The document provides a concise 3-sentence summary of the key points: The text discusses factors that drive the world economy, including GDP growth, government trade policy, consumer confidence, interest rates, and exchange rates. It then explains the business cycle of economic growth and contraction. The effects of globalization are also covered, along with arguments for and against globalization related to prosperity, cultural impacts, and the environment.

2. Business
Vocabulary
Builder

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2013201224112A1A2049
1 0 9 8 7 6 5 4 3 2 1

4. Business
PaurEmmerso"VOGabU Ia ry
Builder
Intermediateto Upper-intermedi
Thewords& phrasesvouneedto succeed
AMACMILLAN

5. Contents
B U S t N E S St O P t C S
Thebusinesswo.ld
1 Theecono y
2 Th€businesscycle
3 lnternational tlade
4 Setting up and g.owing a businest
5 Company tt|pes and corporate gov€rnance
6 Global issuesfor the 21st <entury
7 Management styles and qualiti€s
8 Organizingtime and work
9 Planningand setting obi€ctives
10 Leadingand motivating
11 Insuranceand risk management
Produdtionand op€rationt
12 Manufaduring end engineering
13 Insidea factory
14 Procurementand purchasing
l5 Supply chain manag€ment and logistics
16 Leanproduction
17 Quality
Salesand marketing
18 Sales
19 Cuttomer sedice
20 Markeb.nd marketing
21 Product
22 Distribution(pla.e)
23 Promotion
24 Price
25 Ma.keting management
Coftpany tinance
26 lncomestatement
27 Balanc€sh€et
28 Cashflow statem€nt
29 Managing <ashflow
30 Profitability
6
8
1 0
1 2
1 4
20
22
24
28
30
32
34
38
40
48
50
52
54
58
60
62
64
Financialmarkets
31 Financialmarkets
32 Investing in stocks
33 Re.ruitment
34 Payand b€nefits
35 lisues in the workplacc
CFFECIIVE COM MI',IIICATION
36 Yoqr ba<kgroundand carcel
37 Youraompany
38 Youriob
Tel€phoning
39 Telephoning- making end taking calls
40 Telephonlng- messages
41 Telephoning- checklng,.larifying, active
lisiening
42 Telephoning- arranging a me€ting
43 Telephoning- <omplaints
z|4 telephoning - .€vi€w
Emails
45 Emails- basica
46 Emails- inlernal .ommunkilion
47 Emails- aomrneftial
48 Erneils- custom€r i$u€s 1
49 Enails - arranging a Yiit l
50 En.ils - rcview 1
66
68
7A
72
74
76
78
80
a2
a4
86
88
90
92
94
96
98
00
02
04
51 Presentations - oFn-E
52 Presentations - nEin boql
53 Presentationi - da*EIF bt
54 PresentatiorE - trcr*r I
55 Prese8tatioG - t!* I
56 Pr€sentatior6 - rrfu
106
108
I 1 0
112
1 1 4

6. Meeting5
57 Meetings - opinions
58 Meetings- making drings d€a.
59 Meetings - problem-solving
60 Meetings-leading a meeting
61 Meetings - negotlating I
62 Meetings - negotiating ll
63 M€eting3- diplofiatic l.ng$ege
64 Meetlngt - rcview
Businersrcpons and prcposals
65 Buslne$ rcport3 .nd propo3ali - rcpotts I
66 Suaine3r rcports and proposab - reports ll
67 Bu3ine.3 lrports and prcpoad3 - prDposals I
68 Buainear |lport3 and prcpo3.b - prcpo.al5 ll
69 Bualn$a Fporta and propoa.b -
linkirg wordr
70 Burlnaar raporta and propoaab - rlvl€w
SPEAKII{GPRACTICE
Dbcuislon toplaa
WRITING PNACIICE
$kiting tasks
LISTEIIIIIIGPRACTICE
Interviewr wlth bBlnest peoplerererrii€5
1 Interviewwith a privateequityinvettor
2 Interyiewwithanentrepreneur
3 Interviewwitha managementtainee
4 lnterviewwitha supplychainmanager
5 nterviewwitha salesmanager
6 Interuiewwitha ma*etingdirector
7 Intervlewwithafinancedirector
8 Interviewwitha humanresourcesdirector
1 1 8
120
122
't24
126
124
130
'134
136
138
140
142
'lM
146
t 5 l
153
153
154
154
154
155
LISTEiII G SCRIPTs
Listenand i€peat exercises
Intewiews with busiress peopl€
ANSWERKEY
156
151
164

7. The economy
Whai drivesthea orld economy?Thesimplestans{pr to
ilrjs questjor is'cons!mer spending'.And what drnes
consumerspendnlg?Sohe cohbination of the faciorsbeldr
is generallyconsideredio p(,ide a reasonablean${cr
GDPgrowth for different countries
Grossdomesticprcdu.t (CDP)measuresthe sizcol a
.ountry's economyIt reFresentsthe iotallaluc ofall goods
ind se^,icesproducedoler a specifictime period.Cro$ th in
GDPis oneofthe primarr-indicato.susedto gautc
(= neasure)thehe!1thof a couniryse.onom: Usunll),GDP
is expressedasn comparisonto the prelious quartcror ,ear
Governmenttrade policy
Thc hro polcsof govc.rucnt policl'arc liberalizationand
'Lib€ralization'isassoci.lcdwiih frccmarkets,open
bor.lers,dcr.Bulationand ihc frccmorc,nentof capiinl
aroundthe world.
'Protcctionisnr'is associatcds'ith golcrntrent
inlcNcnlion, sulrsidics,quoiasand t iffs,and resiriciions
o! lhc movcmcnioicipiial.
Nation.l govci,nnentsdo hi!c som0gcnrin. choic.sherr,
cv.n if ihoy .ft'consh.nlcrl by thc p.licy of th.ir rc8ional
tridiig bkJc(ogthe EU,NA1TA, ASE,N).ln ih. cod host
countrieshNc . mixc.l ccdnotuywhich islonre('herc
briwccn ihc two crh'omos.
(l.n...lly sp..knrg, froon.rkots pronartcgrowih ii thc
wodd d.onon', and ptutcct.d markcisdos doer thc
pr1,c.ss(.lihough thcy nrayha!. a b.neficialeffecton
p.rticllar induslriosi'rsidci couDlrv).
consumerconfidence
lf.onsumcrs areconfideniaboui tomorrow,theywill spend
more Themain factorsaffechngconsumerconfidencearc
thelerel of memplovment ifpeople'sjobsa.e at risk,or
the.don t haveajob, theysill spendless ind housepices
if people'shousesareworth more thanihevpaid for ihcm,
the.feel.ich and rvjllspend nrorerrcely.
lnterestrates
Inierestratesire setbv CeniralBanks When int€resirates
arelo$r.onsumersandb!sinessesc.n boirow mon.y
cheaplyand ihereis a sfimuhs to the economy.8ut thc
cheap(edit alsocausesinflationan.ttoo much Liquidjiyin
thesystem.Thisliqli.lity leadsto bubblesin siockmarkets,
housingma.kets,eic.When ihe CeniralBanksccstheneed
b controlinflafiondnd coolgroivtha liiile, ii .aiscsintcrest
Exchangerates
Cur€nciesfllciLutc againstcich othcr thc c!rc itg.inst th.
dollariheten .gainstthcyuan.Thisisduc k) manycomplcx
factoEsuchasthe undc.lyingst..ngth of thc economy,
inicrcstratcdiffcrcntinlsand spcculitnr. Ha!ing a sirong
curcncv makcsimpo.tschcip f(r dotucsticconsrmcrs.irut
huris cxpo.te.s(rvhoscPrcducit bccotuchotu orpdlsivc
The business cycle
Economicsgo throughcycl.s ofg(trt,th.nd coniri.ti()n
(= sldvdor!n). Thisis codc.t in unii 2.
externallrnancinq
Cultural
Cross-cult!ral
rmmrgraton;
Ecological
Global
cnaeng€s
n€eding
Eflects of globalization
Coser
Arguments in favour of globalization
Generaprosperity:lowerprices,moreemployment.
hiqherstandardof living.
lncreasedopportunjtyandsoclal/pelsonalmobility.
lmprovementsforpoorcountrles:lifeexpectan{y,intant
mortalty,llteraq,padicipationof wonreninsociety.
Rapidflow of
acrossthe qlobe
Argufi ents againtt gIobaIization
lnequalityof w€althwithinnations notrnuch'tricke
downeffect'(whenfinanclalbenefitsarcp.sseddown
frombigbusinessto consumeBandordinarypeople)
Humancosts:injusticedueto increasedpowerof local
elites,erosionof traditionalcultures.
Environmentaldarnaqe.

