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This book brings the real world of international business into the class.
It offers the widest and most flexible range of materials for learners. Key
features of the book are authentic texts from different sources; up-to-date
business topic and issues; comprehensive language. It concentrates on
reading skills and vocabulary development.
Both American and British English are used.

.
6
31 2006 .

CONTENTS
Unit 1 Connections
Culture & communication
Company Culture Questionnaire
Telephone language

5
7
7
9

Unit 2 A Company
A company problem
Company Structure
Check Questions

14
15
18
24

Unit 3 Corporate Cultures

Check Questions
The Customer

24
29
30

Unit 4 The Global Company

Check Questions
Meeting
Presentation

32
36
37
39

Unit 5 Global Production. Global Careers

The Global Company
Check Questions
Global Careers
Check Questions

41
41
45
46
49

Unit 6 Market & Production

Market
Production
Putting it in writing

50
50
54
56

Unit 7 Entering a foreign market

Check Questions
International Mergers
Check Questions

58
62
63
67

Unit 8 Management
Check Questions

68
76

Unit 9 MBA in Management

Check Questions

76
81

Unit 10 Selecting International Managers

81

International Management Development

Check Questions

81
86

Unit 11 Business and Society

Business ethics

91
91

Unit 12 Business in the 21st century

Check Questions

98
102

Unit 1
Connections
In the Hollywood movie Big Night, one of the characters, gives a
definition for a businessperson :
Im a businessman . I am anything I need to be at any time. Tell me.
What exactly are you?
So, business, job, work and main question What are you?
Ex.1. Work with a partner.
Discuss the definition above.
Do you agree with him? Why or why not?
Compare your ideas with the others in the group.
Ex.2. Work with a partner.
Which of these is the main focus of a businessperson
work? Explain why.
Product;
customers;
money;
other people.
Ex.3. Work with a partner.
Which of these best describes the kind of organization
that he or she works for? Give a few details.
A multinational; a medium-sized company; an institution;
A small business; a government body; I dont work for an organization.

Glossary:
Affair(s) - : ,
The state affairs; a pleasant affair; foreign(domestic, home) affairs;
private affairs.
Matter
- , ..
The matter is that
Business - , ,
A business talk; Its none of your business.
Case
- (),
Job
- , ()
I have a new job at a hospital.
Work
- , ()
She has a lot of work.

Occupation
Profession

-
- , , .
.
Shes a teacher by profession
Trade
- , , ,
.
Tricky jobs
-
Chef = cooker; operator = telephone-operator.
Ex.4. Answer the questions.
1. What are you?
2. What do you do?
3. What are you doing here?
4. Where do you work?
5. Whats you job?
Ex.5. Comment the following:
Increasingly, men are taking on jobs traditionally done by women.
Perhaps one nurse in six is a male; there are an estimated 5000 male.
Secretaries in London; a probable one in eight home-helps is male.
Husbands are even taking over at home!
Situation : Rodney Mace, 35, is married with two young children and is
a part-time teacher of architectural history. His wife Jane, an Oxford
graduate in modern languages, has a demanding full-time job. She is
director of Cambridge House scheme. (Volunteers go to peoples homes
and teach them how to read and write.).Her working week involves several
evenings and Saturdays, and at these times her husband is in sole charge of
home and family.
Ex. 6. Read the situation above and discuss it in your group. What do
you think about roles of the couple?
Ex. 7. Rewrite the text below, read it once more very attentively, choose
unknown words, learn them and be ready to read the text within the given
period of time. Write the text down as a dictation.
The majority of the European businessmen whose jobs interests had
brought them to Mexico had at first been somewhat skeptical over the

prospect of a monarchy. But Bazaines (Marshal) continued successes in

the field and the enthusiasm with which the Mexicans were welcoming
their Emperor was gradually bringing them round to the idea, and
Maximilians charm succeeded in wining them over completely. British
investors were already reported to be taking an interest in the future of
Mexican railways, communications were the most pressing of Mexicos
priorities.
CULTURE AND COMMUNICATION
Read the story and answer the questions.
1. What did the Tibetans think they were communicating?
2. What did the British think the Tibetans were communicating?
A TALE OF TWO CULTURES
When British soldiers entered the Forbidden City of Lhasa, Tibet, in the
summer of 1904, their leader, Colonel Fransis Younghusband, saw
crowds of local people clapping and cheering. Colonel Younghusband
thought it was a friendly welcome but he was wrong.
A Tibetan writer explained the other point of view:
When the British officers marched to the Tsuglakhang and other places,
the inhabitants of Lhasa were displeased. They shouted and chanted to
bring down rain, and made clapping gestures to repulse them. In the
foreigners custom, these are seen as signs of welcome, so they took off
their hats and said thank you.
A Culture Questionnaire
Fons Trompenaars is a Dutch expert on business and culture. He
interviewed over 15,000 business people in fifty countries to find out how
culture affects business life. Here are a few of the questions that he asked.
COMPANY CULTURE QUETIONNAIRE
Q.1. Emotion
You are upset about something at your company.
Do you show your emotions at work?

Yes / No
Yes / No

Q.2. Respect
Do you respect someone because of their
family background ?

Yes / No

Q.3. Responsibility
You are an employee of an engineering company
and work as part of a team. Another team member
makes a serious mistake while he is working on a
piece of machinery for an important customer.
Does the whole team take responsibility?
Q.4. What makes a good manager?
a) Does a good manager allow employees to work
alone?
b) Does a good manager control everything?
Q.5. Working life and private life
Your boss asks you to help him paint his house
at the weekend. Would you help?

Yes / No

Yes / No
Yes / No

Yes / No

(Source: Riding The Waves of Culture, Fons Trompsnaars)

Compare your answers to the results of survey of managers in several
different countries. In your groups, discuss :
1. Do any of results surprise you?
2. Can you see any general trends? What are they?
3. What does this tell you about doing business in different cultures?
Q.1. Percentage of people who do not show emotions at work:
Italy
29%
France 34%
USA
40%

UK
71%
Japan 83%

Q.2. Percentage of people who say that respect does not depend on family
background :

Russia
Italy
Germany

53%
64%
65%

UK
USA

76%
77%

Q.3.
Percentage of people who think that the individual should take
responsibility :
Austria
Japan
USA

28%
36%
40%

Spain 47%
Russia 68%

Q.4. Percentage of people who think that a good manager allows people
to work alone :
China
Japan
Italy

57%
71%
78%

USA 83%
France 89%

Q.5. Percentage of people who would not help the boss with his house
painting :
China 28%
Austria 65%
Spain
71%

USA
UK

89%
92%

TELEPHONE LANGUAGE
Richard made two calls after picking up his messages. Read the
conversations and complete them with the expressions in the box. One of
the expressions in each set of three is wrong. Choose the most appropriate
expression from the other two.
a)
b)
c)
d)

Hello. / Good morning. / Speak!

Is () there? / Id like to speak to (). / Is there ()?
Are you ()? / Is that ()? / Whos calling, please?
Hold on, please, Ill try to put you through. / Hang on, Ill go and get
her. / One instant.
e) I am (). / Its me. / This is () here.

10

f) What are you up to later? / What do you do later? / Are you available
later on today?
g) Ill look forward to seeing you tomorrow./ To tomorrow. / See you
tomorrow.
Phone conversation 1
Jane: a)..Hello.
Richard: Oh, hi. b)
Jane : c)
Richard : Yes, hello, Jane. How are you?
Jane : Fine, thanks. d)
Maggie : Hello.
Richard : Hi! e)
Maggie: You got my message then. I thought youd forgotten about me.
Richard : Dont be silly. Of course I havent forgotten you. Ive just been a
bit busy, thats all.
Maggie : Busy playing computer games, I suppose.
Richard : No, not all the time. Anyway how are you?
Maggie :Not too bad. A bit tired. Too much work as usual. Which reminds
me, have you heard anything from the travel agents?
Richard : Oh, yes. Theyve got the tickets.
Maggie: Great! I really need this holiday.
Richard : Listen, I cant chat now, but f)
Maggie : Ive got to work this evening, but I thought we could go to the
cinema tomorrow.
Richard: OK, Ill come round at about seven.
Maggie : g)..
Richard : Bye.
Phone conversation 2
Receptionist : a) Good morning. South-Western Bank. Can I help you?
Richard : Yes, b).
Receptionist: c)..
Richard: My names Richard Swainston.
Receptionist : OK, d).

11

Oh, Mr Swainston, Im afraid shes on the other line. Would

you like to hold ?
Richard : Yes, thank you.
Alison: Alison Moore.
Richard: Oh, hello . e) ..
Alison: Oh, yes. Mr Swainston,. Thank you for getting back to me so
promptly. There seems to be a problem with your account.
Richard: Oh, dear. What sort of problem?
Alison: Well, youre over your overdraft limit by more than 200$. You
really need to come to the bank, to discuss it. f)..
Richard: Im afraid Im rather tied up today. Would tomorrow be
convenient for you?
Alison: Yes, ten thirtys fine for me.
Alison : Well, thank you for ringing. g)
Richard: Goodbye.
ANSWERING THE PHONE
After the invention of the telephone in 1876, there was one immediate
problem:
What do you say when you answer it?
At first people were not sure how to respond to a ringing phone.
Edison ( Thomas Edison an American inventor) thought that callers should
answer with Ahoy! Others said Yes! or What? and many merely
picked up the phone and listened hopefully.
How do you answer the phone in English
when youre at work?
when youre in a hotel room?
when youre at home?
when your mobile phone rings?
Compare what you say with others.
Ex. 8 The film Glengarry Glen Ross starts with a businessman called
Sheldon Levene making a phone call. We dont hear what the person on
the other end of the line says, but you can probably guess.
Can you put the
sentences below into the correct places in the
dialogue?

12

1.
2.
3.
4.
5.
6.
7.
8.
9.

Just a moment, please.

Can he call you back?
No, its me again.
No, Im afraid hes in a meeting.
No, Im sorry hes not here.
Hello. Dr Lowenmsteins office.
Is it urgent?
Could you tell me your name, please?
Hello.

Receptionist..
Levene : Could I speak to Dr Lowenstein, please?
Receptionist :..
Levene : Well, its rather important. Could you get him for me?
Receptionist:
(PAUSE)
Receptionist: .
Levene: Ah, doctor
Receptionist:
Levene: Well, could you get..?
Receptionist: ..
Levene: What do you mean? Hes not there? I have to speak to him.
Receptionist: ..
Levene: Yes, it is fairly urgent.
Receptionist:
Levene: Mr Levene.
Receptionist:..
Levene : No, I cant be reached. Ill get back to him.
Ex.9. In this table, make summary of some telephoning phrases from the
dialogue above. Compare your answers.
Asking to speak to someone
What you hear if the person is not available
Asking someone to wait
Asking for the other persons name

13

Saying that youll phone again later

Ex. 10. Less than 30% of business calls get through to the right person
at the first attempt. How difficult is it to get through to you at work?
Which of these do you have?
A secretary
voice mail
Answerphone
a receptionist
Ex.11 Phone Verbs: Phone conversations use a lot of phrasal verbs.
Match the phrasal verbs in the column on the left to the phrases with
similar meanings in the column on the right.
1) to get through
a) to connect
2) to put through
b) to be connected
3) to cut off
c) to disconnect
4) to hang up
d) to wait
5) to hold on
e) to put down the receiver.
Notes: telephone is more official; phone is more common
171 345 876 792 - one seven one three four five eight seven six
seven nine two;
0 (zero) is read as oh (ou)
101 one oh one
66 double six
666 triple six
Ex. 12. Make up a dialogue using the following sentences.
Would you take a message, please? We are disconnected.
Hello? Can I help you?
You are wanted on the phone.
This is Mrs Grant.
Am I through? (Did you disconnect?)
Is that Mr Shell?
Go ahead. (speak)
Hold the line, please.
There is no answer.
Youve got the wrong number. He is out at the moment.
When will he back?
Would you ask her to call me back?
Will you tell him I called?
My name is Harry Jackson.

14

Unit 2
A Company
The Irish management, Charles Handy, believes that the traditional
company is dying. In his book, The Age of Unreason, he says that today
more and more people are working in a shamrock organization. Below is
the description of it.
The first leaf of the shamrock represents the organizations core
workers. These employees are usually qualified professionals and
managers. They work very long hours and, in return, receive high salaries
and generous benefits.
Work that is not essential to the organization goes to people in the
second leaf of the shamrock. These people are normally self-employed and
are specialists in certain kinds of work. they often sell their services to
more than one organization.
The third leaf of the shamrock is the flexible labour force temporary
and part-time workers. The organization saves money because it only
employs these people when it needs them.

Ex. 1. Compare the shamrock organization with a traditional company.

What are the advantages and disadvantages of a shamrock organization for
the following?
For the company
( advantages; disadvantages)
For the core workers . . . .
For the self-employed people . . . .
For the flexible labour force . . . ..
Ex. 2. A traditional oil company has decided to reorganize as a shamrock
organization in order to cut costs. Work in small groups and discuss these
points. In each case, give your reasons.
1. Which of these jobs should you keep in the core?
Account; computer programmer; lawyer; secretary; personnel
manager; company director; geologist; chief executive officer.
What other jobs should be in the core?

15

2. Is it better to use self-employed workers or a flexible labour force to do

the non-core jobs?
3. Which of these functions should you keep in the core?
Cleaning; strategic planning; training; sales; catering; administration;
travel booking.
4. Which non-core functions should be done by self-employed workers
and which by a flexible force?
A COMPANY PROBLEM
1. It is estimated that there is an assault on a retail employee during every
minute of every day. Shoplifters make up 62% of this total the rest are
mostly drunks, drug addicts or angry customers. But few companies have
any kind of strategy to deal with violence in the workplace. Should
employers do more to protect staff against violence?
(Management Today, May, 1997)
Ex.3. Read this problem, then discuss these questions.
1. What do you think should employers do more to protect staff?
2. What solutions to the problem can you think of?
2. Time for a smoke break?
The anti-smoking lobby continues. In the early 1980s less than 5% of
UK companies had a policy towards smoking. Today, according to
ASH (Action on Smoking and Health) nine out of 10 major companies
have some code of practice on smoking in the workplace. But more than
25% of Britains adults continue to smoke, so what attitude should the
other employers take? Should they try to accommodate the needs of
smokers as well as non-smokers? Or should they ban smoking
completely?
3.
Travel sick blues
Business travellers are making up to 15% more trips than a year ago. The
constant time zone changes, time wasted in transit and frequent delays
wear down many. What can the tired executive do about the problems of
business travel? And under what circumstances can he or she simply say
no when asked to go on yet another trip?

16

Ex. 4. Discuss solutions to these two business problems.

