Business in the 21% century _ EES 24) Discuss these questions. 4 What Impact are developments in information technology having on the way companies are organised, e.g. the use of video conferencing, which means people need to travel less? 2 How has the Internet changed the way you work or study? Peace A Understanding main points Read the text on the opposite page about how businesses will be organised in the future and answer these questions 1 Which of these statements gives the best surnmary of the ideas in the article? a) New communications technologies enable information to be shared instantly across the world, ‘b) in the future most people will be self-employed or will work as freelancers. ©) Companies are having to restructure due to developments in electronic communications. 2 What exactly do the authors mean by the term ‘elance economy’? a) Most work inside large companies will be done using e-mail and computers. b) in the future tasks will be done by individuals and small companies linked to the Internet. ©) Business between companies will increasingly be done through the Internet. B Understanding details Mark these statements T (true) or F (false) according to the information in the text. Find the part of the text that gives the correct information, 1. Big corporations will soon go out of business. F 2 There is a move towards decentralisation of decision-making in many companies, 3 Many companies are now experiencing cash flow and similar financial problems. 4 No more than 10 per cent of workers in the US work for the top 500 companies. 5 ABB and BP Amoco have sold many parts of their businesses. 6 Large organisations can save money by centralising all transactions. 7 Computer companies have decentralised their decision-making process. 8 Itis possible that the shape and structure of companies will be very different in the future,Business inthe 2ist century J The e-lance economy Summary. Despite the wave of big mergers and acquisitions over the past few ‘yoars, the days of the big corporation - as we know it - aro numbered. ‘While the casi flows that they control are growing, the ditect power that they exercise over actual business processes is declining. Because mod- 5 ern communications technology makes decentralised organisations pos- ile, control is being passed down the line to workers at many different lovels, or outsourced to external companies. In fact, we aro moving towards what can be called an ‘e-lance economy’, which will be charac- torised by shifting coalitions of freelancers and small firms using the 10 Intemet for much of their work. Wwenty-five years ago, one in five US workers was employed one of the top 500 companies. ‘Today, the ratio has dropped 10 1s fewer than one in ten, Large com panios are far less vertically inte- grated than they were in the past and rely more and more on outside suppliers to produce eomponents and provide services, with a cons quent reduction in the size of their workforce ‘At the same time, decisions within large corporations aro 25 increasingly being pushed to lower levels. Workers are rewarded not. for carrying out orders efficiently, but for working out what needs to be done and doing it. Many largo ao industrial companies ~ ABB and BP Amoco are among the most prominent — have broken them- selves up into numerous indepen- dent units that transact business How the text is organised aswith one another almost as if they ‘wore separate companies, ‘What underlies this trend? The ‘answer lies in the basic economies of organisations. Business sorganisations are, in essence, mechanisms for co-ordination, and the form they take is strongly affected by the co ordination toch- nologies available. When it Is 4scheaper to conduct transactions internally, with other parts of the same company, organisations grow larger, but whon i is ehcaper to conduct them externally, with, spindependent entities in the open market. organisations stay small or shrink, ‘The co-ordination technologies of the industrial era — the train ssand the teleeraph, the car and the ‘telephone, the mainframe comput- er and the fax machine ~ made transactions within the company not only possible but advanta- sngeous. Companies were able to ‘manage large organisations cen. trally, which provided them with economies of scale in manufactur. ing, marketing, distribution and. ssother activities. Big was good, But with tho introduction of povierful personal computers and electronic networks - the co-ordi- nation technologies of the 21st ‘mcentury ~ the economic equation ‘changes. Becauso information can he shared instantly and inexpen- sively among many people in many Iocations, the value of centralised tsdecision-making and bureaucracy decreases. Individuals can manage themselves, co-ordinating their efforts through electronic links with other independent parties. ‘50Small becomes good. In the future, as communica. tions technologies advance and networks become more efficient, the shift to elancing promises to ssaccelerate. Should this happen, the dominant business organisation of the future may not bea stable, per mavtent corporation but rather a flaxible network of individuals and snsmall groups that might some- ‘times exist for no more than a day or two, We will enter the age of the ‘temporary company ‘These phrases summarise the purpose of each paragraph, Match each phrase to the correct paragraph. ) illustrate the decline of big companies Paragraph | b) give a prediction about the future ©) give examples