8. 1 THE ECONOMY
Exercises
1.1 Finda word in th€ text opposite thal matches€ach
definition below' The words appear in orcler.
1 makessomethinqwork; p.ovidesthe powerfor somethng
2 removingtheru€sandlawsthatcontrobusin€tsdctivty
3 moneythattheqov€rnrnentpdysto supporlndunresor
' p d L , F r p r o . . op o d u . r
4 officallrnitsontheamountol somethng
5 " . p . o . g o o d .o - 9 . n l o d . o - n t a /
6 limited,r€strded
-
r e d r o L o ln o n e y n c i c - l c t o .
8 periodsof t mewh-"npeoplepaymorclhantherealvaue
o .o1el'nq.b. 5o'ar r-a oLd
9 wth dnimportantefiect,butonethatiln t easyto notce
10 (forma,thedegreeoi differencebetweenth ngs
Nowdo the samefor the wordsin 'Efiectrof
globalization'opposite.
11 wh€npeop€ h.ve..oneyandeverylhngtheyneedlora
good f€
12 theab ityto readandwlte
1.2 [4akephrasesby matchjngan itemfromeachcolumn.
I consumer movementoJcapital
2 fre€ andconvacton
3 growih borders
4 Ie
...-
rpendinq
5 open oi livnq
5 standard expectancy
1.4 Readthe articleaboutthe USeconomy,then answ€r
the questionsbelow.Checkanyunknownwordsin a
dictionary
it aiulacturngin the US slowedmorethanlorecast
lUl ln Ocloberas factores recevedjewerordercafd
producuonconiracted,an induslryreportshowedtoday.
ManufacluringLsonlhevergeofstallngasthedeepenng
housingslLimpweakensdemandlorconstructionequrpmenl,
furnilureandappliancesBul ona moreposiUvenole the
weakerdollaris boostingexportsand hep ng companes
thatdomlch ofther busin
Theseilguresmakeit ciearwhythe Fedclt nterest
ratesby a quarterpointastweek.n theirstatement,Fed
porcymd.€rssardrl-dl rl-eouloo o ho p,oro n) (
unce ain,evenafterso d growlhastqua.ler.Theyadded
lhal upsideriskslo lnialionroughlybalancethedownsrde
riskslo grcwlh.
Finda word in the text that means:
1 (ftvewotds)rcat1ysloppingn itsprogress
2 perodwhensomethngismuchesssuccessiulthanbeiore
: hepi.gsorel' nqro n.'pd"
4 (shortfam)Cefita Bankol theUsA
5 approximately
seepage146lorsomediscu55iontopi.s.
' fAi ;;t tr d? ;tlir tht !,nan|
8 goods
9 rnt€ren
l0 cheap
1I socia
12 Lrnderlyng
srengrn
oamaqe
1.3 Usephrasesfrom 1.2to completethe sentenceg
below.Thephrasesarenot in order.
1 Theeconomyw qrcw { q]]:njlql l|ert'rfg rsnsrnq
2 conslmersandbusnessegcantakeontoomuchdebtif
re e 5easJaccessto
3 Economc qrowthbrngsmateriacomforts,bulalsohrgher
prcesforthebascnecesstiesof ife n oiherwords,your
qoesuP,buisodoesYolr
costot vinq
4 Economesqothrolghcycl,"sof
5 Thenraintool avail.bleto a centra Banks ts abilityto s€t
Oe' -he o,rgrp r e,.rdnqA,drF.dppp'd or lr€
or rne economy.
Thebusinessworld 7