HANSONS EMPIRE
Between the early 1960s and the mid 1990s, two British businessmen,
James Hanson and Gordon White, built a global business conglomerate
with a value of over 10.5 billion pounds. During that period they bought
over 40 companies in the UK and the USA.
However, Gordon White died in August 1995 and a few months later
the 74-year-old James Hanson decided to break up their empire.
Hanson wanted to divide his conglomerate onto four groups of
companies.
Ex. 5. Below there are details of eight of Hansons major companies.
You dont need to understand every word in the texts, but find the answers
to these questions as quickly as possible.
1. Which company owns power stations ?
2. Which company is interested in continental Europe ?
3. Which companys main customers are in the paint and paper industries
?
4. Which company had a flat turnover last year?
5. Which company is the worlds biggest private coal miner?
6. What are aggregates?
7. Which company is based in California?
8. Which company produces polyethylene?
9. Which company has nearly no international business?
10. Which company is interested in power generation in Asia?
1. Company name : SCM
Location: USA
Main product : Titanium oxide
(a chemical used to make things white)
Main customers: the paint and paper industries
Sales: 531 million pounds
Future plans : to increase production capacity by 22% before 2000.
2. Imperial Tobacco
Imperial Tobacco is number two in the British cigarette market. Its
operating profits are 350 million pounds from sales of 780 million pounds
and it will soon have new factories that will make it even more efficient.

17

But these profits are nearly all in the British market; it has almost no
international business.
3. Company name : Cornerstone
Location : California, USA
Main product : aggregates
( rock, sand, and gravel)
Turnover : 930 million pounds
Profit : 50 million pounds
4. Hanson Brick
Hanson Brick has about 30% of the UK brick market. Last year it
increased its profits from 23 million pounds to 38 million pounds despite
the difficult housing market. It is now turning its attention to continental
Europe.
5. Eastern Group
The Eastern Group has a number of power stations in the UK and
makes most of its profits from electricity distribution in the south-east
of England. It is also the UKs fourth largest supplier of gas. Easterns
management would like to develop international interests.
Profit last year: 245 million pounds.
6. ARC
ARC is the second largest producer of aggregates (rock, sand and
gravel) in the UK. It is also second in coated stone for road construction.
Despite a difficult construction market last year, ARC increased operating
profits from 69 million pounds to 84 million pounds on flat turnover of
563 million pounds.
7. Peabody
Peabody is the worlds largest private sector coal miner and a leasing
US distributor of propane gas. Hansons accounts show that St Louisbased Peabody had a difficult time last year. While profits rose from 149
million pounds to 215 million pounds, the underlying trend was down.
Peabody is currently interested in power generation projects in Asia.

18

8. Quantum
Quantum is an American chemical company that specialises in
plastics, in particular, polyethylene products. Last year it made operating
profits of 30% on sales of 1.4 billion pounds. However, it operates in a
very unstable market and results will probably not be as good over the next
few years.
COMPANY STRUCTURE
Ex. 6. Before you read discuss these questions.
1 How many different ways of organising or structuring a company can
you think of? Think about departments, products and markets.
2 If you work for a company or organization, how would you describe the
company structure?
Doing The Business
Roisin Ingle hears how efficient management structures are vital for
success
The need for a solid structure
within all business entities
is absolutely fundamental,
according to Ms Angela Tripoli, a
5 lecturer in Business
Administration at University
College Dublin. Organisational
structure concerns who reports to
whom in the company and how
10
different elements are grouped
together. A new company cannot
go forward without this and
established companies must ensure
their structure reflects their target
15 markets, goals and available technology.
Depending on their size and
needs there are several organisational
structures companies can
20 choose from. Increasingly though,
in the constantly evolving business

19

environment, many firms are opting for a kind of hybrid of all

of them.
25
The most recognisable set up is
called the functional structure
where a fairly traditional chain of
command (incorporating senior
management, middle management
30
and junior management) is
put in place. The main benefit of
this system is clear lines of
communication from top to bottom but
it is generally accepted that it can
35
also be a bureaucratic set up
which does not favour speedy
decision making.
More and more companies are
organising themselves along
40
product lines where companies have
separate divisions according to the
product that is being worked on.
In this case the focus is always on
the product and how it can be
45
improved.
The importance for multinational
companies of a good geographic
structure, said Ms Tripoli,
could be seen when one electrical
50
products manufacturer produced
an innovative rice cooker which
made perfect rice according to
western standards. When they
tried to sell it on the Asian market
55the product flopped because there
were no country manages informing
them of the changes that
would need to be made in order to
satisfy this more demanding

20

60

65

70

75

80

85

90

95

market.
The matrix structure first
evolved during a project developed
by NASA when they needed to
pool together different skills from
a variety of functional areas.
Essentially the matrix structure
organises a business into project
teams, led by project leaders, to
carry out certain objectives.
Training is vitally important here
in order to avoid conflict between
the various members of the teams.
During the 1980s a wave of
restructuring went through
industry around the globe. This process,
known as delayering, saw a
change in the traditional hierarchical
structures with layers of
middle management being
removed. This development was
driven by new technology and by
the need to reduce costs. The overall
result was organisations that
were less bureaucratic.
The delayering process has run
Its course now. Among the trends
that currently influence how a
company organises itself is the
move towards cetralisation and
outsourcing. Restructuring has
evolved along with a more
customercentric approach that can
be seen to good effect in the banks.
They now categorise their
customers and their complex
borrowing needs into groups instead of
along rigid product lines.
Another development can be
seen in larger companies, which

21

100

are giving their employees more

freedom to innovate in order to
maintain a competitive edge.
Ms Julia MacLauchlan, Director
of Microsofts European Product
105 Development Centre in Dublin,
said the leading software company
had a very flat organisational
structure. There would not be
more than around seven levels
110 between the average software
tester and Bill Gates, she said.
Microsoft is a good example of a
Company that is structured along
product lines. In Ireland, where
115 1,000 employees work on
localisation of the software for all
Microsofts markets, the company
Is split up into seven business
Units. Each unit controls the
120 Localisation of their specific products
while working closely with the
designers in Microsofts Seattle
Headquarters.
It works, said Ms Maclauchlan,
125 because everyone who works in
the unit is incredibly empowered.
Without a huge bureaucratic
infrastructure people can react a
lot more quickly to any challenges
and work towards the companys
objectives.
( From The Irish Times)
Ex.7. Read the text about the different ways in which companies are
organised and answer these questions:
1. Four main kinds of organisational structure are described in the article.
What are they?

22

2. Is one kind of organisational structure more common than the others?

3. When did delayering take place?
4. What were the reasons for delayering and what were the results?
5. How does Julia MacLauchlan describe Microsofts organisational
structure?
Ex. 8. Match these definitions with the four organisational structures
described in the text.
1. A cross-functional structure where people are organised into project
teams.
2. A structure rather like the army, where each person has their place in a
fixed hierarchy.
3. A structure that enables a company to operate internationally, country
by country.
4. A structure organised around different products.
Ex. 9. These words and expressions are used in the text to describe
different aspects of organisational structure. Which are positive and which
are negative?
clear lines of communication (line 32) positive
bureaucratic set up (line35)
speedy decision-making (line36)
traditional hierarchical structure (line77)
customercentric approach ( line 91 )
freedom to innovate (line 101)
flat organisational structure (line 107)
Ex.10. Match these nouns as they occur together in the text.
1) product
a) teams
2) target
b) objectives
3) borrowing
c) lines
4) project
d) units
5) delayering
e) company
6) country
f) process
7) business
g) markets
8) software
h) needs
9) company
i) managers

23

Ex. 11. Complete the sentence. Use the appropriate phrase from
Exercise10 to complete each sentence.
1. Banks need to be fully aware of their customers ..
2. Silicon Valley is full of .
3. Many companies are now organised along , in which each division
is responsible for a group of products.
4. A matrix organisation groups people into ..
5. Some companies are divided into different.., often also called
profit centres.
6. A multinational company will often have a number of ., in charge
of activities in different parts of the world.
Ex. 12. Match these terms with their definitions
1) business entities (line 2)

a) focusing on the customer

rather than the product
2) set up (line25)
b) new, original
3) innovative (line 51)
c) companies
4) flopped (line55)
d) something that makes you
better than other companies
5) outsourcing (line90)
e) did not succeed, failed
6) customercentric (line91) f) structure
7) competitive edge (line102) g) getting external companies
to do work for your company.
Ex.13. Complete the sentences with an appropriate preposition.
1. Organisational structure concerns who reports . whom.
2. Depending .its size, there are several organisational structures a
company can choose from.
3. Many companies are organising themselves . product lines.
4. In the 1980s a wave of restructuring went industry.
5. Delayering was driven the need to reduce costs.
6. Microsoft in Ireland is split .seven business units.
Ex. 14. The word business is used several times in the article combined
with another word which comes after it ( e.g. business environment
(line21)).It can also be combined with words that come before it,(e.g. big
business). Try to think of as many word combinations using business as

24

you can, then look at the entry for business in the Business English
Dictionary.
Do the same exercise with the words company, management, manager
and product.
CHECK QUESTIONS
1. The functional organisational structure has clear lines of
communication. In contrast, where things are organised along product
lines or with a matrix structure, people often report to two people at
the same time their boss in the functional structure and their
manager or team leader in the other structure. What, if any, problems
could you imagine in the second case?
2. Do you think people from certain cultures would favour one kind of
organisational structure over another? Can you think of some
examples and give some reasons.
3. Either use your own companys organisational structure, or select one
from a companys annual report, and give a presentation of it to your
colleagues.

Unit 3
Corporate Cultures
Ex.1. Discuss the questions.
1. 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 when 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?

25

TRANSPOSING A CULTURE by Peggy Hollinger

NOT TO BE TAKEN FOR GRANTED
Asda and Wal-Mart should be the perfect merger, given that the former
has deliberately set out to copy the US retailing giants style. But Asda id
keenly aware of the pitfalls.

10

15

20

25

30

You could not hope to find a neater

fit, said the commentators when
Wal-Mart, the worlds biggest
retailer, agreed a 6.7 billion pounds takeover
deal with Asda, the UKs number
three supermarket group.
It had long been known that the
team which was brought in the rescue
Asda from collapse in the middle
1980s had deliberately set out to
copy virtually every aspect of the
giant US discount group that could
be replicated in the UK.
So Asda stores have colleagues,
not employees. They have people
in the parking lots to help drivers
to park . They have old-age pensioners
wearing colourful name
badges, standing at the door to say
hello and ask customers if they
need help. In the Leeds headquarters
no one has an individual office,
not even the chairman.
Finally , store staff get actively
involved in promoting individual
product lines, and are rewarded
when their efforts lead to tangible
sales improvements.
Most of these ideas came
straight from Bentonville,
Arkansas, home to one of the
Worlds most unusual retailers.

26

For Wal-Marts corporate culture

has become a legend in retailing.
35
The companys employees chant
The Wal-Mart cheer before store
meetings. They benefit from a
share ownership scheme which is
one of the most widespread in the
40 industry. Top executives share
rooms when on business trips, and
pay for their coffee and tea from
vending machines like the lowliest
sales assistant.
45
Given the similarities, there are
few who really believe putting
Asda into the Wal-Mart network
will result in anything but success.
But, says Asdas Chief Executive,
50 Allan Leighton, this is no reason
to be complacent. Failing to bring
together corporate cultures, even
those as similar as Asdas and WalMarts, could lead to the downfall
55 of the most logical mergers. When
acquiring or merging with a business,
getting the cultures to fit is
fundamentally important, he says.
Half-way houses, where compro60 mises are made, never work, he
believes, and nor does imposing
one culture on another. A company
calling their colleagues
colleagues and treating them like
65 staff is not the answer, he says.
The key to getting the deal to
work culturally rests on a few
fundamental issues, he believes. The
first and most important is termi70
nology, he says. Businesses have
their own language. You have to

27

75

80

85

90

95

100

105

get everyone aligned so that when

someone uses a word it means the
same thing to everyone.
Middle management comes
next. Initially, everything is done
at the top of organisation, he
says, But most of the work is done
in the middle. If middle management
is not incentivised, a deal
can go horribly wrong. It all boils
down to people in the end. And
what motivates people? Unless you
can demonstrate very quickly that
their influence in the organisation
is at least the same if not better
than before, then people will get
concerned about it, he says.
Third comes getting to know
each other. Asda and Wal-Mart
have spent the last few weeks
swapping store managers and IT
systems staff. We will go out there,
look and bring back, Lerighton
says. That way
we will have ownership of the changes as opposed to
having them pushed on us.
It will always be hard to determine whether a merger or
takeover has failed because the
cultures simply did not fit. But
success is more likely to elude
those who do not really believe in
the cultures they are trying to create. This all comes from the
heart, says Leighton. You do not
get it from textbook management
or instruction. You have to create
an environment where people feel
comfortable in expressing them-

28

selves in a different way.

(From Financial Times )
Ex. 2. Read the text about the merger of two companies and their corporate
cultures and answer these questions.
1. Which company is bigger Asda or Wal-Mart ?
2 .Which 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.
c) 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?
Ex. 3. 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.
2.
3.
4.
5.
6.

Asda and Wal-Mart have very similar corporate cultures.

Asda is the biggest supermarket group in the UK.
Wal-Mart is the biggest retailing group in the US.
Asda had financial problems in the 1980s.
Many of Asdas employees are over 65.
Allan Leighton is sure the merger of Asda with Wal-Mart will
succeed.
7. Wal-Mart plans to impose its corporate culture on Asda.
8. Creating a corporate culture cannot be planned in theory only.
Ex. 4. 1. Choose the best explanation of the phrase there are few who
really believe putting Asda into the Wal-Mart network will result in
anything but success (line45)
a) most people think the combination of Asda and Wal-Mart will
succeed

29

b) not many people think the merger will succeed.