of changes in the way companies are organised d) introduce the idea that big companies are starting to change and even decline summary @) describe the new way of working £) explain why these changes are taking place g) describe the old way of working| Business inthe asst century ATES AEE _26J A Word search 4. Find a word or phrase from the text that has a similar meaning, a) movement of money into and out of a company's bank accounts (summary) MSP cee LOM. ) passing tasks to an external company (summary) iduals who are self-employed and work independently (summary) @) describes a targe company that produces everything it needs internally (para 1) v feeeneeneness e) extemal companies that provide products or services to an organisation (para 1) ©. f) parts of 2 company that operate independently as separate profit centres (para 2) ae avs ) whete price and quality are the main factors for doing business (para 3) s. ear nm. h) something large companies can achieve by doing things in big volumes {para 4) e. +. FS. 2 There are many words that can be used instead of ‘company’. Four other words are used in the text. What are they? Is there any difference in meaning between them? B Understanding expressions Choose the best explanation for each phrase from the text. 1 ‘the days of the big corporation are numbered’ (line 2) a) big companies will become less important in the future 7 b) companies will have to improve their financial controts 2 ‘control is being passed down the line" (line 6) a) nobody in the company wants to take decisions b) some decisions will be taken at lower levels in the company 3 ‘what underlies this trend?’ (line 37) a) is this trend really true? b) what are the reasons for this trend? & ‘inessence’ (line 46) a) basically b) necessarilyBusiness in the 2ast century } 5 ‘organisations shrink’ (line 51) a) they become smaller b) they disappear completely 6 ‘the economic equation changes’ (line 70) a) things become cheaper because of the Internet, b) there is a move in favour of decentralisation C Complete the sentence Use an appropriate verb and preposition to complete each sentence 4 Large multinationals still eACCP/Se. considerable power oF... the world. 2 it's difficult problem. It will take time to w. 3 Ina traditional, hierarchical company, employees are expected to c. the orders of their superiors. 4 To improve flexibility and speed of reaction we have decided to b u into separate business units. 5 Our policy is tot business only w. environmental policy. 6 The speed at which you can get information from the internet is sometimes a. b soseesee~s the time of day. | 1 Do you agree with the opinions in the article? Can you give some examples from real cases to support your opinion? . Many people around sssssees the Dest way to solve it. a .. the company companies that have a strong 2 The authors are both on the academic staff of MIT (The Massachusetts Institute of Technology) in the USA. Till now, most of the innovations in using the Internct and in ‘e-commerce’ have come from the LISA, where companies seem prepared to use new technology quickly. Do you ic that the concept of the ‘elance economy’ described in the article is mainly relevant to the USA or do you think it will work in other parts of the world too? 3. IF whet the authors write is true, what are the implications for the way international managers will need to work in the future and also for the training and education they will need?a Corporate cultures __ ac Discuss these questions. 4 Every organisation has its own distinctive culture, and this can vary enormously from company to company. To an outsider, corporate culture differences are usually reflected in external symbols or characteristics, such as advertising and design. Other characteristics of corporate culture are only observable wien you get inside the company as an employee or a supplier, such as the kind of dress ‘worn by staff or the use of first names. Try to think of some other characteristics of corporate culture based on companies that you know. 2 Think of some large supermarket groups you know. What kind of image do they project to their customers, e.g. friendly, giving best value? _ _28} A Understanding main points Read the text on the opposite page about the merger of two companies and their corporate cultures and answer these questions. 4. Which company is bigger — Asda or Wal-Mart? 2 What are employees at Asda called? 3. Which two countries are Asda and Wal-Mart from? 4 Which of these statements best summarises the corporate cultures of Asda and Wal-Mart? a) We must keep costs as low as possible. b) We value the contribution of every employee to the success of the company. ©) Everyone in the company is considered equal. 5 What extra financial benefit do Wal-Mart employees have? 6 Allan Leighton mentions three things needed to get the deal ‘to work culturally’. What are they? B Understanding details Mark these statements T (true) or F (false) according to the information in the text. Find the part of the text chat gives the correct information. Asda and Wal-Mart have very similar corporate cultures, T Asda is the biggest supermarket group in the UK. Wal-Mart is the biggest retailing group in the US. Asda had financi Many of Asde’s employees are aver 65. Allan Leighton is sure the merger of Asda with Wal-Mart will succeed. Wal-Mart plans to impose its corporate culture on Asda. 8 Creating 2 corporate culture cannot be planned in theary only. problems in the 19808 Nanweune