9. History shows thal there is a businesscyde that repeatsagain and agai4 although of .oue tlle detaiis vary
eachtime. Look at the diagram below. The outer circle is the €ycle of e€onomicexpmion md conbaction.
The next circle icide shows somes€€torsof fte economy that tend to do wel at particular tims duing this cyde.
The cnde inside that shows inter€st rates and infiation. Finalv, the imer cinl€ shows the sidk market cvcle.
Grotvth
Let'sgoroud thediagram,startingat twelveotlock. This
point markstheendof w€aknessin the€conomyandthe
earlysiSnsof growth.Wlat hascausedthesegr€€nshoots?
Theclueisinterestrater whichbottomedout around
eleveno'€lock.lj)w interestratesmeancheapborrowhg for
individualsmd compani$.Amongstthequickests€ctorsto
resPondm consmer discr€tionary(egrestaurants,leisure,
travel)hd technology.
On€ethereare€arlysiSnsof growth,tnnsportation picksup
(moregoodsarebeingshipped),andindu€tryspendsmorc
oncapitalgoods(egmchinery). During this pedod,infiation
startsto rise,andsobondssuffei Bondspay a6xedrateof
interesito theirbondholde$,andthevalueof thisintelestis
erodedovertimeasinflation go€sup-
The peak of the Gycle
A1l good things mEt come io m end. rs six o'dock on
the diagram- By now inflation hd bmme a prcblm, md
Cmrral Banls have nis€d inteBt rates to deal with it. That
meansthat credii is tighL md bonowing is expsrsive. The
stock market rccognizes that tl|€ 6d is omin& ard perts
just before the final p€ak in the e(al,dr_r. Inr€sto.s rsw
switch to more d€fensive stocls lik€ drglffi.riples (eg
food, household products) and utiliti.<
Corltra(tion
Now ils seven o'dock arld w€'rr {tkd d. Fin of
conhaction. Stock Mkets are A|L? Ltcrd 8-Ls
se€the danger md e low€rit iH rG b -'m8e
spending md avoid a r€.tsin- Bd q'd Frtudy
to the drop in rat6, md th.{.as'hlh. f;l. to
safety' etr(t 6 inv€srors rFirD-.b -&-
The bottom of the q*
Evmtuall, firffiials stdt b .--fq rtqte nore
bonowin& and ttF th. !d_'-G a bottom
about six to niE r..dE i J-{-.F ir d€ real
economy.Justlike 4 dE qrJ|tqt,tE|ct s€€ms
ro knowthara hmirahl__,_y Now the
eonomy is $ni4g b - i----l rd fte whole

10. 2 THEAUSINESSCYCLE
Exercises
2.1 Putthe wordsin italicsin order1-4.
a Theeconomy,nartngattwev€o clorkonth€
diagram,rhows ..
contraction I a downturn
) expansion anupturn
b Thenockmarket,staaringat eleveno'cockonthe
dragrdm,..
battoms perks
turnsdawn
2.2 MatcheachsectoroI th€ economyl-'10with an
2.4 Compl€tethe text about dealing with th€ business
cyclewith the phrasesin the box.
govetnnent debt labaurnatket ne,r'bonawing
poh.y n,akeljj side-effects taxcuts
indurtrygroupa-i.
1 Basicrnaterids
3 Cornmercalserurc€s
4 Consurnerdscretonary
5 Consurnerstdpes
6 Enerqy
8 Technology
10 Ut (res
What.ancentralbanke6andgovernment
' do?cantheyprevent
a contractonfromturnnginloa rccesson?Whattools
areavaabeio them?Thefollowingihreearethemost
Interertrateadjustments
Thesvonqestandfastesttoo n a weakeningeconomy
sthecenvalBanks'abrtyio cutrntereslrates
Forcompanesand ndvidu.swithexistnqbank
oans,repaymentsarered!ced,lor others,
' oecomes€ss
expen5veMostCentraBanksdropratesbyqlrarteFpornts
or,atcruoat mes,half-ponts Lowerinqralesst takestwo
or threeqlarlersto benefitaneconomy,andit doesalso
a holes,restauranis
c empoymenlagences,audtnq
d rnachinery,eqLiprnent
€ householdgoods,foodretailnq
f banking,insurance
9 software,rommuncatonsequpr.ent
h oilprodlction,gasprodu(ton
i electrcty,waier
j air nes,ogsllcs
2.3 Underlin€the corr€ctwordsin italics.Checkany
unknownwordsin a dictionary.Someideasbeloware
alsoaoveredin unit1.
1 Thecons!merdrscretionarysectoroi theeconomyslartsto
recoverwheninterestraresarch/gh/iow, andlustbelore
thegeneraeconomypicksupI tunsdown
2 Inve9torsiavoLrrtheconsumerstapessectoral lhe
beginning/ endal lle grcwthcycle,lun asthemarkeisare
pickingup/ tuntng down
lf a qovernmentorcornpanywanlsto borrownroney,it
canits€ a bandI anobllgatronlnvestorsre.eivea F/ied/
vatiable,aleol nlerestoveraf xedperiodof time.and lhen
gettheirorg nalinvenmentbackattheend
A risen nterestratesrnakesborrcwng.heaperlmore
expensive.Ihicaols/ stlnulateriheeconomy.
CentraBankslowernterestratesif iheyth nktheeconomy
s ikeyrogtow/contrcct,andwil aciaqgrcssveyllhey
thinkiheres a danqerof abaom/ rccessian
Stockmarketsfendto arfic,bate/ mavein linewith/ react
rocnangesInrnereaLeconomy
nterestratestendto bottomoutbefore/ afterboththe
nockmarketsandtherealeconomy
A risngmarketiscalleda bearlbul/market.Peopewho
th nkthaid paarcularmark€tk qoingto risen thelutlre
arcdescribedar beingbulrsh/ bull/keonthatmarket
Thenegatrveconsequenc$are
(urren.y.andthatanyqrowth
Economicstimulus
that t weakensa ndtion's
it causesmaybeinflatonary
Eventuay thai
A naiionalgovernmentcanchooseto spendmon€/
usudy moneyrt munborrow onallsorisoJprcjectsn
orderto nimulateiheeconomyThs puismoneybackinto
peop€'spocketssothattheycanbly goodsandservcesto
boostlheeco.on/ o
areanotherwayoi achevngthesarneeffect.
-fheproblem
ariseswhentheser.eaguresleadlo hiqhevesof
debtwillhaveto berepard
Regulatoryreforms
A counlrycanimplementreforrnsto the awinofderio
stimulategroMh.Theseincludemeanrresto enhance
competition.to liberali?ethe
siada newbu5ness,€tc.
Seepage146for somediscussiontopics.