2.What does Allan Leighton mean when he says it all boils down to
people in the end (line 81)
a) the number of people in the new organisation will need to be
reduced
b) people are the most important element in a merger or takeover.
Ex. 5. Match these terms with their definitions
1) virtually (line11)
a) cause something to fail
2) parking lots (line16)
b) people of retirement age who no
longer work
3) old-age pensioners(line17) c) almost all
4) chant (line35)
d) sing
5) widespread (line39)
e) escape
6) lead to the downfall(line54) f) a place where cars are put
7) incentivised (line80)
g) motivated through money or
other means
8) elude (line102)
h) available to lots of people
Ex. 6. Complete the sentences
1. schemes for employees help to develop loyalty and
commitment.
2. Most large supermarkets sell hundreds of
3. With the increased emphasis on the customer in retailing, the role of
the .. is imported.
4. The increased use of audio and video conferencing should reduce the
number of executives need to make.
5. Large organisations need sophisticated . To operate efficiently.
6. If people didnt wear .. at big conferences, you wouldnt know who
anyone was.
7. Most executives never progress beyond ..
8. The role of a is to motivate and control the sales staff in the shop.
CHECK QUESTIONS
1. Wal-Marts corporate culture has become a legend in retailing. It
includes such things as employees chanting the Wal-Mart cheer each day
before the store opens. How well do you think Wal-Marts corporate

30

culture would travel across national cultures, especially outside the UK

and the US? Would you feel comfortable with it?
2. Choose two large retailing, restaurant or hotel groups that you are
familiar with. If you have time, go and observe the way they present
themselves to customers. Then give a presentation comparing the two
organisations approaches to customers.
THE CUSTOMER
Here are nine things that you may need to be when dealing with
customers:
precise,
persuasive,
positive,
polite,
practical,
punctual, persistent, patient, prepared.
Which do you think are the most important ?
Rank them from 1 to 9.
Mark McCormack is probably the most successful sports agent in the
world. He represents the interests of hundreds of top sports stars. In his
best-selling book, What They Dont Teach You At The Harvard Business
School, he tells this story about dealing with a customer.
For several years, I had been trying to convince Andre Heiniger, the
world-wide chairman of Rolex, to sponsor the construction of a new
electronic scoreboard at Wimbledon, but he felt it was a waste of money.
I knew the only chance of changing his mind was to rake him there,
which I finally managed to do during one Wimbledon championship.
As we sat in the Royal Box, I could see him taking everything in: the
elegance of the Centre Court, the excitement of the match, the beauty and
the charm of this very special place.
When the match was over, Heiniger turned to me and made a slow
sweeping gesture with his hand.
This, he said, is Rolex.
(from What They Dont Teach You At The Harvard Business School)
Ex. 7 Which of the above nine qualities does he show?
Explain why.
Ex. 8.
Here are four activities that connect a business to its customers:
distribute, sponsor, advertise, sell.
Match the number of the appropriate definition to each verb
1. to give goods to someone else in exchange for money

31

2. to make something known to the public, for example in a newspaper or

on television
3. to supply goods in a particular area
4. to pay for a show, broadcast, sports event, etc. in return for advertising.
In his book, Mark McCormack also makes these statements about
dealing with customers.
I cant imagine anyone being effective in business without having some
insight into people.
All things being equal, people will buy from a friend.
Effective selling is directly tied to timing, patience and persistence.
Just as there is a right time to make a sale, there is a right place for it as
well.
Ex. 9. Read them and then look again at his story about
Andre Heiniger and Wimbledon.
1. Which of these ideas does the story illustrate?
2. Do you agree with Mark McCormacks four statements?
Situation: You are selling a product for 1800 pounds, but your customer
wants to pay 1500 pounds. Here are three things that you could say to the
customer.
1. If I were in your position, I would also want to get the best possible
price. But were both in business to make a profit and were only
talking about 300 ponds difference. If you meet me half way, Ill work
out a nice little deal for you. What do you say?
2. This is crazy. If we were criminals, we would try to help each other.
But were not. Were honest businesspeople and we cant reach an
agreement. Now I want to help you, so this is what Ill do. Im going to
take a coin out of my pocket and toss it. you can call Heads or
Tails. If you call correctly, Ill give you the product for 1750 pounds.
But if you call incorrectly, youll pay me the full price. How does that
sound to you?
3. If you make me a reasonable offer, say 1750 pounds, then we can
shake hands. If I accepted anything less, I wouldnt make a profit. If
you dont want to pay that much for it then, Im sorry, but I wont sell it
to you.

32

Ex. 11. Read the text and then discuss these points.
Which of the three approaches do you think would be most effective? Give
your reasons.
Can you think of any other ways of dealing with the situation? Decide
what you would say to this customer.

Unit 4
The Global Company
Ex. 1. Discuss the following questions:
Can there be such a thing as a world car? or
Should cars be designed to suit the tastes of different markets?
What are the financial and marketing implications?
Which do you think is better for an international company strong central
control of international operations or decentralised decision-making?
Does it depend on the business the company is in?
CASE STUDY : FORD and HONDA
Haig Simonian on two car groups different routes to the global market.
Rising costs and the worldwide
spread of shared tastes in car
styling have prompted the industrys giants to exploit global
5
economies of scale. But rivals
such as Ford and Honda have
approached the task very differently.
Ford is one of the worlds earli10 est multinationals. Its first foreign
production unit was set up in
Canada in 1904 just a year after
the creation of the US parent. For
years Ford operated on a regional
15 basis. Individual countries or
areas had a large degree of autonomy from the US headquarters.
That meant products differed
sharply, depending on local execu-

33

20 tives views of regional requirements. In Europe the company

built different cars in the UK and
Germany until the late 1960s.
Honda, by contrast, is a much
25 younger company, which grew
rapidly from making motorcycles
in the 1950s. In contrast to Ford,
Honda was run very firmly out of
Japan. Until well into the 1980s, its
30 vehicles were designed, engineered and built in Japan for sale
around the world.
Significantly, however, Honda
Tended to be more flexible than
35 Ford in developing new products.
Rather than having a structure
based on independent functional
departments, such as bodywork or
engines, all Japans car makers
40 preferred multi-disciplinary
teams. That allowed development
work to take place simultaneously,
rather than being passed between
departments. It also allowed much
45 greater responsiveness to change.
In the 1990s both companies
Started to amend their organisa
tional structures to exploit the perceived strengths of the other. At
50 Ford, Alex Trotman, the newly
appointed chairman, tore up the
companys rulebook in 1993 to
create a new organisation. The
Ford 2000 restructuring pro55 gramme threw out the old functional departments and replaced
them with multi-disciplinary product teams.

34

The teams were based on five

60 (now three) vehicle centres,
responsible for different types of
vehicles. Small and medium-sized
cars, for example, are handled by a
European team split between the
65 UK and Germany. The development teams comprise staff from
many backgrounds. Each takes
charge of one area of the process,
whether technical, financial or
70 marketing-based.
Honda, by contrast, has decentralised in recent years. While its
cars have much the same names
around the world, they are becom75 ing less, rather than more, standardised. Glocalisation a global
strategy with local management
is the watchword. Eventually the
group experts its structure will
80 comprise four regions Japan, the
US, Europe and Asia-Pacific
which will become increasingly
self sufficient.
Two reasons explain Hondas
85 new approach. Shifting to producetin overseas in the past decade
has made the company more
attuned to regional tastes. About
1m of Hondas 2.1m worldwide car
90 sales last year were produced in
the US. A further 104,000 were
made in the UK. No other manufacturer has such a high proportion of foreign output.
95 Honda engineers also reckon
They can now devise basic engi
neering structures which are com-

35

mon enough to allow significant

economies of scale, but sufficient100 ly flexible to be altered to suit
regional variations. The US
Accord, for example, is longer and
wider than the Japanese version.
The European one may have the
105 same dimensions as the Japanese
model, but has different styling
and suspension settings.
Both Ford and Honda argue
their new structures represent a
110 correct response to the demands of
the global market. Much of what
they have done is similar, but
intriguingly, a lot remains different.
( From Financial Times, Wednesday October 15)
Ex. 2.
1. Read the text about two car companies global strategies and
say which of these statements apply to Ford and which to Honda.
a) now has a strategy of decentralisation
b) now works in multi-disciplinary teams for car design and development
c) has always worked in multi-disciplinary teams
d) produces more cars abroad than in its home country
e) used to be very decentralised
f) used to be very centralised
g) has divided the world into four regions
h) designs and develops all its small cars in Europe
i) has always been flexible and able to respond to change.
2. According to the ideas in the text, why do car companies now need to
have a global strategy?
3. How did the two companies change their strategies?
Ex. 3. These phrases summarise the main idea of each paragraph of the
text. Match each phrase with the correct paragraph.
a) one reason for changes in Hondas strategy
b) Hondas original strategy

36

c) Fords new strategy

d) Conclusion
e) Hondas new strategy
f) Fords original strategy
g) The advantage of Hondas original strategy
h) Introduction
i) Fords new strategy in detail
j) Another reason for Hondas new strategy.
Ex. 4. Complete the sentences
1. The company .. three divisions - cars, trucks, and commercial
vehicles.
2. Each division has a lot of . to decide its own strategy.
3. Companies seem to change their every few years in response to
changing economic and market conditions.
4. Our total ..of cars from all our factories in Europe went down last
year.
5. We need to develop products that meet the .. of the market.
6. Big car market now produce different models based on the same
platform in order to achieve .
7. All the main Japanese car makers have . in Europe.
Ex. 5. Complete these sentences with the adverb or phrase used in the
text.
1 For many years Fords products differed . from region to region.
2 Individual countries had of autonomy.
3. Honda grew. from its early days as a motorcycle manufacturer.
4. For many years Honda was run very .. out of Japan.
5. The use of multi-disciplinary teams allowed development work at
Honda to take place in different parts of the company.
6. Honda experts its four regions to become .. self-sufficient.
7. No other car maker has ..of foreign output as Honda.
CHECK QUESTIONS
1. You have been asked by the board of multinational car maker to
present the case for a glocalisation strategy, as described in the

37

article. Prepare a presentation or write a report to give your arguments

in favour of this.
2. You are the members of the global strategy team of US Motor, an
American multinational car maker. The company currently has
production units in the UK, Germany, France and Spain for the
European market. But with the opening up of the markets in Central
and Eastern Europe, you are considering whether to set up a production
unit in Ukraine. Hold a meeting to discuss the advantages and
disadvantages of this strategy, and try to come to a decision.
MEETINGS
Michael Crichton is one of Americas best-selling novelists. This is
what he writes about how to behave at a meeting with a Japanese person.
The extract below comes from the novel, Rising Sun. It tells the story of a
police investigation into a murder at the head office of a Japanese
company in the USA. It later became a film starring Wesley Snipes and
Sean Connery.
Itll help to be formal. Stand straight and keep your suit jacket
buttoned at all times. If they bow to you, dont bow back just give a little
head nod. A foreigner will never master the etiquette of bowing. Dont
even try.
When you start to deal with the Japanese, remember that they dont
like to negotiate. They find it too confrontational. In their own society,
they avoid it wherever possible.
Control your gestures. Keep your hands at your sides. The Japanese
find big arm movements threatening. Speak slowly. Keep your voice calm
and even.
Ex. 6. Read the description and answer these questions about the text.
What does Michael Crichton say about..
1the best way to greet a Japanese person?
2being direct?
3your body language?
Kinds of meeting:
Ex. 6. Here are five situations which you could describe as meeting.

38

A progress review;
An appraisal;

a brainstorming;
a briefing.

a chat;

Match each situation to one of five meetings above.

1. Several people trying to think of new ideas
2. Two people talking in a corridor
3. One person giving several other people information about a new
project
4. A boss talking to someone about his or her recent performance
5. Several people having a regular meeting to discuss the way a project is
developing.
Ex. 7. 1. Which of the meetings do you think are normally formal and
which are normally informal?
2.Which of these things do you expect at a formal meeting and
which at an informal meeting? Give examples for some of the meetings in
the list above.
An agenda, matters arising, AOB, coffee, a chairperson, an objective,
a time limit, minutes, any other business, briefing documents.
Ex. 8. Here are six phrases that you heard in the meeting. Write them in
the correct boxes.
What do you mean by that?
Are there any questions?
Were here today to sort out this mess. Can I say something here? Lets
get down to business. Can you repeat what you said about the money?
To signal the start..
To introduce the objective.
To ask for questions.
To ask for clarification..
To ask for repetition.
To interrupt..
Ex. 9. Work in small groups and have a series of short meetings.
Take turns to be chairperson.
The chairperson should choose the subject of the meeting and decide on
things like a time limit, agenda, minutes, etc. At the beginning of each
meeting he or she should do the following:

39

1.
2.
3.
4.

Signal the start.

Introduce the objective.
Mention issues such as agenda, time limit as appropriate.
Ask for questions.
Others in the group should interrupt, ask for clarification, repetition,
etc. as appropriate.

PRESENTATIONS
This is what the American writer Steven Silbiger writes about
presentations (or public speaking) in his book, The Ten Day MBA.
The Mini-Course on Public Speaking
1. Know your audience. Their interests, attention span.
2. Know your own capabilities. Can you deliver a joke?
3. Keep it simple. Detailed information is best delivered
in print. Speeches should deliver concept
and motivate.
Ex. 10. According to Steven Silbiger, are the following true or false?
You shouldnt allow the audience to influence what you say.
You should always use humour in your presentations.
Presentations should be about ideas.
There should be lots of facts and figures.
Presentations should inspire people.
Planning a presentation.
Nearly all speakers plan their presentations carefully. Here are three
ways of preparing a presentation.
1. Practise the presentation beforehand and then deliver it without notes.
2. Give the presentation from notes.
3. Write the presentation in full and read it.
Ex. 11. Answer the questions :
What are the pros and cons of each approach given above?
Would you prepare a presentation in one of these ways?
If not, describe how you would do it.

40

Ex. 12. Compare two visual aids given below. Which do you think would
be more effective on a screen during a presentation? Think about these
points.
1. Which has more visual impact?
2. Which is easier to read?
3. Do you want people to read or to listen to you?
Audience
1. It is important that you know as much as possible about your audience.
2. You should try to find out who will be in the audience before the presentation
starts.(Phone the organiser or speak to the boss!!)
3. You should also try to find out whatever you can about their interests.(You dont
want to make jokes about soccer in a room full of Americans!)
4.Think about their attention span. Make sure that you dont give them too much
information or spend too long on a subject which they find boring.

AUDIENCE
Who are they?
What are they interested in?
What do they want to know?
Ex. 13. Decide how you would present this as a visual aid in a
presentation. Write your own version.
When giving presentations, it is important to keep things
as simple as possible. If you have got lots of detailed
information, it is probably best to put it in print and allow people to read it
either before or after the presentation. Presentations
work best when they talk about ideas rather than facts. They can also be
good for motivating and inspiring people. But, of course,
that very much depends on your personal qualities!
Compare your visual aid with those of others in your group.

