BUSINESS FUNDAMENTALS

INDUSTRY GROUPS, COMPANY TYPES AND STRUCTURE

ECONOMIC SECTOR INDUSTRY GROUP
BASIC MATERIALS Chemicals, mining
CAPITAL GOODS Machinery, equipment
CONSUMER STAPLES (fundamentals, necessities; prodotto basilare) Food, beverages
CONSUMER DISCRETIONARY (non essenz) Restaurants, hotels
COMMERCIAL SERVICES Auditing, consulting

ECONOMIC SECTOR INDUSTRY GROUP

ENERGY Oil, gas
FINANCIALS Banking, real estate (immobili)
TECHNOLOGY Telecoms, software
TRANSPORTATION Airlines, logistics
UTILITIES Electricity, water

1 SOLE TRADER/SOLE PROPRIETORSHIP Ditta individuale

3 PRIVATE COMPANY/CORPORATION Società privata

4 PUBLIC COMPANY/CORPORATION Società pubblica

2 PARTNERSHIP

Enterprise resource planning (ERP) is business process management software that allows an organization to
use a system of integrated applications to manage the business. ERP software integrates all facets
(sfaccettatura) of an operation — including product planning, development, manufacturing, sales and
marketing — in a single database, application and user interface.

THE BUSINESS CYCLE

Over time, economies tend to grow. However, growth is not steady; periods of contraction (below-average
growth) are followed by periods of expansion (above-average growth).

In the boom phase-> as growth increases, so does inflation (rise in price) and central banks raise interest
rates in order to control it. When borrowing money to invest becomes too expensive, economic activity
peaks and then slows down. This second phase is called slump (crollo), which is then followed by a period
of recession. In recession, central banks lower (abbassa) interest rates to encourage spending. Eventually,
the economy picks up (risollevarsi) and we move into the fourth stage, recovery – and then back to a boom.

One cycle follows another, punctuated by ups and downs called peaks and troughs, but providing along-
term trend of growth.

Variations in the business cycle are caused by many different factors: overproduction, overexpansion of
credit, speculative bubbles, and shocks like wars, political upheavals (sconvolgimenti) and so on.

Up and down peak and trough (pronunciation troff)

THE INVESTMENT CYCLE

The investment cycle can be divided into four phases:

1. Accumulation When prices have reached the bottom (fondo), “value investors” will buy,
principally in the technology and industrial sectors, despite the ongoing (continuo) bear market
(mercato in ribasso -> prices are falling). In this phase, initial hope develops into relief, and
eventually, as prices begin to rise, optimism.
2. Mark-up optimism overcomes the fear of losing money and the market becomes bullish
(tendente al rialzo), as investors go through excitement, thrill and finally euphoria, buying
household products, food and services.
3. Distribution wise investors know that the bull market will not last forever and in this third phase,
they become more cautious and sell shares to buy utilities and bonds. Anxiety sets in, and as prices
drop the mood turns to denial, fear and depression when investors realize it is too late to sell for a
profit.
4. Mark-down in this final phase, investors who cannot afford to wait for a recovery start to panic.
In the end, many will give up and take losses in desperation. Value investors who sold earlier at a
profit now have the chance to buy cyclicals at low prices and enjoy the next mark-up.

+ p.8

1) PERSONAL DEVELOPMENT

1.1 About business – developing your career

Top tips for getting on (trovarsi bene)/ to feel good in the workplace:

1) Get yourself noticed (farsi notare): getting ahead in business means getting noticed.
What a senior management likes more than anything else is junior managers who
show signs of initiative and volunteer to do things. Most of the reason for this is that
the more junior managers volunteer to do, the less senior managers will have to do
themselves.
2) Ignore the emails: working in the post room (ufficio smistamento posta) is not
generally a career choice for most people. If something really matters, the person
who sent it will eventually call you to ask about it.
3) Manage without bosses: what bosses never understand is that if they didn’t give
you things to do in the first place, you wouldn’t make so many spectacular foul-ups
(errori..). Good bosses are those who lock themselves in their rooms and leave you
completely alone.
4) Dress up (elegante) not down: business suits are for doing business in (≠ dress-down
Friday)
5) Treat appraisal (valutazioni) as auditions for pantomime: an appraisal is where you
have an exchange of opinion (you go in with your opinion and leave with their
opinion) with your boss. Giving appraisal is actually as hard as getting them. The
secret is to mix criticism and recognition (stima).
 6) Learn to recycle reports: the quickest and easiest way to write a report is to change
the names in the last report.
7) Be nice to PAs: give the chief executives one good PA (Personal assistant) and they
might get some useful work done. That’s why is difficult for PAs to become
managers. It’s not that PAs couldn’t do management jobs, it’s because management
couldn’t do management jobs without PAs.
8) Remember that less is more: lazy (pigro) people are found at all levels in business,
right up to chairperson (fino al president). When something goes wrong in business,
it’s generally because someone somewhere has tried to do something, but if you
don’t do anything, you can’t be blamed when it goes wrong. These people (lazy) are
therefore the only people with a 100% record of success, and with sort of record,
promotion is inevitable.
9) Steer well clear of all meetings (evita del tutto): a lot of time is spent in meetings,
half of which are not worth having, and of those that are, half the time is wasted.
There are meetings for which you have to prepare, in which you have to work and
after which you have to take action. But these are rare.

Cyclical: adjective referring to a business or stock whose income, value, or earnings fluctuate
greatly according to variations in the economy or the cycle of the seasons: Selling Christmas
decorations is a cyclical business.
EBITDA: earnings before interest, tax, depreciation and amortization
Flawlessly: describes an action done without any mistakes or faults (= impeccabilmente)
To screen: to get information to decide whether someone is suitable for something, for
example a job
SG&A: selling, general & administrative expenses
Slump: a period when an economy is much less successful than before and people lose
their jobs (= calo)
Trough: a period when something that rises and falls regularly is at a low level, especially
economic activity (= depressione)
Recovery: ripresa
Peak: picco

PIECES OF ADVICE FOR GETTING ON AT WORK GIVEN FROM 3 EMPLOYEES IN THE

LISTENING:

• RELATIONSHIP WITH YOUR BOSS To befriend your manager you need to think of
him or her as a person rather than a figure in authority. Show them you’re a good
guy on a personal level, not just professionally. Managers promote people they
know and like so developing a friendship with them is a smart career move (talk
 about their favourite team or holiday destination, direct the conversation to things
that feel natural).
• PROMOTION When the time comes for a promotion your manager will think about
the person with whom he worked together successfully, so the key is to always
trying to be in your manager’s mind. By for example sending regular updates, show
that you get the work done etc.
• WORK-LIFE BALANCE Your manager will always try to get you to do as much as
humanly possible but there limits. So sometimes it is OK to say no and turn down
assignments.

1.2 Vocabulary – behavioural competencies and setting goals

Behavioural competency: any behaviour attribute such as knowledge, skill set, teamwork,
leadership skills, technical know-how etc, which contributes to the development of an
individual in the organisation to take up bigger roles is known as behavioural competency.
They are observable skills and qualities required for effective performance in a job.
Examples of behavioural competencies:

 Being able to bring disciplined analysis to data and situations, to see cause and
effect and to use this to make effective decisions -> analytical thinking
 The ability to use appropriate channel, means and style of communication with tact
in a variety of situations -> effective communication
 The willingness and ability to give priorities to customers, delivering high-quality
services which meet their needs -> client focus
 The ability to adapt with ease to a variety of situations; it is also about not being
disconcerted by the expectation -> flexibility
 The ability to find opportunities to develop your skills and attributes through self-
study, training, practical application, and/or support from others -> self-
development

Mind share: the amount of awareness an individual or group has about a particular person,
product or service

Clear guidelines in setting objectives:

1. Make sure you set performance objectives (obiettivi di prestazione). This means
being precise in terms of quantity and quality and will ultimately help you to achieve
your goals. It’s also advisable to set short- and long-term objectives
2. Make sure you set measurable targets. Don’t be overambitious but make sure you
have all the support you’ll need in terms of both people and resources
3. An appraisal (valutazione) of your goals means a document to refer to regularly
 4. A clear plan of your objectives gives you an insight into your priorities and
aspirations

SMART = specific, measurable, achievable, realistic, time-bound (scadenza precisa). An

acronym used to help formulate objectives, often within corporate performance
development

1.3 Grammar – tense, aspect and voice

Active and passive forms:

 We want to avoid mentioning who did the action so the passive is appropriate
 The passive is appropriate because it is unimportant, or unnecessary, to say who did
the action
 The subject of the sentence is extremely long so the active sounds better because it
puts the long material at the end
 There is no reason to use the passive, so the active is better

Peter Principle: Lawrence Peter’s belief that employees tend to be promoted one level too
far, to their level of incompetence
Blow your reputation: to cause the opinion people have of you to go down (affondare)

1.4 Management skills – self awareness and communication

Johari window: a tool designed by Joseph Luft and Harry Ingham in 1955 to help people
understand how they relate to and communicate with other people. It is a useful tool for
helping people to reach a better understanding of their interpersonal communication and
relationships. It has 2 columns and 2 lines: the column on the left contains information
which you know and the column on the right information you don’t know and similarly the
lines.

