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TEST 10
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Reading Academic
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Test 10

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SECTION 1 Questions 1 – 13

Words fail them

A It seems companies will soon begin to say goodbye to the written word. The basic unit of
communication will no longer be typed out in e-mails. It will be shot in pictures and shown on video.
Companies have already discovered that the written word is failing them. Its feebleness compared with the
moving image was rammed home in 2010 when the sight of BP's oil spewing out into the Gulf of Mexico on
YouTube sent a message to the world far more compelling than any written statement could ever be.

B If the word has become weak at conveying big corporate messages, it has become even weaker at
conveying small ones. For years the in-boxes of all office workers have been overflowing with unread
e-mails. But managers will do something about it and desist from communicating with staff in this way.
E-mail will still exist as a way of talking to one person at a time, but as a means of mass communication it
will be finished. Companies will find instead that to get a message over to employees, customers,
shareholders and the outside world, video is far more effective.

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C In the past three years video has come from nothing to make up nearly half of internet traffic; in
another three, it is likely to be more than three-quarters. So far corporations have taken a back seat in this
growth, but they will soon need to climb into the front and start to drive it.

D This shift in communications will have three important effects. It will change the sort of person who
makes it to the corner office. It will alter the way that businesses are managed. And it will shift the position
corporations occupy in society and possibly make us like some of them just a little bit more.

E The new corporate leaders will no longer be pen pushers and bean counters. The 20-year reign of
faceless bosses will come to an end. Charisma will be back in: all successful business chiefs will have to be

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storytellers and performers. Just as political leaders have long had to be dynamite on TV to stand much
hope of election or survival, so too will corporate leaders. They must be able to sell not only their vision of
their companies but their vision of themselves. The new big boss will be expected to set an example; any
leaders showing signs of human frailty will be out on their ears. The moral majority will tighten its hold on
corporate life, first in America, but then elsewhere too.

F With this shift will come a change in management style. Numbers and facts will be supplanted by
appeals to emotion to make employees and customers do what they are told. The businessperson's emotion
may be no more genuine than the politician's, but successful bosses will get good at faking it. Others will
struggle: prepare to cringe in as corporate leaders spout a lot of phoney stuff that used to look bad enough
when written down, but will sound even worse spoken.

G One good consequence of the change, however, will be a greater clarity in the way companies think
about their businesses. The written word was a forgiving medium for over-complicated, ill-conceived
messages. Video demands simplicity. The best companies will use this to their advantage by thinking
through more rigorously what it is they are trying to say and do.

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Questions 1 - 5
In which paragraph ...

1 The need for managers to understand peoples' feelings


2 A tool which will be used when communicating with just a single person
3 How personality will become more important
4 An example of video's power compared to the written word
5 A need for corporate change

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Questions 6 - 10
Write True, False or Not Given.

6 Large corporations are already using video extensively.


7 We will probably like the managers of corporations a lot more.
8 Business leaders will have to be seen in public.
9 A business leaders ability to sell themselves will become more important.

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10 The new bosses will have to be physically stronger.

Questions 11 - 13
Complete the summary with NO MORE THAN THREE WORDS from the text.

One change which is predicted is that in order to motivate 11............... , managers will use different
techniques, for example, using 12 ................. rather than data. Another change, and no doubt a positive one,
is that because of the need for 13.................... when using video, companies will have to bring more clarity to
their business.

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SECTION 2 Questions 14 – 26

The way the brain buys

A It may have occurred to you, during the course of a dismal trawl round a supermarket indistinguishable
from every other supermarket you have ever been into, to wonder why they are all the same. The answer is
more sinister than depressing. It is not because the companies that operate them lack imagination. It is
because they are all versed in the science of persuading people to buy things-a science that, thanks to
technological advances, is beginning to unlock the innermost secrets of the consumer's mind.

B In the Sainsbury's in Hatch Warren, Basingstoke, south-west of London, it takes a while for the mind to
get into a shopping mode. This is why the area immediately inside the entrance of a supermarket is known
as the "decompression zone". People need to slow down and take stock of the surroundings, even if they are
regulars. In sales terms this area is a bit of a loss, so it tends to be used more for promotion. Even the
multi-packs of beer piled up here are designed more to hint at bargains within than to be lugged round the
aisles. Wal-Mart, the world's biggest retailer, famously employs "greeters" at the entrance to its stores.

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Whether or not they boost sales, a friendly welcome is said to cut shoplifting. It is harder to steal from nice
people.

C Immediately to the left in Sainsbury's is another familiar sight: a "chill zone" for browsing magazines,
books and DVDs, tempting impromptu purchases and slowing customers down. But those on a serious
mission will keep walking ahead-and the first thing they come to is the fresh fruit and vegetables section.