11. lnternational trade
De.iding to export
ttry export? The two mosi important reasotr are likely to be:
1 To increasesalesand revenue. Expoiting i{il allow you
In ,lp
"dunliBeof"nl
uJeFu.pd cdpd'ih. n,rea+
production,reducemit cosisilrough economiesof.cale
and increaseprofits if thin8s go well.
,r To diversify. Relying on jrst yotrr own domeshc market is
risklaSelllngto othercountriesallowsyou to splcadthe
Bui befoiedecidingto exportthereis a lot of !6earch to be
doneon the foreignmarket:
/, Backglound:economi.siiuation,poltical stabiliry
a Markei sizeand likely productdemand.
'f Competiiionrsimilar productsalreadyin the market.
,, Disiributionchannels:agents(who acton your behauand
receivea commission/but don'i buy goodson theirown
account),or distribuiors(who actuallypulchasctoods
from you for resale,likea wholesaler).
,, Promoiionalmaterial:salesand supportmatcrialneeded
in the loc.l lanSuage.
1,,customcrservice:Proceduresforenquiries,comPlaints,
w.rrrarltyclaims,servicing,€tc.
,, Lcgalrcquircments:iechnical,safetyandcnvironmental
The first step in €xporting is likely io inlolve an iniermediary
(eglffal agent,distributor).Theywill havelocalknowledge
and contactsin the unfamiliar market- If ihings go w€ll,
the exporter may then decide io establish its own presmce
in the foreiSn market such assettinB up a salesoffice and
wareholse.Thisallows diiect contactwith cuslom€rs,faster
del,reryandrare conEolnr rhcIncrlmi-1p,.
Two key issuesfor an exporterarea)the methodofpaymeni
seethe tablebelow andb) who paysfor transportation.
This latierissueis coveredin thecontiactby specltyingthe
relevantlncotem (IntemationalCommer.ialTerm)for iliat
particllar consiSnment(= quantityof goodsshippcdat the
Otheroptions
Exporiingisoneway to selLyour goodsinto a foreignnarket,
br.rthercareotheroplions.rrrilrblero Lrr8ercomf._.rr
/j, Ioint venhtre:two companies(a foreigncompanyancl
a localpartner)work iogetherbrt keeptheir own lcgal
r ForeignDirectInvesiment(FDl):a busin€sssetsLrp
operationsin a foreigncouniry,or acquires(= buys).
'oca'comPany.
r Licensing:. companysellsthe right to usca patented
manufacturingprocess,orsomecommercialerperiise,
or a irad€mark,in exchangefor. feeor a royalty.One
particularcaseof this is franchising.
Cash-in-advance(Pre-payment)
Theimpoderpay$th€invoiceln
advance,beforeshipment.Whe.e
ih6yonlypaya partinadvance,it's
calleda 'downpayment'.
L€tte.ofcredit(UC)
one bankguaranteespaymentto
anotherbank.Theirnpoer Pays
whenlheexporlerpresenlscenain
listeddocumenlstotheirbank.
Typicaldocumenlsneededare:
lransponationdocumenls{egbill
of lading),insurancedocumenis,
commercialdocumenls(eginvoice).
Documentarycollection
A cheapervaiationof anL/C.The
lwobanksmakenoguarantees,
butsimplyhandletheexchangeoi
oderaccouni
Thesuppliefshipslhe goods,and
theimporterpayslaler,according
tolhetermsof lhecontraci.Thisis
morersky,andisonlyusediflhe
lmponerhasestablisfreda qood
credlthislory.
ConsignmentDurc..has€
Theimporterreceiveslhegoods
andholdslheminstock,butonly
payslor themafterihey havebeen
soldto theendusers.
LO

12. 3 INTERNATIONALTRADE
Exercises
3.1 Find a word in the text opposite that matcheseach
definition below. The words appear in order
1 fthreeworc&)spreadng cons ov€fd ldrgernumberoi
unts, andihereforeproducng th ngsmoreche:ply
3.4 completethetext aboutIncotermswith the wordsin
the box.Noticethe glossaryat the bottom.
./€arrr.e customr .iacunentation freight
handling laading ptentses temlnal ttansi ttu.k
2 (threewords)insteadof you,ordsa representatveofyou
3 wrttenpromisethata companyw reparsomethnglf1
4 bq bu d ngwherelargeamountsol qoodsarenored
s sp€calrksorknowledge
6 nameor designond productthatshowsrtsm.debyd
partcudrcompdny
7 non€ypdd ior professona setuce5,ora one'tim€amount
8 moneypaidto sorn€onewhosedeasor invenlronsyou'r€
U,ng
Nowdothesameforth€wordsin'Financing
internationaltrade'opposite-
9 documentreqlestnqpaynrent(aleocalleda 'b ')
1A fthreewotds)n givn9d€ta! of goodsthata shrp.etc|s
carryng,. soactEasa conlractto tr.nsportlhosegoods
Whatareln(oterms?
lncotermtstatetheresponsibltiesof buyerandseler n
relatonto marnetranspodatonnotjusttheshrpping
cosls,butallotherassociatedcostsslchas nsurance,
' duties,andqrcund
Thebuyerpaysfor the seacrossing
A prcequotedEXWiswherethetelermakesthegoods
avail.ble.lthelrownr , anolne
buyercolleclsthemthere.Thebuyerhasresponsbilltyfora
lheothertransporicostsandrsksfromthalpont onwards.
lf th€prceisFAS,lhentheseerasocoversthecostof
po( ol shpment.andof !nloadng the.ontan€6ontothe
'roo neouyerpaysror-
3.2 Make phrasesby matching an it€m from each
shrppusa the.ons fromthatpont.
FOBsalrnostthesame,exceptherethesellerpaysfor
oadrnqontotheshrp,nottheb!ye.
Thesellerpayslor the seacrossing
No{ +F good_a'" 01 _l-F.lrp i 1" p r p asbe"- '"1
sothat the se er alsopaysthe '
(= goodsandthe ryslemof movrngtheseqoodt cons,
thenthererre f!rlher hcoterrnsto be used
WrthCFRthe selerpaysthe lreght costsand handlesthe
expon7 (= paperwork),bLrtdoes
not paylhe nsuranc€wh lethe goodsare n
s at sea.Wih C Fihe selerpays
nsurancers well.8ut in both casesthe r responsbi ty
endsat the portol denination,wh lethe goodsarcst on
board.Thebuyerhasresponsbilty for unloadnq iees, oca
noraqeat a e , the mpo( cen.e,
duti€sandtax€s,the custombroker'sfeesandonward
deiveryto th€ buyer'sown premses.
Inrhe finalc.se,DDqit! lhe sellerwho paystor
everything,andwho alsohdsto handlednyclstoms
'o probems.Thebuyerhasno
.dditonalcostsor isks at all but of (oLrrsethe pnce
quotedin the contfactw I reflectthis!
3.3 Studythe methodsof paymentshownin the box
opposite.Thencompletethe diagramby writing thefive
methodson the horizontalaxis.
2 relyon
3 spredd
5 estabsha presence
7 hande iheex.hanqe
8 payaccordnq
lunyourdom€etc m.rket
onsomebodysbehali
- of anyunderuredcapac1y
thenik
to the termsof the contra.l
lega dentiy
IYPESOFFINANCING
EXWExworks
tAs:kee A ongsdeship
CFRCon& F€ght
CFrCon,lns!ran.e& Freght
DDPDeliveredDutyPad
Seepag€146Jorsomediscussiontopics.
RISK
Thebusinessworld I