 Arena: the pane on the top left that contains information known to oneself and to
others. It tells things about ourselves which are public knowledge.
 Blind spot: the quadrant of a Johari window that contains information known to
others but not to oneself. Asking other people for feedback can help us reduce our
Blind spot.
 Facade: the quadrant on the bottom left that contains information known to oneself
but not to others. Other people’s perceptions of you are incomplete if you choose
not to share certain information about yourself.
 Unknown: the quadrant of a Johari window that contains information unknown to
oneself and to others, for example your hidden talents and undiscovered potential.

Known to me Unknown to me
 Others know
Others don’t know

1.6 Case study – the glass ceiling (soffitto di vetro)

Glass ceiling: an unfair system that prevents some people, especially women, from
reaching the most senior positions in a company or organization.
The example in the book speaks about a woman named Gemma who is a product manager
in the company in which she works. She is a valuable and dependable (fidata) member of
her team, she is outgoing (estroverso), has strong communication skills and is keen to take
initiative. She has performed well in her current position, with the exception of the
tendency to overreach (superare) her authority. However, she is extremely disappointed
that her application for the position of Marketing Manager was unsuccessful. But she
doesn’t realize that SEVs has never employed a woman as a Marketing Manager.

Headhunt: to try to persuade someone to leave their job and go to work for another
company
Devil’s advocate: someone who pretends (finge) to disagree with someone in order to start
an argument or interesting discussion
Comfort zone: in business, it may describe a set of behaviours where risk is avoided,
leading to disappointing results

2) CORPORATE IMAGE

2.1 About business – corporate image

During the years, McDonald's has been transforming itself. And today it announces the
fruits of its labours: financial results for 2007 that are expected to be excellent around the
globe and, in Britain, a triumph. The US-based chain is now selling more burgers than at
any time since it arrived in Britain 34 years ago. Sales are growing almost as quickly as in
the 80s boom.
But at the end of the 1990s, the company was in trouble becoming emblematic of all that
was rotten in capitalism, due to: the McLibel case, in which two environmental activists
were sued by the corporate giant and (in the end) won (the longest ever English trial
between McDonald’s and 2 ordinary people who humiliated it in the biggest corporate PR
disaster); an obesity crisis in the western world; the disdain for the dead-end McJob (si
intende un impiego sottopagato, mal edificante e che offre poche prospettive di carriera. La parola prende il nome dalla nota
and an army of vegetarians. From
catena di fast food McDonald's, più volte accusata di sfruttare i suoi dipendenti);

1999, annual UK sales stagnated and in 2005 its profits collapsed by almost two-thirds. Its
restaurants seemed tired and its customers appeared embarrassed to be there.
McDonald's was dying. But by the end of last year, 140 outlets had been "reimaged" and
another 200 will be given what McDonald's calls the "less is more" treatment. It was
reported that McDonald's now only sold sustainably farmed coffee certified by the
international environmental charity Rainforest Alliance; it launched free, unlimited Wi-Fi in
hundreds of its restaurants; it is turning its cooking oil into biodiesel to power its fleet of
155 lorries; is voluntarily raising what it pays for beef and pork by 5% above the market
rate to help British farmers; and it only sells organic British milk. Gone are the garish
(sgargiante) red signs, the strip (striscia) lighting, the tacky plastic seats and sinister
clowning Ronald. McDonald's success is because of both its green moves and a back-to-
basics focus on burgers. The restaurant has attracted more customers by extending its
opening hours (to 6am in many places), improving core food (chicken breast in its
chickenburgers and nuggets), switching from filter to freshly ground coffee and only using
Rainforest Alliance certified beans and British organic milk. So there is an absence of
embarrassment or defensiveness about dining under the golden arches. There is an acute
awareness of the health perils (pericolo) of junk food and a healthy cynicism about the
corporate food industry, but it no longer seems to affect McDonald's sales. People have
realised that their concerns about obesity, industrial food production and environmental
degradation cannot be the fault of one brand. Companies have responded, but people also
understand the issue of obesity better: the debate is more grown-up at the same time as
McDonald's has evolved. The combination of these two factors means that people are less
embarrassed to be associated with it.

Fruits of its labour: result of work done

Green on the inside: showing concern for the environment as a core principle at the centre
of an organization’s activities
Green on the outside: showing concern for the environment but only superficially
Greenwash: activities by a business or other organization that are intended to show that
the organization is concerned about the environment

2.2 Vocabulary – corporate social responsibility (to demonstrate CSR)

Eco-efficiency was a phrase coined by the Business Council for Sustainable Development to
describe the need for companies to improve their ecological as well as economic
performance. Minimizing the company’s environmental impact is a particularly popular
tactic amongst companies whose products are destructive to the environment. The
concept of creating more goods and services while using fewer resources and creating less
waste and pollution
Corporate philanthropy – donating to charities is a simple and reputation-enhancing way
for a company to put a numerical value on its CSR (corporate social respons) commitment.
Activities that demonstrate the promotion of human welfare through business.
Cause-related marketing is a partnership between a company and a charity, where the
charity’s logo is used in a marketing campaign or brand promotion. The charity gains
money and profile and the company benefits by associating itself with a good cause as well
as increasing product sales. A type of marketing which involves the cooperative efforts of a
for-profit business and a non-profit organization for mutual benefit.
Sponsoring awards – through award schemes, companies position themselves as experts
on an issue and leaders of CSR simply by making a large donation.
Corporate codes of conduct are explicit statements of a company’s values and standards of
corporate behaviour. They cover these issues: the treatment of workers, consumer
reliability, supply chain management, community impact, environmental impact, human
rights commitments, health and safety, transparency and dealings with suppliers.
Community investment – many companies develop community projects in the vicinity of
their sites, to offset (controbilanciare) negative impacts or give back to the community and
local workforce. This includes a lot of activities such as running health programmes,
sponsoring schools, playgrounds or community centres, employee volunteering schemes. A
type of investment which focuses on how companies manage their activities in the
community, and in so doing create a positive impact for both the community and the
business (= investimenti comunitari)

CSR: Corporate social responsibility -> Exposing the fraud: CSR initiatives can simply create
a smokescreen (doing something to make people believe that you are being fair, although
this is not really true), and give companies the chance to sidestep (= avoid) their
responsibilities of dealing with social and environmental issues. Many organizations pay lip
service (fare qualcosa a parole, ma non a fatti) to CSR but only to meet legal requirements.
It’s clear that they now need to move to implementing genuine CSRs programmes. Off-
shoring (delocalizzazione) key business processes to countries with lower labour costs, for
example, may be economically sound, but it is ethical? We have to learn how to expose the
fraud (to reveal something that is usually hidden and that is not what people claim it is) of
CSR.

Tokenistic: simbolico

2.3 Grammar – the future, tentative and speculative language

There are over 100 different alternative ways of expressing the future. This include using
modal verbs or other constructions.

Almost certain Probable Tentative

 Be on the point of  Be likely to  Might
 Be certain to  Will probably  May
 Be going to  Could  Should
 Be on the brink of (=
sul punto di/quasi)
  Be poised to (= essere
in procinto di)
 Be bound to
 Be on the verge of (=
sul punto/orlo di)
 Be set to (= essere
pronto per)

Tentative language: it is used in academic debate to present ideas as ideas rather than
definite answers. For example, ‘this seems to indicate’ rather than ‘this proves’. Tentative
expressions are also employed when the speaker wants to soften a message and to
present it as an objective rather than personal opinion. Typical tentative language includes
limiting words, for example ‘possibly’ and ‘probably’, softening verbs, for example
‘appears’ and ‘indicates’, and modal, for example ‘could’ and ‘may’. Examples: appear to
be, seems to indicate, prove challenging, appears likely (sembra probabile), are concerned
about, benefit from.