D For shoppers, this makes no sense. Fruit and vegetables can be easily damaged, so they should be
bought at the end, not the beginning, of a shopping trip. But psychology is at work here: selecting good
wholesome fresh food is an uplifting way to start shopping, and it makes people feel less guilty about
reaching for the stodgy stuff later on.

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E Shoppers already know that everyday items, like milk, are invariably placed towards the back of a store
to provide more opportunity to tempt customers. This is why pharmacies are generally at the rear, even in
"convenience" stores. But supermarkets know shoppers know this, so they use other tricks, like placing
popular items halfway along a section so that people have to walk all along the aisle looking for them. The
idea is to boost "dwell time": the length of time people spend in a store.

F Traditionally retailers measure "footfall", as the number of people entering a store is known, but those
numbers say nothing about where people go and how long they spend there. But nowadays, a ubiquitous
piece of technology can fill the gap: the mobile phone. Path Intelligence, a British company working with the
Massachusetts Institute of Technology, tracked people's phones at Gunwharf Quays, a large retail and leisure
centre in Portsmouth-not by monitoring calls, but by plotting the positions of handsets as they transmit
automatically to cellular networks. It found that when dwell time rose 1% sales rose 1.3%.

G Having walked to the end of the fruit and vegetable aisle, Basingstoke's hard-core shoppers arrive at
counters of prepared food, the fishmonger, the butcher and the deli. Then there is the in-store bakery, which
can be smelt before it is seen. Even small supermarkets now use in-store bakeries. Mostly these bake
pre-prepared items and frozen dough, and they have boomed even though central bakeries that deliver to a
number of stores are much more efficient. They do it for the smell of freshly baked bread, which makes
people hungry and thus encourages people to buy not just bread but also other food, including frozen stuff.

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H Most of the information that shoppers are bombarded with is visual: labels, price stickers and
advertising. But the wafting bread aroma shows smell can usefully be stimulated too, says Simon Harrop,
chief executive of BRAND sense agency, a British specialist in multi-sensory marketing. In the aisle by the
laundry section he suggests introducing the smell of freshly laundered sheets. Even the sound of sheets
being folded could be reproduced here and contained within the area using the latest audio technology. The
Aroma Company, which Mr Harrop founded, has put the smell of coconut into the shops of Thompson, a
British travel agent. Some suntan oils smell of coconut, so the scent is supposed to remind people of past
holidays. The company even infuses the fresh smell of citrus into a range of clothing made by Odeur, a
Swedish company. It can waft for up to 13 washes.

I Such techniques are increasingly popular because of a deepening understanding about how shoppers
make choices. People tell market researchers and "focus groups" that they make rational decisions about
what to buy, considering things like price, selection or convenience. But subconscious forces, involving
emotion and memories, are clearly also at work.

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Questions 14 - 22
Match each heading to the most suitable paragraph.

i An odour for every product


ii The significance of dwell time
iii Tricks to keep us in the store
iv A healthy start
v Price and convenience still rule
vi Not so rational
vii A smell to whet our appetite
viii Slow down. Chill out.
ix Getting customers in the mood

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x Not a shortage of creativity

14 Paragraph A ..........
15 Paragraph B ..........
16 Paragraph C ..........
17 Paragraph D ..........
18 Paragraph E ..........
19 Paragraph F ..........
20 Paragraph G ..........

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21 Paragraph H ..........
22 Paragraph I ..........

Questions 23 - 26
Write Yes, No or Not Given.

23 'Footfall' data is not useful.


24 Supermarkets could get very good service from central bakeries.
25 People buy more bedding when they hear the sound of sheets being folded.
26 The Aroma Company believes the smell of lemon can help to sell clothes.

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SECTION 3 Questions 27 – 40

The biggest contract

A THE great, long-running debate about business's role in society is currently caught between two
contrasting, and tired, ideological positions.

B On one side of the current debate are those who argue that (to borrow Milton Friedman's phrase) the
"business of business is business". This belief is most established in Anglo-Saxon economies. On this view,
social issues are peripheral to the challenges of corporate management. The sole legitimate purpose of
business is to create shareholder value.

C On the other side are the proponents of "Corporate Social Responsibility" (CSR), a rapidly growing,
rather fuzzy movement encompassing both companies which claim already to practise CSR and sceptical
campaign groups arguing they need to go further in mitigating their social impacts. As other regions of the
world-parts of continental and central Europe, for example- move towards the Anglo-Saxon

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shareholder-value model, debate between these sides has increasingly taken on global significance.

D That is a pity. Both perspectives obscure in different ways the significance of social issues to business
success. They also caricature unhelpfully the contribution of business to social welfare. It is time for CEOs of
big companies to recast this debate and recapture the intellectual and moral high ground from their critics.