13. Setting up and growing a business
Initial idea
Someonehasan ideafor a newbusiness(a'stait up').
Maybe they spoi a 8ap in the markeL or maybe they
havean ideathai is simllar to existingoffers,but wiih a
competitiveedge.Pot€niialsourcesof financefor ihis new
businessincludesclf'fuding, backerssuchastsiendsand
family trenbers, a bant loan,anda venfurecnpitalfirm.
A bank will want somesortof securityin casetheloanis
notrepaid, and sometimesihe person'sholse is offered
as.ollateral.Thefourth option,venfurecapital(VC),is
aiiractiveforbusincsscs$'jth a high profit potentialin the
medium term,but high start'upcosts.A VC company$'ill
offerfunds and takeon the risk of thebusinessfailing,but
in exchangewillwant a lalgenumberofshares.They aim
to selltheselater,wlren ihc businessgoespublic
Whenfinancingis in placc,thebusinessis registeredasa
lcgil entity:solehader pa.tnership,limited compant etc.
Early months and growth phase
Now thc businesscanstarttrading.Therisk of failu.c
nr thc first iwo yearsis very high.Oftcn thc problem
isn't salcs,bui cashflow: ihc cornpanyhasto wait for its
invoiccsio be paid,and mcanwhilethc debtsarepiling
up. Thc bank will onl),extendits linc of creditup to a
But hop€fully thebusinessachicvcsa critjcalmassot
custom€rs,andesiablishesitselfin the markerplace.lt
entGsa gfowth phase.This earlygrowth tendsto be
organic tlrnover increases,the companyemploysmore
"rdff.
'l d(vc ops.r.upplJ networl..rc. Ihe mdloriryo,
nrrll .umprnrcsr!:t conlnuein rl-Fwdv- growirBor
shrinkingye.r by yeardependingon theirmanagerial
skillsand generalmarketcondihons.
Sellihgthe business
However,thereareolhe. possibiliiies.Thefounderof
lhebu-incmo! decidelo -cllthebuh's di d going
concern.They might sellto a competiior or io a company
wantnrgto expandinto thatmarket.Thebuyershele
nrclookirg to SrowihJolgh a straiegyofacquisitions
/- at<over). dn ilrerna !e ,o lhe strdtegyot organic
tPo
Anoiherpossjbilityis ilut the fouders may decideio
go ptrblic(= floaillisl on ihe stocketchange).Here,
they sell their onginal privately-held sharesat an IPO
(initial public offering). Thii brings in a huge amount of
money, some gojng dilectly to the owne.s asrerrard for
their hard work, the rest going back into the businessas
Cause:beingtooambitious Solution;berealistic
Solution:Taketime
to researchthemarket
tho.ouqhy beforeyoustart
tradng
Solution:prodlcereaistc
cashflowforecastsandpay
strct atlentonto budqets
Solution:rememberthat
accessiblityforcusiomerss
Solution:Activey seekthe
MewS0l cLrStorneTs,andac1
onwhattheysay
Cauierthinkingthata good
prodlctw llsellitself
Cause:f. seeconomy- a
cheapleaseinthewrong
neighbourhood
Cause:compacencyafl€r
nitialsuccess,lackof
Solution:b€creative,
constanty revrewthe
marketingplan
Solution:pannnq,keeping
Soiution:traninq,
monronnq,comp.nycl]rure
Solution:beflexble,
recognLzeoppoftuntres,
Cause:spendingyo!r seed
Cause:behaviourof some
Cause:assumingthatyou solution:watch
irve customerloydlry .oroet Lorscose)
TENREASONSWHYA NEWBUSINESSCANFAII
Cause:startjnga business
witha goodidea.some
entnusiasmbutnoserous
Cause:buyingtoornuch
srocK,cusromerspaytng
l.te or notat aI,suppliers
needngto bepaidont me
Cause:Stickingwithyour
ownonginalideasfortoo
long
72

14. Exercises
4.I Finda word in thet€xt oppositethat matche5each
definitionbelow.Thewordsapp€arin order.
I smaladvantage...............
2 peoplewhoslrpporta pan,especiay byprovidnqmoney
prcpertyor moneythatyoupromseto gvesomeonef you
4.3 Fillin €a<hgapwith ale word from cgilhbox,
cut €stmare expang pefiorn
ide spend take
4 SETTINGUPAND GROWINGA 9U5INEsS
]
!ch
w thoutchangingi
4-2 Makephrase5by matchingan itemtrom each
12 (twowords)eo.r.elhtngthatischeapbutcouldhavebad
Tesut5
13 smalareaol a town
14 (f,^/owads) morcyrhatisusedto slarta newbusrness
15 bengfaithfultoa product/ brand/ company,etc
I 6 beingioo satisliedandconfident,sothatyoustoptryrng
lf yourconrpanygoespananothern termsof sales,profiis,
mdr€l-rdre.etc.rl"pnyoJ
lf youusetoomuchrnoney,or morethanyouplanned,you
li youaska c entfortoolitte money(Lisuallybymn.k€),
you lnera.
Finda word from th€ text that means:
7 lf youuseyoLrrauthortyto relectsornebodysdecslon,you
8 lfyouthinkthatsomelhngissmaleror essimportantthan
t reallys,you rt.
4.4 Readthe text aboutfran.hising,then answerthe
lltould voLhhelosrarla newbLs'r€ss,perfapslrr 19
Y U a smattrera'oJrler?Frarchsings anoovioLsopl01.
Howdoes t work?Theparenlcompany(lhe'lfanchsor')
ollersyou (lhe lranchisoe)ts trademarkprcduclsand
businessmethodsYoupaytheman initiafeeto usothe
name,andthenpaya percentageotlhelurnoveraswe .
Youwlllneedlolulfillcerlaincorporateidsntryslandards
suchasthoserelalngiolurnilureorstallunlforms.lts hald
work,buttheadvanlagesarefirany:yo!?ebuyng a w€I
knowobrandandtheriskisminimzed.
Flomthefranchisor'spontofviewthebenellsarec ear
Theycanleaveihe day{o-dayfiJnningoi thebuslnessto
you,whilegeliinga shareoiyourturnover
(farnal:tuvawards)busnessthat sa singleunitiroma
lega'o'd..of ingpo' ol vew
docLrmentsgvingdetailsof productsthatsorneone
hasbought,andrequeningpaymentforth€m
6 (phrcsalverb)incrf.asnq in a waythat isdifficr.rltto manage
7 Income,revenue
8 rrhr"" nord5rd srccess'ulblsirei)
a corpd €s I dl hole beenboLghlby o herco'npanip5
Now do the samefor the wordsin
new businesr<anfail'opposite.
10 carefulyandcompletely
11 (infomal;ph?salverb)contin!ngto dosomethinq
lfyousellgoodsata ow€rpfcethanyourcompettors,you
yourcompetitors.
li youdo.'t makear muchmoneyasexpected,or
yo-rele5ssucc"rs'u1vo-' oblrdr e pF(rod.yc-
1 lf yougrowa businesstooqucklyandtdkeontoom
rlsk,you tr:lrxP;rro
1 anypLacewherea prcductssold
2 wait
3 grow
5 spot
6 takeon
7 brng n
8 enter
9 extend
10 9o
rl grow
12 se
a gapinthernarket
forinvoicesto bep. d
theriskof thebusinesstailing
or snnnKyearDyyear
thebusrnesrasa gorngconcern
a hugeamountof money
a growthpnase
organLcay or byacquisitrons
2 moneyyoupayto dosomething(orto a professionap€rson
fortheirwork)
3 do5on'elfnqp'on'"d: Fd'l
4 levelso' quahyo' a,l_eveme_.
5 operatingandmanagng .....
Seepage146for somediscussiontopic..