Carbon footprint: the amount of carbon dioxide emitted by a person or organization per
year

2.4 Management skills – time management

Seven steps to effective delegation:

1. Define the task and check it is SMART (Specific, Measurable, Achievable, Realistic,
Time-bound)
2. Identify the person who can do the job
3. Explain the reasons why you are delegating the task to them
4. Discuss how they will do the job, and what resources are needed
5. State the results you expect
6. Communicate details to other people who need to know
7. Agree on deadlines, review dates and feedback strategies

Brainstorm: to develop new ideas by exploring all possible solutions before choosing the
best ones
Paired Comparison Analysis: a decision-making technique where different opinions are
compared: each possibility is compared with each of the other options, and given a score.
Adding up the total scores for each option provides an indication of their relative
importance

2.5 Writing – Newsletter articles

State-of-the-art: all’avanguardia
Humble: umile
Bargain: affare
Factual: lista di fatti

2.6 Case study – Pixkel Inc.

Caitlin Marks is the new Manager of Corporate Communications at Pixkel Inc., a California-
based start-up which designs chipsets for digital cameras. Her job is to build a new image
for Pixkel Inc. that is growing like crazy, but not really making any money and not winning
too many friends. Bill, her uncle, is an electronics wizard, but he’s pretty much hands-off
when it comes to management so she doesn’t expect much help from him. Everyone else
seems to be out firefighting. She hasn’t met most of the management team yet but set up
a conference call to get their views on the situation and to work out a strategy.

Endorsement: an occasion when someone famous says in an ad that they like a product (=
appoggio, sostegno)
Firefighting: the activity of trying to stop a serious problem that suddenly happens by
reacting quickly and effectively. In business, it frequently refers to wasting time and energy
dealing with problems that would not happen if managers were more proactive
Flavour of the month: someone or something that is very popular for only a short time
Hit the ground running: to be successful from the start of an activity
Real McCoy: something that is real and not a copy
Swoosh (fruscio): something which moves through air or water with a smooth gentle sound
The bottom line: morale della favola
From scratch: da zero

Capitolo 3  SUPPLY CHAIN

Vocaboli
to outsource: esternalizzare (the owner decides to outsource the staff to an employment
agency)
lift-out: when an external provider hires staff who used to do the same job for the
customer (a major advantage of the lift-out model lies in acquiring a team with intimate
knowledge of the client’s business, thus making the new provider fully operational from day
one)
To roll out: to introduce a new product or service
data-crunching: dealing with large amounts of information or calculations very quickly
(there are times when data crunching doesn’t give you the whole picture)
knowledge drain: when a company loses specialist skills e know-how because experienced
staff leave the organization for reasons such as redundancy (licenziamento), retirement o lift-out
outsourcing backlash: contraccolpo/reazione negativa dell’esternalizzazione
eager to: avido/desideroso/appassionato di ..
disruption: interruzione/disagi
to wield: detenere autorità
ledgers: libro mastro
to morph: trasformare (effetto digitale = trasformare tramite morphing)
thrums with: strimpellare (provare)
to tremble: tremare
to freed up to: libero di
batch-processing stage: elaborazione a blocchi
to meet demand: incontrare/soddisfare la domanda di mercato
JIT: just in time
retail organization: organizzazione di commercio al dettaglio
raw materials: materie prime
repositioned: riposizionati (to reposition = target new market)
salvage: items saved, materiali recuperati
supply chain: filiera, processo di produzione/distribuzione
warehouse: magazzino
database handling system: sistema di gestione dei dati
smallholder producers: piccolo proprietario/produttore
a bewildering choice: confusing, sconcertante
tradable: negoziabile
commodity: merce
depot: magazzino
to source: tirare fuori, prendere
business hub: centro direzionale
reverse logistic: the reverse flow of products and materials for resi (returns), riparazioni
(repair), ricostruzione (remanufacture) e riciclaggio (recycling)
vertically integrated industry: companies which own operations at different levels of a
production process, such as farms, processing plants and distribution facilities in order to
increase economies of scale (MyCoffee is a vertically integrated company which runs its
own coffee plantations as well as a shipping company)
CPFR: Collaborative planning, forecasting and replenishment, the activity of sharing
forecasts and business info with business partners in order to optimize the supply chain
replenishment: rifornimento
force field analysis: a method used in change management for displaying and evaluating
factors that may drive or obstruct (impedire) change (performing a force field analysis
helps build consesus by allowing people to express, discuss and resolve their objections)
to think outside the box: to find new ways of doing things especially of solving problems
to tackle problems: affrontare i problemi
driving forces: forza trainante
restraining forces: limitanti forze
to advocate: sostenere, essere a favore di (he advocates 4 key steps to successful change)
offshoring: delocalizzazione
batch: lotto, serie (we liked two of the designs from the first batch of samples and one from
the second batch)
oversight: svista
coating: a thin layer that covers something (the metal part of the machine have acquired a
thin coating of rust and will need to be replaced)
fastening: a screw (cacciavite), bolt (bullone) or hinge (cardine) used to assemble parts of a
structure, machine or vehicle (they use stainless or brass steel fastenings for the outside of
the submarine because both metals are resistant to corrosion)
galvanized: galvanized metal is covered with a layer of zinc (zinco) to protect it from
damage, especially rust (ruggine)
workmanship: prodotto oppure anche maestria (the workmanship of this piece is
particularly fine)
steady demand: richiesta stabile e ferma
scorecard: a table of the most important info needed to achieve an objective, consolidated
and laid out so that the info can be monitored at a glance (a prima vista) (the balanced
scorecard is a strategic planning and management system which adds strategic non-
financial performance measures to traditional financial metrics in order to provide a more
balanced view of organizational performance)
USP: Unique Selling Proposition, the thing that makes a product or service special or
different from others
to relocate: trasferire
go ballistic: perdere le staffe, arrabbiarsi
sunset industry: impresa in declino
blue-collar: lavoratori che occupano posizioni tipo elettricista, bidello, idraulico ecc (lavori
abbastanza pratici e spesso che non richiedono lauree)
white-collar: solitamente lavorano in office-setting quindi sono figure professionali che
hanno competenze specifiche e lauree specifiche tipo Founder and President, General
Manager and Operations Manager
Micron: a unit for measuring very small lengths in the metric system
The writing’s on the wall: it seems likely that something will soon go wrong or stop existing

Modi di dire
- .. in a push for efficiency
- they have proved remarkably effective at creating ..
- many of the staff have complained of significantly higher overall transport costs as a
result of the move
- they fear that .. is on the increase again
- they would do well to investigate a little deeper in order to make their choice more
informed
- upgrade computer software
- adopt JIT
- outsource business processes like HR and IT
- how likely is your plan to succeed?
- WEF is now applying its know-how to developing new high-quality audio products
incorporating the latest technology, ranging from … to

The Indian machine (summary)

The reading about the Indian Machine in chapter 3 says that a huge phenomenon has been
taking place in the last years, which is outsourcing to India. The outsourcing wave looks
unstoppable and the speed at which the Indian tech industry is learning new skills is
surprising (no wonder why some US firms now outsource their PowerPoint presentations
to India). Of course US workers are threatened by such phenomenon but we have to
consider that if today’s cry is “they sent my job to India”, yesterday’s was “I was replaced
by a computer”. And the truth is that yes computers have replaced the workplace, but they
have also proved remarkably useful. In the same way outsourcing to India can actually be
something positive-> it could lead to the next great era in American enterprise: today
innovative firms spend too much money maintaining products (fixing bugs errori etc.) and too
less in true innovation; by sending the maintenance (manutenzione) to India, companies
will have more money they can spend on innovation.