41

Unit 5
Global Production. Global Careers.
Global Production
Discussion : Discuss these questions.
1. What criteria do you think global companies use when they choose
the location of their manufacturing operations around the world?
Some examples are labour costs, education level of the local
workforce, and political stability. Can you think of others?
2. It has become increasingly common for organisations to subcontract
some aspects of their activity to outside companies. Typical examples
are catering (the company restaurant) or security (protecting the
buildings). What, in your opinion, are the advantages and
disadvantages of subcontracting work in this way?
The Global Company
Lowest Cost Isnt Always The Answer
Lower tariffs and new markets opening to foreign investment have
complicated the decision about how manufacturing should be organised,
says Nikki Tait
Visit any western toy superstore,
and most of the basic products will
say Made in China or, perhaps,
Malaysia or Indonesia. Until, that
5 is, you reach the Lego section.
Suddenly, the boxes are more likely
to identify Denmark, Switzerland
or the US as the country of origin.
It might seem logical that a
10 global company, selling into a multitude of country markets and
measuring its market share in
global terms, should place production
facilities wherever costs are
15 lowest. But Lego, the privatelyowned Danish company, has for

42

years concentrated its manufacturing in Europe and the US, arguing

that this best satisfies design
20 and quality requirements. For
Lego the notion of cost is only a
small part of the production picture.
So how does a global company
25 go about organising its manufacturing network? The decision has
become more complicated over the
past two decades due to a number
of factors. On the one hand, trade
30 barriers across much of the world
have declined sharply.
Simultaneously, a range of new
markets notably in Asia and
Eastern Europe has opened to
35 foreign investment.
This has made global production much more possible. But it
has also reduced the need for
many overseas plants. Markets
40 that previously demanded local
production facilities because tariff levels made importing far too
expensive can now be supplied
from other countries
45 Plainly, in this newly-liberalised
environment, basic manufacturing
costs do become more significant.
But there are limits to a purely
cost-driven approach. Many
50 companies have built their current
production structure through
acquisitions over a number of
years, rather than in a planned
way.
55 Another problem is that costs

43

60

65

70

75

80

85

90

themselves can be subject to rapid

change, making todays Indonesia,
for example, tomorrows Hong
Kong. This adds a further dimension to any global companys
investment decision-making. The
reality is that manufacturing businesses also need to think : how
quickly can we pull the plug?
Some companies have addressed
this issue through what is called
the part configuration model.
This involves selecting a number
of regional manufacturing bases
which are viewed as longer-term
investments, and augmenting
them with lower-skilled assembly
plants, which can more easily be
moved between markets.
The availability of suitable
employees also needs to be examined when investment decisions
are being made. There may be
close links between manufacturing and product innovation and if
too much focus is put on low-cost
assembly operations, product
innovation tends to suffer.
Perhaps the hottest topic is
whether a global company needs
to be a producer at all.
Outsourcing of production to
other suppliers gives a company
more flexibility, and fits well with
a global strategy. A business may
be better placed to supply differentiated products into different
regional markets, and it can probably adjust more swiftly to chang-

44

95 ing cost considerations. These

operational advantages come in
addition to the financial benefits
of outsourcing, such as lower capital employed.
100 But there can be pitfalls.
Perhaps no company exemplifies
the outsourcing trend better than
Nike, the sports shoe group. On
paper, its strategy of subcontract105 ing the production of its shoes to
local factories looks eminently
sensible. But these arrangements
have turned into a public relations
disaster in recent years, as human
110 rights campaigners have complained of sweatshop conditions
in many of the Asian plants producing Nike products. Lack of
ownership, it seems, does not bring
freedom from responsibility.
( From Financial Times).
Ex. 1. Read the text about how global companies organise their production
and answer these questions.
1. Where are most simple toys manufactured and why?
2. Why does Lego do things differently?
3. What is the reason for a global company to have a part configuration
model?
4. According to the text, what are the advantages and disadvantages of
low-cost assembly plants?
5. What are the operational advantages of outsourcing?

Ex. 2. Mark these sentences T(true) or F(false) according to the

information in the text. Find the part of the text that gives the correct
information.

45

1.
2.
3.
4.
5.
6.

The main reason to have overseas plants is to be close to local markets.

A lot of plants are now being located in Eastern Europe.
Imports to many markets are now cheaper.
The number of overseas plants is increasing.
Cost is the main factor in choosing the location of a foreign plant.
Outsourcing production to subcontractors gives a company more
flexibility.

Ex. 3. Match the terms with their definitions.

1) notably (line33)
2) augmenting (line71)
3) links (line79)
4) swiftly (line94)
5) exemplifies (line101)
6) eminently (line106)

a) is a typical example of something

b) especially, particularly
c) a relationship or connection
between two things
d) quickly
e) very, extremely, completely
f) increasing something by adding
to it.

Ex. 4. Complete the sentences. Use an appropriate word from Exercise 3

to complete each sentence.
1. The success of the engineering company ABB .. the ability of an
organisation to think globally and act locally.
2. We recruit our future international managers from the top business
schools, Harvard, INSEAD and London.
3. Many business schools and management faculties have
close.with industry.
4. Our new Chief Executive was easily the best candidate for the job. In
fact, he is suitable for this position.
5. During the busy months of the year we deal with the extra work by ..
our full-time staff with temporary employees.
6. If incorrect and potentially damaging news is reported about the
company in the press, it is important to move .. to deny it.
CHECK QUESTIONS
1. Some of the main benefits for a company that is listed on the stock
exchange are that it can raise capital by issuing new shares, and it can

46

also use its own shares as payment when acquiring or taking over
another company. But there are some disadvantages too. What do you
think they are?
2. Most big international companies are listed on the stock market. But
Lego is not. What do you think the reasons are?
3. Your company, a well known multinational producing components for
the car industry, has a production plant in southern Italy, an area of high
unemployment. The plant received Italian government and EU financial
assistance when it was built three years ago. Now, due to poor
productivity levels at the plant, the company is considering closing it
down. However, there could be social, economic and political problems
if it does so. You have been asked by the top management to write a
report to present the case in favour of not closing it. Do so, giving as
many reasons as you can.
4. You are a member of the strategic planning team of a company that
produces PCs. Till now, the company has produced most of the
components for the PCs itself. Hold a meeting to discuss the arguments
for and against outsourcing the production of some of these
components, so that your company becomes only an assembler and
distributor of the finished PCs.

Global Careers
Discussion: Discuss the questions.
1. What qualities do you think a person needs in order to be a
successful global manager? Some examples may be
independence, or an interest in foreign cultures. Try to think of
others.
2. What personal and professional skills do you need for a
successful business career in your country, e.g. specialist training,
knowledge of foreign languages, outgoing personality?
GLOBAL CAREERS
Ideally, it seems a global manager should have the stamina of an Olympic
runner, the mental ability (1)of an Einstein, the conversational skill of a professor of
languages, the detachment of a judge, the (2) tact of a diplomat, and the
perseverance of an Egyptian pyramid builder. And thats not all. If they (3) are going
to measure up to the demands of living and working in a foreign country, they should
also (4) have a feeling for the culture; their moral judgement should not bee too

47

rigid; they should be able to (5) merge with the local environment; and they should
show no signs of prejudice.(6)

Thomas Aitken
According to Colby Chandler, the former Chief Executive of Eastman
Kodak Company, these (7) days there is not a discussion or a decision that
does not have an international dimension.(8) We would have to be blind
not to see how critically important international experience is.(9).
International companies compete with each other for global executives to
manage their operations(10) around the world. Yet what it takes to reach
the top of a company differs from one country to (11) the next. For
example, whereas Swiss and German companies respect technical
creativity and (12) competence, French and British companies often view
managers with such qualities as mere technicians.(13) Likewise,
American companies value entrepreneurs highly, while their British and
French (14) counterparts often view entrepreneurial behaviour as highly
disruptive. Similarly, whereas only (15) just half of Dutch managers see
skills in interpersonal relations and communication as critical to (16)
career success, almost 90 per cent of their British colleagues do so. (17).
Global management expert, Andre Laurent, describes German, British,
and French managers (18) attitude to management careers as follows: (19)
German managers, more than others, believe that creativity is essential
for career success. (20) In their mind, successful managers must have the
right individual characteristics. German
(21) managers have a rational outlook; they view the organisation as a
coordinated network of individuals(22) who make appropriate decisions
based on their professional competence and knowledge.(23)
British managers hold a more interpersonal and subjective view of the
organisational world.(24) According to them, the ability to create the right
image and to get noticed for what they do is (25) essential for career
success. British managers view organisational primarily as a network of
relation(26)ships between individuals who get done by influencing each
other through communicating (27) and negotiating. (28).
French managers look at organisations as an authority network where
the power to organise (29) and control others comes from their position in
the hierarchy. French managers focus on the organ(30)isation as a pyramid
of differentiated levels of power. They perceive the ability to manage
power(31) relationships effectively and to work the system as critical to
their career success.(32)

48

As companies integrate their operations globally, these different

national approaches can send(33) conflicting messages to success-oriented
managers. Subsidiaries in different countries operate dif(34)ferently and
reward different behaviours based on their unique cultural perspectives.
The chal(35)lenge for todays global companies is to recognise local
differences, while at the same time creating(36)globally integrated career
paths for their future senior executives.(37)
There is no doubt the new global environment demands more, not
fewer, globally competent (38) managers. Global experience, rather than
side-tracking a managers career, is rapidly becoming the (39) only route
to the top. But in spite of the increasing demand for global managers, there
is a poten(40)tially diminishing interest in global assignments, especially
among young managers, a big ques(41)tion for the future is whether global
organisations will remain able to attract sufficient numbers of (42) young
managers willing to work internationally.(43).
(From International Dimensions of Organisational Behaviour, Thomson
Learning 1997)
Ex. 5. 1. Which of these statements gives the best summary of the text?
a) A successful global manager needs many qualities.
b) The qualities required to become a top manager differ from
country to country.
c) Many young managers are not interested in a global career.
2. 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.
a) International experience is essential if you want a global career.
b) Subsidiaries of global companies use the same criteria when
promoting managers
c) The demand for global managers is increasing.
d) Young managers want to work internationally.
Ex. 6. Match these terms with their definitions.
1) stamina
a) ability to think quickly and intelligently
2) mental ability b) physical or mental strength to continue
doing something
3) detachment
c) ability to be polite and careful in what
you say or do

49

4) tact

d) determination to keep trying to do

something difficult
5) perseverance e) not becoming involved in things
emotionally.
Ex. 7. Complete the sentences.
1. German managers take decisions .their professional knowledge.
2. The qualities most valued in managers .. country to country.
3. To operate successfully in different countries you need to .. good.
different cultures.
4. In a global company, managers from different countries . .each
other for the top jobs.
5. Expatriates who dont .. to the demands of working and living
abroad sometimes return from their foreign assignment early.
CHECK QUESTIONS
1. Do you agree with the list of personal qualities necessary to be a global
manager which are quoted by Thomas Aitken at the beginning of the
text? Can you add anything?
2. If you have experience of companies in Germany, Britain and France,
would you agree with Andre Laurents analysis of what is essential for
career success and how organisations work in each country? Can you
add anything?
3. Imagine that you wish to apply for the job advertised below. You have
the right qualifications and experience, and these are on your CV. Write
a letter of application to accompany your CV, empasising your personal
qualities and suitability for this position.
EUROPEAN MANAGEMENT JOURNAL
Director, International Sales & Marketing
As a key member of our managerial team, you will direct the
international business, promotional, and advertising sales activities for The
European Management Journal. You will determine the profitability and
feasibility of establishing new products and build strategies for delivering
current products into new international markets. You will also direct an
independent sales force on three continents and be responsible for the day-

50

to-day management and coordination of marketing strategies between

national and international divisions.
Requires a BA (or equivalent) in Marketing or Finance, and 7 years
product management or development experience, with 3+ years
international marketing/sales experience in publishing or management
development. An MBA, experience in start up ventures, and the ability to
adapt to different cultures preferred. English and one other European
language essential. Overseas travel is required. The post is based in
Brussels.

Unit 6
Market and Production
Market
In 1924, Philip Morris named Marlboro cigarettes after the English
aristocrat, the Duke of Marlborough but the company cut the final three
letters from the name. thats because gh or ugh are sometimes silent in
English, as in this case. In some cases, though, its pronounced as f.
Marlboro is probably the most successful brand of cigarettes in the
world. Its advertising and its image are famous in nearly every country.
Marlboros image has changed dramatically since its early days. In
fact, when the tobacco company. Philip Morris, launched Marlboro in
1924, its target market was women. Its advertising slogan said that it was
Mild as May. But it wasnt a great success and by the early 1950s it still
had only around 1% of the total tobacco market. That was when the
company asked the Chicago advertising executive, Leo Burnett, to
reposition the product as a cigarette for men. He came up with an
advertising campaign based on the image of a cowboy and Marlboros
sales suddenly soared. Within a year it became the fourth best-selling
brand in the USA; before long it was the biggest in the world.
But Marlboro hasnt always had its current image, as the text explains.
Ex. 1. But, what is special about Marlboros image?
Look at the Marlboro advert and choose the two advert and choose the two
adjectives which you think describe it best.
Glamorous, upmarket, masculine, luxurious, tough, functional,
downmarket, feminine, caring, simple.
What three other products could these adjectives describe?

51

Ex. 2. Match the words with their definitions.

Launch

a)a person with an important job in the

advertising business
target market
b) a series of advertisements
slogan
c)to introduce a product to the market
advertising executive d) the group of people that the company
wants to buy the product
advertising campaign e)to make the product appeal to a
different type of customer
reposition
f) a short phrase
Ex. 3. Read the text and answer these two questions.
1. Who were Marlboro cigarettes originally for?
2. How successful was Marlboro before the 1950s?
3. Can you think of other products which have been repositioned?
Here are two ideas.
Explain how their images and target markets have changed.
1. Japanese cars (compare the 1960s with now).
2. Running shoes ( compare the 1970s with now).
Ex. 4. Discuss which of these groups of people you think this Marlboro
advertisement appeals to. Rank them from 1 (high) to 5 (low).
Category

Definition

Rank

Yuppies

young urban professionls with a

high income
dinkies
couple with a double income and
no kids
the green market people who are concerned about
the environment
blue collar workers people who work with their hands
ethnic minorities
people who are of a different race
from the majority of people in a country
Ex. 5. Now discuss which target markets these brands are for:
McDonalds, Disney, Mercedes Benz, Levis.

52

Ex. 6. Explain your answers to these questions:

1. What image does the most important product of your company (or
one you know) have?
2. What is its target market?
3. How is it advertised?
MAKING A PROPOSAL
The Godfather
The Godfather is a film about the New York Mafia. In the
film,Sollazzo, a gangster, makes a business proposal to the man they call
The Godfather, Don Corleone.
Sollazzo

Don Corleone, I need a man who has powerful

friends. I need a million dollars in cash. I need,
Don Corleone, those politicians that you carry in
your pocket like so many nickels and dimes.
Don Corleone What is the interest for my family?
Sollazzo
30%. In the first year, your end should be 34
million dollars. And then it would go up.
Don Corleone And what is the interest for the Tattaglia
family?
Sollazzo
Ill take care of the Tattaglias out of my share.
Don Corleone
So I receive 30% for finance, political
influence and legal protection. Thats what
youre telling me.
Sollazzo
Thats right.
Don Corleone
Why did you come to me? Why do I deserve
this generosity?
Sollazzo
If you consider a million dollars in cash just
financeti salute, Don Corleone.
Glossary:
Nickels and dimes = small American coins of not much value
( 5c. And 10c.)
your end = your return
the Tattaglia family = one of Don Corleones big rivals

53

Ex. 7. Read the script and make a summary of the deal:

What does Sollazzo want?
What is he offering?
STRUCTURING A PROPOSAL
Look again at the script and notice how the meeting is structured. In
which order do these stages occur?
Don Corleone summarises. Sollazzo says what he wants.
Don Corleone asks what is in it for him. Sollazzo explains what hes
offering.
Here is some of the language you can use for each of those four stages : I
need Lets sum up Im offering,What is the interest for me?So
this is the position Id like you to consider Im looking for Whats
in it for me?
Write the phrases and sentences in the appropriate places.
If youre making an offer.
How to say what you want ..
How to say what youre offering
And if youre listening to an offer
How to ask about your interests
How to summarise the deal.
A REFUSAL
Don Corleone

I said that I would see you because I heard

that you were a serious man, to be treated
with respect. But I must say no to you and
Ill give you my reasons. Its true I have a
lot of friends in politics, but they wouldnt
be friendly very long if they knew my
business was drugs and not gambling
which they regard as a harmless vice. But
drugs is a dirty business
Sollazzo
Don Corleone
Don Corleone
It doesnt make a difference to me what a
man does for a living, you understand. But
your business is a little dangerous.