15. @
ao-o.t y typesand corporategovernance
Company types
ln 1aw,therearevarioustypesofbusinessentiry.For each
one there are different legal adangements to register the
conpmy, different requirements for presenting accomts, eic.
The main businesst'?es are:
Soletrader (UK) / SoleplopdetoGhip (US)
A singlepelsonowns and operatesabusiness-Legally,
the bushesshasno separateexistencefrom its owner
(proprieto!).Thismeansthat.ll the debtsof thebrsinessare
ihc debts of the owner
Partnership(UK and US)
Two or morcpcoptc s'ork togetherand sharethc risksand
profits.Justlikc a solcproplietor the partners.rc fully liible
f(' (= responsiblcfor) an)'debisthebusinesshas.Thisis
.efefed to in law aslurlimited iiability'.
Cofrpany ruS and UK) / corporation (US)
Thcb!snless is a lcgalcniity ihat is separatefrom its or'ners
thc sha.choldcrs.Thc osne$ arenot fully liablcfor the
debtsof thebusincss.lnstcad,then liability (= potcntialrisk)
is rcstrictedb thcjr sharecapital.This is thc amountof cash
ihat theyhavecontribuicdto ihe compan}lThis,s rcfcred k)
nrl.w .s'limitcdliability'.
Theredr€lwo manl rypesofcompanies:
' l'rivatecompany:thc sharcs(ArnEsto.ks)arc'p.n atc
in thc sensethat thcycannotbe boughtby mcmbersoi
thc public.Thc vasttrajority ofcompaniesfall into this
catcgory.Thcy'rcoftcn smallercompanies,with sharcs
hcld by a fei{ businessassociatesor family nembe.s.
'i Public.omp.ny: thesha$s areopenl!'b.1dedon a public
stockexchangc.Thcsearc thc large,oftenwcll-known
businesses.Thc word 'public' shouldnot bc confDscdwith
'siate{wned'. A'sialc-owned cntcrprisc'(SOE)is o$'ned
by thegovernment.
The Board
Publiccompaniesare.ontrollcd by a boardot directors('the
Board'),eleciedby the shareholders.Noi allBoardsaretully
independent,bui in generaliheir rolcis to:
,| Setlong term straiegy.
,r Appoint a ChiefExe.utiveOfficer(CEO)andother
membersof the seniormanagemeniteamkJrun the
.ompany dairto day.
't Ask questjonsaboutany short-or medium-termstraiegy
developedby theCEO,and thensuppori it oncetheyhave
Overseeihe preparationof the finmcial statements.
Appointand ensurcihe independenceof thecompany's
t Overseeand managerisk.
,r' Setan amual dn'idend.
Who choosesthe Board?In theory',jt's the shareholders.
At theAmual GeneralMeeting(AmE Annual Meetingof
Stocholders)the shareholderscanquestionBoardmembers,
vote io acceptor reject the dividend, vote on replacements
for ieiinng Boad members,etc. But, in piaciice, the situahon
may be different. In pdticular mosi sharesare held by la€e
institutions, and thesemay simply sell their stake if they
arent happr instead of qving to chdgc ihe Board.
In reaiity many Board members arc chosenby the CEO
and the shareholdeG simply approve ihes€members.
Corporate governance
Thi" wholeNucut lherol<rt lhc Bodrd,l-ow.cnrr
managersareresponsibleb shareholders,andhow ihe
companyis run, is refe.redb as'coryorategolemance'.
Traditionally,differentregionsof the world havehad
differentmodelsof corporategovemance.
s:'.,
Anglo"Am€ncndod€l:epafarionol ow.e6hlp( e
shareholdet)andconvol(iemanaq€u);prioritygiventothe
inter€s$o1sh:rehoder
I tlopcai / rapai6. nodel:similar1otheAfglo-Ameri6n
model,bura greaterrecoqnnonotthe intere* oi orher
elakeholdeurucharemployees,5upplie6,cunomeu,enden
(esbankt,andthe.ommunity.
I EaetArian/ tarinnodel:family.ownedcompanie5wilh no
i^deoendenlBoadoroutiidesharehold€u.
No*adays this traditional pattern is breaking down, and
the siiuation is mor. mixed. Howeeer, the followmg basic
piinciples of corporale govemance are widely acc.ptedl
,' Respeci for ihe righis of shareholders.
I A clear definjhon of the roles and responsibilities of Board
r' Integrity and ethical bchaviour
Disclosuie (= givhS tull informalion) and iransparency.
tl)
:F.$.it '
1 4