Forward logistics: products moving to the customer (listening)

Goods, information and financial transactions move from one end of the supply chain to
the other: raw materials are moved to the manufacturer, where they are transformed into
finished goods; these then move forward via warehouses and distribution centres to retail
outlets, and then on to the customer
(raw materials  manufacturer  distribution warehousing  retail 
consumer/customer)

Reverse logistics: products moving back to the manufacturer from the consumer, retailer
or distributor (listening)
The goal of reverse logistics is to maximize the value of all goods which are removed from
the primary distribution channel. Products can be repositioned and sold to customers in a
different geographical location or in a different retail organization: they can be returned to
distribution for salvage or for example for donation to charity or move back to
manufacturer to be destroyed and recycled.
(consumer/customer: reposition  retail: resell  distribution: donate  manufacturer:
destroy  raw materials)

Free trade or fair trade? (summary)

Nowadays consumer should investigate deeper while making their choice.
The cup of coffee they are enjoying in any one of a major regional distribution centre has
been imported (in fact the great majority of the world’s coffee is grown in a small amount
of countries like Brazil and Africa). It’s value has increased dramatically throughout the
years  it involves a chain of high street coffee retailers and different modes of
transportation across continents/oceans to a port .. therefore we can say that this product
has a very complex supply chain. The logistic manager is the one responsible for handling
and overseeing each stage in the supply chain.
Key point: the industry is largely vertically integrated  a small number of powerful
operators control each stage in the supply chain process after the coffee is initially
purchased from the grower (coltivatore). And most likely to receive the least money in the
chain are those at the bottom: the growers and harvesters (mietitori). If coffee is certified
as fair trade, however, minimum standards of coffee brands apply and that means that
those powerful operators are less welcome.

Interview with Goran Radman, a Change Management Consultant (listening)

Goran is specialized in helping companies to manage change, in particular he helps
retailers to move towards (avvicinarsi) an on-demand supply chain. This one is at the top of
every retailer’s wish list: it is the ability to meet customer’s need and demand in real time;
this system aim to eliminate overheads (spese generali) or logistics, stockouts and returns.
Of course, the on-demand model can be created today only if businesses are prepared to
share the right information at the right time  it’s all about working together (retailers,
manufactures, logistic partners ..) and thinking outside the box – that’s called CPFR
Collaborative planning, forecasting and replenishment.
After performing a force field analysis, Goran’s job is to try to strengthen the driving forces
and weaken the restraining ones.

Esempi di driving forces:

- increasing customer power
- if companies can move goods faster and avoid stockouts then results are better

Esempi di restraining forces:

- inertia: it’s easier to do nothing than to change
- lot of retailers are afraid of giving away their secrets
- being afraid of not investing in the right technology
- being worried about not getting a good return on investment

Key steps to successful change according to John P. Kotter (listening: conversation

between Goran and Maria Castillo, a client whose sports equipment stores are
underperforming)
Step 1 – increase urgency: if you don’t unfreeze the situation as fast as you can, your
supply chain is going to falling apart
Step 2 – build the guiding team: it’s essential to hold a team-building day because it’s
critical at these early stages to engage the hearts and minds of the team who are going to
guide the project to success
Step 3 – get the vision right: people should stop burying their heads in the sand; they
should see the big picture, develop a crystal clear vision of where they want the company
to go instead
Step 4 – communicate for buy-in: get all the staff on board; it’s them that should take
ownership of the project
Step 5 – empower action: encourage staff to tackle problems themselves because it’s them
that need to be empowered in order to make the change work (give them autonomy and
don’t forget to congratulate them)
Step 6 – create short-term wins: get everyone together and celebrate each week’s
progress would be very good
Step 7 – don’t let up(allentare pressione): staff can easily slip back (scivolare indietro) into
old habits so they’d better build momentum by rolling out the changes in waves
Step 8 – make change stick (attaccare): it’s essential to re-freeze thing up to this point; it’s
important to consolidate changes so they can really stick

WEF Audio (summary)

WEF Audio was founded by a physicist and opera lover in 1958 in Austria. The aim of the
company was to bring audio perfection to the discriminating audiophile. The company
enjoy a reputation for the highest quality: every loudspeaker has been built by hand from
the finest materials and components available!

Conversation between two middle managers at WEF (listening)

CHANGES EXPLANATIONS

The food has really improved It’s a strategy to reduce staff turnover

Sales are rising New products are boosting revenues

New products only contribute 10-12% of With traditional methods, margins are too
profits small

More and more cash is tied up in stock Products are becoming more and more
sophisticated

They can’t keep skilled staff happy Extra workload

PROPOSAL ADVANTAGES DISADVANTAGES

Just in Time - cut production costs - would quality levels be

- increase productivity maintained?
- cut delivery times - some people would never
agree to it

Outsource - contractors can produce - it’s too risky, it could

cheaply quickly damage our
- contractors would handle reputation
returns
- forget staffing headaches

Relocate - can build a factory cheaply - logistics would be

- salaries are far lower complicated
- the union would go
ballistic

Capitolo 4  MANAGING CONFLICT

Vocaboli
to move the goalposts: cambiare le regole
a slanging match: rissa verbale
gunslinger: someone who is forceful and adventurous in their particular sphere
of activity (he is a gastronomic gunslinger who has revolutionized modern French
cooking)
hell for leather: (informal) il piu veloce possibile/as far as possible
meat and drink: (informal) quando qualcuno sa fare qualcosa molto facilmente
di solito perchè lo fa spesso/something that someone enjoys doing and can do
very easily usually because they do it often

to set out to do sth: prefiggersi di fare qualcosa

to let problem fester: lasciare che i problemi si inaspriscano
undermined: indebolito
like rabbits caught in the headlights: rimanere così stupito/impaurito da
qualcosa da non potersi muovere
get somebody’s goat: (informal) far arrabbiare qualcuno/to annoy someone
harassment: annoying or unpleasant behaviour towards someone that takes
place regularly (threats, physical attacks)
to get off on the wrong foot: rapporto partito con il piede sbagliato
to flew off the handle with: imbestialirsi con
someone is fed up with an auditor: qualcuno è stufo di
fussy: esigente (=hard to satisfy)
tether: legare
to rub someone up: rinfrescare la memoria
unsubtle: esplicito
hearts and mind strategy: strategia che permette di averla vinta sulle opinioni e
sentimenti altrui/a plan to win over the feelings and opinion of people
turn the tables on somebody: to change a situation from being bad for you and
good for someone else to the opposite
secretive: riservato
assertive: (=confident) determinato
have a bone to pick with somebody: (informal) want to talk with someone about
something they have done that has annoyed you
hearing: (legal) incontro in corte costituzionale per discutere di qualcosa ->
udienza
grievance: lamentela per essere stati trattati in un modo che non si merita/a
complaint about being treated in an unfair way
remonstrate: (formal+ intransitive) litigare con qualcuno (he remonstrated with
for her disastrous decisions to close down the department)
statutory: controlled by a law or statute
wilful: done deliberately to cause damage or harm (intenzionale)
infringe: to limit or reduce someone’s legal rights of freedom (violare)
to go over somebody’s head: to go to a more important or powerful person to get
what you want
pensively: (adj=pensive=thoughtful) pensierosamente
concern tag: etichetta/sigla di richiamo
insolent: (=rude) sfacciato
pleasant: gradevole
compliant: compiacente, accondiscendente (compliant with sth = respecting
rules)

Managers from hell (summary)

There are 3 categories of managers: the good (= a charismatic leader), the bad
and the ugly. Managers generally want to be fair and objective, but only a few
succeed: some admit to use both the carrot and the stick; then, there are also
those who plan to achieve results by making other people’s lives a misery .. and
these are the real managers from hell.
What do managers from hell normally do? Why are they so recognizable?
- lack of trust in staff
- blaming other people for their own mistakes
- tendency to let problems fester rather than taking decisive action
- they are poor communicator (they prefer to send emails rather than face
discussion and disagreement)
- if team members express different opinion they scream and shout
- the team self-confident is constantly undermined
Inconsistency (incongruenza) is meat and drink to the managers from hell: a
behavioural psychologist named Housego claims that there is nothing worse
than coming to work every morning wondering whether you’re going to be
dealing with Dr Jekyll or Mr Hide. Often this kind of behaviour is unconscious:
these managers do not even realize how destructive they are.
Why are they managers then? They were probably good salespeople, engineers
or whatever, but the point is that they have never been trained to manage so
they reproduce bad models received from their own bosses.
But how do they cope? How do workers live with the manager from hell? The
team has to manage the boss when the boss is unable to manage the team: staff
should write down in black and white all objectives and deadlines (this way it’s
harder for the boss to move the goalposts), then they should also put any
information that reflect badly on the manager’s decisions in writing, they
shouldn’t get in argument with the boss in meetings when other people are
present , and finally Housego recommends keeping a diary with all the evidence
staff may need if they have to justify themselves.

