps. Many of the biggest and most successful agencies have units that focus on each of these activities. other times—when the client doesn’t have a marketing department— the agency takes on that role. Concept is where the agency takes the client’s strategy and turns it into specific ideas for advertisements—such as a series of ads featuring extreme athletes for a soft-drink maker whose strategy is to make inroads in the teen market. to vote for a political cause or candidate. an advertising agency is a marketing consultant. and the challenge is to put their client's spin on how a news item 205 . PR firms. or a service-oriented company like Charles Schwab & Co. the audio taping. which is typically gathered by independent companies that specialize in customer interviews. getting publicity is easy. They often base advertising or publicity campaigns on market research. Sometimes the agency works in conjunction with the client’s marketing department.) with all aspects of its marketing efforts—everything from strategy to concept to execution. like what new products the client should develop or how the client should define or “brand” itself to the world. Full-service agencies also handle the placement of the ads in newspapers. radio. When they represent truly newsworthy clients. magazines. the industry includes everything from PR agencies (which try to place news items about clients in the media) to direct marketers (who send out all that annoying junk mail) to Internet advertising and design firms (which create pop-up or banner ads or design websites for clients). focus groups. such as image and reputation. They are paid to persuade people: to buy goods or services. or to invest in a company. In broad terms. It helps the client (a manufacturer of consumer products like Nike. Both industries deliver words and pictures. Execution is where the agency turns the concept into reality—the production of the actual ads: the print layout. the film shoot. and surveys. In broader terms. and so on—so that they reach their intended audience. generally try to persuade media to publicize their messages as news. But that’s only a strict definition of what people in advertising do.
Account planning is a discipline that aims at increasing understanding of the consumer. the job is more difficult. the political candidate whose past catches up with him.is presented in the media. advertising and public relations firms have experienced a lot of consolidation in recent years. Other New Media 206 . In advertising. bigger size means more clout with media outlets. and damage control—the term for limiting bad publicity that results from misadventure: the plane that crashes. and sometimes not so creative. When the client is less newsworthy. and therefore lower advertising costs. as companies join forces to lower costs and stay competitive in the global marketplace. rather than the account management staff. investor relations. but in recent years the American advertising industry has discovered account planning in a big way. a single holding company can control several competing accounts without conflict of interest. Account Planning Account planning—also known as strategic planning—was developed in English ad agencies in the 1960s and 1970s. the car that bursts into flame. PR professionals write creative. such as a company that wants publicity for its products without buying an ad. in the hope that it will be run as such on the front page or reported at the beginning of the evening news on television. Trends Consolidation Like so many other industries. the computer chip that can't add numbers correctly. PR firms also provide services such as speech writing. account planning is such an integral part of many American ad agencies that it’s the account planners who do most of the strategizing on behalf of clients. It took a while. Today. This trend is also a result of the fact that by owning several different advertising agencies. ghost writing. the pain pill that poisons people. press releases that dress up company messages as topical news.
advertisers are now trying to get your attention through nontraditional advertising media like the movies. and the kind of advertising it does: branding vs. So. Cordiant. They are joined by advertising agencies that have expanded their operations by opening offices around the world and by acquiring other marketing and media companies. you'll need to think about its location. global has become the way to go. and often won’t even pay attention to ads. 207 . and Publicis Groupe. the advertising industry is learning how to create ads like smart bombs. promotional. E-mail and automated direct mailing let advertisers reach individual customers economically. It seems that people are jaded by the overload of ads in traditional media. As a result. the WPP Group. These include the Grey Global Group. That means that technological expertise is increasingly important within advertising agencies and. Other nifty places where you can now see ads: on bus rooftops (ads atop buses reach the professional market that works in office towers. Big Global Networks In the past decade. PR firms. its client list. the big names continue to handle most of the accounts—and earn most of the dollars. to a lesser extent.The Internet is not the only new medium when it comes to advertising. like television or newspapers. all media versus specific media. capable of delivering a customized message to a precise target. Havas. Targeted Marketing Computer databases let advertisers store detailed information about each of their customers. the Interpublic Group. They also are the primary source of employment opportunities. apparently) and at the bottom of golf holes. general vs. How It Breaks Down Though boutique agencies are growing in number and revenue. specific industries. for the first time. In addition to the size of the firm. Beer ads have even begun to show up on disinfectant cakes in men’s room urinals. Several huge global marketing and media conglomerates now dominate the advertising industry. where product placement has become a permanent part of business. On-demand printing lets advertisers customize brochures to individual customers. These include Omnicom. of all places.
and placing banner ads to designing corporate websites to developing e-commerce 208 . and recently acquired Bcom3 Group. Shine & Stern in Sausalito. which owns Leo Burnett Worldwide and D’Arcy Masius Benton & Bowles (the latter no longer exists under this name. In the old days. Walter Thompson. At smaller agencies. it’s not the rule it once was. California. and Interpublic owns the Lowe Group. Interpublic owns McCann-Erickson Worldwide. And Publicis Groupe owns Publicis Worldwide and Saatchi & Saatchi Worldwide. The WPP Group owns Ogilvy & Mather and J. Omnicom. Though that’s still often the case. Mad Dogs & Englishmen in New York and Butler. being big meant being corporate and account-driven. Lowe (The Partnership). are two of the hundreds of smaller shops. and Campbell-Ewald. but has been folded into Publicis). for example. Another is that big companies now own what were until recently independent shops known for strong creative. Omnicom. FCB Group. This includes everything from concepting. in a smaller agency people will often be working on several accounts at once. Havas Advertising owns Euro RSCG Worldwide and Arnold Worldwide Partners. with many advertisers now recognizing the value of catchy creative work. the boundaries between different departments are often not as pronounced as at larger agencies. for instance. owns Goodby Silverstein. Deutsch. Cordiant owns Bates Worldwide. Interactive Agencies Interactive agencies specialize in online marketing and advertising. owns BBDO Worldwide. DDB Worldwide. Smaller Shops While a lot of hot shops have been snatched up by the big global holding companies. While the staff at bigger agencies is divided by client. Often these are creative boutiques— agencies started by people from bigger agencies who have hung out their own shingle in order to follow their vision of what makes good advertising. there are still plenty of smaller shops—some with as few as five employees. these firms own many of the major players in traditional and interactive advertising. designing. and TBWA Worldwide.Together. One reason is that advertising has changed.
you won't lose your job if you can't come up with a brilliant idea every week. Inc. Also. or consumer-product marketing. Internally. Usually. such as direct marketing or promotions. Typically. which create and produce brochures. Charles Schwab & Co. Research firms. and corporatereputation management. Powers all measure the success of agency campaigns. Smaller PR firms. Other firms specialize in certain aspects of the advertising world. marcom work is not on the creative edge. like ad agencies. crisis management. Some corporations create and produce some or all of their own advertising. and MasterCard both have in-house ad departments. telecommunications. large corporations usually have marketing communications (marcom) departments. investor relations.solutions for corporations. one difference between PR and ad agencies is that PR firms tend to organize themselves around practice areas.D.). entertainment. but on the other hand. online-ad click-through rates plummeted— resulting in dismal online-advertising revenues. others are owned by big players. and other so-called marketing collateral. labor relations. such as public affairs. Nielsen (of TV-ratings fame). Nonagency Opportunities Beyond the traditional ad and PR agencies. may specialize in a particular field. and J. these will be more corporate 209 . consumer-product marketing. Ketchum PR. Although some of these are independent. and Hill and Knowlton (owned by WPP). there are a number of other job sources in this field. Marcom departments also often write and distribute press releases and perform other PR functions. Gallup. media relations. For example. such as IRI (Information Resources. This segment of the industry has been devastated in recent times. such as the Internet. As Corporate America cut back on advertising expenditures. But the segment looks to be on the rebound. Public Relations Firms that specialize in providing PR services include Edelman. as advertisers try out new online strategies with a newly realistic perspective on what advertising on the Internet can and cannot do. product sheets. health care.
So. this means designing and producing mock advertisements. like their more-traditional bricks-and-mortar Corporate America cousins. The easiest routes into the marketing and business side of advertising are entry-level media positions and administrative assistant positions. you can’t get a job in advertising without a book of your work. Chicago. • Focus group = a group of consumers brought together to give opinions about products. too. and you probably won't make a huge salary to start. and as a result. Job Prospects The advertising industry has taken a big hit due to recent economic events. where the biggest agencies are headquartered. be prepared to start at the bottom and work your contacts to get interviews. those that are still around are much less willing to plunk down millions of dollars on advertising. and it doesn't pay well when you start. The first thing job seekers should know about advertising: It isn't easy to break into. While some of the bigger agencies do recruit on campus for entry-level account-management hires. jobs in the industry are scarce. but the work can be interesting and rewarding. Second. Add in the fact that it’s exceedingly difficult to start in this industry in anything but an entrylevel position. adverts etc. 210 . particularly the decline of the dot coms and the overall recession. San Francisco. In PR. For entry-level copywriting or artdirection positions. if you want to work in advertising. Remember all those expensive dot-com Super Bowl ads from a few years back? A lot of those companies are no longer in business—and. but you’ll get a chance to show your stuff and get promoted. or Los Angeles. most entry-level hires are not recruited.in feel and will produce advertising that’s not as exciting as that of general agencies. The ad and PR industries are going through a difficult cycle currently. If you’re a creative. They don’t pay that well and they involve lots of grunt work. expect to work in New York City. and you end up with a whole lot of competition for relatively few low-paying jobs. you'll typically start at the bottom (an internship is a favorite way to break into the industry).
business or bank in order to get profit Holding company = companie holding / a company which owns more than 50 % of the shares in another company / company which exists only or mainly to own shares in subsidiary companies (Am. Proprietary company) Strategic planning = previziune strategică / planning the future work of a company Boutique – agency = agenţie tip boutique (de mici dimensiuni) Marketing collateral = auxiliare de marketing Dot coms = a company that primarily does business via the Internet Inroads = atac.• • • • • • • • • • • (Market) survey = a study of the state of the market. a ţine. năvală Take on = a-şi asuma Pop-up = care sare. se mişcă rapid / a book. toaster etc that is designed to make something suddenlz spring out of it. Account = customer who does a large amount of business with a firm and has an account. straşnic Ads atop = reclame pe acoperişuri 211 . a apărea în ziar Misadvanture = accident. moarte accidentală To catch up with = a ajunge din urmă pe cineva Clout = puterea sau autoritatea de a influenţa decizia altora Media outlets = piaţă de desfacere media Jaded = istovit. card. Newsworthy = important or interesting enough to be reported as news Spin = a way of providing information that makes it seem to be favourable for a particular person or political party Topical news = ştiri de actualitate Report = a face un reportaj To be run = a circula. epuizat Nifty = grozav. Press Release = sheet giving news about something which is sent to newspapers and TV and radio stations so they can use the information Speech writing = scrierea discursurilor Ghost writing = the writing of a book or a story for another person who then says it is their own work Investor relations = the relations with investors – the person who gives money to a company.
a trade 212 . simulare Mock-up = model of a new product for testing or to show to possible buyers Internship = poziţie internă Rewarding = plin de satisfacţii Advertising Ads seem to be everywhere: filling magazines. companiile care îşi desfăşoară activitatea în mod tradiţional Add in = a adăuga Currently = în prezent. on billboards lining the road. foarte Hires = slujbă. a veni cu ceva (o idee) In-house = interior Due to = datorită To plunk down = a arunca Bricks-and-mortar corporates = “clădiri”. Their object: to market and sell goods and services. extrem de.Men’s room urinals = closet On-demand printing = tipărituri la cerere Customize = to lok special or unique To a lesser extend = într-o mai mică măsură Revenue = venit Fold up = if an organization folds or folds up it closes becose it does not have enough money to continue Snatched up by = a fi apucat. angajare Grunt work = the hard. and showing up at regular intervals on television. especially as a doctor or a lawyer Cut back = a micşora. înhăţat To hung up your own shingle = to start your own business. acum Exceedingly = grozav de. a reduce Click-trough = care se accesează prin click-ul mouse-lui computerului Rates = cotaţii Plummet = to suddenly and quickly go down in value or amount To be on the rebound = a-şi reveni Come up with = a concepe. uninteresting part of a piece of work (donkeywork) Mock = model. According to Ad Age.
such as Old Navy. Advertisers play a role in shaping the ads that shape our culture. The work you do will be determined partly by the type of agency you're in and your role within it. from strategy to concept to execution. Account-driven agencies' ads usually focus on product benefits. account planning. for which an "Energizer Bunny" campaign extolled the product's long life. You might go into the business side of account or account planning. on television. companies spent close to $80 billion dollars on advertising in 1998. It helps a client—a manufacturer of consumer products such as Nike. the Web design. An advertising agency is a marketing consultant. or the audiotaping. Strategy involves helping a client make high-level business decisions. which uses retro clothing styles to connect with its teen and twenty-something market. Execution also involves placing the ads— buying space in newspapers. the film shoot. The agency takes a client's strategy and turns it into a specific concept for advertisements —such as a series of ads featuring extreme athletes for a soft-drink maker with a strategy of making inroads in the teen market. You'll work in one of five departments— account management. production. or creative. where you'll have a similar goal. 213 . Careers in advertising can be lucrative. As a result. though your means will be quite different. Execution is where an agency turns a concept into reality—the production of actual ads: the print layout. design— particularly graphic design—and editorial and writing careers join ad agencies as creatives) or media planning or production. or a serviceoriented company such as Charles Schwab & Co. the creative side. Some people interested in advertising may find they prefer public relations. accountdriven agencies end up with accounts such as Energizer batteries. Creative agencies end up with accounts where lifestyle or image is more important. such as how to brand a new line of suntan lotions. media.magazine.—with its marketing efforts. where you'll create ads (many people interested in visual arts. while creative agencies' ads focus on brand image. or in subway stations.
and able to handle deadlines and stress. new-business departments. and for how long. organized. culturally aware. good with people. resilient. motivated. you need to be creative. you've got to be able to handle pressure and deal with the frustration of having clients who may not understand or appreciate your creative vision. which keep track of possible new clients and gather resources in preparation for pitches. understand and incorporate technology. either in-house or outsourced. and in which medium—radio. To succeed in advertising. If you're a creative. You'll also have to be able to work individually and in a team environment. television. which direct publicity programs. on budget. In account planning. you'll try to understand consumer behavior and use your knowledge to devise strategies for clients. good at math. understand buying and selling patterns. and public relations departments. 214 . There you'll juggle a number of projects.Account management is the clients' primary contact. or Web—when. tactful. showing well-dressed people driving up to a discount store to highlight a change in product selection. For a career in account planning. Production involves physical creation of the ads. and ensure that they come in on time. On the creative side. you'll also have to be capable of carrying out qualitative and quantitative research. Media decides where to place ads. storyboards—cartoon-style Some larger agencies contain traffic departments to handle the flow of projects between departments. and have a thorough understanding of marketing. you'll be responsible for turning strategies into concepts that can be made into finished ads—for example. Good media planners are detail-oriented. and on strategic target. print. and appreciate creativity. Creative departments also create summaries of what an ad will contain. decisive.
those in PR do more than make their clients seem great. when mediated by a supposedly objective third party. rather than directly to the client's target market. for instance. antitrust violations." said the historian. PR. Boorstin. and some hire public relations officers. hucksterish flacks trying simultaneously to pull the wool over the eyes of their 215 . help mitigate harmful publicity when. Because of their role in generating media coverage. Unlike an advertising agency. Daniel J. PR professionals are sometimes thought of as disingenuous. And in many sectors it's a fast-growing field. is all about relating (or communicating) to the public—a relationship generally mediated by the press. You might think of PR as a specialized area of marketing and akin to advertising. which incorporates a similar client-oriented structure. and generally represent a client to the media in order to get the most favorable publicity possible. The objective in PR is to use the press to reach the target market because. a PR agency communicates a company's message to the press. your job is to make your client seem great without anybody knowing you were trying. say. They speak on behalf of client organizations. Of course. deceitful. or to sell something by saying how good it is Sales pitch = what a person says about a product to persuade people to buy it Resilient = rezistent Public Relations "Some are born great.Lucrative = profitabil Suntan lotion = loţiune pentru bronzat Extol = a preţui foarte mult Juggle = a jongla Devise = a inventa a plănui / to plan or invent a way of doing something. which is also known as communications. the federal government sues a client for. especially something complicated and clever Pitches = to try to make a business agreement. some achieve greatness. His point? In public relations. the message will become more powerful.
perhaps. for instance. needs. helping the client understand what the public wants. and develop strategies that will spark media interest. either pitching the story or furnishing the reporter with statistics to write it. They also serve as company spokespeople. celebrity. but in a world glutted with information. perhaps. and all of them are using public relations to do so. are confident. it's likely that a PR pro was behind the scenes. are articulate both with the written and spoken word. if the woman happens to be Madonna. every company. develop and publish newsletters. Reporters will complain. plan and hold events intended to generate publicity. are able to understand a variety of people. could be a PR ploy to get her in the papers—a well-considered one. work alongside an advertising agency to position products in the mind of the public. An actress's appearance at an awards ceremony wearing nothing but a potholder. in today's business world. Usually. The fact is.clients and the public at large. endeavoring to put a positive spin on events for a client organization. When you read something in the newspaper about the phone company. PR practitioners will represent the public to the client. as well as the Internet start-up seeking funding from investors. issue press releases. and is concerned about. and manage crises. but less effective if the woman is Nancy Reagan. Michael Jordan consults with PR pros to figure out how he can best maintain his image. PR pros "pitch" story ideas to reporters. Day to day. and plan events. That's inaccurate. seeking to maintain its image. PR serves those fighting to legalize medical marijuana. Those with more experience in PR will write speeches. and association wants to show the best possible face to the public. so does Intel. trying to elicit coverage of subjects important to their clients. you'll spend much of your day working with the media. You'll make phone calls. And along with representing the client to the public. strategize the best time to announce a new product. and quick studies— 216 . they rely on public-relations practitioners for information they don't have the time or budget to gather themselves. Those who do well in PR have strong communication skills. CEO.