E Large companies need to build social issues into strategy in a way which reflects their actual business
importance. They need to articulate business's social contribution and define its ultimate purpose in a way
that has more subtlety than "the business of business is business" worldview and is less defensive than most
current CSR approaches. It can help to view the relationship between big business and society in this respect
as an implicit "social agreement": Rousseau adapted for the corporate world, you might say. This agreement
has obligations, opportunities and mutual advantage for both sides.

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F To explain the basis for such an approach, however, it may help first to pinpoint the limitations with the
two current ideological poles. Start with the "business of business is business". The issue here is not
primarily legal. In many countries, such as Germany, the legal obligation anyway is to stakeholders, and
even in America the legal primacy of shareholders is open to very broad interpretation.

G The problem with "the business of business" mindset is rather that it can blind management to two
important realities. The first is that social issues are not so much tangential to the business of business as
fundamental to it. From a defensive point of view, companies that ignore public sentiment make themselves
vulnerable to attack. But social pressures can also operate as early indicators of factors core to corporate
profitability: for example, the regulations and public-policy environment in which companies must operate;
the appetite of consumers for certain goods above others; and the motivation (and willingness to be hired in
the first place) of employees.

H Companies that treat social issues as either irritating distractions or simply unjustified vehicles for
attack on business are turning a blind eye to impending forces that have the potential fundamentally to alter
their strategic future. Although the effect of social pressure on these forces may not be immediate, this is not
a reason for companies to delay preparing for or tackling them. Even from a strict shareholder-value
perspective, most stock market value-typically over 80% in American and western European public

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markets-depends on expectations of companies' cashflow beyond the next three years.

I Examples abound of the long-term business impact of social issues. These are growing fast. In the
pharmaceuticals sector, a storm of social pressures over the last decade-stemming from issues such as public
perceptions of excessive prices charged for HIV drugs in developing countries, for example-are now
translating into a general (and sometimes seemingly indiscriminate) toughening in the regulatory
environment. In the food and restaurant sector, meanwhile, the long-escalating debate about obesity is now
resulting in calls for further controls on the marketing of unhealthy foods. In the case of big financial
institutions, concerns over conflicts of interest and mis-selling of products have recently led to changes in
core business practices and industry structure. For some big retailers, public and planning resistance to new
stores is constraining growth opportunities. And all this is to say nothing of how social and political
pressures have reshaped and redefined the tobacco industry, say, or the oil and mining industries over the
decades.

J In all such cases, billions of dollars of shareholder value have been put at stake as the result of social
issues that ultimately feed into fundamental drivers of corporate performance. In many instances, a

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"business of business is business" outlook has blinded companies to outcomes (or shifts in their implicit
"social agreement") which often could have been anticipated.

K Just as important, these outcomes have posed not just risks to companies, but also have generated
value-creation opportunities. In the case of the pharmaceuticals sector, for example, in the growing market
for generic (ie, non-patent-protected) drugs; in the case of fast-food restaurants, in providing healthier
meals; and in the case of the energy industry, in meeting fast-growing demand (as well as regulatory
pressure) for cleaner fuels such as natural gas. Social pressures often indicate the existence of unmet social
needs or consumer preferences. Businesses can gain advantage by spotting and supplying these before their
competitors.

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Question 27 - 30
Which paragraph contains

27 a new kind of contract with society


28 the type of economies where shareholder value is king
29 restrictions placed on the marketing of money products
30 a key factor affecting share value

Questions 31 - 35

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Write True, False or Not Given.

31 Social issues can provide companies with early warning signals.


32 Tackling social issues early usually has a positive effect on longer-term cash flow.
33 Many people would like to see stricter controls over the catering industry.
34 Retail companies often need to pay more to expand their premises these days.
35 Changes in the oil and mining industries have been similar to those in the tobacco industry.

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Questions 36 - 40
Complete the summary with words from the table below.

The impact of social issues on many large corporations has put billions of dollars of companies' value at
36 ................ . Probably the main reason why organisations have not acted more quickly is because of the
37 ................ on the 'business of business is business' way of thinking. However, it is now clear that some of
the potential threats have created opportunities. At the end of the day these 38 ................ for more social
awareness are, from a 39 ................ point of view, simply demands which have not yet been 40................ .

reasons, opportunities, way, safe, met, investment, risk, blindness, emphasis, blinded,
calls, financial, administrative, marketing, social, offered, supplied, people

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1 E 14 x 27 E
2 B 15 ix 28 B
3 D 16 viii 29 H
4 A 17 iv 30 G
5 C 18 iii 31 True
6 False 19 ii 32 Not Given
7 False 20 vii 33 True
8 True 21 i 34 Not Given
9 True 22 vi 35 Not Given
10 Not Given 23 Not Given 36 risk
11 employees and 24 Yes 37 emphasis
customers
25 Not Given 38 calls
12 emotion
26 Yes 39 marketing
13 simplicity

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40 met

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