Case study, Olvea Brasil (summary)

Eliana is the Director of HR at Olvea Brasil (Brasilian subsidiary which supply
components for the automobile industry).
Eliana’s concerns: four employees had been put in the ‘concerns’ category and
she is worried about that  she knows that a concern tag should only be an
early warning .. but the problem is that too often it meant that a crisis was just
waiting to happen.
So what did she do? She made appointments with those 4 employees because
she wanted to hear their points of view too after reading their manager’s
comments (more often than not it’s the manager who is the real concern)!
4 members of staff:
- Wilson Holden (position: Moulding Engineer)
according to the manager he did good the first year but then became
uncommunicative and started suggesting changes to procedures and
encouraging colleagues to disregard (ignorare) them.. he also refuses to follow
instruction and he is insolent and arrogant.
Wilson’s point of view: when you’re new you expect to be told what to do,
that’s why he kept a low profile.. but he claims he knows the job, he’s been doing
it for ages so he is ready to take more responsibilities. The problem is that his
manager is paranoid and she won’t let him do that so he says that he won’t stay
at Olvea Brasil any longer with a boss who won’t even contemplate the idea that
she might be wrong
- Susan Shipley (position: Project Manager)
according to the manager she is very experienced but she seems unhappy and
demotivated
Susan’s point of view: her manager doesn’t seem to care about it, he arrives
late and leaves early, sits in his office with the door closed and when there are
problems he just waits for them to go away (that’s why in the department
people call him ‘the invisible man’)
- Luigi Tarantini (position: Head of R&D)
according to the manager he does a great job but recently he’s become colder
and secretive about his job
Luigi’s point of view: he says that Isabel is a good manager, demanding but
encouraging too, always very close to her people .. that’s the main problem: Luigi
doesn’t need someone constantly looking over his shoulder, he knows what to
do, he’s been doing it for years so Isabel’s behaviour gets on his nerves!
- Natasha Gomes (position: Administrative Assistant)
according to the manager even if she is pleasant, she lacks initiative and seems
frightened of making mistakes, her work is acceptable but not excellent: she
phones too many times when a little common sense is all the necessary
according to Natasha’s point of view: that’s her first job and therefore she
wants to do it properly; when her boss gives her something to do, he never tells
her exactly what he wants

Models for management and conflict styles (listening pag 48)

1) McGregor: this theory confronts opposing views of human motivation  the
theory X manager assumes that people are lazy and need to be threatened in
order to get the job done while the theory Y manager believes that workers are
creative, self-motivated and autonomous

2) Blake & Mouton: they create a chart which defines 5 leadership styles  the
x axis is expressed as ‘concern for production’ and the y axis as ‘concern for
people’. Each axis has a scale of nine points, from low to high: the results of a
questionnaire on attitudes are used to plot a manager’s position on the grid:
- ‘produce or perish’ style (score nine, one) = manager obsessed with achieving
goals no matter what
- ‘country club’ style = manager values the security and comfort of employees at
the expense of productivity
- ‘impoverished’ style = manager interested in neither production nor people but
only in doing the minimum necessary to hang onto their jobs for as long as
possible
- ‘middle-of-the-road’ style = manager tries to find a compromise (happy people
and at the same time reasonable results)
- ‘team’ style (score nine, nine) = manager provides high job satisfaction and
meet production targets

3) Hersey & Blanchard: as an employee gains experience a manager needs to

change styles and adapt to the employee’s development stage. They redefined
‘nine, one’ as ‘telling or directing’ (a new recruit who needs to be told what to
do); ‘nine, nine’ becomes ‘selling or coaching’; ‘one, nine’ is now ‘participating or
supporting’ and finally very experienced staff who can take on complete projects
with very little help from their managers will react best to a ‘delegating or
observing’ style of management
4) Bolton & Bolton: assertive (determinato) people are considered to be
forceful and demanding while responsiveness is a measure of how much
awareness of emotions people show
- the driver are very interested in getting what they want and not very
interested in how anyone else feels about it
- the expressive tell people how they feel
- the amiable are prepared to be unassertive in order to keep everyone happy
- the analytical are quiet, shy and let everyone else get what they want

5) Kilmann: the grid considers different behaviours in situations of conflict

- ‘competing’ is the behaviour of someone who is prepared to do whatever is
needed to win
- ‘collaborating’ when a person will work hard to try to find a solution which
satisfies everyone
- ‘avoiding’ describes avoiding dealing with the problem by procrastinating
(rimandare) or sidestepping
- ‘compromising’ where a person will look for concession which will lead to an
acceptable deal
5.1 ABOUT BUSINESS – STRATEGIC MARKETING AND PARTNERING
GLOSSARY

Air time the amount of time given to someone or something in a radio or television broadcast

M&A Mergers and Acquisitions, the activities of companies that combine with or take control of
other companies.

Testimonial a formal statement about someone’s qualities and character, usually provided by
an employer.

Workhorse a very useful piece of equipment that you use a lot.

A RECIPE FOR SUCCESS. HOW TO DEVELOP A STRATEGIC MARKETING PLAN

Strategic marketing involves putting yourself in your customers’ shoes, understanding who they
are, what they buy and why they buy it. It’s about gathering and interpreting information in order
to develop a coherent, long-term plan, setting goals that are understood by everybody in the
organization, and then making sure that every tactical choice is consistent (coerente) with the
overall strategy.

How do you develop a strategic marketing plan?

First, you need to identify and understand your customers. You need to know where they live,
what they do, what inspires them, which media they engage with (relazionarsi), and what kind of
messages resonate with them.

Next, you need to check the competition: what kind of strategy they are pursuing, which market
segments they are targeting and what they are doing better or worse than you.

A strategic marketing plan also requires careful opportunity analysis. Businesses need to identify
opportunities for growth, for profit or volume, and to plan measures needed to pursue them. In
the same way, the message sent out to customers must be planned, refined, polished (raffinato)
and then protected against dilution or deviation: a consistent message and brand are essential to
keep a clear message in customers’ minds. Only then marketers should start considering the most
effective tactics to implement their strategy: the media plan, networking, direct mail, website,
brochures, testimonials, etc.

Finally, results must be followed up closely so that any necessary adjustments can be made.

Three well-known companies are used to illustrate particular strategic marketing skills:

- Automobile maker Renault S.A.  in 1999 Renault realized that establishing and
maintaining a global presence would require a product offering covering the full range of
vehicles, from basic low-cost workhorses to high-end alliances with Nissan, Dongfeng
Motor and AvtoVAZ; this allowed Renault to be placed behind only General Motors and
Volkswagen.
- India’s Kingfisher Airlines they looked at new low-cost competitors as well as the
established market players and understood that the low end of the market offering
(although very cheap) was falling below customers’ expectations. Leveraging the young,
dynamic image of the group’s Kingfisher beer, they launched a new flying experience in
2005 with modern, comfortable single-class aircraft, in-flight meals and entertainment and
called it “Funliners”, while keeping the cost low. By doing so the airline ended up owning
the second largest share in India’s domestic air travel market.
- Toyota  It’s pioneering hybrid vehicle, Prius, first marketing in the US in 2000 as a green
vehicle with low emissions, failed to convince American ecologists who found it
underpowered and overpriced. Toyota listened to consumers and redesigned the car with
more space and power. Today’s message is one of high customer value achieved without
compromise: Prius owners get comfort, performance and safety, and help save the planet.

BUSINESS PARTNERING

It consists in working with external partner to develop synergy between your brands and deliver
added lifestyle benefits to your customers. Business partnering works in all sorts of sectors, but
perhaps most of all in any business which promises lifestyle benefits like travel, entertainment,
healthcare, finance and so on.
The best-known example is the partnering strategy between Apple and Nike. They have something
very major in common, because they both offer to customers lifestyle management solutions.
Apple’s core market is the “creativity culture” while Nike’s is the “sport culture”.

Nike wanted to provide their customers with performance data from their shoes in real time, and
thought that sending data to an iPod was the way to do it. Apple, knowing that around half of their
customers use their iPods while they work out, were obviously interested. So they developed
shoes which communicate with your iPod and can tell your speed, how far you’ve run, how long
you’ve been running, how many calories you’ve burned etc.. and you can feed your data into
Nike’s website and connect with or even compete against other athletes anywhere in the world.
Moreover Apple’s iTunes will sell you music mixes with exactly the right tempos for your personal
workout.