One insider says that if you know you're shy. A public relations professional who is afraid of the public won't be able to represent his or her clients authoritatively. especially by deceiving someone Issue = a emite Glutted = încărcat. harmful. PR professionals should also be quick thinkers and persuasive. or serious Antitrust (violations) = which attacks monopolies and encourages competition Akin to = foarte asemănător cu Huckster(ish) = someone who uses very strong. most jobs in the PR field require assertiveness and an outgoing personality. sometimes dishonest Flack = strong criticism To pull the wool over the eyes of somebody = to deceive someone by not telling the truth Elicit = to succeed in getting information or a reaction from someone. direct selling methods. Mitigate = to make a situation or the effects of something less unpleasant. PR probably isn't the best career choice for you. plin de Practitioners = someone who regularly does a particular activity Endeavor = a încerca din greu Assertive(ness) = behaving in a confident way so that people notice you Authoritative(ly) = în mod autoritar.you'll need to learn quickly what your clients do in order to communicate their messages effectively. While there are some behind-the-scenes opportunities such as research that could accommodate introverted types. plin de încredere şi care impune respect Outgoing = liking to met and talk to new people 217 . especially when it is difficult Spark = a stârni interesul cuiva în ceva Potholder = a piece of thick material used for holding hot cooking pans Ploy = a clever method of getting an advantage.
They create budgets and schedules. You can think of account managers as corporate jugglers. Any company that serves other businesses hires account managers tonesses hires account managers to needs are being met. Web-design companies. and advertising and public relations firms. Then they make sure their company develops products or services to meet those requirements. Account managers work in many different industries. They also identify and solicit new customers. and explain clients' agendas to their staffs and management. Account managers keep a careful eye on projects in development.Account Management Account management combines sales with customer service. What You'll Do Account management acts as a liaison between a company and its clients. They let customers know how their accounts are progressing and are the first to hear about problems. Account management professionals work with clients to ensure they’re getting the most out of the products and services their employers sell—and to persuade clients to continue to do business (preferably more and more business) with their employers over time. when a client hates what the agency’s creatives have put together—they do their best to smooth things over and maintain a good working relationship. Account managers coordinate everything and everyone. consultant firms. They make sure no details fall through the cracks. enforce deadlines. When something blows up—such as when deadlines aren’t met or. Examples include employment agencies. And many serviceoriented businesses such as advertising and public relations agencies provide similar support to their customers. Clients can depend on them to protect their interests. this means making sure that clients are happy with your company’s products. In high tech as well as in more traditional manufacturing industries. Account managers work closely with customers to determine the customers' needs. 218 . in the advertising industry.
Account managers interact with clients. Who Does Well Account managers need to be detail oriented. You need to know exactly what services you can provide and how quickly a project can be completed. and try to come up with a solution. As the project progresses. The account manager works with the client to determine the type and scope of the campaign. Read up on changing business trends and strategies. Clients expect the account management team to understand the needs of their businesses. You may need to hold a client's hand as you walk him or her through a project. Organization is a key part of the job. He or she will talk to the client. find out what's wrong. Whatever the case. a business hires an agency to come up with an ad campaign. You will be expected to keep on top of every aspect of the project. Unfortunately. You can't offer more than your company can deliver. long hours may be required.In advertising. Promises made to customers must be kept. the account manager makes sure the campaign meets the client's specifications. It's up to the account manager to fix the problem. all projects do not go as planned. An experienced account manager understands that knowledge is power. Business Development 219 . Your knowledge base will attract new accounts and keep the ones you already have. Sometimes a client won't like the work that has been done. Some clients will be harder to work with than others. He or she then communicates those concepts to the ad agency's creative team. and management. You will need to learn as much as you can about your clients. Good communication skills are also necessary. creative staff. the better. The more industry insight you bring to the table. an account manager seeks the best solution for his or her client and employer. When a deadline looms.
A deal might be a co-branding initiative. an e-commerce partnership. At larger companies such as AOL Time Warner. Working in business development is an excellent way to become adept at business strategy while gaining hands-on experience in negotiating deals and managing partner relationships. Who Does Well Business development involves varying degrees of sales and strategy. a technology. biz dev people may focus on getting new corporate sales accounts. or some combination of the three. and how can we make them happen?" Their objective is to expand the market reach or revenue of their companies in ways that make the most of their companies' resources and capabilities. and marketing to ensure that a deal is consummated. while in others they may lead new product development. requiring close collaboration with various internal and partner-company teams such as sales. Biz dev executes the company's strategy by "doing deals" with complementary businesses.or content-licensing arrangement. or Microsoft. Business development jobs are also highly cross-functional. What You'll Do Business development people constantly ask: "What ten things will have the biggest positive impact on my company's business.Business development (also known as biz dev) is exactly what it sounds like: It involves figuring out how to build or develop a business. Exactly what that means varies from company to company. Cisco. biz dev steers the direction of a company— the deals forged today determine what the rest of the company will be working on tomorrow. one of biz dev's many responsibilities may be to decide which smaller companies the company should acquire next to ensure that it retains its market strength in the future. 220 . What the work entails depends on how established a company is and what its business model is. With its focus on strategy. You can find business development jobs in all industries—at everything from tech start-ups to huge pharmaceuticals companies. engineering. In some companies.
including both the long-term strategy and its dayto-day execution. and even a company's chairperson rely on the general management team to promote the company's interests at every turn. to keep their businesses profitable. and make systematic changes. and others. find and develop alliances with suitable business partners. What You'll Do For the most part. strategic partners. year after year. or the executive team. and answer to shareholders. raise money to grow their organizations. general managers control how an organization operates. and the company's general philosophy. They communicate the value of their organizations to the outside world. chief operating officer (COO). They develop strategies that will make their organizations successful. A GM decides what products to produce. Their knowledge about an industry and their ability to provide direction can mean the difference between an organization's success and failure. as needed. GMs are also expected to raise money. What General Management Is General managers (GMs). consider a career in general management. run a company's business. president. keep a company profitable. The health of a company rests firmly on their shoulders. GMs also need to be their companies' biggest advocates. Employees.General Management Do you have a corporate vision? Understand how an industry operates and how to improve it? Know how to manage and motivate employees? If so. GMs are expected to see and understand the big picture. They are involved in planning and policy making at almost every level. GMs give their subordinates a 221 . also known as executives. shareholders. direct and coordinate employee activities. They develop corporate structures and policies. They include the chief executive officer (CEO). which markets to go after.
General managers bring a measure of order and purpose to their organizations. They in turn hire and oversee managers who handle the day-to-day supervision of lower-level employees. Small businesses and start-ups often have limited management teams. the highest-ranking manager. As a company grows and departmentalizes. For example. who supervises the entire organization. who take on the titles of CEO and president. the heads of Web development and information technology answer to the CTO. Department heads answer to the executive officer who controls their area of specialty. and ensure that deadlines are met. Operational managers report to department heads who set policy and determine the goals of their divisions. and general manager (GM). Their work is overseen by the general manager or president. chief technical officer (CTO). Above them is the CEO. and goals. Lower-level employees answer to operational managers. Such supervisors are responsible for managing the functions of an organization. the general management function is divided into a family of positions. Many firms have several layers of frontline and middle managers. Without their guidance a company could flounder. The founders. such as marketing or human resources. chief financial officer (CFO).reason to want to work for them. typically lead such companies. other positions have more specialized responsibilities. Some examples are the chief operations officer (COO). marketing strategy. While the CEO and president remain committed to the overall mission of the organization. In this way. who oversee their daily work. The CEO is held accountable for 222 . They instill a sense of pride in shareholders. make hiring decisions. settle staff disputes. Executive officers work together to set the goals and policies of a corporation. They set project goals. Underneath them are department heads who run specific areas of an organization. larger corporations have developed a well-defined chain of command. General managers tell the press why people should care about their products.
But even a slight blip in the markets can change public perception. GMs can expect to be in the spotlight most of the time. The trade press follows a GM's every move closely. up to and including firing the CEO or any other top executive. Who Does Well GMs can be found in every industry and organization. If the company begins to falter. Members of the board have a fiduciary responsibility to look after the stockholders' (owners') interests first and foremost. In publicly held corporations. Employees and shareholders want to know what makes GMs tick. the board is ultimately responsible for the success of an organization. 223 . However. then slowly work their way up the corporate ladder. They are often the first to be let go. the CEO still has to answer to the board of directors.all aspects of the business. what they do in their spare time." Marketing When you think about cola. Every decision they make and every policy they set is subject to scrutiny by those around them. Those companies have spent a lot of money so that you'll associate a generic product such as a computer with a brand name. They are given as little privacy as their Hollywood movie-star counterparts. Before entering management. from publicly held companies to non-profits and governmental agencies. However. the board takes control of all managerial functions until a business has stabilized. the public dismissal of a GM will be padded by a large settlement offer and the GM's equity in the company—the so-called "golden parachute. what do you think? Coke? Pepsi? That's due to marketing. they have the right and the duty to correct the situation using any means possible. There will be no place to hide. CEOs and presidents of large organizations are the stars of the corporate world. In some cases. they can do no wrong. Usually they work for a while as operations managers. GMs should have first proven themselves in their core industries. What comes to mind when you think of computers? Dell? Apple? IBM? That's no coincidence. and how much money they made last year. As long as profits are up.
In the consumer products industry. Engineers. preferences. In marketing terms. and enhance brands. and public relations. advertising. lifestyle. Of course. marketing (called brand management) is the lead function. Who Does Well Marketing appeals to creative thinkers as well as numbers-minded statisticians. a specialized marketing function is the industry. At a high-tech company. Marketing is a function at every company in every industry. marketing may play a supporting role to research and development.) Marketers want the consumer to ask: "Which brand helps me look and feel my best? Which brand can I trust?" Their goal is to make the brand they represent the obvious and uncontested answer to those questions in the consumer's mind. and so on. a brand can't be all things to all people. for instance. In other industries marketing may play a supporting role to another function. A single purpose underlies the diversity of opportunity 224 . How can a company aggressively expand its market share and keep customers satisfied? That question is central to everything a marketer does. marketing is the intermediary function between product development and sales. or interest group) or the market niche corresponding to the brand. Marketers create. (A brand can be thought of as the way consumers perceive a particular company or its products and how a company reinforces or enhances those perceptions through its overall communications—its logo. it's the marketer's job to ensure that consumers look beyond price and functionality when they're weighing consumption options. packaging.What You'll Do Broadly speaking. age range. work with customers to help define new products (a marketing function). this is called owning share of mind. and constraints that define the target group of consumers (who may be from the same geographic region. manage. market research. for example. A key part of a marketer's job is to understand the needs. In a nutshell. income level. And in advertising. psychologists analyze consumer behaviour so that marketers can better target their promotions.
manufacturing. architecture. engineering. and a demanding full-time job. a skill. and excellent communication skills. indicating the required completion of various steps. In computer hardware and software for example. releasing a product. Scitor 225 .and the variety of marketing roles: to create something customers will want and to communicate why they should want it. All project managers are familiar with at least one CPM scheduling software application. but many opportunities for PMs exist outside these areas. such as Microsoft Project. a precedence-based technique that determines the sequence in which things must happen. What You'll Do Project managers live and breathe by their schedules. high-risk work demands multitasking ability. developing new technologies. Milestones punctuate most project schedules. a project is planned down to the daily or even hourly level. homeowners plan their housework. and real estate development. analytical thinking. Primavera. project management is an art. and a formal schedule is developed using the Critical Path Method (CPM). and managing alliance programs with strategic partners. project managers are responsible for launching new products. Project Management Everyone practices project management to some degree. Their high-profile. project managers make sure everything comes together in a timely. A writer blocks out her novel. In most cases. the host of a dinner party makes sure the meal is served on time. Whether a project involves constructing a building. Project managers are key employees in such industries as construction. or launching a rocket. In business. Large corporations such as insurance companies and banks may also hire PMs to manage the implementation of new standards or practices in their many branch offices. Internet companies often look for project managers to oversee site launches or the development of new applications. cost-effective manner—and take the heat if it doesn't.
and the project manager will lose a bonus—and possibly even his or her job. PMs are responsible for their projects' successes or failures. The job offers the opportunity to lead. you have to know how many engineers will be available and how many hours they'll need to work. and new projects keep the work fresh. Most scheduling programs also help allocate resources. to counselor and negotiator. The job requires flexibility. materials. which determine both their income and their status within a company and industry. if a project isn't brought in on time. If you are running a software development project. CA-SuperProject. Human Resources Industry The role of human resources (HR) in business has increased in recent years and has evolved from an exclusively in-house function to become its own industry providing a complete range of HR services. for example. Balancing limited labor. another big part of a project manager's job. HR is the field of personnel recruitment and administration of a company’s relations with its employees. the black-and-white scenario is a refreshing challenge. AEC FastTrack. but all use CPM precedence methodology. If you have an analytical mind. and other resources is a difficult task that earns a good project manager top dollar.Project Scheduler. Likewise. good people skills. For some. the builder has to pay damages for each day's delay. and the ability to quickly switch gears from administrator. grace under fire. Delivering a project "on time and under budget" can provide great emotional rewards. and the willingness to rise or fall on the demonstrated success of your work. if you're running a construction project involving cranes and excavators that must be leased on an hourly basis. Whether in-house or third party. or Kidasa Milestones. you'll need to know when to have those machines on site to get the most work done for the least money. project management may be for you. The range of roles and tasks in HR is broad and varied. Who Does Well Many project managers cite stress as the main downside to their jobs. In construction. HR 226 . Many scheduling applications are tailored to specific industries or project types.
or they can work for a thirdparty outsourcing company. the need for HR staff exists in virtually all industries. clerical staff tended to be assigned human resources tasks. and marketing. HR has come a long way since the ’60s and ’70s when it was labeled a “touchy-feely” job. Top HR officers in corporations are usually key members of the executive team. HR employees can be hired directly into a company or organization. If you're an analytical whiz. It’s often the case that HR is charged with making the company’s goal of profitability central to his or her business planning. accounting.handles all aspects of the employer/employee relationship from staffing. sitting right alongside his or her counterparts in research. a natural seller of ideas and concepts. according to a study by the Society for Human Resource Management (SHRM ) and the consulting firm William M. training. Many in the field have master’s degrees and certifications. operations. finance. Mercer Inc. human resources requires that you find it more satisfying to work with people than with products. and legal issues. Trends The Rise of the Third Party Companies are increasingly outsourcing their HR work to third-party companies. benefits. statistics. In 2001. and employee disputes. the HR industry offers an array of opportunities. you may have a future in this field (which used to be called personnel. A new type of firm. or a good listener and shrewd judge of people. compensation. At the time. In today’s business environment. a successful HR manager’s mission is to balance the overall company’s business requirements with individual employee needs. Because all workplaces need at least some HR support. there is a growing need for HR professionals who have a strong grounding in business. Ultimately. and moved up through the ranks sans business strategy skills. they became proficient in these tasks. Although HR is about working with employees. though this name has fallen out of favor). if you do. sales. 74 percent of all companies outsourced at least one HR function. called a professional employer 227 .
