Chapter 2: The company

Start up
Self-employed people have to do everything themselves. A plumber, for example, has to buy his
own tools and equipment, carry out the work himself, decide how to advertise his business, and
fix his own price scales. If he needed to raise capital for a business investment (such as a new
van), he would arrange a loan from the bank. He would also do his own book-keeping and,
possibly, his own tax declarations. He may decide to take on an assistant to lighten his
workload. However, as companies expand and more people are employed, one person can no
longer perform all the administrative and decision-making functions. Organization, and the
division of labor, is required.

In larger businesses, there must be people who can take authority for certain decisions and who
can tell other employees what to do. A typical chain of command would start with the Chairman
at the top, then the Chief Executive, followed by (in large organizations) the heads of divisions
(such as the Group Finance Director), then the heads of departments (such as Sales and
Marketing, Human Resources, Finance, etc.), and finally the people who work in the office or
on the shop floor.

Every person in an organization is a member of a formal group within which he or she has to
perform specific tasks. This breakdown of an organization into formal groups offers a number of
advantages: workers specializing in specific areas can perform more effectively, which reduces
company costs; there is a clear chain of command as employees receive instructions from their
line manager; the employees’ performance can be monitored more easily; and there is better
internal communication as manager can speak for the section they control. At the same time,
employees can experience the benefits of working in a team, and they can also ask their
supervisor or more experienced colleagues for help and guidance.

Of course, a departmental organization can also have certain disadvantages: some employees
may be so focused on their own particular tasks that they become cut off from employees in
other departments; and managers may be more concerned with their own and their department’s
performance that with the overall performance of the company.
Questions:

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 1. When does a company need a loan?
2. Why do large companies have the chain of command?
3. Why can the breakdown of an organization reduce its costs?
4. Which type of organization do you support, centralization or decentralization? Why?
5. Find words or phrases in the text which mean:
- Money that somebody borrows from the bank
- How well somebody does their job
- A helpful and useful effect that something has
Vocabulary
1. Work in pairs. Discuss what you think these people and departments do.
Example: I think the Purchasing department buys things the company needs
2. Match the departments (1-7) and descriptions (A-G).
1. It deals with billing, salaries, taxes, investment, and budgets.
2. It is responsible for advertising and market research. It organizes the selling of
the products.
3. It produces the finished products.
4. It deals with staff and is responsible for recruiting and training.
5. It organizes the maintenance of the buildings, including office space.
6. It is responsible for the computer systems, and train staff in computer use.

7. It is responsible for buying the materials the company needs to make its products.

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3. Which departments do these people work for? Complete the chart.

“This is a busy time of the year because we

are producing the annual accounts”
Andrew Symonds
“We notify our staff if there are promotion
opportunities”
Elena Morales
“We’re dealing with lots of enquiries at the
moment. It’s a busy time!” Steven
Baines

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“We produce and distribute publicity Ray Clarke
materials such as catalogues and brochures” “We check the quality of the product at
Mitsuko Saito each stage of the manufacturing process”
“We’re doing health and safety checks Dean Wilson
around the building this month” “We maintain good relations with our
Philip Král suppliers”
“This week we’re installing new virus David Lee
protection on our whole system” Agnes “We do everything from organizing
Laforgue meetings to making travel arrangements.
“At the moment we’re designing an exciting It’s non-stop!
range of new products” Lisa Papi Penny James
“We make sure that all our goods are
properly packed and labeled before they are
dispatched”
Wordcheck
Find the hidden words in this square. You can read from left to right, from top to bottom and
diagonally. Use the clues below to help you.
H X Y W A R E H O U S E
Z E X S Y Z X Y M Z U X
Y X A X T Y Z R A X B R
Z X Y D Z A E X N Y S E
X Z R Y Q M F Z U X I V
Z Y X A U U Y F F Z D E
Y X Z S N X A Y A Z I N
Y Z N Z X G Y R C Z A U
J O I N T V E N T U R E
C X Y N Z X Y Z U E Y S
Y Z E F A C T O R Y R Z
X R Y Z X Y Z X E Y Z S
1. The main office of a company (12)
2. The people who work for a company – its employees (5)
3. A large building where goods are stored (9)
4. A building where goods are made (7)
5. A person who buys and uses goods or services (8)
6. A company that is controlled by another company (10)

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 7. To produce in large quantities with machinery (11)
8. The total sales of a company (8)
9. A group of products sold by one company (5)
10. A regular payment for use of land, building, offices, machinery, etc. (4)
11. A cooperative operation between two companies (5,7)
Reading
1. Read the introduction to the article. Then with your partner, discuss how we use the
Internet in business.
Examples: emails, booking flights, advertising

E-commerce
You probably use the Internet to send emails, download music and films, or look for
information. But did you know that the Internet is transforming the business world?
Electronic commerce (e-commerce) is the buying and selling of products and services on the
Internet instead of using shops, phones, faxes, and letters. It creates opportunities for
companies to sell more and to improve customer service. It also gives customers greater
choice.

There are three main types of e-commerce. The first is Business to Consumer (B2C) – the
consumer buys goods or services from a company on the Internet. Many consumers now buy
books, music, or tickets on the Internet. The second type of e-commerce is Consumer to
Consumer (C2C) – people sell and buy directly on sites such as eBay. The third type is
Business to Business (B2B) – commerce between companies. They use the Internet to order
goods, get services, and manage their business. It is fast and efficient.
In the past, the car manufacturer Ford ordered thousands of parts from hundreds of different
companies. They told the suppliers which parts they wanted and the supplier sent a proposal
to supply them. It was a long and expensive process. These days, Ford uses special B2B
electronic exchanges to order their parts and then the suppliers put in electronic bids for the
job. This process is much quicker and cuts costs. Companies don’t need large Purchasing
departments and suppliers have to cut their prices to be competitive.
So which parts of the world are most ‘e-active’? Europe is number one, the US comes to
second, while Hong Kong is the biggest in Asia-Pacific, particularly in e-business services.