By making the connection with Nike, they created a fantastic opportunity for both companies to
promote a whole family of integrated products and accessories for the “sport-creativity” culture.

5.2 VOCABULARY – MARKETING

GLOSSARY

Generation Y people born between 1979 and 1994: The baby boomers were followed by
Generation X, the children of the sixties and seventies, who were themselves succeeded by
Generation Y.

BRAND STRATEGY FOR GENERATION Y

What are the brand-building strategies for a brand targeted to Generation Y? How do top Gen- Y
brands like Converse (shoes), Ben & Jerry’s (ice-cream) and JetBlue (air travel) succeed where so
many others fail? Their secret lies in establishing an emotional connection with their consumers, a
powerful, psychological attraction that allows these brands to build a special relationship.

For Generation Y consumers a brand is a form of self-expression that communicates an identity to

their peers (compagni). This emotional investment means that Gen Y-ers’ will support and
recommend the brands they use; they willingly become brand endorsers (sostenitore).

To build an emotionally potent brand, first consider Gen Y-ers’ values, and what benefits buying
your brand will bring them.
Then, fine-tune (mettere a punto) your brand by positioning it so that it satisfies your target
customers’ emotional needs.
Finally, learn from Converse and Ben&Jerry to create a sense of brand ownership – how to create
the impression that your brand belongs to Gen Y-ers, and to them alone.

FROM THE LISTENING 2.02 – 2.07

The four Ps in the classic marketing mix are Product, Price, Place, Promotion. Sometimes there is a
fifth P added which is Packaging.

Competitive strategies positions:

 Market leader the company with the biggest market share is called the market leader.
 Market follower when you copy the market leader.
 Market nicher when you just focus on a very specific part of the market, a niche.
 Market challenger

There are four ways in which a market can be divided into segments. One of those is product
related, that’s to say based on product benefits like value for money, safety, comfort and so on.
Another is demographic, based on age, gender and education. Then there’s geographical and the
last one is psychographic which is based on opinions, lifestyle and attitudes.

The four stages in the product life cycle are Introduction, Growth, Maturity, Decline.

Customers are considered to go through three stages of brand loyalty:

1. Brand awareness or recognition

2. Brand preference when they choose your brand rather than another if they’re offered a
choice
3. Brand insistence when they refuse to buy any other brand

There are four main types of promotional activities. Advertising, sales promotions, personal
selling (face to face or by telephone) and PR (public relations).

IDIOMATIC PREPOSITIONAL PHRASES

 On balance a conti fatti. “On balance, what we need more than anything else is a joined-
up strategy”.
 In other words
 As it were / at a stroke (d’un colpo)  “So, we can then, as it were, capture the whole
market at a stroke”
 By and large nell’insieme. “The strategy is, by and large, pretty straightforward”.
 On the one hand / on the other
 At large in general. “I should emphasize that we need to be careful with customers at
large.
 By the same token allo stesso modo. “By the same token, make sure you all keep quit
about the temperature thing

MANAGEMENT SKILLS – ACTIVE LISTENING

LET YOUR CUSTOMER DO THE TALKING

You know your product is the best on the market, but how do you sell it to your customer?

The best way to make your customer understand that your product is the best on the market is to
stop talking and listen actively. Active listening is a skill which can improve communication in all
sorts of situations. Once you know exactly what is that your customer needs, wants, thinks and
feels, it becomes much easier for you to provide solutions.
The first step is to ask the right questions. There a whole range of question types to choose from:

 Open questions questions which use words like who, what, when, why, etc. they can
often be followed up with “How do you see your networking needs developing in the
future?”
 Supplementary questions to focus on a particular point in more detail, or to get the
other person talking about their feelings; “Could you tell me more about the opportunities
you just mentioned?”
 Closed questions require only a yes or no answer; they are useful for confirming what
you have heard, and for redirecting the conversation; “So, do you think you’ll still buy off-
the-shelf software packages in the future?”
 Multiple questions can be useful to help a customer who is finding it difficult to express
their ideas or feelings, but a barrage (raffica) of options is likely to produce an unfocused
response; “Tell me about your IT staff. How do they feel about a change of platform? Do
you think you can bring them round to the idea, and how long will it take?”
 Leading questions encourage the customer to give a response that the seller wants to
hear: they can be a powerful tool in closing the sale, but in the early stages what matter is
to get the customer’s view of what they want, not to sell them our own convictions; “I
think that we should organize a demonstration – when would be the best time?”
 Trick questions are no-win questions: whatever answer the customer gives, they fall into
your trap (this kind of question is very risky, and is probably best avoided). “What would
you say if I told you we hacked into your IT system in less than two minutes?”

No-frills services servizi senza fronzoli.

CASE STUDY – PRESNYA TAXI

PRESNYA TAXI ADVERTISEMENT 

PRESNYA TAXI – Travel in comfort and style with Presnya Taxi!

Fast, reliable transport anywhere in Greater Moscow

Airport transfers a speciality

Friendly English-speaking drivers

FROM THE LISTENING

Conversation between the owner of Presnya Taxi, Volodya Vasilyev, and his Scottish daughter-in-
law, Ally.

1. Why is Volodya worried?  Volodya is worried because from the latest accounts he just
got they can see they are loosing money. Turnover is falling steadily, the taxi business isn’t
what it was, too much competition.
2. What are the threats (minacce) to Presnya Taxi’s business?  The main threats for
Presnya Taxi are minivans that are lot cheaper (they’ve lost half of their airport business to
minivans, people don’t seem to mind sharing if they’re all going to the airport), buses that
are getting faster and more comfortable, trains, trams, the underground. A big problem is
the traffic, taxies spend hours stuck in the traffic.
 3. What does Ally get Volodya to agree to?  Ally and her husband Andrey have been doing
some thinking about this and they think that Presnya Taxi should completely rethink the
marketing strategy. Ally get Volodya to agree to listen to them and to let them explain their
ideas.

ALLY’S IDEAS go upmarket (fascia alta), e.g. limos, business only or ladies only car? Could we use
direct mail? Change name, logo, etc. to something more in line with target customer profile? Make
clearer, more targeted promise to customers – what?

Think laterally (creativamente), e.g. taxi motorbikes, equipped with comfortable passenger seat,
protective clothing and helmet, radio telephone etc. – radical solution to traffic, comfort and
image problems? Can we find a partner business to share resources and costs? E.g.
hotel/restaurant chain, airline, railway, B2B, football club, other? Should we have a website?

ANDREY’S IDEAS make current “we do better” strategy more visible – how? Organize events –
what? Can we use the Internet to enhance customer service/experience, perhaps with partners?
What about sponsoring a basketball team?

Advertising – where, when, what? Go downmarket: cut costs, salaries, service and prices, develop
advertising revenue, develop new image and company values to match new strategy – what?

Strategy options go upmarket, e.g. limos, business only or ladies only car; make clearer,
more targeted promise to customers; Think laterally, e.g. taxi
motorbikes, equipped with comfortable passenger seat, protective
clothing and helmet, radio telephone etc. – radical solution to traffic,
comfort and image problems; Go downmarket: cut costs, salaries,
service and prices; create a website; make current “we do better”
strategy more visible; use the Internet to enhance customer
service/experience
Branding decisions change name, logo, etc. to something more in line with target customer
profile; develop new image and company values to match new strategy
Partnering decisions find a partner business to share resources and costs e.g.
hotel/restaurant chain, airline, railway, B2B, football club; sponsoring a
basketball team

Promotion options advertising, direct mail, events, develop advertising revenue

6. RISK MANAGAMENT
6.1 ABOUT BUSINESS – CRISIS MANAGEMENT
GLOSSARY

 Canard (bufala)  a false story or piece of information, especially one that is intended as a
joke or to make someone stop respecting someone: If this type of canard is repeated often
enough people start believing it’s true.
  Feel-good guru an expert or teacher who makes people feel better by telling them what
they want to hear: Talking to her was like talking to a feel-good guru. She made it sound as
though nothing was impossible.
 Whistle-blower (talpa)  someone who reports dishonest or illegal activities within an
organization to someone in authority: Fearing retaliation, the whistle-blower in the case
changed his name and moved to another city.

DAMAGE CONTROL- an extract from Dezenhall’s book Damage Control

Crisis management is a fundamental corporate discipline as the future of the enterprise is on the
line.