Companies are trying to hire candidates who are a good match with the company’s culture and goals of profitability. has sprung up and is equipped to take on the entire scope of human resources activity. Therefore. it’s ethical conduct. are still viewed as less crucial to the bottom line than other revenue-generating positions. and even who the company will hire. but they more typically go with specialty firms. a company’s culture. and finally payroll. outplacement services. They are beginning to understand that a strong. The demise of Enron and other companies due to unethical accounting practices have certainly brought this connection into the spotlight. some of HR’s functions were seen as “extras” or “nice to haves. By contracting with a PEO. grievance resolution. in general. And whether good times or bad. Larger companies are also outsourcing HR tasks. HR takes on the responsibility of molding a company’s culture by setting policies that dictate the company dress code. well-defined culture can be a competitive advantage to attracting the best candidates during boom times. small firms can afford to give employees a range of benefits comparable to those offered by larger companies. HR folks were often among the first to go in a layoff. the kinds of benefits it will offer. This helps level the playing field for small companies. training. HR can serve as the company backbone by administering programs that bolster the company’s culture and values. followed by pension and retirement plan management. The most commonly outsourced function is employee assistance. While HR employees. Most PEO clients are smallto medium-sized companies that sign up with a PEO in co-op fashion —obtaining better deals on the purchase of benefits as a group rather than as a single small entity.” As such. and set of values are seen to have a direct impact on how the company does financially. the stress on investing in top-quality human capital is even greater. companies have begun to take some of these “nice to have” HR functions more seriously. Finding and Keeping “Human Capital” Now more than ever. Some employers now believe that fostering employee 228 . In the early 1990s and prior to that.organization (PEO). who are competing with large firms in hiring top candidates. The Cultural Vanguard To a certain extent.
and culture. outsourcing firms are the hotter commodity. when companies were in what the staffing industry calls a “war for talent. you'll want to think about the specific functional areas you'd like to pursue. in high demand are outsourcing firms that place workers who have lost their jobs due to layoffs or closures. recruiters are in low demand. the buyers were companies looking for workers. Automating systems that were once clunky and slow paper processes has freed up HR administrators to focus on tasks more directly tied to the company’s business goals. Two years ago.” Outsourcing has grown by 12 to 14 percent in 2001 and 2002 and not just because of the recession. Growing Reliance on Technology HR departments are increasingly relying on software applications and Internet access for two main reasons: to streamline administrative tasks (reduce clerical tasks or paperwork) and gain access to more information key to recruiting and setting employee policy. Company networks and e-mail also make it simpler and faster for HR to communicate with and distribute information to employees. history. “Before. many employers are using outsourcing as a way to stay in the good graces of some of their more qualified laid-off employees in case they cut back too deeply and have to rehire them as contractors. However.” says one out-of-work recruiter. In-House HR Staff 229 . Weathering the Storm Because of the recession. “It’s always a buyer’s market. How It Breaks Down We divided the opportunities in HR into in-house staff and service organizations that include staffing firms. Many companies now rely on public websites as an important recruiting tool for collecting resumes and disseminating information to potential hires about the company’s management. Now that the bubble has burst. and HR information systems. it’s workers looking for jobs.loyalty will result in a stronger brand identity that will in turn boost the company’s public and financial standing. Now.” everybody was hiring recruiting firms. Within each of these segments. Recalling the tight talent market of two years ago. consultants.
and specialists in managing benefit programs. health insurance. right next to the furnace. training. They include companies such as Manpower. such as Ceridian. Staffing Firms These firms replace or supplement in-house HR functions. and others) that place higher-level candidates into full-time positions and charge clients a hefty percentage of the candidate's first-year salary. Players in this field include HR consulting firms like Hewitt. but almost every company in the country has somebody on board to handle HR issues. good communication and negotiating skills. and even some of the investment houses and insurance companies that offer benefits packages. the HR person may wear many hats. It also includes the executive-recruitment firms (Heidrick & Struggles. Right Associates offers outplacement consulting. 230 . analytical ability. one thing you'll want to evaluate is the relative importance of the HR department to the companies you're considering. employee relations. and patience. Korn-Ferry International and Heidrick & Struggles offer executive recruitment. Kelly. As a job seeker. In smaller organizations. further subdivided into specialty areas—for example. Interim. compensation and benefits. the comps and benefits staff may include specialists in fields such as payroll. HR outsourcing providers may specialize in functional areas. For example. and 401(k) plans. Manpower and Adecco provide temporary staffing. This field requires an interest in research. Compensation and Benefits Consultants The work here entails everything from policy development to the selection of health care providers to communication about programs to the rank and file. Hay. you may want to cross that company off your list. Spencer Stuart. ADP provides payroll processing. adding a fee to the hourly rates of the candidates they place. You also need the ability to think beyond the client's immediate needs. and information systems. and Towers Perrin. In larger organizations. Jobs in these organizations usually require you to be a sharp judge of people and a good salesperson and negotiator.HR employees deal with all of these issues: staffing (everything from sourcing to orientation to retention). several HR people may work on each of these functions. If the HR office is still down in the basement. and smaller organizations that focus on temporary positions.
legal services. residential care and home health care services are expected to grow. and benefits will also grow. employee information. The staffing industry is rated fourth by the BLS as an area of expected growth by the end of the decade. and IT firms such as PeopleSoft and Resumix that offer software and systems for operating the company's payroll. and recruitment systems. Human Resources 231 . Look for changes in the HR profession to reflect overall lifestyle and population trends. and has identified the computer and data processing services as the largest area of growth. Those two industries are tied for second place in terms of expected HR employment growth.788 new human resources jobs to be created between 2000 and 2010. Job Prospects The Bureau of Labor Statistics expects 27. as the population ages. such as ADP and Paychex for payroll. While human resource jobs are expected to grow by only 12. Success in this division also requires technical knowledge about systems and software and an ability to plan and implement training.HR Information Systems (HRIS) Players here include service bureaus. Another area of expected growth isn’t an industry per se. requiring the ability to work with users in defining needs and with vendors in understanding the capabilities and weaknesses of their wares. human resources management. Both BLS statistics and studies by SHRM indicate that specialized third-party firms dealing in compensation. HRIS has much in common with IT jobs elsewhere in a company.7 percent (lower than the average for jobs overall). but rather the area of specialized HR business services. Also related to the aging population is the need for more human resources workers in hospitals and in health allied services. For instance. HR jobs in the computer industry are expected to grow by an impressive 66 percent.
administering workplace security programs. HR is charged 232 . which means they need to be available from 8:00 a. This requires wearing many hats: It’s an HR administrator’s job to make sure that employees are working in a safe environment. dealing with legal issues such as occupational safety. Who Does Well Human resources acts as the administrator between an organization’s management and its workers. the first thing that comes to mind when you think of an HR administrator is someone responsible for screening and interviewing potential employees. In addition to recruiting. What You'll Do Chances are. and sexual harassment. workers with disabilities.m. the range of HR duties and specializations continues to grow. and even coordinating food services. but at the eye of the hurricane remains the key relationship between employer and employee.Is the information technology department avoiding your phone calls? Do you have a cool idea to increase office productivity? You can't tell the difference between your IRA and 401(k) plan? It might be time to talk to someone in your human resources department. but when you add to this the more than 6. maintaining their records. dealing with labor unions that represent them. Common tasks include: recruiting and screening potential employees. Ninety-nine percent of HR workers responding to a 2001 industry survey said they both conducted searches for new staff and ran interviews. you’ve accounted for a healthy chunk of what the majority of HR experts do. that disputes are settled. this is one of those times when perception is reality. Well. and that benefits are understood and functioning properly. diversity. providing and arranging training programs for them. HR duties may also include distributing employee mailings. In some cases.000 people working in personnel outsourcing companies. to 6:30 p. Most of the survey’s respondents were in-house HR staff. determining their compensation. most days—and on weekends several times a year.m. managing and administering their benefits. HR personnel must be accessible to prospective and current employees as much as possible. At the same time.
or law school classes. They also represent management when negotiating for benefits with companies administering these benefits and when implementing companywide policies that will ultimately bring down costs or boost profits. Internet companies have witnessed a precipitous decline in advertising revenue. fiction. building brands. and many more. companies are doing a stunningly wide variety of things online—selling products. and able to juggle many projects at once. anywhere in the world. and some old-economy companies decided to scale back their Web operations. leaving tens of thousands of people out of work. and developing online gaming networks. software. or greeting cards.with recruiting new employees who will both fit in well and help the company achieve its goal of profitability. require someone who is not only good with people. As a result. In the process. In the past couple of years. and management consultancies—and you get a sense of just how broad this industry is. disseminating medical information. delivering search engines. Internet Service Providers (ISPs). Internet companies —start-ups as well as online extensions of clicks-and-mortar companies—have singled out some activity to reinvent by conducting it on the Internet—distributing textbooks. What happened? It turns out that many of the biggest online advertising spenders happened to be the struggling Internet companies themselves. For all of these activities. analytical. The needs of HR cover a wide range of tasks. recruiting employees.and magazinestyle publications. Internet & New Media Industry Trying ardently to fulfill the promise of the Web. producing newspaper. but also organized. Quick money from cashrich dot coms willing to wantonly spend for market share and brand 233 . immediately. or swapping vacation homes. business-minded. to name a few. planning parties. many pure-play Internet companies have gone under. providing services like travel agencies and stock brokerages. and therefore. the Internet makes it possible to distribute information of all kinds and conduct a transaction at the same time. Add to this all of the companies that underpin and service these endeavors —the online ad agencies.
awareness is gone. Marketing and content jobs have been slashed the most.) Trends Layoffs and Closed Shops The harsh realities of the economic decline. Internet companies must demonstrate profitability or a clear plan for it. the first month since 1975 that not a single company went public. you’d better have a strong e-commerce component. and hard times for Internet companies with an advertising revenue model. Safest are techies and salespeople. hiring freezes. have hit the Internet industry hard. tech firms are asking employees to leave in order to trim their costs. to make it on the Web these days. Often in droves. no matter what his or her job title. worst of all. The Bright Spots 234 . or at least a viable subscription model if you’re primarily a content provider. In the new world order. Even behemoths like Yahoo! and AOL Time Warner have been hit hard. most are very short on cash. Each month the unemployment rate seems to reach a new high. And old-economy companies facing cost-cutting pressures in a difficult economic environment became less likely to spend for online advertising. the much-needed venture capital funding no longer flows freely. layoffs. the majority have disappointed stakeholders with lower revenues and longer than projected “paths to profitability. but have become painful lessons to the new. The result: Either companies fold or scale back considerably. In other words. or risk near-term financial disaster. an IPO is no longer a viable exit strategy. (As evidence. and. For most pure-play Internet companies. take September 2001. And if a company closes its doors—as many have in recent times (716 companies closed up shop between January 2000 and November 2001)—everybody is out of a job. budget cuts.” As far as the remaining private startup shops are concerned. The result: a dried-up revenue stream. younger generation of dotcom workers. though even they can face the ax. Such cost-cutting actions are nothing new to corporate veterans. and more often without warning. In the case of public Internet companies.
in which the author. financial. and thus make the world a smaller place. and ESPN. on the other hand—which has to deal with procuring and shipping actual physical products—operates at a 26 percent margin. It might not be doing quite that.com. and widespread profitability seems unlikely in the near future. from a business perspective. Many players in this field are online ventures of already-established media brands. an extension of the sports cable channel. Web pundits hyped the ability of the Internet to bring people together on a one-to-many basis—to give Internet users a voice they didn’t have previously.” for short—are a kind of online diary. How It Breaks Down The industry is a baggy monster that resists classification. Amazon. a leading travel site. Most of the players are losing money. a subscription-based version of the leading business newspaper. but the promise of one-to-many connections is being fulfilled these days by the weblog phenomenon. For example. or “blogger. operates on a 70 percent profit margin. The following breakdown is not a definitive taxonomy but rather a chance for the uninitiated to make some sense of a rapidly changing landscape. 235 . often including hyperlinks to other Web pages containing information about the topic at hand. But there’s no doubt blogs are proliferating—and that even journalists and newspapers are getting in on the act. Expedia. software. for companies engaged in low-overhead e-commerce—for instance.com. again. Now Web pundits are making the claim that blogs are going to change the face of journalism. Publishers Online publications make money by selling advertising or subscriptions or both. we’ll have to wait and see on that claim. Weblogs—“blogs.The Internet seems to work best. Some examples include The Wall Street Journal Interactive Edition. and travel-services sites that don’t deal in storing or shipping inventory have low costs once they’ve established their technological infrastructure. Blog-a-Thon Back in the 1990s.” writes regular postings about whatever interests him or her.
Mail-order companies with websites—Lands' End. movies. for example. Communities Online communities serve as centers for people who share special interests. the leading search engines. Vendors Vendors make money by selling goods or services. and so on) in a given city.There are also a number of important players whose primary presence is online. GeoCities is one of the largest. Expedia acts as a travel agent. each devoted to life (restaurants. greeting cards. community-service opportunities.com. And hundreds of daily newspapers put all or part of their content on websites that are still exploring the differences between reporting for print and for the Web. Other so-called freestanding search engines like the popular Google. Other sellers provide services: E*TRADE and Charles Schwab act as stockbrokers. Search engines—which account for five of the ten busiest websites—are aggregators (so named because they offer a huge aggregation of links to other websites). is designed as an Internet portal. hosting a number of 236 . Aggregators and Portals Some of the busiest sites on the Web fall into this category. and commodities. increasingly.com have opted for search performance over the glitz and glam of gateways. and CitySearch. and vice versa. have positioned themselves as gateways. through alliances with companies that pay a lot of money to be the gateway or aggregator's "preferred provider" of travel services. The home page of AOL. and so on. which provides news and information on the online world. A few examples are CNet. which is actually a cluster of publications. raw materials. and FreeMarkets creates customized business-to-business online auctions for large buyers of industrial parts. for example—fall into this category. In a move that typifies the fluidity and opportunism of this industry. such as Yahoo!. The best-known online seller of goods is Amazon. All of these sites make money from banner advertising (think billboards on your computer screen) or. Portals (also referred to as gateways or start pages) are sites that serve as home base for Web surfers.
online advertising. and. these sites used to make money from advertising and alliances. iVillage. Organic. and government. providing services including management and strategic consulting specialized for Web companies. Razorfish. most of those start-ups have disappeared. research. and operations in today’s tight job market. marketing. The ISP (Internet Service Provider) world is still divided between large players like America Online and smaller local players. which then reside in the community's site and serve as a draw for more members. Companies in this category include DiamondCluster International. and PlanetOut. there is still a need for good programmers and engineers. Most of the major phone companies are also competing as ISPs. 237 . The result: A tough road to hoe for job seekers. a site for gays and lesbians. All of these sites encourage users to sign up for free memberships by offering access to chat. although many of the latter are being bought and consolidated into national companies. BabyCenter. some offer members the opportunity to construct Web pages. all of the above. Like many other Internet concerns. Local and long distance carriers such as PacBell and AT&T provide the latest in DSL and high-speed cable Internet connections. This segment also includes a variety of now struggling consulting firms that help develop websites. But while there’s little demand for new hires in business development. and even those that haven’t have cut back on staff. Other examples of community sites include Motley Fool for small investors. e-commerce development. a site for parents. user-interface design. Job Prospects This industry is in the doldrums. golf. but are trying to pump up revenue streams like e-commerce and subscriptions. and Sapient. All those jobs that were created by hot start-ups a few years back? Well. newsletters.communities with interests as varied as fashion. and bulletin boards. increasingly. Consulting and Support This category encompasses all of the companies that have sprung up to support and provide services to the industry. a site for women.
or in the 1880s. and Metropolitan Home). and numerous computer magazines are published in and around Silicon Valley by companies like Miller Freeman. the standardization of movable type. educate us. Rolling Stone. newspapers. Car and Driver. and many smaller ones. the publishing world's term for brands. cities. There is also a huge market for technical books for virtually all occupations. but the vestigial empires of William Randolph Hearst and Joseph Pulitzer are not giving in. and bring us the news we need to be informed citizens. five hundred years ago. So are many of the special-interest magazines published by outfits like Hachette Filipacchi (Woman's Day. such as Addison-Wesley. some of them parts of giant worldwide entertainment conglomerates. Many mass-market magazines like Time. The major difference between newspapers and periodicals on one hand and books on the other is that the former is supported by 238 . and Vanity Fair are published in New York City. most of them based in New York City. Elle. also tend to cluster in New York City. Each of them publishes under many imprints. though the number of cities served by two or more major papers can probably be counted on one hand. However. Variety is published in Hollywood. Today. Technical publishers. Newspapers continue to be published in U. Daily newspaper circulation has been decreasing for about a decade. the journalism and publishing industries continue to produce books.Journalism & Publishing Industry Publishing is changing awfully fast for a well-established industry that began several thousand years ago.S. though many are found elsewhere. a good number are published in the centers of their respective industries. from bricklayers to software engineers. and periodicals that entertain us. while many of the thousands of trade magazines are also published in New York. Mass-market book publishing resides in a decreasing number of large corporations. depending on whether you date it from the first use of papyrus and stone tablets. Academic and scholarly publishing is performed by publishing houses connected to the great universities. or the invention of the Linotype machine. The New Yorker.