54

Glossary:
A harmless vice = behaviour which is bad but not very dangerous.
Ex. 8. In Don Corleones position, if you wanted to refuse Sollazzos
proposal, which of these phrases would you use?
- Im sorry, but thats out of the question.
- I must say no to you and Ill give you my reasons.
- Im afraid we cant agree to that, but I hope to do business with you
some other time.
- I need some time to think about that.
ACCEPTANCE
Here are four ways of accepting a proposal. But which ones are
unconditional acceptances and which allow space for a negotiation to
develop?
- I like the sound of the idea.
- I think we have the basis of an understanding.
- That seems like a reasonable offer.
- OK, its a deal.
How else can you accept a proposal?

Production
What makes an efficient production process? Here are seven things which
could be important. Rank them from 1 to 7.
Large inventories of parts
Plenty of space
Good communication
Strict quality control
Fair division of labour amongst workers
Smooth flow of production through the factory
Good safety producers
(inventories US) = stocks (UK)).
What other factors do you think are important in an efficient production
process?

55

The Machine That Changed The World is a book that contains the results
of a 5 million dollars research project which examined the reasons for the
success of Japanese car manufacturers.
Below is the description of two car factories : a General Motors plant
at Framingham in the USA and a Toyota plant at Takaoka in Japan.
Ex. 9. Read the text and make notes listing the differences between the
Toyota and GM factories.
The differences between Takaoka and Framingham are striking to
anyone who understands the logic of lean production.
Toyotas
philosophy about the amount of plant space is just the opposite of GMs at
Framingham : Toyota believes there should be as little space as possible.
This means that face-to-face communication among workers is easier, and
there is little room to store inventories. GM, by contrast , believes that
extra space is necessary so that people can work on vehicles which need
repairs. They can also store the large inventories required for smooth
production.
The final assembly line revealed further differences. Less an hours
worth of inventory was next to each worker at Takaoka.
The parts went on more smoothly and the worker tasks were better
balanced, so that every worker worked at about the same pace. When a
worker found a defective part, he sent it to the quality control area in order
to obtain a replacement.
At Takaoka, each worker can pull a cord just above the work station to
stop the line if any problem is found; at GM only senior managers can stop
the line for any reason other than safety although it stops frequently .
At Takaoka the line is almost never stopped.
At the end of the line the difference between lean and mass production
was even more striking. At Takaoka, we observed almost no rework area
at all. Almost every car was driven directly from the line to the boat or
trucks taking cars to the buyer.
Ex. 10. Which of these sentences do you agree or disagree with?
Workers are more productive when music is being played in a factory.
Output is improved when conditions are made more comfortable for
workers.

56

Less management time is wasted when managers spend more time talking
face-to-face with factory workers.
Breaks should be taken at regular intervals, but production should not be
interrupted at any other time.
Ex. 11. Complete this summary by putting the verbs in brackets into the
correct passive form.
The Hawthorne Experiments
A Summary
The Hawthorne experiments (conduct) by Elton Mayo in Chicago in the
1920s. More than 20,000 workers at Western Electrics Hawthorne Plant
(involve).
In the first experiment, lighting conditions in the Hawthorne factory
(improve); in this case, it (find) that output also improved. In the second
experiment, lighting conditions (make) worse. Unexpectedly, output went
up again. Finally, lighting conditions in the factory (return) to normal.
Much to Mayos surprise, once again, the workers productivity improved.
Ex. 12. A Hamburger Production Process
Take turns to describe each step in the process, using the passive
form as appropriate.
Grill meat + heat bun > hot plate > assemble burger > wrap burger >reheat
burger in microwave > serving bin
PUTTING IT IN WRITING
In business, is it better to write something down or to say it on the phone
or in a meeting?
Here are three reasons why you might prefer to write something down on
paper.
- You dont want to speak to the other person.
- The material needs to be kept for future reference.
- You need proof that you have taken actions.
Here are two documents the accident report form and the memo. What is
the difference in the content of the two?
What is the difference in style?

57

Accident Report Form

__________________
1/8/03
Dear, Bob,
I thought you should know that weve had a few problems on the night
shift. Im afraid that one of the lads has caught his arm in a machine. He
went off to hospital but its nothing too serious. Hes made a mess of the
machine, though, Im afraid. I had to shut the line down for a couple of
hours, so we lost a fair amount of production last night.
We followed all the procedures, so theres nothing to worry about but
Ill talk you through it when I get back to work this evening.
A/f
Memorandum
Date 1.8.03
From Bob Russell, Factory Manager
To Cynthia Prytherch, Production Controller
__________________________________
RE: Accident on production line
I have been informed that there was an accident at the factory last night
involving a worker and one of our machines.
The man in question was taken to hospital, although I understand that he
was not seriously hurt.
However, the machine was damaged and, as a result, the production line
had to be shut down for two hours with a corresponding loss of production.
I have been assured that proper health and safety procedures were
followed, but I am, of course, investigating the incident to see if any
lessons can be learnt.
Ex. 13. Look at these pairs of phrases from the two documents.
1. a) I thought you should know.
b) I have been informed that..
2. ) I had to shut the line down for a couple of hours.
b) The production line had to be shut down for two hours.

58

3. a) We followed all the procedures, so theres nothing to worry about.

b) I have been assured that proper health and safety procedures were
followed.
In each case, Bob Russell has used the passive rather than active form of
the verb. This moves the focus of the sentence from the subject to the
object.

Unit 7
Entering a foreign market
International Mergers
Discussion: Discuss these questions.
1. What are the main reasons for manufacturing a product in the country
or region where you want to sell it?
2. A lot of products are increasingly being ordered by phone or through
the Internet, assembled to order and delivered from the factory directly
to the customer. This is especially the case in the US and Europe. Do
you think this approach would work well in South America?
Information Technology Logistics
DELL TRIES TO CRACK SOUTH AMERICA
John Barham examines the US computermakers strategy for expansion
using a Brazilian base
Dell Computers, the Texas based
computer-maker that was among
the pioneers of online ordering, is
preparing to attack the difficult
5 Latin American market.
Soon, Dell will start making
computers at a new factory in the
small, southern Brazilian city of
Eldorado in its first manufactur10 ing venture in South America.
Within a few hours flying time of
Eldorado lie four of the continents main metropolitan regions
-Buenos Aires, Rio de Janeiro, Sao

59

15 Paulo and Santiago which generate about half the regions wealth
and where most of the computerusing populace is concentrated.
Dell hopes to serve all these mar20 kets including more distant
regions in northern Brazil and the
Andean countries from
Eldorado.
According to Dells plan, air25 craft from Miami will land at a
nearby international airport carrying computer components that
will be sent straight to Dells factory. Together with parts delivered
30 from suppliers in Brazil, they will
be assembled to order, packed and
delivered to consumers across the
continent.
The challenge for Dell is not
35 only to mount an effective marketing campaign to educate customers about online ordering, it
must also manage a complex logistics system and deal with the prob40 lems of unreliable road and air
transport networks. And it must
operate in half a dozen volatile
Latin countries, with unpredictable governments and con45 sumers as well as well-established
competitors.
Dell could not afford to ignore
the South American market much
longer. It currently exports com50 puters to a few Latin American
countries such as Mexico and
Columbia, but has never sold to
markets in Argentina or Brazil.

60

Latin American consumers last

55 year bought 5 million PCs and
demand is growing at 15 percent a
year. Growth is likely to remain
strong for some time to come: in
Brazil, the regions largest market,
60 only 3-4 percent of the population
owns a PC.
Dell is not the first company to
view South America as a single
market. For a decade, Ford and
65 Volkswagen and many other
multinational companies have
operated in the regions main
countries as if they formed one
integrated market. That was a nat70 ural reaction to falling import tariffs and consolidation of the
Mercosur customs union linking
Argentina, Brazil, Paraguay, and
Uruguay. However, the distances,
75 the red tape and the animosities
between national governments
often make fulfillment of this strategy difficult.
Dell decided to locate in Brazil
80 because it is the regions biggest
market and because the government gives computer companies
substantial tax incentives as part
of its plan to develop local high
85 technology industries. If Dell
meets Brazilian local content criteria and attains agreed production
volumes, its products are considered to be 100 per cent locally made
90 and automatically gain duty-free
access to Mercosur countries.
However, there is little Dell can

61

do about the internal transport

networks in Brazil or the bureau95 cracy in neighbouring countries.
Although roads, air transport and
delivery systems are tolerably efficient in south eastern Brazil and
parts of Uruguay, Chile and
100 Argentina, Dell may still find it is
struggling to coordinate operations and sales over a vast region.
(From Financial Times ).
Ex. 1. Read the text about Dells plans to assemble PCs in South America
and answer these questions.
1. Is the writer generally positive about Dells chances of success in its
South American venture?
2. Why has Dell decided to attack the South American market?
3. Based on the information in the text, which country is the odd one out,
and why?
4. Colombia b) Argentina c) Brazil d) Paraguay e)Uruguay
5. Why has Dell chosen to locate its manufacturing plant in Brazil?
6. Which of the following challenges facing Dell are mentioned in the
article?
a) unreliable transport networks
e) terrorism
b) poor productivity
f) large distances
c) political instability
g) high import tariffs
d) high inflation
h) well-established competitor
Ex. 2. 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.
2.
3.
4.
5.

Dell will sell only in the big cities.

Dell already sells computers in South America.
The company also produces PCs in Mexico.
It plans to import all the components it needs.
Ford and Volkswagen have been operating in South America for some
years.

62

6. Considering South America as a single market is not an easy strategy.

7. To meet local content criteria Dell must use a certain percentage of
components produced locally.
8. Dell hopes to sell its computers duty-free in many countries.
9. Delivery systems in Brazil are better than in other parts of South
America.
Ex. 3. These phrases summarise the main idea of each paragraph. Match
each phrase to the correct paragraph.
a) the challenge for Dell
b) reason for choosing Brazil
c) an overview of Dells intentions
d) reason to enter the South American market
e) how Dells plan will work
f) other companies experiences
g) problems Dell may face in Brazil and elsewhere
h) advantages of Eldorados location.
Ex. 4.Complete the sentences.
1. Many countries offer companies .to encourage inward investment.
2. When we launch our new Internet service we will need to a big
marketing. .
3. In order to be successful, the new manufacturing plant will have to
reach target.within six months.
4. Assembling to order and delivering direct to each customer means
managing a complex . .
5. When importing is expensive due to high, the alternative is to
manufacture locally.
6. In order to have free access to the EU market, Japanese car
manufacturers in the UK need to .minimum content.. .
7. In some countries the only way to .well is to have local production.
8. Most countries in Europe are now part of a which allows free
movement of goods.
CHECK QUESTIONS
1. Imagine you work in the marketing department of a European truck
manufacturer. Prepare a presentation giving arguments for setting up
production in South America.

63

2. You are a consultant specialising in economic and political fields. You

have been asked by a client, a European computer manufacturer, to
summarise in a report the difficulties and challenges of setting up a
production operation in one of the following countries: Colombia,
Russia , Ukraine or Indonesia. Choose one and write a report.

International Mergers
Discussion: Discuss these questions.
1. How would you define a merger? How does it differ from an
acquisition?
2. Think of three or four big international mergers in recent years. Have
they been successful?
3. What kind of things do you think can lead to problems or even failure
in international mergers and acquisitions?
HOW TO MERGE
AFTER THE DEAL
Doing deals is easy. As mergers hit record levels, now comes the hard part.
The merger wave, which in
1998 was a predominantly
American affair, is now
sweeping over Europe. Cross-bor5 der deals, such as Daimler-Benzs
takeover of Chrysler, accounted
for a quarter of mergers in 1998;
more are expected as firms go
global.
10 In many cases this consolidatin makes sense at least on
paper. But just as certain as the
flow of deals is that most will be
failures. Study after study of past
15 merger waves has shown that two
out of every three deals have not
worked.
Success in the future will

64

depend more than ever on the

20 merged companies ability to create added value. And that will
depend mainly on what happens
after the deal has been done. Yet
many deal makers have neglected
25 this side of the business. Once the
merger is done, they simply
assume that computer programmers, sales manages and engineers
will cut costs and boost revenue
30 according to plan.
Yet, just when post-merger integration has become decisive, it has
become harder to pull off. Not only
are modern firms complicated
35 global affairs, but executives are
putting todays deals together in a
hurry. Few give enough thought to
the pitfalls.
One set of obstacles is hard
40 things, such as linking distribution or computer systems. In particular, many recent mergers have
been undone by the presumption
that information technology is
45 easy to mesh together.
More difficult are the soft
issues; and here the same word
keeps popping up culture. People
never fit together as easily as flow
50 charts. Culture permeates a com
pany, and differences can poison
any collaboration. After one large
US merger, the two firms had a
row over the annual picnic:
55 employees of one company were
accustomed to inviting spouses,
the others were totally against the

65

idea. The issue was resolved by

inviting spouses only in alternate
60 years.
Two new things made culture clashes harder to manage.
The first is the growing importance of intangible assets. In an
65 advertising agency, for instance,
most of the value can walk out of
the door if key people leave.
The second new thing is the
number of cross-border mergers.
70 In this area Daimler Chrysler may
prove to be an interesting case
study in differing management
cultures. One worry is compensatin: Chryslers pay levels are
75 much higher than the German
companys. So a US manager posted to Stuttgart may end up reporting to a German manager who is
earning half his salary.
80 Nor is pay the only difference.
Chrysler likes to pride itself on its
flexible approach, where speed
and ingenuity are prized. When
designing new models, teams of
85 engineers, designers and marketing people work on each model.
Daimler Benz has a more traditional structure, in which designers and marketing people mix less
90 and engineers are in charge.
Some recent deals will no doubt
prove a stunning success.
Nevertheless, there are three ominous signs about the current
95 merger boom. First, much of the
attention seems to be on the deal