16. 6 COMPANYTYPESAND CONPORATEGOVERNANCE
Exercises
5.1 Underlineth€ (orr€rtwods in italics.
1 Moneythata personorcompdnyowesisdebt/ /abiltty
Th€worddebts/ /rabtlites,whenusedinthepluralandina
formalcontext.hasthesamemeaninq- butit canalsohave
awidermeanngoi 'egalresponrbiltiei.
2 fhe wotdowner/ prcptietormeansthatyoulegallyhave
som€thinganything.ThewotdownerI propnetarmeans
thatyouhavea busness(andismorcfo.ma).
3 f youandyourbusnesspartnersallhaveth€samerisks
atth€sametime,thenyoudrrde/sharethersks.ll you
separatetheisksintosmallerpartsor ditfercntcategores,
thenyoud/v;de/ sharethem(=spit them).
4 A sharchaldett stakehalder/ 5toctho/d€rssomeonewho
ownspaftof a br.rsiness,in Bit shEfglishA shareholdetI
stakehalder/ stockhaldersthesame,inAmerca.Engsh.
Ashareholder/ stakeholder/ sfockho/derisanyonewho has
aninterestn thesuccessof a plan,lyslemoroaganzaton.
5 f yoLr'rea shareholderina company,theneveryyearyou
teceveanincane/ a profit/a d dendpad outoi the
company'sincane/ prcfiE / di/idends.
5.2 Readthe definitionbelowandtind the word in the
text. (lt appearstwice.)
fforma,'ageneraliermforanyinstitution,company,
parinershp,governm€ntagency,or anyotherorqanrzanon
whchexistsn lawaraseparateandcompeteunit.
Now do the samefor th€ tcorporategovernance'section.
5 th€qualityof belnghonestandhavnghighmoralnanddds
6 doingthlngslnawaythatallowsotherpeop€to know
exactlywhatyou'redoi'rg
5.5 Makeword partnershipsby matchingoneitemfrom
ea(hbox.Thenusethe word partnershipsto complete
delatletl legal ltnted nonprcfit
liabllity aryantzation
TheletteEthatfolow a cornpanynamecantellyouabout
a publiccompanyhasPLC(standingfor Pubc Limited
Company).
IntheU5.'1.(' {L.litedL,ab,'tyConpany)andCo'o'a'e
app.oximateequivalentsto'Lrd'and'PLC',altholghthe
? governingcompanyformationrs
diffefentinthetwoco!ntri€s.
TheletteB'lnc'(meanng'rncorporated')arealsousedn
thelJS,aodtheycovera verybroadrangeof ofganzatons.
Theycanreferto anyI rharsseoarate
fromilsownerssuchasa privatecompany,a public
company,a .o osPorcl-D
5.6 CovereveMhing on thesetwo pageswith a pie.eof
paper.Writedown lhe fullform oI thes€abbreviations:
CEO,AGM, PLC,LLC.
seepage146for somediscussiontopics.
IntheUK,a pivatecompanyha5'Lld
(becauseoi the'
dlu k 1tu6 oI r dt 6 ot lhfu;rt?"
.fteritsname
of itsowne6)and
5.3 Fillin the miisingletters,
1 f you'recompeteyliableforsomething,thenyolJ'rci y
iabe,
2 f youlelableforsomethinginl.w thenyou'rele lly
liable.
3 lfyouas.n ndvidua.reabelorsomething,thenyoure
per allylable.
4 lf youmaybe abeforsomethng,thenyou'repot |ally
llable.
5 lf youkeepsharesfor. longt me,thenyouh them.
6 f yo! buyandseI shares,thenyouir them
5.4 Finda word in The Board'sectionoppositethat
matcheseachdefinitionbelow
1 waichthepfoqressof sqmethingio makesurcii'sdone
correcrytsupervEe.......
2 exiernaf rmsthatofficlalyexamnethefinancalrccods
of a companyto seeihatiheytetrueandcorrect
3 anamountof theprofisthatthecompanyp.ysto
4 moneyinv€stedina busness
Thebusinessworld 1:

17. Globalissuesfor the 21st(entury
Geopoliticsand the world economy
lvhat big-pictureissuesarelikel'to dotrlnate
geopoliiicsdrl the rLorld econotrvin th€ coming
decadcs?Herearesomesuggestionsl
The Browth of the BRICS
T h " q L ;{ o r o f t h . 2 l . r , F . r . f l . r h c r r ^ ' h '
Brazil,llussia,lndia andChina (plusthe Middle East).
Thisis ccrtainio tr.nslaie nrtolncreasedgeopolitical
tuflucnccfor ihesecountries
The declineof the dollar
Oneifrp.ct of thc prcrious trend is thdt the dollar
will krseits statusnsihc l'orld's r€serlecurr.nc:
Cent'!l brnks rvill hold fci{cr dollars,.nd oil s ill
be pricedin i rangcof currcn.ics.But rLhaiclscsill
h.ppen h thec!(cncv arca?Willa.onmon Asianor
Lath Ame.i(.n c!rrcncv.tncrge?And what atrouiih.
nrternalconflictovcrthc.uro - shoridiibe strongto
fighi nlflitior or {'cak to heh exporters?
(;krhl !!armnlg is hippc,rint Ho('.!cr, any srlulxu
l " r l r , l , ll . r t r h rf r " r ( . . , . i . i r . , r . . t . .r . , { r ' ' r ..
is likcly i(rtrcrcslsidrl.DeYck,pnlgcouni.icsc.nl
rccus. lhc Ll.!ck)pcd nitions of h!poc,is! $cstc.n
couniricshi!c ilrcid! bdcnihrouththei,iidusbiil
fhascind Dor!h.. lhdlurur! of thinknlgnlrdut
i'stnin.ble g()wlh. Dclolopnlg naltun! Llont haro
' , l + , ' ^ , p ' ' , , r i ' - : , { r ' r ! p , 1 , . s " { .
lh.r.'s just ndt cnoughlefi nr thc gnD.l. 5o supplv js
s]finlitlg. lso,derelopingnationsarc hungry id oil
- ld tr.nspo.t, nldusq, etc.Sodcmandis risirrg.hrt
logcthcrfilling supplv an.l risingdcnrandaDdlou
gcl onc thing:much higherpricesfor the i.rcsccablc
Energyse.lrity and alternativeenerSy
Somccountdcsh.!e a lot ofenergy re$urces,others
don't.And if you don't, you hive a nrajo geopoliticaI
problen. li's calleddependenc.Put this issue
bgether s'ith pcakoil, and it pointsin onednection:
aliematile cncrg.But sone g.eenaciiistsare
unre.listi. aboutthis solar Nind, tidal,ei. canonh
nreeta lractionofthe world's energl'needs.Theone
technologythatmight makea differenceisnuclear.
And ihat,of course,is.onhoversial.
ShortagesoI otherresourcesand cofrnodities
Thebad nerls continucs.As ryellasa shotage or
energy,{,e're alsoshortof water (in China,Southem
Europeand the MiddLcEast).And ash,ing standards
rise,$Ie'11find thatmanv agricultural.ommodites
(eg('heat, com,neat) arejr shortsupplv aswell.
Managementandbusiness
il.r3!iri ,!.i: ne<.!'.'r'rrh.idr,cJr tfril.l..1jLir;. th:ri.alj
Irei:,r.!i<ru?s.iiri:2:ir .:iirn,l ?e.:i..,r.j.rerLi..h.1o,,1
Forme,brandinganddesigni€ thekeyiss!es.Customers
caneasityfindgoodquatityandvalue-formoney attour
compeiitouoff€rthis.Tosutujve,youneedmorethanthis,
yo! n€€dbrandirq.Withouta strorqbrard,youhaveno
customertoyattyardnopncingpower.Ardtinkedto brandirq
is design- cusiomerswittpiy fordesiqn.Thesearethemajor
batttefietdsin moderrburinesr,notcostorquatjty.
1r ourorganizalion,findinganddevetopingtatentisgoing
to bea majorissue.There'sa dectinjngbirthnie,ardtlre
incrcasedmobitityof tabourmeansthatworkerscanchoose
wherctheyworkandforwhom.Sotalentis goingio bein
shortsuppLy-AndthatspaticutarLytrueforknowtedgeworkers
andcreatives.Wewitlneedto findwaysto motivat€thernand
retairth€minsideourorsanization.
In themodernworkptace,manaqinqdiversityir goirgto
beconreincreasinqlycomptex.W€vegatissresofgender,
ethnjcityarddge.Wetryto makeequatopportLritieswork,
butwehaven'tdoneaswettaswe'dtike.Andnoww€have
newprcbtemsoi muttjc!tturatmanagemertacrossnalionat
bo.ders.Imaqinelheprobtemswhenteamnemb€rsfrom
differentcutturatbackqroundshotdvjduatm€etingsonthe
webwithoutth€charceto qetto kfoweachotherin person.
TheissuethaiwelatkaboutmoreardmorethesedaysjsCSR
- corporatesocjatresponsibility.I'mtalkingaboutfairtrade,
theenvjronmertatimpa.tofbusiness,theeffectontocat
.o-1rri'r'es. rsainabe devetoplear.tdbo..pra-riLe', d
stufftikeihat.Campaiqnsbyactivistscanaffectyourprofits
anddestroyyourbrand-
In nra'ryindustnesa majorissueisthethreatcausedbythe
Internet.Basicatty,if it canbedigitized,it canbepilated.
lhe musicdndsoftwareindustrieshavealreadybeerhit badty
bythis,thefitmindustryis nextandpubLishirgwittfottow.
GeneratLyspeakirg,qtoba[zationhasbeengoodforbLsi]ress.
Butnowthereis a backtashagainstgtobalizationarnongst
thepubLic-Ihisis creatjngpotitjcatpressuresfor protectionisrn
aid fortocatsourcingto protectjobs.ForLsthai means
reducedaccessto worLdmarketsandhighercosts.
16