USA Today was a pioneer in the easy-to-swallow strategy: Peppered with brightly colored photos and accessible information in graph form and sold in coinboxes designed to look like television sets. Consolidation At the same time as the Web is making it easier for unique journalistic voices to be heard. the daily newspaper achieved immediate success (and disdain) as a prototype of the TV/newspaper/comic book hybrid. with publishers playing arbiter. it means securing deals with distributors like Ingram. But there’s no doubt blogs get the news in front of reader in a hurry. though editorial staffs wage a ceaseless war for independence from the dictates of advertising sales departments.advertising.” writes regular postings about whatever interests him or her. even the most prestigious news publications are being accused of pandering to popular taste. AOL swallowed Time Warner. Book publishing is a little different. In recent years. and tone standards. Weblogs—“blogs. 239 . often including hyperlinks to other Web pages containing information about the topic at hand.” for short—are a kind of online diary. or that they are proliferating—and that even journalists and newspapers are getting in on the act. or “blogger. Weblogs and Journalism The promise of one-to-many connections is being fulfilled these days by the weblog phenomenon. content. with huge chains like Barnes and Noble or Borders. Now Web pundits are making the claim that blogs are going to change the face of journalism. we’ll have to wait and see on that claim.com. Trends Pop Journalism As circulation numbers become increasingly important in today's tight market. That means that their content and their production are both influenced by the interests of big advertisers. again. online journals and print publications alike are deferring to the numbers in setting layout. the companies at the top of the heap in the industry are getting ever-larger. Sales does not mean bringing in advertisers. in which the author. and Web merchandisers like Amazon. Breaking from the legendary editorial tradition of choosing worthwhile topics in spite of general appeal.
as in most any other industry these days. Times Mirror. and The Washington Post. are entering a new era: Most conventional newspapers boast online content on their own websites or those of partners. Niche publications focusing on health. McGraw-Hill (Business Week) and the Washington Post (Newsweek) leading in the Fortune rankings. with top publishers such as AOL Time Warner (Time. Most of these also own substantial interests in broadcasting. accounting for nearly 40 percent of the industry's revenue. and new media. Traditional newspapers. How It Breaks Down Newspapers Newspapers remain the biggest segment of the publishing world. Magazines This is a multibillion-dollar industry that expands each year. The New York Times. Knight-Ridder. there are very few jobs whose future is 100 percent secure. and such are a growing presence. offering authors the only viable means of producing books and persuading stores to sell them. Often this M&A activity is accompanied by a lowering of costs (read: layoffs)—so be aware that in publishing. Sports Illustrated. Books In the past. too—they've been thriving for the past 20 years and are slated for even more impressive growth. and McGraw-Hill acquired Tribune Education. and television news programs' increasing influence on the magazine format of glitzier features suggests the possibility of more links between the two media (to the chagrin of serious readers). book publishers acted as gatekeepers. The big players here are Gannett. Dow Jones. People. Gannett acquired Central Newspapers.Tribune acquired Time Mirror. But the proliferation of the Web and the publishing alternatives it offers are challenging this staid Goliath. like all traditional publications. golf. As technology forges ahead. cable. nutrition. travel. TV Guide still outstrips them all in sales. this segment lags behind—reluctance to embrace new media is 240 . Insiders even foresee personalized news services in which customers will subscribe to writings by particular journalists. Fortune).
this segment is a multibilliondollar business of pulp titles and blockbusters that accounts for about a fifth of the publishing industry pie. subscriptions. such as the introduction of radio. 241 . the book publishing industry is realistically predicted to weather the storm. and even novels. As a result. But having recovered from similar catastrophes. and discuss their ideas. consolidations. but it will continue to be one of the more difficult professions to break into. The rapid dissemination rate and global capabilities of this far-reaching medium exceed traditional methods and offer information that can be easily updated. but long-term profitability is yet to be determined. including encyclopedias. and lower advertising revenues. television. The big players are New York's clashing titans—Bertelsmann (Random House) versus Viacom (Simon & Schuster) versus AOL Time Warner (Warner Books)—whose diversified interests put them on the path towards world domination. Job Prospects Publishing has been marked recently by massive mergers. and focused content-based sites like CNet. In spite of the current identity crisis. think. the job market is stagnant with employment expected to grow more slowly than other occupations through the year 2010 according to the Bureau of Labor Statistics. and CDROM. on-the-job experience is where most skills are cultivated. Revenue is generated by advertisements. decreased circulation.common among traditional publishers—and cynics allege that the death of print is approaching. The biggest players are well-established publications that support an online presence. A quick browse on the Web will produce a spectrum of publications. Seasoned reporters concede that whatever one's education. Online Information This is an ever-expanding universe. daily journals. Publishing is still one of the bright and shining career options for humanities majors and people who love to read. interactive newspapers. and e-commerce partnerships. An internship or apprenticeship is often the best idea for recent grads—you'll gain valuable experience and make industry connections. such as the Wall Street Journal Interactive Edition.
if you began life as a print reporter. Rush Limbaugh. broadcasting generally encompasses any audio or visual programming that is disseminated to a large number of radio or television receivers. this career profile focuses on opportunities in radio and television news production and station management. While such dramatic rises to superstardom attract many young hopefuls to broadcasting. Barbara Walters. Oprah Winfrey. As recently as 15 years ago. For every well-known newscaster or talk-show host. The diversification of the media giants has had interesting repercussions on the job market. Howard Stern. If you covered hard news stories. there's a score of people hired to create a program and keep it running. you did not generally end up in television or book publishing. What You'll Do 242 . The mix is much more fluid now. And although a few old-school journalists decry these developments. broadcasting stations hire writers. Broadcasting Peter Jennings. What Broadcasting Is From world news to local weather and the Top 40 countdown.Once you enter the field. these on-air personalities all started their broadcasting careers as unknown announcers at local radio and television stations. program directors. there are myriad possibilities due to the diverse interests of corporate employers. What do they all have in common? Besides being extremely rich and famous. In addition to on-air announcers. they make your job prospects more interesting than they once would have been. there are many more professionals working behind the scenes. and producers who manage the overall creation and delivery of station content. Although that definition could be expanded to include Web-based media outlets. you did not moonlight in PR and other promotional copy.
public funding and support. it helps to have a background in journalism. But talent and skill alone may not be enough to succeed in broadcasting—it takes a certain amount of business smarts and determination to become the next Walter Cronkite or Ted Turner. 243 . and require grueling hours. produce new programs and commercials. and even permanent positions don't often pay very well. Editorial and Writing Anyone who's corrected the spelling on a memo or questioned the insight of a newspaper reporter has edited. which in turn attracts advertising revenue or. and everyone else must work together to tailor a station's programming to attract the largest possible audience. or both. but many more are satisfied by the opportunities to speak with local political figures. directors. In smaller markets. stations may also be responsible for producing ads. the glamour jobs in broadcasting are few and far between. Those with more realistic goals. If it's money you're after. and the competition for entry-level jobs is fierce. you'll need an ongoing engagement with language—and a keen desire to communicate ideas to people effectively and efficiently. Announcers. communications. If you want to turn that editing and writing into a career. In truth. however. Many jobs in fact are unpaid internships. a station's success depends on its ability to entertain its audience. can find creative and engaging careers in broadcasting. or production. not to mention serendipity and star quality. you might have more luck teaching in a public school. Not everyone in the business gets the chance to interview the president. At the end of the day. and get intimately involved in their communities.Broadcasting is a lot like other entertainment sectors. producers. in the case of nonprofit stations. or satisfy its audience's hunger for information. you've written. depending on the position you're after. If you've composed a letter or an e-mail. Who Does Well If you want to work in broadcasting.
Feature writers tell stories about celebrities. in the course of reporting or writing a story. They help writers craft stories. their role also bridges the space between writer and publication. Advertising agencies hire copywriters to create compelling copy that will sell readers on a brand. and enforcing general editorial standards of quality. length. setting deadlines. sometimes unusual things. managing writers and budgets. PR agencies use writers to create press releases. and organizes it into a story—hoping. and economic successes and failures. organizational structures.What You'll Do Editors and writers tell stories. sociologists. draft speeches. drug abusers. In their role. Business writers tell stories about companies and their management teams. legislators. The reporter then analyzes and synthesizes interviews and research. for instance. and ensure that every article is suitable for a particular publication. perhaps. might include conversations with doctors. The subject. they must become experts. as well as research into public documents about government policy and the causes of drug abuse. and create op-eds (opinion pieces that PR firms try to "place" in newspapers to reach target groups). Writing almost always requires research or knowledge about a particular subject. and in many cases their role involves substantial writing. they straddle management and production. write annual reports. movies. An investigative story in a magazine into the causes of drug abuse. Copywriters use language to convey a story about the benefits of a brand or product. scheduling what will run and when. Writing and editing careers vary widely. make sure writers adhere to style guidelines and rules of grammar. to win a Pulitzer Prize. While many writers start out as generalists. and people doing different. Editors often start out as writers. However. Varieties of Opportunity Editorial and writing careers span industries. and style of what one writes or edits are variables that depend on where one works and what one has chosen to do. Computer software and hardware companies use technical writing and editors to 244 . drug-policy-reform groups and experts on organized crime.
the profits come from discretionary spending. Most jobs require both writing and editing skills. While some writing is highly persuasive. writers and editors should be able to look at a subject objectively. they're in the business of fun. An ability to organize language and think critically and a desire to communicate to others are critical skills.develop documentation and technical information on software and hardware products. so these industries enjoy the most success in economically stable countries where leisure dollars flow freely. You'll need to understand its rules—and when to break them. As a truism goes. though people generally start off in a role more primarily writing-based or editingbased. synthesize it. Who Does Well Editors and writers need to have a strong command of language. You will be required to interpret the facts you find. This is the only industry whose product is an illusion—neither a good nor a service. and the best approach to those facts is with an open mind. and silver-screen masterpieces. Entertainment & Sports Industry In entertainment and sports. Industry companies supply their audiences with large-scale sporting events. And standing at the pinnacle of entertainment culture are the celebrities: the movie stars and quarterbacks and rock stars and talk-show hostesses who seem to realize our dreams and thereby give us hope. and yet both at the same time. as is a mastery of the form in which your work appears. and explain it. this industry flourishes as an escape from hard times—for all walks of life. and all good writers are editors. able to find information. Writers and editors should be curious and resourceful. A good sense of how to tell a story is also important. 245 . Even during economically depressed periods. all good editors are writers. Simply put. TV situation comedies. music concerts.
and music businesses under one umbrella. watch for unexpected potential employers such as Microsoft and Intel. there's no people like show people. publishing. though. The people? Well. It's also a big-ego crowd. the glamour rubs off. and working with its members can be both stimulating and frustrating. Poring over Nielsen ratings all day doesn't sound so bad when you describe it to your dinner companions as analyzing the relative sex appeal of Jerry Springer. is that even if your job does not bring you into contact with the creative members of the industry. Often. digital audio systems. they own professional sports franchises as part of the package. and the sports world has even more pep. film. If you are interested in this industry. The War for Control of Copyrighted Entertainment Products 246 . This is a high-energy crowd. Bottom line. as simply as MP3 music files are now distributed over the Internet. more expressive of individualism. lending an aura of excitement to mundane tasks that would be boring in any other industry. and the Internet. studied casualness. There are still uniforms—an ever-changing array of baseball caps and jackets in the music business. each controlling television. so that all home entertainment may soon be distributed through a single so-called set-top box. which lifted an important ban on telecom companies developing new media content. technological developments are leading to a convergence of digital television. Oprah Winfrey. and Dan Rather. Congress has encouraged this integration by easing restrictions on how many television stations one company can own and by passing the 1996 Telecommunications Act. But they're invariably less starchy. At the same time. companies that are expected to play major roles in the industry's development. new media. Trends Vertical Integration A few enormous conglomerates dominate the entire entertainment industry.The culture in this industry is one of anti-corporate. for example. than anything worn to work in the fields of finance or law.
cable channels (everything from HBO to MTV to Comedy Central) make for a much more fragmented landscape. In the broader fight to make money off all use of copyrighted entertainment products. and the WB. for instance. EMI. And a good chunk of new music products these days come with copyright-protection software that limits users’ abilities to copy files. VCR technology ended up vastly increasing consumption of the industry’s products—and pumped up profits in the process. Despite the movie industry’s howls of protest when VCRs came on the market some 20 years ago. Adding to the confusion has been the success of upstart networks like Fox. the industry is now trying to make the case that all PCs and other digital products that run entertainment software should come loaded with software “keys” that will “unlock” software protections embedded in the industry’s digital products. the major networks have adopted an “if you can’t beat ’em. an online music file-swapping application. In addition to citing the legal protections due to copyrighted materials and initiating legal battles with file-sharing providers. File-sharing advocates point to the rise of the VCR market as evidence that the industry is misguided in its efforts. join ’em” strategy. formed MusicNet. Nowadays.The fight against Napster. To enhance their moneymaking ability. In terms of online music file-sharing. Others are banding together to provide their own online services: AOL. the major networks—ABC. the industry has now turned its sights on technologies such as those offered by KaZaa and Audiogalaxy. and Vivendi took over MP3. UPN. partnered with Napster. for instance. some big entertainment companies have resorted to taking over or partnering with these companies to ensure they make money from the sharing of copyrighted files: BMG. 247 . A New Television Landscape In the old days. hoping to prevent them from allowing the sharing of copyrighted songs. and Bertelsmann. and CBS—ruled the television roost. NBC. was just the beginning of the entertainment industry’s efforts to make sure it doesn’t lose profits due to new technologies that allow consumers to access entertainment products without paying for them. making all kinds of production and distribution agreements with their cable competition.
provide the financing. and make the deals with thousands of smaller production companies. Beyond the Top 40. is a Disney subsidiary. The 1996 Telecommunications Act lifted restrictions on how many radio stations a company can own and the ensuing domination by conglomerates resulted in more standardized (and oft-criticized) playlists nationwide. cable. Sony. movies. Film In the days of celluloid movie factories. and the Atlantic record label. AOL Time Warner.How It Breaks Down Despite the blurring lines between sports. Home Box Office. and whom you know and whom you owe—and who owes you—counts for a great deal. most people choose one area and stick with it.) Music Like most movies. and Walt Disney. some do. Vivendi. particularly when you're looking for work. Today there are six major entertainment companies: News Corp. The indies (independents) remain only marginally profitable—and are often owned by one of the Big Six. At least. the major studios controlled the project from the earliest script draft to the opening night at Radio City. and others. Six Flags theme parks. Viacom. Warner Brothers. and publishing—and the media behemoths that preside over them all— these various forms of entertainment are distinct domains. the Monkees. the Billboard charts always seem to have room for packaged products like Menudo. music. music is also big business in conjunction with the advertising industry: Whoever owns the rights to songs used in big national ad campaigns stands a good chance of making even more 248 . But the modern studios control Hollywood in a different way now: They solicit projects. These worlds are closely knit. Known as the Big Six.000 to produce. and N'Sync. they all have their roots in the original Hollywood studios: MGM. But the artists retain some control. And though at Time Warner you could conceivably enjoy a career that includes working for the Atlanta Braves. (Miramax. Most films were completed in under a month and cost as little as $200. for example. music is often created by committee and on the whim of the record label. Paramount.
249 . are increasingly owned by companies: AOL Time Warner (publisher of Sports Illustrated) owns baseball's Atlanta Braves. Television The old news in television is the emergence of cable. RCA). These developments opened the floodgates for telecommunications and technology companies to enter the competition—Pacific Telesis (NYNEX and SBC). and Compaq have become strong players. The Molson Companies. and sky-high revenues are pulled in through a variety of avenues including advertising. "Show me the money." team owners. and also the 1996 Telecommunications Act. The more interesting and pertinent news for job seekers is the slow but inexorable digital convergence of computer technology. which allows phone companies and power utilities. ticket sales. Comcast. to create and distribute entertainment content. Sports When world-class athletes cry. managers. and the surprising success of Fox TV. EMI (Virgin. Universal). Intel. Major League Baseball (MLB). As far as professional organizations go. The popularity of professional sports teams is phenomenal. Capitol). Teams. the Internet. the only new network to date that has threatened the supremacy of reigning giants CBS. and Anheuser-Busch all have teams as well. and News Corp. Cablevision.. and ABC. among others. and television. with the National Basketball Association (NBA). agents. team name and logo licensing. sponsorships. AT&T (TCI). the decline in network viewership. Sony is currently the acknowledged leader in the business. Also building on this technology. and Bertelsmann (Arista. basketball's Atlanta Hawks. and hockey's Atlanta Thrashers. Microsoft and other companies are melding broadband cable and electronic media to enhance Internet capabilities. the National Football League (NFL) leads the pack in profits. and the National Hockey League (NHL) not far behind. and sponsors dance to the tune. the Tribune Company owns baseball's Chicago Cubs. Other top music companies are Time Warner (Atlantic). NBC. and worldwide broadcasts. Walt Disney owns hockey's Mighty Ducks of Anaheim and baseball's Anaheim Angels. Vivendi (PolyGram. once owned by individuals.than the record company or the artist.
intense networking. Lord of the Rings. Getting a job in sports or entertainment is a difficult undertaking that requires persistence. personal managers. For those of you with a business or technical background. Technicians are needed in traditional fields such as sound engineering and photography. The difficulty of getting a job in the movie biz is legendary—making a feature-length film can take years and a cast of thousands.Job Prospects Keep in mind that this could be the most competitive industry out there. removing unwanted telephone cables from outdoor scenes and wrinkles from stars' faces. If you prove that you've got the skills to thrive in a challenging and nontraditional work environment. they eventually end up taking jobs in production or administration. PDI. and communications. and good luck. and Industrial Light and Magic. and contribute unobtrusively to scores of other films.. hundreds upon thousands of job seekers flood New York and Los Angeles hoping to become celebrities. though. that companies can't ignore talent. HR. Leading companies in this field include Pixar. don't count on landing even an entrylevel slot easily. Careers in this industry usually start at the entry level. Take heart in the fact. IT. Sony Pictures Imageworks. then you're in for a thrilling ride. and the majority of them wind up waiting tables to make ends meet And. if they decide to stay in show biz. Unless your dad knows Ted Turner. work is more readily available. and contacts in the industry are crucial. Monsters Inc. The big corporations that dominate the industry always need people in the standard management functions such as finance. Once launched on their careers. and Spider-Man. and in the rapidly expanding fields of digital special effects: Dozens or perhaps hundreds of companies in Southern California and the San Francisco Bay Area employ software engineers and other specialists to create digital special effects. Every year. marketing. people in the entertainment industry tend to change jobs frequently. yet you 250 . which are at the center of films like The Matrix. and studio executives usually got their start as lowly assistants. agents.