66

itself rather than the integration

that must follow. Second, many
deals are rushed. And third, merg100 ers have too often become a strategy in their own right.
So the things that are so impressive about todays mergers their
size, complexity and daring
could count against them if the
economy turns down.
(From The Economist)
Ex. 1. 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. The majority of mergers take place in the USA.
2. Many international mergers are failures.
3. Most attention is concentrated on what to do after the merger is
completed.
4. Many mergers are done too quickly.
5. Connecting different computer systems together is not usually a
problem.
6. High salaries were given to Chrysler managers as compensation for the
merger with Daimler-Benz.
7. Chrysler has won many prizes for its production methods.
8. Engineers have a high status as Daimler-Benz.
Ex. 2. Choose the best explanation for each extract from the text.
1. the merger wave is now sweeping over Europe (line1)
a) a lot of American companies are merging with European ones
b) there has been a big increase in the number of mergers involving
European companies
2. success will depend on the merged companies ability to create added
value (line18)
a) they must try to make sure the share price goes up after the merger
b) they must try to reduce costs and increase revenue in the new merged
company

67

3. post-merger integration has become decisive (line 31)

a) the way merged companies work together as one company is
extremely important
b) it is necessary to take quick decisions after the merger is completed
4. the growing importance of intangible assets (line 63)
a) some assets are carefully protected and cannot be touched
b) people are the most valuable asset in many companies
Ex. 3. Choose the best explanation for each word or phrase from the text.
1. pull off (line 33)
a) stop
b) succeed
2. pitfalls (line 38)
a) problems
b) accidents
3. mesh together (line 45)
a) combine
b) mix up
4. popping up (line 48)
a) exploding
b) coming up
5. permeates (line 50)
a) destroys permanently
b) goes into every part
6. pride itself (line 81)
a) be pleased with yourself for something
b) tell everyone about your good points
7. ominous (line 93)
a) easy to predict
b) predicting something bad
8. in their own right ( line 101)
a) by themselves
b) in a correct way.
CHECK QUESTIONS
1. The article emphasises that the post-merger integration is the hardest
but most important part of the deal. Here is a list of some issues that
must be considered to enable things to work well after a merger has

68

2.

taken place. Which are the most important? Can you add others? What
factors need to be taken into account when coming to decision?
who will be the chief executive of the new company?
where will the HQ be?
if it is a merger between companies from different countries with
different languages, what should the company language be?
on which stock exchange should the new company be listed?
where there is duplication, e.g. two centres for R&D, should one be
closed?
should key managers be moved to different parts of the merged
company to speed up integration?
Differences in pay levels between the two companies in a merger can
cause problems. Imagine you are members of the Human Resources
departments of the two company. Hold a meeting to discuss this
problem and try to suggest some solutions.

Unit 8
Management; Management Attitudes in Germany and Britain
Management
MANAGEMENT BRIEF
Ford 2000
One afternoon in 1993, 15 senior managers from Fords American and
European divisions met in London. At the head of the table sat Alex
Trotman, an Englishman who had just become the companys chairman
and chief executive officer.
Mr Trotman is a perfect example of a company man. His entire career
had been at Ford, starting in 1955 as a clerk at one of its factories near
London. But he was about to change Ford dramatically.
At the meeting, Mr Trotman introduced the Ford 2000 initiative
which brought together the companys European business (sales: $23
billion ) with its North American one ($105 billion). Since each continent
had separate management structures, products, factories and ways of doing
things, it was, in effect, a huge corporate merger.
Full-scale globalisation, like this, is a difficult thing to do. In theory, a
company can get rid of lots of unnecessary duplication and benefit from
huge economies of scale. But, in practice, things can easily go wrong.

69

One of the reasons that Ford 2000 went relatively smoothly was
because Mr Trotman worked hard to involve his workforce. In a video
shown to all Fords 320,000 employees, he explained that Ford 2000 was
not just a re-drawing of an organisation chart, but a whole new way of
working. The aim was not just to cut costs and increase efficiency, but to
produce cars to delight their customers.
Perhaps this seems like a Disneyesque approach to re-engineering a
major multinational. But , by 1996, Ford had become a very different
organisation.
How far have Fords high hopes been realised? As an exercise in
change management, Mr Trotman can claim considerable success, but
there is a suspicion that Ford 2000 may be a solution to yesterdays
problems rather than a great leap forward. As one leading analyst observed
:
All Ford 2000 is aimed at doing is solving a problem that they had
created.
( From The Economist)
Ex. 1. Read the article about Ford and then decider whether these
statements are true or false.
1.
2.
3.
4.

Fords new boss had spent his whole career at Ford.

Fords American and European working practices were very similar.
The Ford 2000 plan had a lot of problems.
The main aim of the Ford 2000 plan was to cut costs.

Ex. 2. When youve read about Ford 2000, look at this summary and
replace the phrases in italics with words or phrases that are underlined in
the text.
Ford is one of the worlds most famous (1) companies which operates in
many different countries. The project Ford 2000 was the (2) coming
together of Fords American and European operations. It involved great
changes to the (3) way that management is organised, but it was more than
just a change to the (4) diagram of the company hierarchy. Among other
things, Ford hoped to get (5) lower costs due to the increase in the scale
production. The success of the project was partly due to the way that
Fords (6) boss communicated with the (7) people who work for the
company.

70

Ex. 3. Below are three pieces of management jargon which are used in the
text. Try to explain what they mean.
Globalisation,
re-engineering,
change management.
Match them to the three definitions.
a) way of completely reorganising a company which ignores both its past
and present working practices.
b) introduction of new ideas and new working practices
c) using the same products and methods in all parts of the world.
GETTING INFORMATION
In the film The Firm, Tom Cruise plays the part of Mitch McDeere, a
brilliant young lawyer with several job offers from Americas leading law
firms. At the end of a job interview with the partners (senior lawyers) of
the law firm Bendini, Lambert & Locke, they give him a sealed envelope.
McDeere
McKnight
Bendini

McDeere
McKnight
McDeere
McKnight
McDeere
Quinn
Bendini
McDeere
McKnight

McDeere
McKnight

Do I open it here?
Of course.
Unless you can tell us whats in it. A lawyer
worth that offer shouldnt have to open the
envelope. (Pause).
Mr McKnight, you are the managing partner
at Bendini, Lambert and Locke, is that correct?
Yes.
Did Mr Lambert as senior partner give you any
instructions regarding my employment?
He did.
And Mr McKnight, do you usually follow Mr
Lamberts instructions?
Objection. Vague, imprecise.
Sustained.
What precisely were those instructions?
That you were in great demand and that I
should make sure that we obtained your
services before a bidding situation developed.
How did you go about making certain?
I bribed a clerk at the Harvard law placement
centre for the exact amount of the highest offer
. and added 20%.

71

Glossary:
Objection a word that a lawyer uses in court to say that a
question is not fair.
Sustained - a word used by a judge to show that she/he agrees
with an objection
A bidding situation a situation in which competing companies
make higher and higher offers for something.
To bribe - to buy information illegally.
The Harvard law placement centre an office at Harvard
University that helps young lawyers to find jobs.
Ex. 4. Read the scene above and answer these questions.
1. In the room, which of the characters is the boss?
2. The four men are pretending to be in a particular situation. What is it?
3. What is the salary offer?
Ex. 5. Leonora, a new manager, is preparing for a series of individual
meetings with the members of her new department. She wants to hear their
opinions of recent changes in the company. Before the meetings, she
makes a note of five things that she particularly wants to find out about.
Write the five questions that you would use to find out someone
elses opinion on these five subjects
(They could be open or closed questions.).
new arrangements in the office
new management structure
morale in the department
training needs
the departments progress over the past year.
AN INTERVIEW
A job advert
AFRICA - General Manager
A large international energy company is looking for a general manager
to run its east African office. Based in Nairobi, you will work closely with
technical and operational specialists and play a leading role in all the
companys commercial activities in the region.
You should be a graduate with a working knowledge of English.
You must also have excellent communicative and interpersonal skills.

72

In addition to a performance-related salary, we provide an attractive

benefits package.
Please reply with c.v. to:
Nicholl Executive Search, PO Box 1997, London, UK
Ex. 6. read this job advertisment and answer these questions.
1. What kind of company is advertising?
2. Where is the job based?
3. What special skills are required?
Ex. 7. Discuss which of these people you think would be the best
candidate for the job. Give your reasons.
1. A 25-year-old graduate from Harvard Business School who grew up in
Kenya.
2. A 35-year-old major in the South African army who is looking for a
new career.
3. A 40-year-old communications consultant who has worked in 12
different countries.
Ex. 8. To make its decision on the best person for the job, the company
needs to find out about these four areas:
The skills the candidates have;
their personality;
Their experience;
their expectations.
Think of two or three questions to ask about each area.
Ex.9. Which of the four areas is each of the questions asking about?
1. Do you think that youre a natural communicator?
2. What did you like most about your last job?
3. How do you try to motivate the people that you manage?
4. How do you spend your free time?
5. What kind of job would you like to have in five years time?
6. Why did you leave your last job?
7. What do you think are your weak points?
8. How much do you expect to earn?
Ex. 10. * A. You are a senior manager who has recently joined
Bs company. You want to get to know B, so you invite B into your office
to discuss a few personal and job-related questions.

73

B.
* B.
A
* A.
B.

Play yourself.
You are a journalist who is interviewing A for a magazine.
Play yourself.
You are applying for the job below.
Interview A.

Salespeople For Young Biotech CO.

We are a biotechnology company based in Boston, Mass. and we are
looking for new salespeople. You dont have to have specialist knowledge
or years of experience. But you do need confidence, ambition and
unlimited potential.
Do you have excellent communication skills? Do you have the right
image for this young, thrusting organisation?
Then you could be the person for us!
Call 0101020 for an interview - right now!

Management Attitudes in Germany and Britain

Discussion: Discuss the following:
Based on your experience or what you may have read,
how do you think British and German managers would differ in their
approach to management?
STYLES OF EXECUTION
Christopher Lorenz looks at the contrasting attitudes between German
and British managers
A study comparing
shown most clearly in the
British and German
contrasting attitudes of
approaches to man25many Germans and Britons
agement has revealed the
to managerial expertise and
5 deep gulf which separates
authority, according to the
managerial behaviour in
academies. This schism
many German and British
results, in turn, from the
companies. The gap is so
30very different levels of qua
fundamental, especially
lification, and sorts of career
10 among middle managers,
paths, which are typical in
that it can pose severe probthe two countries.
lems for companies from the
German managers - both

74

two countries which either

35top and middle -consider
merge or collaborate. The
technical skill to be the most
15 findings are from a study
important aspect of their
called Managing in Britain
jobs, according to the study
and Germany carried out by
It adds that German mana team of German and
40 agers consider they earn
British academics from
their authority with col20 Mannheim University and
leagues and subordinates
Templeton College, Oxford.
from this expert knowledge
The differences are
rather than from their posi45 tin in the organisational
thirteen had held their curhierarchy.
rent job for less than two
In sharp contrast, British
years, compared with only
middle managers see them- 85 three in Germany. Many of
selves as executives first and
the Britons had also moved
50 technicians second. As a
between unrelated departresult, German middle manments or functional areas,
agers may find that the only
for example from marketing
people within their British 90 to human resources. In conpartner companies who are
trast, all but one of the
55 capable of helping them
Germans had stayed in the
solve routine problems are
same functional area.
technical specialists who do
Twenty of them had occunot have management rank. 95 pied their current positions
Such an approach is bound
for five years or more, com60 to raise status problems in
pared with only five of the
due course.
Britons.
Other practical results of
The researchers almost
these differences include a 100 certainly exaggerate the
greater tendency of British
strengths of the German
65 middle managers to regard
pattern; its very stability
the design of their departhelps to create the rigid attiments as their own responsitudes which stop many
bility, and to reorganise them 105German companies from
more frequently than hapadjusting to external
70 pens in Germany. German
change. But the authors of
middle managers can have
the report are correct about
major problems in dealing
the drawbacks of the more
with this, the academics
110unstable and less technical-

75

point out, since British midly oriented British pattern.

75 dle managers also change
And they are right in contheir jobs more often. As a
cluding that the two counresult, UK organisations
tries do not merely have
often undergo more or less 115 different career systems but
constant change.
also, in effect, different
80 Of the thirty British midways of doing business.
dle managers in the study,
(Financial Times)
Ex. 11. 1. The text describes two main differences between British and
German management. What are they?
2. 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.
a) Mergers between British and German companies rarely succeed.
b) The study mainly concentrated on middle managers.
c) Both German and British managers consider technical skills to be
very important.
d) German managers prefer working with technicians in British
companies.
e) British managers are very concerned about their executive status.
f) There is much more change in British companies than in German
companies.
g) German companies are strong and successful because of the way
they are organised.
h) British managers are probably more flexible than their German
counterparts.
3. In your opinion does the article suggest that one countrys
approach to management and organisation is better than the
others?
4. Pick out some extracts from the article which make positive or
negative comments about British or German approaches.
Ex. 12. These sentences summarise the main idea of each paragraph.
Match each sentence to the correct paragraph.
a) British managers change jobs within a company far more often than the
Germans.
b) A study has shown big differences in managerial behaviour in Britain
and Germany.

76

c) Approaches to management in both countries have disadvantages

which are clearly different.
d) British managers are generalists rather than specialists.
e) Attitudes to the qualifications and the role of managers are different in
Britain and Germany.
f) The structure of British companies changes frequently.
g) German managers are experts in their jobs.
CHECK QUESTIONS
1. From what you have read and heard, do you agree with the points made
in the text?
2. If you have experience of working with managers from countries such
as Japan, Sweden, USA or France, how would you describe their
approach to management and organisation?
3. If you were going to collaborate with a British or Germany company,
what could the potential problems be?
4. Write a short report giving suggestions and recommendations on ways
to try to avoid or reduce these problems.

Unit 9
MBA in Management
The value of MBAs
First a bit of history: in 1959 obtaining an MBA ( Masters of Business
Administration) was far less common, each could enter the MBA program
at Harvard Business School.
The times were stable enough, and employees docile enough, to make
more quantitative and strategic concepts appropriate.
Then came the sixties and the wave of disrespect for authority, the tough
economy of the seventies, and the glorification of financial manipulation
of the eighties, now has come the dawning realization of the nineties that
the Japanese, Germans, and many others in the Pacific Rim and Europe are
serious competitors that wanted to the dominant economy in the world.
The fifties style US business practices no longer are the envy of the
world, and they no longer work. Management practices need to change to
fit the times.