Companies that survive crisis tend to have certain features in common:

 They have strong leaders who have broad authority to make decisions
 They question conventional PR wisdom and do not follow feel-good gurus who embrace
“reputation management”, the false belief that corporate redemption follow popularity
 They are flexible, changing course when the operating climate shifts
 They commit significant resources to the resolution of a crisis without knowing whether
these resources will provide results
 They have a high threshold for pain, recognizing that things may get worse before they get
better
 They think in terms of baby steps, not big gestures
 They know themselves, and are honest about what kinds of actions their culture can
sustain
 They believe that corporate defence is an exercise in moral authority
 They are lucky

Crises are now judged not only by financial (Did the company recover?) and ethical (Was the
public welfare served?) standards, but by whether the company handled its crisis effectively.

We endorse (promuovere) a political model of crisis management versus the more conventional public
relations approach. The fundamental difference is that while the public relations model sees crises
as organic and resolvable through good communication, according to the political model in real
crises there are often opponents (a mirror image of your own crisis management team) that want
to sabotage you. That opposing team consist of competitors, plaintiffs’ lawyers, the news media,
short-sellers, politicians and regulators, whistle-blowers, blogger etc.. They don’t care whether
you “do the right thing”; they care about defeating you.

LISTENING 2.11

From the interview with Jack French, journalist at The Spin Monitor.

According to Jack French it is not true that, as Dezenhall says, “whoever attacks wins, whoever
defends loses”. The journalist claims that even though Eric has been very successful, the
counterattacking may work, but it’s a high-risk strategy. There is always the danger that showing
aggression to your opponent may backfire (ritorcersi contro) and do your image even more
damage.

He also says that we can see the measure of the risk involved by the way that, for example
someone like Eric, combines his aggression with being very discreet about who his own clients are
and what he does for them. It makes sense to give your opponents as little information as possible
to work with.

VOCABULARY – RISK MANGAMENT AND DIGITAL RISK

GLOSSARY

 Cease and desist order an order from a lawyer, court or government agency prohibiting
a person or company from continuing specific behaviour: They received a cease and desist
order, advising them that if the unlawful practice of downloading copyright material from
the website continued, the company would seek all appropriate legal remedies without
prior notification.
 ERM Enterprise Risk Management, an approach to optimizing the way a company
manages risks by taking an integrated view of the various uncertainties involved across the
organization: Following a series of high-profile corporate finance scandals, enterprise risk
management has become one of the most aspects of corporate governance.

ENTERPRISE RISK MANAGEMENT

ERM allows organizations to examine all the risks they face, measure the impact of those risks on
the long-term viability of the company, and take the right steps to manage or mitigate those risks.

In general, the risks a company may face can be divided into four categories:

 Hazard risks such as property damage and theft (furto);

 Financial risks  such as interest rate and foreign exchange fluctuations;
 Operational risks such as supply chain problem or cost overruns (superamento);
 Strategic risks such as misaligned (disallineato) products.

The key to ERM success is to address all those risks in an integrated way.

ERM is an efficient tool for a number of reasons:

 The process of identifying, quantifying and prioritizing risks makes them more notable and
real to executive and managers
 A holistic approach to risk management expands the company’s definition of risk to include
anything that threatens the organization’s continuity
  It divides the concept of risk into those risks that can help a company grow and those that
will only lead to loss. If a risk does not impact company performance there is no need to
look at it.

IMPORTANT EXPRESSIONS

1. To trace to-> “A survey found that 58% of the companies that suffered a stock drop traced
it to strategic risks”
2. To take the appropriate steps
3. To threaten the organization’s continuity
4. To account for (fornire spiegazioni riguardo a)-> “Operational risks accounted for losses at
31% of the companies”
5. To have one’s bases covered
(to ensure one's safety or success by dealing with every potentially problematic aspect of a
situation or activity)-> “Although most companies have their bases covered should they
meet with fire, theft or flood, such hazard represent only a small portion of the myriard
risks they face”
6. To impact company performance
7. To cite as the reason for-> “None of the businesses cited hazard risks as the reason for their
losses”
8. To identify risk at the level of granular detail-> “risk identification at the level of granular
detail is not necessary an can even be detrimental to a thoughtful ERM effort”
9. To be material to business performance-> to be highly important to business performance
10. To attribute to
11. To measure the potential impact
12. To have an impact on the long-term viability of the company

DORFMAN’S FOUR Ts

All techniques for dealing with risk belong to one or more Dorfman’s four Ts:

 TOLERATE a strategy for small risks which are not material to business performance.
 TREAT this means identifying methods that examine the severity of the loss, and taking
the appropriate steps to reduce any impact on the long-term viability of the company.
 TERMINATE avoiding risk completely can be cited as the reason for choosing not to enter
a market or accept an order
 TRANSFER some risks may be transferred to another party, for example by insurance.

FROM THE LISTENING 2.12

Passing off / ambush marketing when someone else has a website masquerading as your
company’s name – often they even pirate your own text, images and logo.
Cybersquatting when you have an established offline brand and you decide to start an online
business to reach more customers. You then find out that someone else is freeloading on your
reputation by using a domain name featuring your brand name.

Hacking everything from simply defacing (rovinare) web pages to cracking credit card
information databases.

Protest issues protest and rumours of all kind: to incite customers to boycott a company or its
products, to try to manipulate your stock price, to bombard a defenceless mailbox with hate mail.

GRAMMAR – PERSPECTIVE AND STANCE

Stance Stance refers to our personal view or evaluation of the subject under discussion. We
indicate stance using adverbials: “there is little doubt that…” “arguably..” “surprisingly…””in
financial terms” “politically speaking” “from a legal perspective”.

FROM LISTENING 2:13

Definition of risk management Risk management is the attention that organizations must pay in
simple terms to things that can and do go wrong. It covers the financial context, technology,
human activities, professional and expert activities, and the interface between all of those things.

MANAGEMENT SKILLS – COMMUNICATING IN A CRISIS

“IT WILL NEVER HAPPEN TO ME”

There is this myth that crises only happen to other people. Like so many other business skills, the
essence of communicating in a crisis is preparation; if you’re convinced it’s not going to happen,
you’re unlikely to have prepared for the worst. Following a few simple dos and don’ts can make
life a lot easier:

1. Do prepare for the questions you want to answer, those you can’t answer and those you
don’t want to answer. Find out what your opponents are saying. Have an answer ready for
everything.
2. Don’t be led where you don’t want to go as long as you provide relevant information, there is
no need to answer leading or trick questions.
3. Do build bridged from question you don’t want to answer so that you can give the answer you
want to.
4. Do use sound bite (succinct statement, quotation) techniques: indicate that you are going to
summarize the essentials, leave a brief pause to focus attention, then deliver your key message
in 20 seconds or less.
5. Don’t be drawn into speculating about outcomes for which there is no evidence.
6. Don’t formulate your ideas in negative terms; always use positives.
7. Do use alliteration and groups of two or three words to reinforce your key messages.
8. Do use analogies or stories to explain difficult or technical concepts.
 7. INVESTMENT
INVESTMENT BANKS, HEROES OR ZEROES? (per “zeroes” fa riferimento agli zeri dei loro stipendi)

How do investment banks make profits and pay salaries that are so much higher than in other
industries? First, we need to consider what investment banks do.

Traditionally, the role of the investment banker has been to help corporate clients by providing
financial advice. But it is in the second side of their business that banks have risen controversy: the
markets division. Apparently, not only do investment bank enjoy access to confidential
information on their customers’ business, but they also trade directly on the financial markets.

Most individual customers feel uncomfortable with the idea of their savings being used to finance
their bank’s trading activities.

The banks, on the other hand, see foreign exchange, commodities and derivatives trading
(complex financial instruments that allow banks to make profits by buying and selling future debt
repayments) as a natural extension of their advisory services. They argue that these activities are
essential tools in managing their customers’ growth and the financial risks involved.

Despite their undeniable skills and hard work, how can banker be paid several million pounds per
year, ask the critics, especially when the banks in question have recently been saved using
taxpayers’ money? Shouldn’t shareholders and investors come first?

The banks reply that if you don’t pay them well enough, top bankers will take their talent
elsewhere.

FROM THE LISTENING 2:24

Why doesn’t a free market work for banks? Why is greater regulation needed?

Free market theory depends on the idea that a buyer and seller will only agree on a deal if the
benefits to each side are greater than the costs.

Most of the time that works pretty well because a company’s employees and its shareholders
share the same interests: if the company does well, it’s good for both.