there'd be no products to market or sell. and publicity—and then more publicity. But over time you often actually come to know the stars and other industry bigwigs you serve. there'd by very little need for any other career. WetFeet focuses on outlining the technical jobs in manufacturing and production. your initial contributions are generally limited to contracts. which are growing apace and are gradually replacing CDs and videocassettes. and then different publicity for radio. You can earn almost as much as a good left-handed pitcher if your legal skills include licensing and contract negotiation. publishing rights. promotion. Manufacturing and Production Without manufacturing and production. and creating dazzling promotional copy. gophering. So are MP3 players and DVDs. As the sports industry expands to include lucrative ancillary employment in marketing. clubs. and agency representation. Programmers would be without computers to program on. See our career profile on operations management for 251 . promotional video production. If you're interested in marketing to an online audience or the challenge of developing better online audio. these are also job areas to explore. marketing and sales. and both the mall stores and antimall stores such as Tower Records and Virgin Records. The retail trade would collapse. Accountants wouldn't have anything to account for. spreadsheets. your options extend well beyond one team or sport. you'll have to follow a path almost as long and complex as that from the first stirrings of a tune in a musician's head to the final song you hear every time you turn on the radio. and these relationships evolve into the everimportant industry contacts that will make or break your career. To get a job in the music industry. with an emphasis on high-tech industries. sports medicine.will be competing with hundreds for even the most menial short-term contracts and per diem arrangements. When you finally land a job. The important support jobs in the music industry are cover-art production. In short. In this career profile.
secure the right material and component supplies at the least cost. books you read. the paper for the books. eliminate waste. industrial designers and managers. What You'll Do While the introduction of industrial automation technology has reduced the number of blue collar and semiskilled positions in manufacturing. the evolution of the manufacturing process itself has opened up a wide range of opportunities for technicians. and step-bystep production control is left to sequencing equipment that controls the production flow. It doesn't matter if you're producing silicon chips or Pokemon toys. and the components of the computers. and robotics. responsibilities outside of What It Is Manufacturing and production are relatively interchangeable terms for making a product. The clothes you wear. All products are manufactured and produced. as inexpensively as possible. and in the necessary quantities. the better their companies perform. and computers you use were manufactured. Those working in manufacturing and production know that time is money: The faster and better that they and the machines around them work. People who work in manufacturing and production don't just create products. they create them as quickly as possible. The manufacturing challenge is to develop better production processes. they depend more on computers. and skilled programmers and software engineers are required to develop human252 .information about operational manufacturing and production. Programmable logic controllers (PLCs) handle what human hands used to do in the past. including all of the processes involved in making it. and ensure quality in the final product. sensors. reduce production time. mechanical and electrical engineers. But PLCs are just the beginning: Sophisticated robots and "intelligent" computer software programs can now run entire factories. As production lines become less labor intensive. So were the textiles for the clothes.
Either directly or indirectly. That may sound like science fiction. broker. and title. Production managers. selling goods and services keeps the economy in motion. To succeed. Who Does Well Manufacturing and production professionals today are highly skilled. as management demands new ways to produce new and old goods faster and cheaper. attention to detail. 253 . mission-critical employees in an area where time is money.machine interfaces (HMIs). and the creativity to improve processes. You'll also need to be able to endure stress. because every item that someone owns is an item someone has bought and. you'll need technical skills. but some of the most advanced technology on earth is now used to produce vast quantities of consumer goods and industrial products for an exploding global economy. the sourcing of necessary components and subassemblies has become an international enterprise. technique. manufacturer's representative. As trade barriers and tariffs fall. For example. income. experienced production professionals are needed to direct overseas plant construction and equipment installation and to train local technicians and engineers. As companies move their production centers around the globe. process engineers. What You'll Do The goal of today's salesperson is the same across all industries: provide customers or clients with goods and services. which allow robots to communicate with their human masters. Sales Sales is the culminating function of commercial enterprise. people who sell for their livelihood may go by the name of account executive. or merchandiser (even the term "relationship manager" is used in certain West Coast sets). someone has sold. thereby earning money for the company that produces those items. therefore. What varies are the seller's product. and others involved in manufacturing travel extensively to "qualify" foreign suppliers or introduce new systems and techniques to their international subsidiaries.
The double-talking, door-to-door charlatan intimidating housewives into purchasing a new vacuum cleaner or a World War II chess set is becoming an anachronism. Today's salespeople may sell for a small insurance company, never leaving the home office in Duluth—or they may spend half of their time abroad, selling software applications to firms on the other side of the world. Who Does Well A salesperson must become an expert in his or her field—be it telecommunications equipment, real estate, or pharmaceuticals— supplying answers and information as much as goods or services. The contemporary salesperson is a listener more than a talker and tailors the sale to fit the customer's needs. Establishing and maintaining a wide-reaching customer base is the salesperson's primary responsibility. Though cold calling—the act of initiating contact with a potential customer—is still a major technique in creating such a database, it’s becoming less crucial in many industries. Cold calling has been subsumed under the larger umbrella of prospecting, which incorporates attending trade shows and using data marketing (relying on market research to determine likely customers) in its mix of strategies. At many companies the sales department works closely with marketing to ensure that a product is getting into the right people's hands and that the right people know about the product. Maintaining the client base is the key to acquiring new customers because most industries depend on repeat business for survival. To ensure client satisfaction, duties traditionally associated with customer service have become significant elements of the sales function. Salespeople are often expected to handle paperwork, address client problems and grievances, and manage special circumstances (such as supervising unusual delivery conditions or alternative payment plans). Wages vary greatly in the world of sales. Base pay may be literally $0.00 per year for those confident enough to take a commission-only position. But salaries fall all along the income spectrum, and earnings at the high end can be in the six-figure range. Most sales positions
offer a small base salary and pay a commission on each deal. Management positions generally command a reasonable base salary and don't earn commissions because managers usually aren't directly responsible for sales. Though pressure in commission-only positions can be tremendous, the percentage that, say, a real-estate broker makes on a sale can be quite hefty. In such situations the salesperson can potentially earn an unlimited amount of money—and often earns more than his or her supervisor. Research Are you a trivia junkie, a science buff, a bookworm, or an armchair philosopher? Do you get a rush out of conducting scientific experiments, debating opposing viewpoints, translating ancient texts, or deconstructing postmodern political thought? If so, you might find your professional calling in research. Careers in research are diverse. Research can play a significant role if your career is in science, education, pharmaceuticals and biotechnology, marketing, or investment banking. In this career profile, we explain what research entails, regardless of the field you're in, and suggest specific career options to those who want research to play a significant role in their careers. What You'll Do All researchers share one primary objective: to uncover the meaning, significance, causes, and effects of whatever subject they're investigating. The work they do can have academic, commercial, political, or scientific impact. In investigating a particular subject, researchers have several purposes. They may be trying to advance society's understanding and appreciation of a particular subject, or develop products or practical applications based on their findings, or advocate changes in policy. During the course of their work, researchers review previously published findings, formulate hypotheses, and gather original data to
support or rebut their hypotheses. In technical or scientific fields, researchers develop experiments and conduct trials to test their hypotheses and gather new data. The results of research vary depending on its subject and purpose. An academic's research may result in a paper that proposes a new way to understand U.S. foreign policy after the Cold War. A researcher at an investment bank tries to determine the proper valuation and prospects for a company. A market researcher might investigate the market potential and public reaction to a new food product, such as a hot dog made of fruit. Scientists at high-tech companies investigate scientific principles that can be applied to developing a new type of computer chip or wireless data transfer. Who Does Well To be successful in a research career, you need to have an inquisitive mind, a hunger for knowledge, and a passion for your subject. You also need to be resourceful in finding ways to gather information and, in some cases, funding for your project. It takes an analytical mind to interpret the data you find, and communication skills to present your findings to the public, a professional group, or your boss. You have to be determined and willing to accept failure because, more often than not, you'll wind up at several dead ends before hitting the jackpot. Quality Assurance and Quality Control It used to be that quality control was the Rodney Dangerfield of the manufacturing industry—getting no respect and very little attention from management. The overriding goal was to ship as much product as possible, and if a few lemons got through—well, the profits from sales would more than cover the reclamations. That's no longer the case. Today's quality assurance (QA) and quality control (QC) specialists can hold their heads high. In fact, QA and QC professionals have the power to stop production, stop a shipment, delay a website launch, and even demand personnel changes if quality standards slip.
What You'll Do Quality assurance professionals work with business managers and clients to develop policies, procedures, and programs to ensure the quality of manufactured products. QC specialists are responsible for employees' day-to-day adherence to quality programs. In Web companies and software firms, quality assurance specialists diagnose problems, recommend solutions, and determine if program requirements have been met. In manufacturing companies, QC workers are usually engineers who work closely with manufacturing technicians and engineers on the factory floor to ensure products and processes conform to quality standards and procedures. QC engineers often act as in-house independent inspectors, and must approve production lots based on their assessment of the products' level of quality. Within information technology, QC technicians test software before it is released to market. Their challenge is to try to crash the software, review and criticize the user interface or operability, and generally be the developing engineer's worst nightmare. In today's fast-paced marketplace, any product that's glitchy will die a quick death—and a website with bugs or dead links can kill customer enthusiasm. Quality assurance professionals often seem to have a more glamorous life than their colleagues in quality control. QA specialists often accompany salespeople and business development managers to client sites to make presentations, and QA managers and directors often have a seat at even the most top-level staff meetings. While many people progress from QC to QA, the nature of QA work, particularly in manufacturing, usually requires an MBA or an advanced engineering degree. The ISO 9000 Program Very often, the sole reason for the existence of a QA/QC department is to develop, implement, and maintain an ISO 9000 certification program. In manufacturing businesses, the ISO 9000 program inculcates a "total quality philosophy" throughout an organization, from senior managers
down through the janitorial staff. The ISO program establishes quality management policies and procedures for all aspects of manufacturing, from supply management and vendor qualification and product inspection and testing, all the way through to packaging and shipping. The initials ISO stand for the International Organization for Standardization, which was established by U.N. charter in 1947 as a means of facilitating international cooperation and trade in the wake of World War II. Based in Geneva, Switzerland, the ISO is a nongovernmental organization (NGO) that has established worldwide standards for quality management through its certification programs. The ISO 9000 program is actually a series of specific standards, namely ISO 9001, ISO 9002, ISO 9003, and ISO 9004. These are all quality-standards programs that pertain to different types of manufacturing and/or product supply. Asset Management If money makes the world go ’round, the Earth would grind to a screeching halt without the asset management industry. Asset management is the business of making money with money—or at least trying to. By “money,” we’re not talking about salaries and bonuses (which can indeed be significant), but the gains you endeavor to make for investors who have forked over their cash in hopes that you, through your market savvy and keen instincts, can turn their nest egg into a fancy omelet with toast and hash browns on the side. What You'll Do Asset managers manage money—other people's money, and gobs of it. Generally, they convert that money into assets—stocks, bonds, derivatives, and other types of investments—and try to make that money make more money as fast as possible. Mutual funds, for instance, hire asset managers; so do corporations with lots of money sitting around, banks, and high net-worth individuals. Asset managers have one simple goal: to invest other people's money wisely and profitably. Asset managers use a combination of investment theory, quantitative tools, market experience, research, and
and institutional investing. MIT Press (1998) is the first textbook devoted to the mutual fund industry. The profession requires excellent quantitative and analytical skills—if you hated statistics. Sometimes MBAs work as fund managers right out of school. Coauthored by Fidelity CEO Robert C. or a market index (such as the S&P 500). And the ax will fall if the portfolio doesn't beat its benchmark—a peer group (competitor funds with the same investment objective). Recommended Reading The Mutual Fund Business. a history of funds and the laws that regulate them. including fund globalization. they've stuck their necks out on the block. then there's probably a place for you. Networking and a single-minded pursuit of your goal are big helps. Who Does Well As an asset manager. the book includes an introduction to funds. Pozen. Competition for jobs is fierce at all levels. Crane. As soon as they've picked their basket of investments. though more often they start as analysts in order to prove they have the right combination of caution and chutzpah to make a great asset manager. It makes an excellent introduction to the industry as a whole. by Robert C. technology issues. it's still tough to break into.plain dumb luck to pick investments for their portfolios. It requires the organizational skills—and nerve—to make split-second decisions with millions of dollars riding on the line. And though the profession has seen tremendous growth in the last decade. ranging from high-risk stocks to commercial real estate to cash accounts. good nerves. but if you have strong quantitative and analytical skills. and a series of specialized topics. and can consistently beat the market. It includes articles by various industry experts as well as case studies and other exercises for the student. especially for those who only have an undergraduate degree. But asset management isn't just a matter of adding up the numbers. you can't just bet your hunches. 259 . too. an explanation of the marketing and back-office servicing of funds. a look into how fund managers make and execute investment decisions. you may want to look elsewhere. Pozen and Sandra D.
The asset management company buys and sells the securities in a fund. such as pension funds. real-estate trusts. seeking to maximize its value. Stocks and bonds are both securities. also called securities dealers. exclusive opportunities such as hedge funds and venture capital funds for socalled high net-worth individuals. and electronic trading for most of us. bonds. Additionally. The mutual fund company charges a fee for picking the securities in a fund. which is part of the reason that the stock market rose so 260 . limited partnerships. and they have more choices. insurance companies.Mutual Funds & Brokerage Industry When a large amount of money is needed for any enterprise. mutual fund companies—and other so-called asset management firms—form funds. the enterprise raises that money by either selling ownership shares in itself or simply borrowing it. there are also more ways to invest: full-service brokerages. from building a factory to funding a corporation to drilling wells in a new oil field. More people invest in securities today than ever before. which consist of a variety of securities. Investors buy and sell individual securities through brokers. discount brokerages. and it sells shares in these funds to investors directly and through securities brokers. and institutional investors. and an ever-growing diversity of mutual funds. There is an unimaginably large amount of money chasing investments these days. and university endowments. When ownership is sold. When money is borrowed. Commonly. the investor gets bonds. including stocks. But why lump together two previously distinct areas of the financial services industry—securities brokerage and asset management? Principally because the way your parents invested is not how most people do it these days. the shareholder is shielded from the risk of investing in individual securities. that money is raised from investors—usually a large number of them. In turn. such as multimillionaires. Not only are there more investments to choose from. the investor gets stock shares.
but every other kind of brokered investment—even credit transactions. and home mortgages. Putnam. individual investors are staying away from the market. an increasing number of examples of corporate financial shenanigans. and discounters Charles Schwab and E-Trade) and mutual funds (like Fidelity. More consolidation of financial companies and of services within individual companies has followed. Brokerages and mutual funds are the two primary means by which all these investments are made. bonds. opening the door for banks. Nuveen. and thus lower commission revenues for them as well. when everyone from the guy behind the counter at the corner deli to your neighborhood pedicurist was talking about corporate earnings and upcoming stock splits and looking forward to tearing open the envelope containing their next brokerage-account statement. and less money going into mutual funds. and a plummeting stock market have combined to give investors cold feet—quite a change from the late 1990s. Eaton Vance. Trends The Financial Supermarket Brokerage firms (such as Merrill Lynch. Citigroup/Salomon Smith Barney. securities brokers. Virtually every national and regional brokerage firm now offers its own family of mutual funds. Nowadays. and even a money market checking account. in addition to traditional offerings of funds run by other firms like Fidelity. and MFS. But all that was merely prelude. Congress repealed the 1933 Glass-Steagall Act. credit products such as credit cards. Fearful Investors The struggling economy. The aisles of financial supermarkets of the future will be lined with not just mutual funds. Unless the market turns around. In one account you might combine mutual funds. without restrictions. and options.steeply during the 1990s. and insurance companies to engage in each other's formerly exclusive businesses. and Dreyfus) have invaded each other's turf in an ever-escalating financial-services war. Which means fewer trades and fewer commission dollars for brokers. individual stocks. Fidelity was the first fund to offer a large discount-brokerage operation. Vanguard. the 261 . credit lines. In late 1999.