77

Global competition is one important force. When competitive pressures

force downsizing, reorganization, and company-preserving mergers and
alliances, old models of managerial behavior begin to disintegrate.
Furthermore, some management practices of other countries, especially
Japan, seem to produce greater employee loyalty, more numerous ideas for
improving processes and products, and higher quality and productivity.
American managers are no longer so confident about their ability to gain
cooperation and commitment from employees.
The rapid acceleration of technology in many fields is another major
force driving the need for changed practices. Information cannot slowly
travel its way up and down the hierarchy, while layers of managers study
and polish their recommendations. Decision cannot be made by those who
do not understand the rapidly shifting marketplace and technologies, which
require either dramatic decentralization or delayering. In fact, one of the
dirty-little secrets of modern business life is that bosses no longer know
the answers. It is not because they are dumb or lazy if they are, they
dont stay bosses for long - but because they cannot know.
In some cases even the boundaries between industries are crumbling
because of the advent of new technologies.
For example, telecommunications companies are competing with
computer companies because digital computing is the core of modern
telecommunications ( thus. sells computers now), and telephone
companies are trying to gain permission to compete with cable TV
companies, which in turn want to provide telephone service. Meanwhile
cable companies have had competitive impact on TV networks and movie
companies. Picturetel, a young company that makes low-cost telephone
videoconferencing equipment, is growing competitor for airlines and
hotels, since meetings can be held over the videophone, eliminating some
travel. Makers of fax machines also have an impact on the need to travel,
as do low-cost long-distance providers. All of this is going on around AT
and T, which only a few years ago used a 40-year depreciation life for its
equipment! At this level of rapid technological change, managers are hard
pressed to keep up, and thats just one of the factors making it impossible
for bosses to know.
As more companies figure out how to make the entire sales-service
cycle more convenient and reliable for the customer, competitive pressures
rise with rising expectations.
Managerial jobs were never easy, but they are far more loaded and
complex than ever before. Managers used to be able to think of themselves

78

and act heroically, taking responsibility for everything, having the

answers, making bold decisions when needed, but spending most of their
time keeping the corporate ship on an even keel. Now they must find a
way to go beyond heroism and make everyone else heroes and heroines.
They have to mobilize scare resources and get employee to figure out how
to do more with less.
So leadership requires more than setting people free to follow their
own stars. Thats why management can be an extremely challenging but
thrilling profession.
( From Allan R. Cohen, The Portable MBA in Management, New York).
Ex. 1. Read the text and try to write the summary of it.

The Value of MBAs

Discussion : Discuss these questions
1. What do the letters MBA stand for?
2. In your country how important is it to have an MBA to succeed in
management?
3. Do you know many people who have an MBA, or who are studying or
plan to study for one? Are you one of them? What are the reasons for
doing so?
WHAT DO EMPLOYERS SAY?
Getting an MBA is one thing. Getting employers to
take it seriously is another. MBAs have not traditionlly commanded the same respect in the UK as in the
US, but an increasing number of UK employers are
5 now taking them very seriously indeed.
None more so than top management consulting
firm McKinsey. Of its 260 London consultants, around
half have MBAs. The company actively recruits 30 40
people a year from major business schools, such as
10 INSEAD in France, Harvard and Stanford in the US,
and London Business School and Manchester in the
UK. It spends around $1million a year sponsoring its
25-30 graduate recruits to complete full-time MBAs at
the same institutions.
15 Essentially we see an MBA as a short cut to business experience, says Julian Seaward, head of recruit-

79

ment for McKinseys London Office. It enriches people with a lot of management theory, and perhaps a bit
of jargon thrown in.
20 However, the company still prefers MBAs gained
abroad. With a longer established reputation in the
US, business schools there still have the edge in
attracting candidates, while INSEAD has positioned
itself as an international school with a cosmopolitan
25 faculty and student body.
The networking and experience of other cultures
is very useful as a lot of our clients are global, says
Seaward.
Nevertheless, McKinsey is actively raising its pro30 file over here with a recently-launched scheme offering external candidates sponsorship through a United
Kingdom MBA with a guaranteed job afterwards.
With a $50,000 Harvard MBA, Mckinsey knows how
attractive its staff are to other employers. Those who
35 wish to leave within two years have to repay their
sponsorship, but Seaward believes the staff development strategy has a good return rate. We look for people to develop a long-term career with us, not just an
analyst job for a couple of years, and reward high
40 achievers with good salaries and opportunities.
Equally convinced of the value of MBAs is direct
marketing company OgilvyOne Worldwide, which
recently established an MBA bursary for staff members.
45 Chairman Nigel Howlett believes the MBAs formal
education in analytical skills and constructing solutions provides a very useful training, producing people
who have a good overview of business issues rather
than a concern for details.
50 The company is currently undertaking an evaluation of the best UK schools in which to invest their
bursary. With the recent big increase in the number of
institutions offering MBAs, Howlett is concerned that
not all MBAs are equal. There are clear differences in
55 terms of quality.

80

But not every company favours MBAs. In the early

1990s, Shell actually abandoned its own MBA course at
Henley when it realised it was not producing graduates who fitted the jobs for which they were destined.
60 Were slightly ambivalent towards MBAs, says
Andy Gibb, Shells head of global recruitment. A lot of
Shells work is technical, while MBAs from leading
schools are pitched at a more strategic level. It can be
frustrating and unnecessary to be trained for strategic
65 thinking, when the job youre moving into is not really
suited to that. We would rather focus them on technical leadership.
Companies like chartered accountants
PricewaterhouseCoopers take a more middle-of-the70 road approach. While it does not actively target MBAs
or recruit them directly from business schools, a growing proportion of its senior consultants have got
them, and it is increasingly on the lookout for MBA
graduates.
75 Our business is changing from audit and tax management more into consultancy roles, says UK
recruitment partner Keith Bell. MBAs do bring a
breadth of vision to the business problem rather than
a narrow viewpoint, and tat can be an advantage.
80 But the issue is longer term. If you sponsor someOne to do an MBA, will you get them back again?
( From The Independent)
Ex. 1. Read the text about different attitudes towards MBA graduates and
answer these questions.
1. What is the attitude of UK employers to MBA? Are they very
positive, negative or in between?
2. Several top business schools are mentioned in the text which ones
are they? Do you agree with the list? Would you add others?
3. According to the article, do most MBA students pay for themselves?
4. In which country are MBAs very highly regarded by employers,
according to the article?

81

Ex. 2. Understanding details

1. Four companies are mentioned in the article. Rank them in order in
terms of their attitude to MBAs, starting with the one most in favour.
2. Some disadvantages about MBAs are mentioned by people quoted in
the article. What are they?
3. Business are generally grouped into two broad categories
manufacturing and production on one side, and services on the other
side. Into which categories do the four companies mentioned in the
article fit? What does this tell you about the type of companies which
generally favour MBAs? Is this the case in your country too?
CHECK QUESTIONS
1. Should companies have some of the following policies towards
MBAs?
sponsor students fully and with no conditions;
sponsor students partly and/or with conditions;
form a partnership with a particular business school to design a
company-specific MBA;
recruit only from the top international business schools.
2. Many people study for MBAs part-time over several years, or even
by distance learning. What are the advantages and disadvantages of
this route compared to a full-time MBA?
3. Imagine that you are applying to a business school to do an MBA.
Write a letter of application giving brief details of your work
experience and previous education. Also give some reasons why you
want to study for an MBA.

Unit 10
Selecting International Managers
International Management Development
Selecting International Managers
Discussion: Discuss these questions.
1. What are the different methods a company can use to find new
employees? Which are you most familiar with? Which do you think are
most effective?

82

2. What are the most common selection methods used by companies and
organisations in your country (e.g. interviews, intelligence tests)? Do
you think selection methods vary from country to country?
RECRUITMENT AND SELECTION
Approaches to selection vary significantly across cultures. There
are differences not only in the priotities that are given to technical
5 or interpersonal capabilities, but
also in the ways that candidates
are tested and interviewed for the
desired qualities.
In Anglo-Saxon cultures, what
10 is generally tested is how much
the individual can contribute to
the tasks of the organisation. In
these cultures, assessment centres, intelligence tests and mea15 surements of competencies are
the norm. In Germanic cultures,
the emphasis is more on the quality of education in a specialist
function. The recruitment process
20 in Latin and Far Eastern cultures
is very often characterised by
ascertaining how well that person
fits in with the larger group. This
is determined in part by the elit25ism of higher educational institutions, such as the grandes ecoles
in France or the University of
Tokyo in Japan, and in part by
their interpersonal style and abili30 ty to network internally. If there
are tests in Latin cultures, they
will tend to be more about personality, communication and social
skills than about the Anglo-Saxon

83

35 notion of intelligence .
Though there are few statistical
comparisons of selection practices
used across cultures, one recent
study provides a useful example of
40 the impact of culture. A survey
conducted by Shackleton and
Newell compared selection meth0
ods between France and the UK.
They found that there was a strik45 ing contrast in the number of
interviews used in the selection
process, with France resorting to
more than one interview much
more frequently. They also found
50 that in the UK there was a much
greater tendency to use panel
interviews than in France, where
one-to-one interviews are the
norm. In addition, while almost
55 74 per cent of companies in
the UK use references from
previous employers, only 11 per
cent of the companies surveyed
in France used them.
60 Furthermore, French companies
rely much more on personality
tests and handwriting analysis
than their British counterparts.
Many organisations operating
65 across cultures have tended to
decentralise selection in order to
allow for local differences in testing and for language differences,
while providing a set of personal
70 qualities or characteristics they
consider important for candidates.
Hewitt Associates, a US compensation and benefits consulting

84

firm based in the Mid West, has

75 had difficulties extending its key
selection criteria outside the USA.
It is known for selecting SWANs:
people who are Smart, Willing,
Able and Nice. These concepts, all
80 perfectly understandable to other
Americans, can have very different meanings in other cultures.
For example, being able may mean
being highly connected with col85 leagues, being sociable or being
able to command respect from a
hierarchy of subordinates, whereas the intended meaning is more
about being technically compe90 tent, polite and relatively formal.
Similarly, what is nice in one culture may be considered naive or
immature in another. It all
depends on the cultural context.
95 Some international companies,
like Shell, Toyota, and LOreal,
have identified very specific qualities that they consider strategically important and that support
100 their business requirements. For
example, the criteria that Shell
has identified as most important
in supporting its strategy include
mobility and language capability.
105 These are more easily understood
across cultures because people are
either willing to relocate or not.
There is less room for cultural
misunderstandings with such qualities.
(From Managing Cultural Differences, Economist Intelligence Unit)

85

Ex. 1. 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. Many international organisations have decentralised selection.
2. They look for different personal qualities in different cultures.
3. The SWAN criteria have international validity.
4. The definition of some qualities can lead to cultural misunderstandings.
5. Mobility and language capability are clearly understood across cultures.
Ex. 2. The text states that different cultures look for different qualities
when selecting personnel. Match the cultures with the qualities or attributes
according to the text.
1. Anglo-Saxon (UK, USA, Australia etc.)
2. Germanic
3. Latin
4. Far Eastern
a) being able to fit in with the organisation
b) having the relevant kind of education for the job
c) having the right intellectual or technical capabilities
d) having good interpersonal skills
e) having attended the top universities in the country
f) being able to carry out relevant tasks and jobs
Ex. 3. Find at least five methods for testing or assessing a candidates
suitability for a job (e.g. assessment centres) which are mentioned in the
text.
Ex. 4. Match these terms with their definitions.
1) assessment (line13)
a) finding out
2) the norm (line16)
b) noticeable
3) ascertaining (line22)
c) pay and conditions
4) elitism (line24)
d) evaluation
5) striking ( line 44)
e) usual, standard
6) compensation and benefits (line72) f) concern for status

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CHECK QUESTIONS
1. Make a list of qualities or skills that you think an international manager
should have. Divide your list into technical skills and interpersonal
skills.
2. What are the best ways to measure or evaluate technical skills?
3. How can you measure interpersonal skills?

International Management Development

Discussion: Discuss these questions.
1. What do you think would be the best ways to learn to be an
international manager?
2. What do you know about management development in different
countries? Is it very different?
HOW TO LEARN IN A GLOBAL CLASSROOM
Todays Tuesday, this must be
Hong Kong. No, not the confused words of a jet-lagged
traveller, but the words of an
1 international executive on a business management course.
Our German manager from
Lufthansa will have flown in to the
former British colony on whistle10 stop tours of LG, the Korean conglomerate, and Standard
Chartered Bank, whose main operations are in the Middle East and
Asia Pacific, as part of his interna15 tional training programme. After
that, the next stop could be Brazil
to see how ABB, the international
engineering group, adapts its
working practices to local condi20 tions.
The globe-trotting executive is
already a well-established figure
in the international picture. But

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he or she is now being joined by

25 the global executive on a management training course. Why hold
dry in-house study programmes,
repeating old ideas, when the environment that todays top-flight
30 executives operate in is global?
Business schools have responded
by offering courses in which the
international element is the central point. At London Business
35 Scholls Global Business
Consortium, for example, a senior
manager from each of ABB,
British Telecom, LG, Lufthansa,
SKF from Sweden, and Standard
40 Chartered Bank come together
Each year to learn about how different global business operate.
Each of the regions of Europe,
Asia and South America are repre45 sented in the operations of these
six blue chip multinationals. The
emphasis is on participants learning from each other. Insights into
cultural pitfalls and practical
50 guidance are also part of the package.
But the only way of getting a
feel for the special considerations
of operating on the ground in
55 another country is to visit the
region itself and meet local leaders, academics and senior managers. Here course participants
will aim to gain a better under60 standing of the relationship
between global strategy and
regional characteristics. Each of

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the participating companies acts

as host to the other five as part of
65 the module-based learning programme. On site they will work in
a multinational team analysing
various aspects of the host companys strategy.
70
The Ashridge European
Partnership MBA has been running since September 1998. Three
German companies Lufthansa,
Deutsche Bank and Merck have
75 formed a consortium enabling
employees to study for an MBA
with Ashridge Management
College, in the UK.
The English learning atmos80 phere is different from that in
Germany, said Dr Peter Weicht,
director of personnel and organisational development at Merck,
the international chemical and
85 pharmaceutical group. It is good
for team-building, which will be
very important between different
cultures. In England there is a
more relaxed relationship between
90 lecturer and student.
Dr Martin Moehrle, head of
management development for
Deutsche Bank, also favours global training. In Germany we are too
95 domestically oriented; to become
more international it is a must to
be exposed to the English language and to other industries.
He was impressed, too, by the
100 modern approach of the
Ashridge MBA compared with its

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more technical accounting-led

German equivalent, which is less
concerned with leadership issues.
105 Another plus for organisations
favouring the international element in training is that it will help
them to attract those ambitious
men and women who want to con110 tinue their studies. These training
options enable high-fliers to carry
on with education without leaving
the company.
However, there are drawbacks.
115 Deutsche Bank, in particular, has
had the experience of talented
employees leaving their job to
attend the Ashridge course, only
to join another company later.
( From The Independent on Sunday)
Ex. 5. Read the text above and answer these questions.
1. The text describes two international management development
programmes, each designed for small groups of companies.
a) How many companies take part in each programme?
b) Which company is involved in both programmes?
2. What is the main emphasis on the London Business School (LBS)
Programme?
a) to learn about how different global businesses operate
b) for the participants to learn from each other
c) to provide experience of working in multinational teams.
3. In which country does the second programme take place, and what
language is used?
Ex. 6. Mark these statements T (true) or F (false) according to the
information about the LBS Programme. Find the part of the text that gives
the correct information.
a) Much of the course is based on lectures and discussions.
b) The programme runs every year.
c) The programme is aimed at young managers with high potential.