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 In fact, in 2006, Europe’s three major markets – the UK, Germany, and France – carried out
around 25% of their sales online. This figure is increasing from year to year.
2. Read the article and match the definitions to the terms.
1. Order a. buying
2. Supplier b. a price that a company offers to do work or
supply parts for if it wins the order
3. Bid c. to request goods from a company
4. Costs d. a person or organization that provides goods or
services
5. Purchasing e. the amount of money spent on running a
business
3. Read the article again and decide if the sentences are true (T) or false (F)
1. Electronic commerce uses phones and faxes to do business.
2. B2C is when a consumer and a company do business together.
3. B2B is when private individuals sell or buy things on the Internet.
4. Ford used B2B in the past but didn’t get good results.
5. When a company uses B2B they save money and time.
6. A quarter of all European business is done online.
4. Complete the sentences with the words from “2”.
1. David, the budget is only €12,000 for this project. Please be careful with the .
2. I’d like to fifteen office desks and chairs from the New Dawn range.
3. ADG Construction put in a of €120 million to build the stadium.
4. We have found an excellent in Spain for our engine parts.
5. Beamish Electronics have appointed a new buyer to their department.

Speaking
1. Business know-how – how to manage your time
a. Make a list of all the tasks. Then decide if their deadline is urgent or not.
b. Prioritize the most important task.
c. As you finish a task, cross it off your list.
d. When you complete a task, move on. Don’t be a perfectionist.
e. Concentrate on the task you are doing. Don’t be distracted by emails and text messages!
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 f. Find a place to work that suits your working style.
Which do you think is the best one? Do you do any of these things already? Do you have
any other ideas?
2. What are the advantages and disadvantages of departments
a. For the company?
b. For employees?
3. What do you think? Is it better to work
a. In a small company and learn lots of different jobs?
b. In a large company, in one department, and specialize?
4. Discuss the advantages and disadvantages of e-commerce.
Writing
Thanking letter
Label the parts of the letter
□ Opening salutation
□ Closing sentence
□ Full name (typed)
□ Closing salutation
□ Writer’s address
□ Signature
□ Date
□ Body
□ Recipient’s address

45 Dale Road1
Stevenage
SG6 6SB
UK
Sandman Creek Summer camps2
1831 Ellis Avenue
Eugene OR 97405
3
25 November, 20

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Dear Mr. Hemingway4,
I am writing to thank you for the interview we had yesterday. I am very interested in working in
your summer camp next year. I hope that my qualifications and interests were suitable. I meant
to also mention that I am learning to drive and I hope to have my driving license before the
summer. 5
Once again, thank you for seeing me. I look forward to hearing from you. 6
Yours sincerely, 7
Amanda Nash 8
Amanda Nash 9

Dilemma & Decision

Mission: Impossible?
Brief
Louis Schweitzer, the 59-year-old CEO of the Renault group, has just received the latest results
for Nissan, the Japanese car manufacturer in which Renault has a 37 percent stake. The situation
looks bad. Nissan has lost money for the sixth consecutive year, the company’s debts have now
soared to a record $19 billion and they are now losing $1,000 on every new car they produce.
Clearly something needs to be done to return Nissan to profit quickly. The time has come to
appoint a new CEO. There is only one name that comes to Schweitzer’s mind: Carlos Ghosn,
the tough results-oriented director of Renault’s engineering division. He would be just the
person for the job. But how to convince him to accept what looks like an impossible mission?
Task
Prepare to discuss the assignment to head Nissan. Decide what outcome you want from the
discussion and make notes to support your case.

Guidelines
Louis Schweitzer is the CEO of the Renault group and the partnership with Nissan was largely
his idea as he considered it to be a key element of your strategy to make Renault a truly
international company. If the alliance fails, it will be disaster for the company. Your career is
now coming to an end and you plan to hand over control of the group within the next five years.
Anyone who can turn Nissan back to profit within a relatively short time might be just the right
person to take his place. Carlos Ghosn might just be that person. Louis Schweitzer knows that

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he has a reputation as a man of action who takes quick decisions and who likes to do things his
own way. Make a list of the arguments that you will use to persuade him to accept the position.
 If he is successful, he could become the next director of the group.
 ……………………………………………………………………………………………

Carlos Ghosn is the manager of Renault’s engineering division where you have worked for the
last three years following an international career in the USA and Latin America with the
Michelin tyre company. He knows that Louis Schweitzer is considering him for the position of
CEO at Nissan but he has certain reservations about accepting the assignment:
 He has no experience of working with the Japanese
 Is his direct style of management compatible with the Japanese style of doing business?
 He would need to cut costs by eliminating jobs and factories – would this be politically
acceptable to the Japanese employees and authorities?
 Failure in this mission could damage his long-term career prospects.
How will he respond if Mr. Schweitzer offers him the position? Make a list of the things that he
would like Mr. Schweitzer to do if he is to accept the position.

Japanese culture
The Japanese have a strong sense of belonging to “the group”. In the context of work, the
Japanese are loyal to their organizations and will usually accept management decisions which
have been made to preserve or enhance the profitability of the organization as a whole.
Foreigners may have difficulty being accepted by the Japanese especially if they do not
understand the subtleties of the Japanese language and the sometimes vague way that things are
expressed. Negotiating and decision making often take place outside any formal meeting context
and action is only taken after thorough consultation with the people concerned.

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