but also how the particular company with which you're interviewing is distinguished from the competition. How It Breaks Down Though we divide the industry up into brokerages and mutual funds. large cap. generally just executes trade orders and issues a confirmation—few or no frills. credit (including lending on margin). it deals from its own account and assumes some of the risk itself. bonds. Frills or no frills. Compared to individual portfolios. moneymarket securities. it appears the new paradigm of softer investment-services earnings will be around for a while. or foreign companies. options. Mutual Funds Whereas brokers act on investors' orders. strategy and planning. assume the risk. Mutual funds often have a specific investment focus—be it income. A full-service firm such as Merrill Lynch charges commissions up to several hundreds of dollars for transactions but offers extras such as tailored research. business prospects.corporate-accounting scandals dry up and blow away. Brokerage A broker acts as the intermediary between the buyer and seller in a securities transaction. small cap. gold. A discount broker. or whatever else seems likely to make money. (If the firm acts as the principal or dealer. long-term growth. and brokerage. and asset-management accounts—checking. not the brokerage firm. to be authorized to trade on the various exchanges you need to be a registered representative and licensed by the NASD (National Association of Securities Dealers). such as TD Waterhouse. Which is not good news for job seekers. You'll want to make sure you not only know which segment you're interested in. all in one convenient package.S.) Brokers charge their clients a commission. within the two segments there are significant differences among the players. currencies. The buyer and seller. or the Bush administration starts doing a better job of reassuring investors about U. mutual-fund managers raise cash from shareholders and then invest it in stocks. funds 262 . And managers are restricted in what kinds of investments they can make.
and other types of retirement plans during the 1990s. The Bureau of Labor Statistics predicts that this increase in investments by businesses and individuals will result in faster than average employment growth through 2010. IRA. bonds. more people than ever before can now be classified as investors. hiring plans have changed dramatically in recent years. and more diversification than most individuals can create or afford in a personal portfolio. mutual funds.5 trillion in mutual funds in 1999. This all boils down to a wide range of career options in a dynamic and growing industry. and various alternative investments.hope to persuade investors they offer several advantages: professional money management. discount brokerages. particularly now that switching between funds is allowed. and probably the most important factor in choosing one—whether to work for or invest in—is your tolerance for risk. Due to huge industry turnover and a hyper-competitive market. Bull markets tend to make many funds look good. There was $5. Job Prospects With the tremendous proliferation of 401(k). The choices for the small-time investor have never been greater. but a downward turn or a jump in interest rates can have a significant negative impact that may take longer to correct for a fund than in the nimble independent investor's portfolio. In addition to brain analysts and savvy fund managers. and do-ityourself online trading. and 263 . The next big challenge is keeping it. and they include stocks. marketers. liquidity. Just because you graduated at the top of your class at Harvard Business School doesn’t mean the brokerage houses are waiting for you with open arms. real estate trusts. and a slew of operational folks. There’s also a range of venue options available should one have an itch to invest. But those who have been able to tough it out for five years or more report that it can be quite rewarding both personally and financially. All investors share equally in the gains and losses of a fund. The greatest challenge to establishing a career in retail brokerage is getting a job. individually managed accounts. including traditional full-service firms. most mutual funds also need retail sales personnel. either directly or indirectly.
hiring numbers are way down due to the current bear market. But those first few years of building a client base and learning the markets are difficult. The stakes can amount to hundreds of 264 . Every company has a corporate-finance function. Corporate Finance If you work in private enterprise. and helping managers decide how to spend it in ways that will ensure the greatest return. it spent more than it made because the company and its investors believed it would realize a profit in the near future. insurance. but expect the situation to change as the market regains ground. These profiles detail a variety of specialized financial functions beyond those in private enterprise. If it has made more than it has spent. read our industry profiles for investment banking. it was a bad year—or the company is in an investment phase. There's little patience in this industry for either mediocre or incompetent performance resulting in slow or zero growth in client assets (and correspondingly in firm income from those assets).com.while that number has diminished somewhat over the past few years as portfolio values have declined and investors have pulled out. The responsibilities that fall under finance and accounting range from basic activities such as bill paying to very sophisticated ones such as forecasting the value of a potential acquisition. there’s still a pile of cash invested in funds. Also. and accounting. like Amazon. it was a good year. your company measures its success at the end of the year by comparing how much money it made to how much it spent. knowing where it is. career growth and income can be excellent after your first three to five years. commercial banking.) People who work in corporate finance and accounting are responsible for managing the money—forecasting where it will come from. To learn about other areas in financial services. (In other words. This career profile focuses on opportunities in corporate finance and accounting in private industry. mutual funds and brokerage firms. If it has made less than it has spent. Whether you choose a brokerage firm or mutual fund.
a company's size. execute payroll. and retail is where consumers spend that money. for example. In spite of their different roles. Retail Industry Consumer money drives the economy. Finance pros analyze revenue and expenses to ensure effective use of capital. finance and accounting are often treated as one. Careful assessment of the financial implications of particular strategic decisions can be critical to a company's success or failure. complexity. What You'll Do Corporate finance includes two key functions: accounting and finance. of consumers. and stage of development (start-up or established business) influence what tasks the corporate finance team undertakes every day. They also compile all the financial data needed to issue a company's financial statements in accordance with government regulations. track expenses and revenue.millions—sometimes billions—of dollars and thousands of jobs. Of course. Others (such as insurance companies) have hundreds of millions of dollars to invest and need financial wizards to manage it. Thus. Some large technology companies. mail-order companies and discount outlets—these are the establishments where consumers spend their hard-earned dollars. All companies need to balance their books. Accountants balance the books. finance and accounting are joined at the hip: The higher levels of accounting (budgeting and analysis) blend in with financial functions (analysis and projections). Accounting concerns itself with day-to-day operations. When goods are put in the hands. Boutiques and department stores. retailers realize revenues— 265 . They also advise businesses about project costs. and pay the bills. with different divisions undertaking particular tasks such as cash management or taxes. hire financial experts to valuate potential acquisitions. or shopping bags. economic sector. make capital investments. and structure deals to help companies grow.
which are expected to last at least three years. Retail executive-training programs are crammed with energetic 20-somethings. all hoping to perform those functions as sales and merchandise managers. E-commerce 266 . Mass merchandisers (Wal-Mart. while Wal-Mart and Target saw revenue growth (by 15 and 8 percent. Trends Mom and Pop Disappear—and Traditional Stores Are in Trouble The retail landscape is changing as new store categories start to dominate the marketplace. like furniture. Crew. both smaller mom-and-pop stores and traditional department stores. cars. Indeed. which include food. and manufacturers that make up the rest of the consumer-goods distribution chain. clothing. Most of the retail industry's employees are salespeople and clerks. and administration of retail companies. J. and large appliances. The Limited. and managing the operations. and Mervyn's (owned by Dayton Hudson). At the same time. and Saks. Staples). getting these goods to the right place at the right time. which support public services of all kinds. in 2001. as is evidenced by Kmart’s bankruptcy announcement in 2002. Retail goods are traditionally divided into durable goods. and other categories far too numerous to mention but which eventually form the bulk of the stuff you see on makeshift tables at garage sales. Barnes & Noble. finances. Federated experienced a 15 percent decline in revenue. discount clubs (Costco). Target). In addition. Macys.C. respectively). distributors. Penney. and specialty retailers (J. and non-durable goods. but the industry also has opportunities for people interested in determining what goods will be sold.and so do the wholesalers. But even in the mass-merchandising segment. buyers. have found the competition intense. such as Ann Taylor. and marketers at major retail organizations. Macy's (owned by Federated Department Stores). so-called category killers (Home Depot. retail transactions serve as the means for collecting sales taxes. the competition is fierce. like Sears. Coach) have all developed successful retail models.
and furniture. physical—stores out of business on a large scale and to drastically reduce local government revenues. which enhance their brands and bring in increased revenue. Global Brands and Name Brands The big guys are all converging in the middle of the market. apparel. we'll focus here on three areas: general merchandise. These categories include computers. beauty products. which helped pioneer retail e-commerce. Macy's. consider the Michael Graves line at Target. On the one hand. since many retail e-commerce transactions are not subject to sales tax. Companies like Amazon. discount and mass retailers are finding it advantageous to introduce name-brand exclusive merchandise lines. though not all. However. more expensive department store chains are trying to lower costs and increase unit sales by developing store brands. and its full impact is yet to be felt. It has the potential to put so-called bricks-and-mortar—that is. major retail organizations have online stores. J. On the other hand.C. retail e-commerce raises serious questions. department stores have suffered. Crew. In part this is a result of changing shopping patterns and increased competition from discount stores. the number is growing. It has also come from 267 . for example. autos. So far. Over the last decade or so.Though websites carry only a miniscule percentage of retail transactions. which are expanding retail ecommerce into new markets.com. jewelry. Many. and Montgomery Ward's dominated malls and downtowns all over America. Here's a look at the breakdown: Department Stores A few years ago. sports equipment. however. but the e-tail phenomenon is just beginning its evolution. How It Breaks Down Retailing and wholesaling encompass a lot of consumer goods. and building materials. Penney's. but leave out food. and home furnishings. which essentially offer consumers the same quality as brand names without the higher price tag (and with higher margins for the retailer). clothes. are being followed by bricks-andmortar and catalog retailers like J. names like Sears. there has not been a shakeout.
electronic goods. file cabinets. Tower Records. Many are so successful that department stores have started to emulate their buying. Even more alarming is the growing realization among their harried shoppers that traipsing through endless aisles of merchandise just to buy a roll of tape and some underwear isn't worth the savings. expect more bumps as the strong get stronger and the weak get absorbed. these companies offer earn-and-learn experiences with vendors and distributors before you move onward and upward. However. They are able to buy bathroom tiles. and merchandise display strategies.financial burdens incurred by companies that acquired competitors and grew too fast. These stores concentrate on one type of merchandise and offer it in some manner that makes it special. and Victoria's Secret. Discount Stores These are giants such as Wal-Mart. the deep discounters now face competition from category killers. others cater to the price-conscious masses (Old Navy). and it seems to attract many of the best and brightest in retail. and The Sports Authority). The outlook for this category is better than for many of the more general discounters. or pet food in such huge volume that they can then sell them at prices even fairly large competitors can't match. Originally set up to serve members only. Specialty Stores These include Crate & Barrel. Industry experts predict growth in this segment. and warehouses such as Costco. and mass merchandisers like Ross. and in many of these stores the hand of bureaucracy is not heavy. particularly for home furnishings and home improvement. the largest retailer in the world. Some are very high-end (Louis Vuitton). marketing. non-membership warehouses. Category Killers These are the giant retailers that dominate one area of merchandise (Office Depot. E-tailers 268 . Promotion and responsibility come quickly to those willing to work hard. but the same employment caveats apply. the Body Shop. For most job seekers. It's unlikely that these players will disappear from the market.
resulting in layoffs. such as Amazon. apparel. buyers with product development and private-label experience. and all you managers with either e-commerce or overseas marketing expertise. the following should grow in demand in coming years: distribution specialists and merchandise planners. Employment in department stores. and advances in technology that allow for more efficient means of tracking goods and inventory.com. 269 . Among other areas. is expected to increase. industry consolidation. This is due mainly to the increasing popularity of "mega-retailers" and discount stores like WalMart and Costco that stress self-service and thus are less laborintensive. but still more slowly than the average for all industries. Traditional retailers like Wal-Mart and Starbucks. Job Prospects Retailers are feeling the economic pinch of the recession as well as a changing retail landscape. anyone who understands data-interpretation technology and digital systems such as Quick Response. have also set up online stores so as not to miss out on the revenue opportunities that the Internet offers. have generated enough business to cause top bricksand-mortar competitors to follow up with their own Internet sites. strictly online purveyors with no bricks-and-mortar counterparts are hoping to snare a percentage of the retail profit. But this also means that there will be opportunities for businesspeople able to navigate through the mess of reconstruction as well as for people who can get products to consumers by means other than traditional retail stores. and accessory stores is expected to increase by only 4 percent over the 2000 to 2010 period. on the other hand. jobs in department. And major players. Consolidation of corporations and automation of functions means many jobs become obsolete. and point-of-sale (POS) terminals. According to the Bureau of Labor Statistics. The growth of wholesale trade jobs will be curbed by the increase of e-commerce sales. hugely successful in their own right. slower than the 15 percent increase projected for all industries combined.While most retailers have online storefronts. Electronic Data Interchange.
earthquakes and hurricanes. bonds. These products protect customers from losses resulting from illegal actions. Insurance companies also mount huge marketing campaigns to convince customers that they need protection in general and the company's products in particular. Insurance companies calculate the likely cost of a given loss. They also function as financiers. Despite the fact that it is regularly accused of deceptive sales practices and even consumer fraud.S. deriving a large part of their revenues from investments. as when industrywide over-investment in Latin America during the 1970s led to huge losses for the entire industry and repercussions far beyond the insurance industry itself. About 1. theft.Insurance Industry If you want to impress your friends and family with a job full of glamour. and overseas. But while no industry offers genuine job security these days.S.S.800 U. That can be a risk. insurance companies offer personal and commercial product lines including basic health/life and property/casualty protection as well as a long list of other coverages ranging from automobiles to mortgages to insurance for insurance companies (known as reinsurance). medical needs. sizzle. But that's only the beginning. and prestige. Insurance companies must maintain enormous reserves of capital to back up potential claims obligations. 270 . add something for profit. within the U. providing an enormous amount of liquidity to financial markets and giving the industry an influence on the national economy far out of proportion to its size. They invest those reserves in stocks. insurance is the wrong game for you. insurance comes closer than most. and a variety of other causes. and real estate. companies are currently playing catch-up to worldwide players in the global marketplace and absorbing mammoth deregulation legislation. U. America’s security blanket also protects the economy against losses of all kinds. and reach an amount that they charge each customer for a policy guaranteeing compensation should the loss occur. divide it by the number of people who want protection against it.
and securities brokers are now free to merge and cross-sell each others' products.Trends Terrorism and Insurance In the wake of September 11. Nowadays. but repeal of Glass-Steagall could lead to much greater and quicker changes in the role of traditional insurance agents. the market is looking to the insurance industry to provide investment products. The recent collapse of the stock market has made annuities relatively even more attractive. 2001.S. Shift in Demand The shape of the life insurance sector has morphed over the past generation. banks. which acts as a kind of safety net for writers of commercial insurance. such as annuities. This clears the way for financial service superstores that will offer insurance as well as investment and savings options. Primary insurers. the Bush administration stepped into the picture with the Terrorism Risk Insurance Act of 2002. in late 1999. demand goes beyond straightforward life insurance. reinsurers stopped writing terrorism policies in the U. And in a creative move insurers are building a market for 271 . and stopped offering and/or renewing policies that included terrorism insurance in states where it was not. Deregulation Deregulation is redefining who can offer insurance. in states where that was legal. the government will pay the bulk of claims. Insurers. Rather. Repeal. started stripping terrorism coverage out of policy renewals. thus limiting the insurance industry’s risk exposure. of the 1933 Glass-Steagall Act (which formerly separated all arenas of financial services) promised a major facelift for the insurance industry. As a result. The Act requires insurers to pay terrorism-related claims up to a ceiling. estimates range from $30 to $70 billion. as a result. which provide the consumer with regular payments for life or for a fixed period. In response. Commercial banks have been making modest inroads on traditional insurance markets for several years. beyond that ceiling. What this means in macro terms is that the life insurance sector has had to shift its primary capability from analyzing and predicting mortality rates to a more investment-management capability. insurance companies were faced with tremendous claims.