90

d)
e)
f)
g)

The participants travel a lot as part of the programme.

Part of the course involves staying in Brazil to get work experience.
The programme involves a lot of project work.
Each participant visits five different companies.

Ex. 7. Answer these questions.

1. Which regions of the world are studied in the London Business School
Programme and which important part of the world, from an economic
point of view, seems not to be included?
2. Which of two programmes offers a formal qualification, and what is it?
3. What are the characteristics of the course at Ashridge, as described in
the article?
4. What are the characteristics of equivalent courses in Germany?
Ex. 8. Choose the best explanation for the phrase blue chip
The London Business Schools Global Business Consortium consists
of six blue chip multinationals. (line 46).
a) large and very profitable
b) well-established and well-known
c) listed on the stock market
Choose the best explanation for the word conglomerate.
One of the six companies, the Korean group LG is described as a
conglomerate (line10).
a) a company operating in many different countries
b) a large company with many subsidiaries
c) a very large company which is in many different kinds of business.
Ex. 9. Match these terms with their definitions.
1) dry (line27)
a) something essential
2) pitfalls (line49)
b) serious and academic in style
3) getting a feel for (line52) c) dangers
4) operating on the ground (line54) d) understanding and
experiencing
5) a must (line96)
e) working in a real situation
6) another plus (line105)
f) an extra advantage
7) drawbacks (line 114)
g) disadvantages.

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CHECK QUESTIONS
1. The article describes two very different types of training programme
one very project oriented and the other more traditional, involving
lectures, case studies, etc. which do you think might be more
effective for producing international managers? Which programme
would you prefer to attend?
2. Do you think the two approaches to management development are
suited different kinds of people, in terms of age, experience, cultural
background, education, the industry they work in? If so, why?
3. Imagine you work in the management development department of
one of the six multinationals which take part in the London Business
School programme. Write a description of the programme, asking
for applications from managers in the company; this will be
circulated on the companys intranet around the world.

Unit 11
Business and Society
Below there are extracts from speeches made by these four national
leaders:
Bill Clinton -the Democrat politician from Arkansas who won
his second term as American president in
November 1996.
Tony Blair - became the UKs youngest prime minister of the
twentieth century when his Labour party won the
UK General Election in May 1997.
Vaclav Havel after the end of Communism in Czechoslovakia
in 1989, the playwright Vaclav Havel was
elected as the countrys new president.
Nelson Mandela- spent twenty-seven years in prison, before
becoming President of South Africa in
1994.
Match the politicians above to their speeches below and discuss the
reasons for your choices.
1. So tonight let us resolve to build that bridge to the 21st century Let
us build a bridge to break the cycle of poverty and dependence, to

92

protect our environment for generations to come and to maintain our

world leadership for peace and freedom.
2. The apartheid destruction of our subcontinent is incalculable. The
fabric of family life of millions of my people has been shattered.
Millions are homeless and unemployed. Our economy lies in ruins
and our people are embroiled in political strife.
3. Our country is not flourishing. The enormous creative and spiritual
potential of our nation is not being used sensibly. Entire branches of
industry are producing goods which are of no interest to anyone,
while we are lacking the things we need.
4. I certainly believe that when there is no overriding reason for
preferring the public provision of goods and services then the
presumption should be that economic activity is best left to the
private sector with market forces being fully encouraged to operate.
Glossary:
Embroiled
Strife
Overriding
Presumption

=
=
=
=

involved
troubles
most important
principle

Ex. 1. Extracts 1-3 describe some problems associated with the economy.
1. Which of these problems are described in each of the three extracts?
Put the appropriate number in the column.
Social breakdown
Inflation
Unemployment
Poverty
Trade deficit
Inefficiency
Pollution
2. Write three sentences which summarise the first three extracts.
Ex.2. Extract 4 talks about the public (state) and private (commercial)
sectors of an economy.
Match the terms in the left-hand column with the appropriate descriptions
in the right-hand column.

93

Transport infrastructure
Utilities
Defence
Pensions
Social security

the army, navy and air force;

payments for people who have
retired from work ;
help for people who are
unemployed or very poor;
the supply of gas, water,
electricity ;
road and railway networks,
airports, etc. .

Ex. 3. Discuss the points :

1. What do you think is the biggest economic problem facing your country
at the moment?
2. In your ideal economy, how would you divide the above list between
the public and private sectors? Add other areas that you think are
interesting
for your
discussion
(e.g.
health,
education,
telecommunications).
IS PROFIT THE ONLY GOAL?
Is profit the only real goal of a company? In the United States, 47%
say Yes, but most Japanese people think that other goals are more
important.
Do you agree that profit is the only real goal of a company?
Here are some other possible goals of business. Choose the three which
you think are the most important.
To protect the environment;
to develop new ideas;
To make products for customers; to employ workers;
To provide a service to society;
To support government policies.
Here is what four businesspeople say about the priorities of
their businesses. Read the extract and discuss these points.
Glossary :
Invested capital = money which a business uses to make
more money
stockholder
= American word to shareholder
on a whim
= a sudden or unexpected decision.

94

John Akers : IBM exists to provide a return on invested capital to its

stockholders.
( While John Akers was its boss, the American company IBM was the
biggest computer company in the world. Akers left his job in January
1993.)
Akio Morita : The investor and the employee are in the same position,
but sometimes the employee is more important., because he will be there a
long time, whereas an investor will often get in and out on a whim in order
to make a profit.
( Akio Morita was the boss of Japans giant Sony Corporation. He
introduced the Sony Walkman to the world.)
Walter Schusser : Maximum profit for shareholders cannot be essential
aim of a company, because maximum profit today is not necessarily
maximum profit for tomorrow. For us, economic performance and
motivation are the basis of a companys capacity to perform socially.
(Walter Schusser is Vice President of Human Resources Management
and Development for the German company Siemens.)
Anita Roddick : ..the responsibility of business is not to create profits
but to create organisations with a real commitment to the community. To
do this business has to become a major educator of staff, customers and
shareholders.
(Anita Roddick and her husband started the British cosmetics company,
the Body Shop, in 1976. It now has over 1,500 shops in around 40
countries.)
Glossary:
A commitment = a strong belief
Educator
= a person or an organisation which teaches
others.
General Robert Wood Johnson, who was once president of the American
cosmetics company, Johnson & Johnson, summed up his view of business
in the company credo.
Service to customers comes first
Service to employees and management comes second
Service to community comes third

95

Service to shareholders comes last

Ex. 4. Write your own credo!
BUSINESS ETHICS
When you make judgements about business, you can use the law, you can
use a set of moral principles (ethics), or you can use your own feelings
(common sense). Here are some adjectives you can use when youre
making these kinds of judgements.
The law
- legal; just
Ethics
- moral; ethical
Common sense - honest; fair
Ex. 5. Here are four activities which are against the law in many
countries. Match each activity to its definition, by writing appropriate
letter in the middle column.
Crime
Bribery
Theft
Fraud
Deception

Definition

Verb
to bribe
to steal
to defraud
to deceive

a) the crime of taking someones property

b) making someone accept that something which is false or bad is true or
good
c) unfairly influencing someone by giving them money or gifts
d) dishonest behaviour for the purpose of making money.
This extract comes from Khoo Kheng Hors book Sun Tzu and
Management. Sun Tzu was an ancient Chinese military strategist whose
ideas are still seen as relevant to the modern business world.
This is the area commonly known as industrial espionage. Also some
people have condemned such activities, my personal feeling is that all is
fair in war.
The following shows some of the ways one can obtain information from
men who know the enemy position :

96

1. Getting information from potential recruits

In the past when conducting job interviews, I found some applicants
.would often unknowingly or even deliberately become invaluable
sources of information.
2. Conducting false job interviews
Here the intention is not really to employ but rather to get the selected
candidates to talk and hopefully reveal some useful information.
3. Hiring people away from competitors
A deliberate headhunting activity.
4. Deliberately planting spies in a competitors firm
There have been cases where a person leaves his organisation to join a
competitor for a while before returning to his original organisation.
5. Encouraging key customers to talk
From my experience, key customers such as my wholesalers and
individual buyers are always more than ready to talk.
6. Interviewing competitors
A way of interviewing your competitors is to pretend to be a potential
customer or supplier.
7. Taking factory tours
Highly trained and observant engineers have been known to take in
what they see and reproduce blueprints after visiting their competitors
factories.
8. Taking competitors product apart
Some companies spend years in research and development activities.
But the moment they put a new product on the market, you can buy it, take
it apart and improve on it.
9. Buying competitors garbage
A disgusting business but high returns for the enemy if one is not
too careful what one throws into the wastepaper baskets!
Glossary :
Industrial espionage = spying on another company
Blueprints
= plans
Garbage
= rubbish
GIFTS
In the mid 1970s, the Saudi Arabian businessman, Adhan Khashoggi,
became famous for his role in a major business scandal. It was said that in

97

five years he received $106 million in commissions from the American

company, Lockheed. Here is a brief description of his business style.
Khashoggis attitude to business and hospitality was that there was
no basic distinction between the two In Paris his visitors would find
themselves caught up in his cast of thousands with attentive
executives.To some of the senior executives, Khashoggi showed a
hospitality which seemed almost magical. A private plane just happened to
be waiting at the airport to fly them to some resort: Khashoggis yacht just
happened to be waiting
(From The Observer, 14.3.76.)
Ex. 6. Read the article and then answer these questions.
1. What do you think is meant by the idea that there is no distinction
between business and hospitality? Do you agree?
2. How would you have reacted if you had been one of his visitors in
Paris?
3. Can you think of any similar examples of this style of doing business?
Ex.7. You are on a business trip to visit one of your companys suppliers.
Which of the things below would you accept and which would you
refuse? Explain your reasons.
a) tickets for the Opera;
b) a teddy bear for your child;
c) an invitation to a meal at the most expensive restaurant in a town;
d) a case of wine;
e) a cash incentive.
Ex. 8. Have five conversations based on the five gifts above. Take
turns to offer / invite and accept / refuse, using the phrases above and
others that you know. Then try to finish the conversation in an appropriate
way.
Ex. 9. Put these sentences into the appropriate column.
a) Can I invite you to dinner this evening?
b) This is a small token of our gratitude.
c) Thank you. thats very kind of you.
d) Thanks very much for everything. Id like you to have this.
e) Thats very kind of you, but I must refuse.
f) Im sorry but my company doesnt allow me to accept gifts.

98

g) Would you like to go to the concert tonight?

Invitations and offers
Acceptances
Refusals

Unit 12
Business in the 21st century
Discussion: Discuss these questions.
1. 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?
THE e-LANCE ECONOMY
Summary
Despite the wave of big mergers and acquisitions over the
past few (1) years, the days of the big corporation as we
know it are numbered.(2)
While the cash flows that they control are growing, the
direct power that(3) they exercise over actual business
processes is declining. Because mod-(4) ern
communications technology makes decentralised
organisations pos-(5)sible, control is being passed down
the line to workers at many different(6) levels, or
7 outsourced to external companies. In fact we are moving
towards what can be called an e-lance economy, which
will be charac-(8)terised by shifting coalitions of freelancers and small firms using the (9)
10 Internet for much of their work.
Twenty-five years ago, one in
five US workers was employed
by one of the top 500 companies.
Today , the ratio has dropped to
15 fewer than one in ten. Large companies are far less vertically integrated than they were in the past
and rely more and more on outside
suppliers to produce components

99

20 and provide services, with a consequent reduction in the size of their

workforce.
At the same time, decisions
within large corporations are
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 large
30 industrial companies ABB and
BP Amoco are among the most
prominent - have broken themselves up into numerous independent units that transact business
35 with one another almost as if they
were separate companies.
What underlines this trend? The
answer lies in the basic economics
of organisations. Business
40 organisationa are, in essence,
mechanisms for coordination, and
the form they take is strongly
affected by the coordination technologies available. When it is
45 cheaper to conduct transactions
internally, with other parts of the
same company, organisations
grow larger, but when it is cheaper
to conduct them externally, with
50 independent entities in the open
market, organisations stay small
or shrink.
The coordination technologies
of the industrial era the train
55 and the telegraph, the car and the
telephone, the mainframe computer and the fax machine made
transactions within the company

100

not only possible but advanta60 geous. Companies were able to

manage large organisations centrally, which provided them with
economies of scale in manufacturing, marketing, distribution and
65 other activities. Big was good.
But with the introduction of
powerful personal computers and
electronic networks the coordination technologies of the 21st
70 century the economic equation
changes. Because information can
be shared instantly and inexpensively among many people in many
locations, the value of centralised
75 decision-making and bureaucracy
decreases. Individuals can manage
themselves, coordinating their
efforts through electronic links
with other independent parties.
80 Small becomes good.
In the future, as communications technologies advance and
networks become more efficient,
the shift to e-lancing promises to
85 accelerate. Should this happen, the
dominant business organisation of
the future may not be a stable, permanent corporation but rather a
flexible network of individuals and
90 small groups that might sometimes exist for no more than a day
or two. We will enter the age of the
temporary company.
( From Financial Times)

101

Ex. 1. Read the text about how business will be organised in the future and
answer these questions.
1. Which of these statements gives the best summary 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.
c) Companies are having to restructure due to developments in electronic
communications.
2. What exactly do the authors mean by the term e-lance 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.
c) Business between companies will increasingly be done through the
Internet.
Ex. 2. Mark statements T (true) or F (false) according to the information
the text. Find the part of the text that gives the correct information.
1. Big corporations will soon go out of business.
2. There is a move towards decentralisation of decision-making in many
countries.
3. Many companies are now experiencing cash flow and similar
4.
financial problems.
5. No more than 10 per cent of workers in the USA work for the top 500
companies.
6. ABB and BP Amoco have sold many parts of their businesses.
7. Large organisations can save money by centralising all transactions.
8. Computer companies have decentralised their decision-making process.
9. It is possible that the shape and structure of companies will be different
in the future.
Ex. 3. These phrases summarise the purpose of each paragraph. Match
each phrase to the correct paragraph.
a) illustrate the decline of big companies
b) give a prediction about the future
c) give examples of changes in the way big companies are organised

102

d) introduce the idea that big companies are starting to change and even
decline
e) describe the new way of working
f) explain why these changes are taking place
g) describe the old way of working.
Ex. 4. Choose the best explanation for each phrase from the text.
1. the days of the big corporation are numbered (line2)
a) big companies will become less important in the future
b) companies will have to improve their financial controls
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 underlines this trend (line 37)
a) Is this trend really true?
b) What are the reasons for this trend?
4. in essence (line 40)
a) basically
b) necessarily
5. organisations shrink (line 51)
a) they become smaller
c) 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.
CHECK QUESTIONS
1. Do you agree with the opinions in the article? Can you give some
examples from real cases to support your opinion?
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 Internet and in
3. e-commerce have come from the USA, where companies seem
prepared to use new technology quickly. Do you think that the concept
of the e-lance 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?

103

4. If what 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?

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Business Management Society