The problem comes when the employees’ interests conflict with those of the shareholders. For
example, in industry, if you pay a salesman only by commission on the number of sales he
generates, he will make sales whatever the cost to the company. That’s what happened in the sub-
prime crisis. Because bankers were driven by massive bonuses, they kept on authorizing risky
loans, knowing that if people didn’t pay, all the risk would be borne (sostenuto) by the
shareholders, not by them. Which is why we need regulation to make sure that this kind of conflict
of interest won’t happen.
VOCABULARY – INVESTMENT CHOICES

 Buy-to-let to buy a property in order to rent it out and make money.

 Downshift to change from a higher-pressure well-paid job to a potentially more
satisfying lower-paid job and possibly new area of the country.
 Eighth age of man the final stage of an old person’s life, following Shakespeare’s seven
ages. “With medical advances and greater longevity, more and more people are reaching
the eighth age of man than ever before”.
 Quids in to make good money out of a deal “I’ll sell you ten T-shirts for 100 quid (sterlin),
you can easily double that on your market stall and you’ll be quids in.
 Bricks and mortar  reale, concreto, tangibile (mattoni e malta)
 Recoup my losses  recuperare le perdite
 Risk-averse  avverso al rischio
 Sure-fire investment  an investment that cannot go wrong
 A buffer against market volatility  protection against the rises and falls of the markets
 Command a premium price  charge a lot of money

MEANING OF THE FOLLOWING IDIOMS:

 Have your head screwed on to be practical and wise. “I’ve always had my head screwed
on when it comes to making my investment decisions”.
 Put all your eggs in one basket to depend for your success on
a single person or plan of action: “I'm applying for several jobs because I don't
really want to put all my eggs in one basket.”
 Go pear-shaped expression used to indicate that something has gone horribly wrong
with a person's plans, most commonly in the phrase "It's all gone pear shaped." “Make
sure you have several different types of investment, so if one sector goes pear-shaped,
you’re not ruined”.
 The other side of the coin a different and usually opposite idea about a situation. “Of
course this strategy entails risk, but the other side of the coin is that this risk pays off”.

FROM THE LISTENING 2:25

In the audio an investment product salesman talks about the importance of investment. He says
that the earlier you start investing for your retirement, the richer you’ll be when you retire.

Among the different options, investing in different currencies is going to offer you a bit of
protection against the rises and falls of the market. He recommends adopting a defensive
investment stance to do that. If you invest in several currencies you’ll actually reduce your overall
risk.

Regarding market volatility (instabilità), while you can’t prevent the markets going up and down,
what you can do is invest in property. They’re an investment that can’t go wrong. People are
always going to have to live in houses, and the world population is going up and up, so you’ll easily
find someone to rent your properties out to.

MANAGEMENT SKILLS – DECISION MAKING

GRID ANALYSIS

Grid analysis is a useful decision-making tool, especially in meetings when there are several good
alternatives available and multiple criteria to consider.

THE DECISION MAKING PROCESS

1. Define the objective Check that your goal is SMART (Specific, Measurable, Achievable,
Realistic, Time-bound).

2. Identify the options Unsatisfactory decisions are often the result of not considering enough
options. Discuss possible options with other people and keep an open mind.

3. Define criteria List the conditions that ideal solution would fulfil, and all the selection criteria
that they imply. Making criteria as quantifiable as possible will facilitate the decision-making
process.

4.Quantify the options Prepare a grid with the options as rows and criteria as columns. Grade
each option from 1 (poor) to 5 (excellent) for each of your criteria.

5. Weight the criteria Work out the relative importance of the criteria in your decision, and give
each a weighting: the higher the weighting, the more important the criterion. On your grid,
multiply the score for each option by the weighting, and add up the totals.

6. Make the decision Make a decision without unnecessary debate. It is easier for a group to
accept a controversial decision when all the factors have been visibly quantified and taken into
account.

7. Monitor performance Plot quantifiable measures on a graph over the evaluation period.

8. Take remedial action If adjustment is needed, quantifiable measures will help to see exactly
where action is required.

8) Free trade

1.1 About business – free trade

Social anthropologist Levi-Strauss identified two types of societies: HOT CULTURES (also
called GLOBAL ARCHIPELAGO) which are open to trade, as they warm quickly to the new
and assimilate change; COLD CULTURES which are insular (also called DIGITAL ISLANDS)
and expend a great deal of energy to maintain central control.
The hot cultures maintain their own sense of cultural identity and self-governance while
gaining the benefits of the larger distributed culture and taking fullest advantage of the
network effect that comes from collaboration. By contrary, nations that put up too many
regulatory boundaries – cultural and technological – run the risk of going cold, of becoming
such an island. They lose the economic and intellectual advantages that come from free
trade and access to the technology that drives it.

Citizens of archipelago nations grow up with a far larger conceptual structure, have a
global sense of what’s technologically feasible (fattibile) wasting less time getting things
done asking to themselves “How did they do this?” instead of “How can we do this?”.
Digital islanders, on the other hand, are cut off from outside innovation.

Greater exposure also gives archipelagos more sophisticated consumers. In digital islands,
the adoption of new products slows commensurately (consumers don’t adopt them so
easily) and this means less revenue and less investment capital available for new projects.
Moreover, in the name of self-defence, digital islands try to regulate the flow of content
through their virtual boundaries in the same way they check physical goods – by
interdiction (divieto). They force all incoming and outgoing information to pass through them.

The author is concerned about America’s future (called the Fortress America due to its
trading power) because it is becoming such an island. It wants to regulate privacy and
identity information, control intellectual property, not letting other nations catch the
information necessary for being part of an archipelago. No nation is an island if it cares
about its technological future.

DRM: Digital Rights Management: access control technologies limiting the use of digital
content and devices after sale
Funky: unusual and showing a lot of imagination
Dub: to give someone or something a particular name or description
Hurdle: one of several problems that you must solve before you can do something
successfully (ostacolo)

8.2 Vocabulary – forming new words

English imports and exports words and creates new words:

 Acronym -> BRIC: Brazil, Russia, India, China

 A letter for example E for electronic + a word -> e-commerce
 Affix (off) + a word -> offshore. Then you can extend the word: offshore as a verb,
offshoring as a noun and offshorable as an adjective
 Blends -> Glocalize: global + local
  A word + a suffix -> glocality
 Raiding: grab words from other contexts -> “don’t just start your meeting, kick it
off”
 Nounize -> “you used to stop over, now you have a stopover”
 Metaphors -> glass ceiling
 Combining 2 words in a novel combination -> swarm businesses

8.3 Grammar – phrasal and prepositional verbs

Free trade has long been a controversial issue. It took off between Europe and Asia in the
thirteenth century when precious fabrics, stones and perfumes were transported along the
Silk Road. In the eighteenth century, Adam Smith said that free trade put about an increase
in wealth for those nations involved. After the Second World War, a group of nations came
up with an international organization called General Agreement on Tariffs and Trade which
aimed to cut down on tariffs and protectionist practices. In 1995 the World Trade
Organization promoted free trade too.

Branch out: ampliarsi, espandersi

Break into: penetrare in..
Call off: annullare
Come up with: inventarsi, farsi venire in mente
Crack on: darci dentro
Eat into: erodere
Kick off: iniziare
Soldier on: persistere
Weigh up: valutare

8.4 Management skills – Leading the team

Researches conducted by Dr Meredith Belbin defined nine essential roles in an optimal,

balanced team. One of the key jobs of a team leader is to ensure that each role is
represented. Obviously, in a small team, members need to play more than one role.

Action-orientated roles Shaper Drives the team to overcome obstacles and

perform
Implementer Puts ideas into action
Completer-finisher Ensure thorough (accurato), timely completion
People-orientated roles Coordinator Acts as a chairperson (presidente)
Teamworker Encourages cooperation
Resource investigator Explores outside opportunities
Thought-orientated roles Plant Presents new ideas and approaches
Monitor-evaluator Analyses the options
specialist Provides specialized skills
In/out of the loop: belonging or not belonging to a group that has information and makes
decision about something (al corrente/non al corrente)
Woo: to try to persuade people to support you or to buy something from you, especially by
saying and doing nice things (corteggiare)
Duopoly: a situation in which 2 companies, people or groups control something such as
business activity or industry
Oligopoly: a situation in which only a few companies, people or groups control something
such as business activity or industry