Only the strong will survive as 272 . Hartford. including the replacement of fixed-fee Blue Cross/Blue Shield-inspired policies with managed care networks. Competition is fierce in this sector.products that protect the investor against a variety of risks simultaneously while allowing them to draw down a death benefit while still alive. Prudential. homes. and buying smaller companies. Technology The Internet promises to cut costs in a competitive market.S. This transition is having an impact on the job market. Property and Casualty (P/C) Insurance The focus in this sector is on protection for owners of cars. while Aetna and CIGNA rule the HMO realm. and injury. Consolidation also means that companies will offer a full range of insurance products instead of specializing in certain realms such as property or casualty. The life insurance business is experiencing slow growth. damage. provide a new way for consumers to compare quotes and choose policies. Consolidation Continuing the trend that essentially began 30 years ago. and make for a more convenient service—the ideal customer-friendly combination. merging into conglomerates. leaders in the life insurance game. and Metropolitan Life are U. and life insurance companies are likely to be merging with banks and securities firms. with companies increasingly seeking tech-savvy candidates who can support the move to e-commerce. and profits are falling. This trend is doing away with the independent agencies that used to define the industry. insurance companies are responding to global competition and the need for cost efficiency by forming strategic alliances. Health insurance has gone through some major overhauls. How It Breaks Down Life and Health Insurance The policies in this sector provide benefits packages that policyholders pay a premium to enjoy. and businesses from loss.
adjusters. Reinsurance In the most simple terms. Job Prospects Due to the replacement of agents by Internet sales. the insurance industry will become more hungry for techies as computers play an ever more integral part in business processes. Major players include Aon and Marsh & McLennan Companies. Insurance companies pay reinsurers to assume some or all of the risk the insurers have taken on in writing policies for their clients. But the entrance of insurance companies into the grand arena of financial services marks a new era: Agents will be called upon to provide a full range of services—including insurance. Furthermore. researching industry information to advise companies how to manage risk exposure. Insurance Brokers Brokers act as go-betweens. 273 . Furthermore. and savings—in multidisciplinary teams. on a global scale. uniting buyers and sellers of insurance and creating the contracts that bind them. Growing occupations include systems analysts. and examiners: These positions require fewer hands-on skills and more interaction with information. reinsurance is the insurance of insurance companies. investment banking. especially the ability to gather and manipulate information strategically.weaker companies continue to tank and even more secure ones sell off this line. Insurers use reinsurance to protect against the risk of unusual losses. Reinsurers write reinsurance because their business allows them to pool enormous numbers of individual insurance risks. making their risks even more predictable than the risks faced by primary insurers. Companies are looking to hire college grads with proven ability in sales and information analysis. job opportunities in this industry are increasing at a below-average pace. they play the role of risk consultants for large clients.
if anything.com's industry profile. Insurance is full of jobs that pay well. In general terms. Money managers invest the money the insurance company takes in through premiums. Underwriters determine how much overall risk a buyer will add to the company's business and figure out the premium at which to insure a buyer. Insurance company clients pay fees (premiums) with the understanding that if specific misfortunes befall them—if a fire burns down their house. and you speak a foreign language. assess the relative likelihood of various types of accidents by performing a statistical analysis of anything they deem relevant to the subject. for instance. Agents fill a sales function. Europe and Canada are still a focus for claims processing and investment and actuarial services. To learn more about the insurance industry. the 274 . check out WetFeet. insurance means protection. Claims adjusters decide what. it can hurt your career. Insurance What you don't know about insurance can hurt you—at least. as well as to whom they should sell which policy. usually without the long hours required in some other financial services sectors.Want to work abroad? There are opportunities in insurance. and actually sell the policies. What You'll Do Careers in insurance are varied. and South Korea—are even more attractive places to land new business. They use the resulting information to determine policy prices. Actuaries. but Asian markets—particularly Japan. or they have an accident and need hospitalization—they can make a claim and the insurance company will pay them an amount agreed upon in the insurance policy. you're someone insurance companies will want to talk to. Taiwan. If international financial markets are something you understand. for instance. Yet many job seekers who want to use their analytical skills or get into financial services never seriously consider these attractive career options.
because they need to take in a lot of premiums from a variety of customers in order to diversify and lower their risk of being put out of business by a small number of large claims. Who Does Well If you like sales. and a sense of belonging to a large organization.company will pay on claims. It's also a great field to consider if you're looking for top-notch benefits. Since insurance regulations differ from state to state. this is a very good place to consider looking for a job. Reinsurers essentially insure insurance companies against unexpectedly large claims. Accounting Industry Bean counters. Insurance companies also manage their risk by paying reinsuance companies to take on some of that risk. reinsurers effectively take on many times the number of individual risks as primary insurance companies do. This lessens the likelihood that a small number of large claims will result in an unforeseen risk to their bottom line. Insurance companies also hire folks for marketing. business development. and until recently these would be the images people typically conjured. By writing policies with a variety of insurance companies. Mention accounting. Who knew that the accounting industry could be the source of so much 275 . There's also a place in the industry for entrepreneurs who want to run an insurance agency or work in other sales positions. have a strong quantitative bent. Insurance companies tend to be large in terms of both employees and assets. reasonable hours. Many jobs in insurance require certification or licensing. Risk managers determine and help implement policies and processes to help clients avoid making claims. IT and corporate finance positions. Ebenezer Scrooge. certification and licensing requirements vary accordingly. or like to investigate mysteries.
the clamor to split accounting and consulting is louder than ever. Before Andersen’s collapse. and PricewaterhouseCoopers). and Ernst & Young is being investigated by the SEC for alleged violations of audit independence for teaming up with an audit client to sell software. Ernst & Young. once considered the gold standard of the accounting industry. indeed. in 2000. KPMG. Andersen. in 2001. In the 1990s. But Andersen isn’t the only firm implicated in accounting scandals. the top tier of the public accounting industry was known as the Big Five. Ernst & Young. KPMG was censured by the SEC for auditing a money-market fund it was invested in.intrigue. we’re referring to the scandals that have rocked the accounting world and contributed to the greatest undermining of trust in corporations and the markets in recent memory. can auditors maintain their objectivity if their firms are so beholden to clients for consulting revenue? Because IT consulting has recently become less lucrative (since companies cutting costs often cut back on tech consulting purchases). there’s a problem with how the accounting industry has operated of late. A number of states are going so far as to consider legislation barring accounting firms from doing consulting work for audit clients. and PricewaterhouseCoopers (PwC) have all faced scrutiny in recent times. accounting firms have already been moving away from their reliance on consulting revenue. 276 . How. and PwC have all sold off their IT consulting arms. the largest fine ever for such violations. they say. KPMG. General Electric’s auditor. critics ask. now.9 million to audit GE’s books—a fraction of the $79. is now for all practical purposes out of business. Indeed. In 2002. it’s the Big Four (Deloitte Touche Tohmatsu. KPMG. PwC paid the SEC $5 million to settle allegations of auditindependence violations of its own. KPMG.7 million GE paid KPMG for IT and other consulting work in that same year. was paid $23. Because of the misdeeds of Arthur Andersen accountants working on Enron’s books. But due to the crisis in accounting and the markets. that the public would open the newspaper each morning to eagerly read about the inner workings of accounting firms? Of course. Critics of the industry think they know what that problem is. Clearly. accounting firms became overly reliant on revenue generated by their consulting arms. Ernst & Young.
And the AICPA is considering changing the CPA exam to better gauge test-takers’ ability to think independently as accountants. All three options can eventually lead to lucrative and interesting responsibilities in senior management. there 277 . And all three will also serve as excellent preparation for a variety of business careers should you want to leave the world of debits and credits behind. At that point. the American Accounting Association.As you step into the wonderful world of accounting. or 3) work in the accounting department of a private or government organization. assuming you want to remain in accounting. expect to be asked to shed light on your high ethical standards. A number of schools have beefed up ethics-related aspects of their accounting programs. If you start in the private sector (option 3). (Of course. If you go the public accounting route (options 1 and 2). the American Institute of Certified Public Accountants (AICPA). the accounting industry is refocusing on ethics. and the Institute of Management Accountants have all announced plans to join with universities to develop changes in accounting curricula. but you will learn about one business in far greater depth than your public accounting pals will in their short-term auditing assignments. 2) work for a smaller national or regional public accounting firm. Trends Ethics In terms of how would-be accountants are being affected by the accounting scandals. you'll typically start by studying for and taking the CPA exam and then working for several years on a variety of tax or audit assignments. you may or may not be able to get your CPA (some states require experience working for a public accounting firm to do this). So if you interview for an accounting job. you'll either leave to join a client or stay and try for the partner track. you have three obvious career options: 1) work for a Big Four public accounting firm. The Big Four.
How It Breaks Down The obvious breakdown in accounting is the one we made above: Big Four. the research capabilities—it’s almost information overload at times. but few if any have been resolved. and private and government accounting. “I take a lot of it for granted. external Web. you'd go into an audit with nothing but a legal pad and a couple of sharp pencils. such as the International Federation of Accountants (IFAC). As corporations become multinational. however. The intranet. but we really have an unreal amount of information at our fingertips. and perhaps the Institute of Social and Ethical Accountability (ISEA). accounting is increasingly immune to international borders. but increasingly you'll need to be able to use computers. you'll still need to have your journal entries down pat. One insider says. most people will go into either audit 278 . To do well in this field. and e-commerce technologies. according to one senior accounting recruiter. extranets.are those who are cynical about this new focus on ethics. One thing is sure. Numerous issues have been raised by globalization.” Globalization Like so many other facets of economic life. international accounting bodies. the International Accounting Standards Committee (IASC). auditors arrive with far more serious electronic artillery in tow. Now. In public accounting. will have more influence than in the past. from spreadsheets to ledger packages. One insider says that the accounting industry put a similar focus on ethics following the Savings & Loan crisis. in some cases boasting expertise in various specialized software applications that automate accounting tasks. so do their accounting firms. only to have ethics become a secondary consideration during the 1990s. Big Four firms are renowned for their technology. While each country still has its own canon of standard accounting practices. These firms have been among the most savvy and aggressive users of intranets. there is a gathering movement toward international accounting rules.) Cutting-Edge Technology As recently as 1990. smaller public-accounting firms.
Ernst & Young. By mid-fall 2002. in other cases. In the wake of the Andersen collapse. RSM 279 . human resources management. which means that employees are exposed to complex accounting issues. including in-house accounting. In private accounting there's a wider range of jobs. Big Four firms’ central focus is audit services: The verification of the accuracy of clients’ books. each has annual revenues in the tens of billions of dollars. the Big Four have acquired entire Andersen offices. and merger and acquisition advice. hopefully). Regional Public Accounting Firms Although the Big Four get most of the publicity. bringing clients with them. KPMG. These are the most prestigious employers for accounting grads.or tax. Representative national firms include Grant Thornton. In some cases. the other big public accounting firms are picking at the Andersen carcass. Ernst & Young had picked up more than 200 ex-Andersen clients. They also include non-audit lines of business. The Big Four This group used to be the Big Five. tax consulting. but with the demise of Andersen in the wake of the Enron scandal. teams of accountants have gone from Andersen to the other firms. there are many smaller. Either you’ll move up the ladder in your Big Four firm (to partner. And a job with a Big Four firm is a great career move for someone entering the accounting profession. and PricewaterhouseCoopers.000 employees. an in-house accounting position in industry. less well-known national players and regional public accounting firms that do a lot of accounting and hire lots of people. including actuarial work (risk analysis and management). it’s now the Big Four. while the other Big Four firms had picked up in excess of 100 each. Why? Big Four clients are Fortune 1000 companies. or a government accounting position—or decide to hang out your own shingle—your Big Four experience will shine on your resume. had 88. E&Y. and the smallest among them in 2001. They are mammoth in size. These are the major public accounting firms: Deloitte Touche Tohmatsu. if you decide to go to work for another public accounting firm. or.
every company has internal accountants to set budgets. the Securities and Exchange Commission.McGladrey. accounts payable and receivable. accounting firms like Jefferson Wells International are the answer. In addition to monitoring individual and corporate tax returns. and other financial matters. your only responsibility for three months might be to audit the cash account at IBM. These jobs are just as demanding as those in public accounting. For these companies. the internal staff works closely with the public auditors at the fiscal year-end and with senior management and IT staff year round. and keep accurate track of payroll. manage assets. Insiders tell us that the hours are often a little better than at the Big Four. at a regional firm you'll be a bigger fish in a smaller pond. accounting skills are very portable. government 280 . The biggest federal employers are traditionally the Department of Defense. If you go to a Big Four firm. there are also strong regional players that usually affiliate themselves with some national network of other such players. for extended periods. BDO Seidman. the government hires a lot of people with accounting skills. in one job. Controllers and CFOs at smaller firms often enjoy even more important and influential roles in running and developing the business. Some businesses prefer to outsource their internal audit functions to a third party. In-House Accounting Whether publicly traded or not. Government Although it’s not the biggest blip on the radar screen for aspiring accountants. and the work itself more varied and interesting. and Moss Adams. the General Accounting Office. Ugh! According to one insider. and for auditors who want to work in this capacity. Most accountants in the private sector stay in one place. working with the same colleagues. For medium-sized and large firms. should you choose to move around. Within different regions of the country. However. the path to partner a little quicker. and the Internal Revenue Service.
and PricewaterhouseCoopers).accountants at the state and federal levels formulate and administer budgets. clients need Big Four accounting services. There is plenty of business preparing tax returns and advising small businesses. especially as more and more states require a minimum 150 hours of coursework to take the exam making the certification harder to obtain. and a strong sense of teamwork will give you an advantage over the competition. track costs. Arthur Andersen. individually or in partnership with other accountants. Ernst & Young. Accounting The accounting industry has been rocked by scandal in recent times. Still. being forced out of the picture. excellent communication skills. Before Andersen’s collapse. now. KPMG. the top tier of the public accounting industry was known as the Big Five. such as a thorough knowledge of tax laws. Accountants balance the books. Job Prospects According to the Bureau of Labor Statistics. and analyze publicly funded programs. especially for those interested in entry-level positions. Proficiency in accounting and auditing software. and pay the bills. with one major firm. You also will need to be able to market your services and manage your own business—time-consuming activities that not everyone enjoys. CPAs will continue to enjoy a wide range of opportunities. track expenses and revenue. especially once you have your CPA. it’s the Big Four (Deloitte Touche Tohmatsu. accounting and accounting-related jobs will grow on average with employment overall between 2000 and 2010. provided you have the relevant expertise. execute payroll. They also compile all of 281 . What You'll Do Accounting concerns itself with the day-to-day operations of bookkeeping. and as a result the accounting industry will continue to be a source of many jobs. you can always hang out your own shingle. Independent As an accountant.
Who Does Well Finance and accounting jobs require critical. To be sure. Most public accountants. They're the ones who understand the language of money and a company's complex financial situation. The American Institute of Certified Public Accountants strongly recommends that all accountants balance their technical business training with a classically liberal education. accountants need to pick up as much knowledge about computers and information systems as possible. and it's the accountant's job to make sure a company's records fit inside it and are in lockstep with the law. detail-oriented thinking. solving problems and be able to think critically about the numbers you're working with. If you can't crunch and analyze them. an accountant's day-to-day work is still very different from that of a lion tamer. The box has been well thought out. Accountants are taking a step away from the ledger sheets and are becoming essential to every successful business team. still need to know the specifics of tax law and must file audits that meet the generally accepted principles of accounting (GAAP). there's little room for people who want to think outside of the box. attention to detail is usually considered more important. And as accountants are increasingly being promoted to the boardroom. While accountants need to be good at math and have strong analytical thinking skills. Consequently. 282 . especially for those who are just entering the field. as business is increasingly being performed electronically. they are finding it increasingly necessary to develop strong written and verbal communication skills. this isn't going to be the right job for you. accountants are increasingly being called on to offer advice and even make business decisions based on hard facts rather than on speculation or gut instinct. Furthermore. for example. Here.the financial data needed to issue a company's financial statements in accordance with government regulations. and be good at. You should also like. If you have a knack for using numbers to understand patterns that influence business. not only to understand their utility but also to assess their value to a company. you're going to be valuable to a company.
banks profited by simply holding customers' money and charging them check writing fees and interest on loans. notary. Consolidation. despite changes. and home repair loans. Willie Sutton replied. and merchant banking. but even today. Not anymore.Commercial Banking Industry Asked why he robbed banks. These firms. The bank branch or credit union office remains the cornerstone of Main Street economic life. and bill-payment-services marketers like MFSDC and Integrion. forcing layoffs but also creating opportunity. transaction processing and data services like First Data and Fiserv. Most of us maintain checking accounts at commercial banks and use their ATMs. while at the same time closing branches and replacing service personnel with online and other technologies. Trends Consolidation and New Jobs For decades. include MBNA and Capital One. which are pioneering new ways of delivering financial services. which are credit card lenders. The new behemoths are entering new markets. and technological change are shaking the industry to its core. The money we deposit in our neighborhood bank branch or credit union supports local economic activity through small business loans. Deregulation 283 ." That was in the '30s. mortgages. Jobs were well defined and stable. hiring by a growing number of nonbanks compensates for this trend to a degree. Bank One—dominate the banking industry. competition. The bank also provides loans in the form of credit card charges. and promotion paths were clear and secure. a lot of the money is still in commercial banks. and it renders local services including safe deposit. more than 200 large and small banks have merged. Bank of America. "Because that's where the money is. Since 1995. However. Several of these and a handful of recently consolidated giants— Citigroup. auto loans.
up from $3. banks’ performance could get even worse. Here we've broken down the industry by type of banking. Although thousands of small community banks. Finally.9 percent of all home loans were past due. How It Breaks Down As a job seeker.000 in 1990. served as the backbone of banking regulation. a full point higher than a year earlier. 4. in late 1999. spawning superfirms that will offer banking. Consumer or Retail Banking This is what most people think of when they think of banking: A small to midsized branch with tellers and platform officers—the men and women in suits sitting at the nice wooden desks with pen sets—to handle customers' day-to-day needs. During the late '90s. insurance. and in the current economic environment. and securities. passed by Congress in 1933. Glass-Steagall was repealed. eliminating the legal framework for Depression-era boundaries that had already been abandoned by large financial services firms. On the consumer side of the business. offers insurance through its Travelers subsidiary—so the impact of the Glass-Steagall repeal remains to be seen. the most important distinction to keep in mind is between regional banks and the big global ones. In theory. And the average household has $8. and the resulting bankruptcy of some companies. credit unions. including banks. banks and other financial institutions found ways around the restrictions placed on them by Glass-Steagall and related legislation. rather than size of player.The Glass-Steagall bill. Problem Loans and Lower Profits The recent spate of corporate accounting misdeeds. however. the repeal of Glass-Steagall opened the floodgates to consolidation. in January 2002. means that some banks are stuck trying to recoup loans from corporations that are cash-starved. for example. Profits at deposit-taking banks declined 5 percent in 2001. since banks are increasingly adding new services to their array of traditional ones. big firms are already doing this through affiliated companies—Citigroup. and savings institutions still exist. However. 284 .000 in credit card debt.
and Bank One. and Visa. and J. make sure that you're applying to the right part of the organization. as federal regulations have eased. if you want to work at a Citibank branch. being three names to add to the list of megaplayers above) provide a wide range of advisory and transaction-management services to corporate clients. However.. J. Citibank. One complicating factor in this picture is that the banks mentioned above. many of these firms offer an attractive option. others you'll find on Wall Street. among others. a number of nonbank entities are offering opportunities to people interested in financial services. the hiring for these positions will frequently be done separately from that for corporate and consumer banking. and others. Bank of New York. the larger players (Bankers Trust. So. Nontraditional Options Increasingly. in addition to extending their consumer-banking operations.P. many of the biggest commercial banks. Business or Corporate Banking Many of the players in this group are the same ones in the consumerbanking business. including Bank of America. this field has been the domain of a few Wall Street firms. the work can resemble branch banking or investment banking. For people interested in corporate finance. credit card issuers like Capital One and First USA. securities underwriting. have added to their portfolios by strengthening their investmentbanking and asset-management capabilities. and asset management. Bank of America. Securities and Investments Traditionally. Morgan Chase & Co. Morgan Chase & Co.P. Depending on which institution and activity area you join. Players include credit card companies such as American Express. have aggressively added investment-banking and asset-management activities to their portfolios.employment opportunities are increasingly coming from a few megaplayers such as Citibank. At the highest level. not Main Street. and credit-reporting 285 . However. MasterCard. most of which seem hell-bent on building national—and even international —banking operations.
Job Prospects Banks remain in the business of profiting from other people's money. mortgage and securities experts. Although people at these firms are still in the money business. banks have taken a hit during the current down cycle of the economy. the specific jobs vary greatly. as aggressively as possible. if you're not a B-school grad but you're looking for work experience the equivalent of an MBA. Banks also employ sales and marketing staffs. One thing about banking skills: They are extremely useful and portable. if you're fluent in Spanish. Japanese. so the opportunities to get into banking are fewer and farther between than they have been in some time. developers of new products. Competition has forced banks to move quickly and more creatively into mortgage lending. or another language and you want to live overseas for a few years. you can usually transfer your expertise somewhere else with relative ease. Commercial Banking 286 . At the same time. if you're a business school grad and you want a solid career start. and transactions processing. but now they need to do it in as many markets at home and abroad as possible. So even if you join a bank that gets gobbled up by a competitor and you end up a merger casualty. perhaps more widely than jobs at the traditional banks do. securities and derivatives trading. though. and credit analysts. or if you just want the know-how to eventually start your own business. the full gamut of financial services. there are excellent opportunities for people with strong technical skills. and how to market to new customers.agencies such as TRW. In particular. Banking and bank-related work are a good fit if you know something about finance and you like software development. if you're interested in marketing and sales. Throughout banking there are positions for people who understand technology. given the volume of transactions that many of these organizations handle.
Small businesses are also highly dependent on the goodwill of commercial bankers.Banks used to be the dorky cousins of the hot and flashy investment banks and brokerages. angel investors. As other financial firms expand their services. and insurance. and home improvement loans approved. expanding existing businesses. Commercial bankers have to combine business acumen with strong accounting and interpersonal skills. remodel their stores. 287 . Such loans allow them to secure new inventory. buy registers. developing new markets and clients. and VCs monopolize the news. such as investment banking. and the likelihood a business will succeed. What They Do Commercial bankers perform core financial analysis to assess risk. Ideally. and brokerage. their checking accounts upgraded. Even as dot coms. What It Is Commercial banks hold customers’ money and supply loans. The legislation that kept banks and investment banks separate—Glass Steagall—was struck down by Congress in 1999. After all. international markets. creditworthiness. commercial bankers are at the front lines of the banking business. cover payroll. No longer. cars. So banks are now moving into highly visible spheres of activity. they know their clients' lives intimately and can recommend additional products and services. and consumers. The work of commercial bankers is critical—retail consumers get their credit lines extended. the Internet. and creating new products for e-commerce. Commercial bankers are a key distribution point and referral source for the rest of a bank's financial services activities. Trends Many commercial banks are consolidating in order to branch out and provide other services such as mortgage. They play a key part in deciding the best business initiatives. investment banking. mutual funds. and manage their overseas accounts receivables. their mortgages. most small businesses continue to fund their growth with commercial loans. in exchange for check-writing fees and interest collected from loans. mutual funds.
On the consumer side of the business. resulting in an increasing reliance on technology and more finance jobs available to job seekers with technical backgrounds. in January 2002. Who Does Well If you like intense project work. and often a merger with a peer company is the best way to do this.commercial banks are diversifying to keep up. and the ability to manipulate data intelligently and discover trends is key to long-term success. more than 200 large and small banks have merged. 4. a full point higher than the year earlier.9 percent of all home loans were past due. There are fewer junior staffers. Consolidation usually results in layoffs and fewer job opportunities. Technology is changing the job requirements for bankers. with a good deal of financial analysis and customer contact—if you like helping new families and new businesses create brilliant futures—commercial banking might be for you. Since 1995. You'll just have to function in a larger organization. banks’ performance could get even worse. The recent spate of corporate accounting misdeeds has resulted in seriously diminished funds for some corporations and bankruptcy for others. Securities include stocks and 288 . Banks want to maintain their record levels of profitability by reducing defaults and increasing efficiency. and in the current economic environment. Investment Banking Industry Investment banks are experts at calculating what a business is worth. usually for one of two purposes: to price a securities offering or to set the value of a merger or acquisition. And a growing number of non-banks are pioneering new ways of delivering financial services. but jobs in banks that are more diversified offer more opportunities for career development. Many banks have lost profits trying to recoup loans. trying to build synergies with other product groups across different customer and product platforms. Profits for deposit-taking banks declined 5 percent in 2001. providing more jobs in the finance industry. leaving banks holding an empty bag.
Tokyo. Hong Kong. I-banking heavyweights Credit Suisse First Boston. I-banks charge hefty fees for providing this valuation service. I-banks make markets to facilitate securities trading by buying and selling securities out of their own account and profiting from the spread between the bid and the ask price. Trends Cooldown As the global economic climate cools down.000 Wall Street workers were laid off. approximately 30. many I-banks offer retail brokerage (retail meaning the customers are individual investors rather than institutional investors) and asset management services. I-banks have also pulled back on college and MBA recruiting—but. More than 289 . there are still jobs to be had for the cream of the crop from the best schools. But the bulge-bracket firms were not the only ones to feel the pinch of thinner profits—or to react by cutting costs via layoffs. along with other kinds of financial and business advice. fell by some 30 percent in 2001. Other hot spots include London. and a stock offering may be an initial public offering (IPO) or any subsequent (or “secondary”) offering. Not surprisingly. I-banks are intermediaries between the issuers of securities and the investing public. and Silicon Valley. Firms also compete in Frankfurt. San Francisco. the center of this industry rests in the lofty aeries above Wall Street and Midtown in New York City. In this sense. JPMorgan Chase. and Goldman Sachs all laid off a significant chunk of their employees. In 2001 and 2002. In addition. which can comprise half or more of some employees’ total annual compensation.bonds. and other foreign markets 24 hours a day. Also. In both cases. I-banking bonuses. so has investment banking. such as mutual funds or pension funds. Merrill Lynch. commit to purchasing the issue of stocks or bonds before it actually hits the market. In 2001 alone. because it’s cheaper to employ a recent grad than someone with more experience. When banks underwrite stock or bond issues. they ensure that institutional investors.
down. up. I-banking firms have been mandated to put stock ratings from various sources on brokerage statements sent to investors after they buy a stock. Robertson Stephens was acquired (and then dumped) by FleetBoston. The biggest issue so far has been whether banks overrated the investment potential of client companies’ stocks intentionally. deceiving investors in the pursuit of favorable relationships and ongoing banking revenue opportunities with those companies. and Alex. This means investors will be able to view at least one research report that was developed outside of the brokerage firm with which they have dealings. 20. investment banks. save. the industry is undergoing some serious global consolidation. directs the nation’s largest securities firms to pony up $450 million over five years to buy stock reports from independentresearch firms. ones not involved in I-banking.P. Lufkin & Jenrette was acquired by Credit Suisse First Boston. down focused a lot of scrutiny on firms on the Street. largely due to the late-1999 repeal of the Depression-era Glass-Steagall Act. Coupled with a slowing economy. though. those who do I-banking internships will have the best shot at full-time openings. and Morgan Stanley will also have to pay fines of $50 million on up. Goldman Sachs. Credit Suisse First Boston. and protect their money all under one roof. these mergers have also triggered layoffs. up to down. Deregulation and Financial-Services Consolidation Investment banking has witnessed a rash of cross-industry mergers and acquisitions in recent times. Among the recent M&A activity: Donaldson. 2002. J. PR Nightmare—Or Something Worse? The swing in the markets from up. insurers. 290 .ever. As well. Citigroup/Salomon Smith Barney. Brown was acquired by Deutsche Bank. allowing clients to invest. And a restitution fund will be put into place for investors burned in such dealings. as I-banks make an effort to cut spending and reduce overlap. and securities brokerages to offer one another's services. Morgan and Hambrecht & Quist were swallowed by Chase. The repeal. now allows commercial banks. The outcome: a regulatory settlement released Dec. As I-banks add retail brokerage and lending to their offerings and commercial banks try to build up their investment banking services. which marked the deregulation of the financial services industry.
and Alex. Brown—have all been acquired by commercial banks. The equity markets are strong. Goldman Sachs. Job Prospects Investment banking is one of the best ways a young person can learn about finance and make a lot of money right out of school. at least for the moment. Allen & Co. and that means big business for niche firms focusing on technology. and their names confer distinction. According to the New York Attorney General Eliot Spitzer. a Fortune 500 company planning an acquisition. and Lazard Frčres still do big business in specialized fields. and JPMorgan Chase hold top spots in this bracket. A whole host of others fall into the second tier of major players. but the list of small firms is getting smaller as the market consolidates. including Bear Stearns and UBS Warburg. Boutiques and Regional Firms Obviously. Credit Suisse First Boston. Citigroup/Salomon Smith Barney. Lehman Brothers. Even if you ultimately decide to reclaim your personal life by pursuing other 291 .Of course. biotechnology. Volpe Brown Whelan and Thomas Weisel are Silicon Valley firms capitalizing on their technology connections and expertise. all changes will take place before the end of 2003. How It Breaks Down The Bulge Bracket There's no clear and uniformly accepted definition of this group. UBS. and other high-growth industries. or a job seeker sending out résumés. This is the group that matters most in investment banking. the investment-banking division of the giant Swiss bank. The strongest boutique firms—Hambrecht & Quist. In New York.” These types of issues and other potential quagmires put into question how effective this settlement will be. whether you're a start-up with an IPO to sell. such as when this regulatory settlement is to take effect and what makes a research firm truly “independent. Merrill Lynch. Morgan Stanley. But that's not to say independent firms are nearing extinction. a lot of the details still need to be worked out. the investment banking world extends beyond New York and the bulge bracket. but it basically includes the biggest of the full-service investment banks. Montgomery Securities.
Despite this inherent uncertainty. and the expectation—no. long days and nights of hard work. banks are still bringing on best-and-brightest hires for analyst and associate programs by way of summer internships for the most part. even during a downturn. a few difficult personalities. the skills you learn on Wall Street will be valuable in most business careers. But suddenly it dawns on you. even though they certainly aren’t hiring to the extent they did a couple of years back.options.” Investment Banking You’ve heard about the long hours. count on competition for open spots in investment banking to be especially stiff. because of the current difficult economic environment. the requirement—that all personal plans are subject to the demands of work. you’ll find that life on the Street is very much at the mercy of the markets. including high pressure. But before you can cash in on those potential returns. “We’ll never not hire new talent. the big bonuses. What do investment bankers do? What’s the difference between sales and trading and corporate finance? More to the point. and the megabillion-dollar deals. the field remains a popular destination for undergraduates and MBAs. firms are always looking for new (read: cheaper) bodies. And. What the heck is investment banking? You panic. Still. Bull markets bring more work to do than is humanly possible. why do you want to be a banker? What I-Banking Is 292 . You can even write a good enough cover letter or bid enough points to land a coveted first-round interview slot with one or more of these firms. As one recruiter puts it. You can recite the names of the big firms by heart. you’ll have to put up with some very substantial hardships. In addition. hoping that the rumored layoffs and smaller-than-usual bonuses don’t come to pass. Bear markets can leave you sitting at your desk with a pile of deals on hold. even during a merger. but you’ll be rewarded with a paycheck that can sometimes double year-to-year.
write. governments. profit-hungry world of investment banking can seem like a bigger-than-life place where deals are done and fortunes are made. When Joe on Main Street needed a loan to buy a car. whose members hop from airport to airport trying to sell big institutions a piece of the new stock offering they have coming down the pipeline. When Sprint needed to raise cash to fund an acquisition or build its fiber-optic network. Wall Street is filled with high-energy. and the like). who read. selling. 24/7. Some are investment bankers who spend hours hunched behind computers. and breathe whichever industry they follow. and individuals. providing financial advisory services. commercial banks and investment banks performed completely distinct functions. What You'll Do Traditionally. a phone over each ear. But investment banking has a very steep learning curve. In fact. market maker and position taker in the financial markets. In that capacity it serves many functions. non-profit institutions. action-oriented. hardworking young hotshots. a sales-anddistribution organization for the same financial products. it’s a great place to learn the ins and outs of corporate finance and pick up analytical skills that will remain useful throughout your business career. live. it called on its investment bank. Investment banking isn’t one specific service or function. poring over financial statements and churning out spreadsheets by the pound. Paychecks and lifestyles reflected this 293 . a major investor. he visited a commercial bank.The intensely competitive. An investment bank acts as an adviser to corporations. Then there are the analytically minded research analysts. and a buyer or seller on hold every minute the market’s in session. It's a middleman in the creation and issuance of financial products (stocks. and managing assets. and a research organization. and chances are you’ll start off in a job whose duties are more Working Girl than Wall Street. Others are traders who keep one eye on their Bloomberg screen. Traders work hand in hand with the institutional sales group. It is an umbrella term for a range of activities: underwriting. such as mergers and acquisition advice. and trading securities (stocks and bonds). Investment banks offer these services to companies. bonds.
invest in them. and industry developments in order to provide proprietary investment advice to institutional clients and in-house groups. Today. frequently. as the laws requiring the separation of investment and commercial banking are reformed. A fullservice investment bank includes three major professional divisions: investment banking (which includes corporate finance. but the list of players is getting smaller as the industry consolidates. research them. sell and trade them (see WetFeet's profile on securities sales and trading). individual company stocks. These and other firms are regular visitors to campus career centers. mergers and acquisitions. and advise others on financial transactions. with investment bankers reveling in their large bonuses and glamorous ways while commercial bankers worked nine-to-five and then went home to their families. These may be either Fortune 1000 companies looking to raise cash to fund growth or. sales and trading. The corporate finance group (frequently known as “banking” or “CorpFin”) serves the sellers of securities. and public finance). and JPMorgan Chase. such as the sales and trading divisions. and research. Goldman Sachs. Salomon Smith Barney. Today. Credit Suisse First Boston. private companies wanting to go public (that is. or how best to move ahead with plans to sell or acquire a company. The action and players are still centered in New York City and a few other money centers around the world. The research division also plays an important role in the underwriting process. 294 . more and more firms are making sure they have a foot in both camps.division too. how to structure their balance sheets. Investment bankers issue financial products. Nearly all banks have a staff of research analysts who study economic trends and news. Morgan Stanley. Think of investment bankers as financial consultants to corporations. This is where CEOs and CFOs turn when they’re trying to figure out how to finance their operations. leading banks include Merrill Lynch. both in wooing the client with its knowledge of the client’s industry and in providing a link to the institutions that own the client’s stock once it’s publicly traded. to sell stock on the public markets for the first time). thus blurring the lines and the cultures.
If the market or your industry group is in a slump (or if your firm suddenly decides to get out of a certain segment of the business). 295 . there’s always the chance that you may find a pink slip on your desk Monday morning. and many investment banks divide their corporate finance departments into industry subgroups. quite honestly. are at ease with numbers and analysis. financial institutions. or which are being acquired by others. then investment banking may be a great career choice. As a result. much less to do well. The mergers and acquisitions department provides advice to companies that are buying other companies. or into product groups like high-yield.The activities of the CorpFin department can range from providing pure financial advice to leading a company through its first equity issue (or IPO). utilities. even if you love the work. such as technology. But. a job in investment banking could turn out to be a bad dream come true. health care. you’ll need to like the work itself. To survive in investment banking. But if this doesn’t sound like you. deal-oriented work. and insurance. Who Does Well You shouldn’t go into banking just for the money—the lifestyle is too demanding. and don’t mind putting your personal life on hold for the sake of your job. and investmentgrade debt. And. entertainment. industry or product knowledge is key. if you like fast-paced. communications. an investment banking career can still be a tough road. have a tolerance for risk. The job of salespeople is to ensure their bank's financial stability by getting investors to commit to buying (subscribing to) stock and bond issues before the new securities actually hit the market. private equity.
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