18. 6 GLOBALISSUESFORTHE21STCENTT,RY
Exercises
5.1 Makephrasesby matchingan itemfrom each
I geopotrca- ------ warming
2 .limare i.fhren.e
5.4 Fillin the gapswith a differentform ofthe worcl
in brackets.Th€newform maybea noun(singularor
plural),verbor adjedive.Somewordsarenot in th€ text.
1 Glob. .'r!l!ll (warm)afdthe
/.1..r,..n1r rh6 0-,'..rrent ore
(threadtheplanet
2 Green (.ctive)dndotherpressure
groLp)d e be(onig inr'edr19y
i,n{r,,on.o,n rror4rminn. rh4
(environment)polici€sof argecompanies.
3 globa
5 p€ak
6 green
8 livng
9 pricing
10 decning
1l knowledge
growth
change
banlef€ld
3 Genec
(controve6y),but many
developingnalionrseeii ar the on y wayto ensure
continuing (grow)in agricultura
lpfoouce)
6.2 completethe beginningot ea<hphrasewith its ( nd!straliz€).Thishas
5.5 Completethetext abouttair tradewith the wordsin
the box.
access gendet averyrcductQn pavefty prentun
2 behungry
3 be in shoft
supply
a vnuarmeerng
4 Ther governmentS
isoneot rapid
(-"conomy)strateqy
4 havea commonAsian
5 p r c e o n
7 in the coming
8 ior ihe foreseeable
t hold
6.3 tind a word trom the section'Managementand
business'oooositethat matchesthe detinitionsbelow.
Thewordsappearin order.
1 goodquality(orquantty)inreatonto theprce
caoabeof contnulnofora onoiirneatthesarnelevel
Fairtradersanorganr?ed5ociamovementwhichpromotes
I lor labolr,sociapolicy,
environmentali5mandsu5tainabledevelopment.
Key': ol faiftradeare:
a Creatingopportuntiesfofeconomicallydsadvantaged
p.oducersbypayngafarfprlce.lt isa nfrtegyfor
reduclngl
e DeveopngproduceB'ndependencebyopening
to newmarketsandbuiding
managemeniskils
', SaJeandhealthyworkifgconditons.
. equality
e Goodenvironmenralpractc€sandr€sponsibe methods
Butlairtradehasitscriiics.Peoplesaythattoomuchof the
retarlelsAndove'thelongtern f" r LrddeoperaLesasa
hidden7 ............................................. li putsa prcefloorundera
commodrtyard theeroreencoJr"ge,3
Thiscaneventuallyleadio lowerpicesfor9rowe6
Seepage146for somedircurriontopics.
2
3
be,_g'a lhl-|. a{ays 9r.
'g ,Lpporl
peoplewho lse theirimagnatonor skis to makethings
(numanresourcetkeepsomeone
thefactof belngeithermaleorlemale5
6
7 a stronq,neqativereactonto somethinqthatwa9prevbusly
popuar pricepaidbyconsumeBgoesto the
8 qettinga productorcomponentfromsomewhere
Thebusinesswofld 17

19. Managementstylesand qualities
Manag€mentstyles
Elerv ftanageririllbe different,bui oler th€ lears
mnnagenlentthcoryhasest.blishcdtlueebroadcategoriesof
The authoritaIianmanager
This personis strict,demanding,conh.nlng and probabh
ioo rigid in their vic{'s. Thevi.ke a krp do$r approa.h tsut
somestlff like this- thev kno$,qficrc ihcy si.nd and rrhai
ihcir rcsponsibiljticsare.Thelrjobsi,r clcirh dclirlcd
The consensual,nanager
Tliis pcrsont,clielesin consuliation,andin coachingand
menbrnlg th.ir shffto help thcn dcr.lop.Sllrordlrat€s
!suallv like this tvpc of manager,lrul thc man.ge na! lnck
visionand f.ril t()sln { lcadershr.
The handroff manager
ThispcFon deleg.tcsc!.rl,d)lng, o, just l.ircs probl.Drs
n1ihc hopeth.t thc! to.rLi!. Thcv$.illjustill ihcirstlc
.s cn+row.nef t (icgn ing.onhl,lov(. dcc,s(rnsto othcr
p$Flc), bui slbordnlilcs q ill frrl r l.rckof guidincc ind
{ppo.l. Li.iwr bfts'ccn .olL.g!.s (.o $rfkc,s) $ ill Lrc
An inTortnnl |oiDl is thil nr,rn.rgrnrcnlsh lf Di8ht rcflrct
the.oilpinv .uli!rf .s much.rsih. fcrsonnlit'oi the
indi!idu.l So.rhic rhicrlconrpnfy sllh. b!ro.ucr.t1.
dccisi(nh.rkingpk)c.sswillsuitoncrvpool hinagc. On
lh.othorh.!r!l, n dcccntialized.oDrpan'lrhrr. kn!-lelrl
mrrigo.s cin i.rkcthc jniti.riivcwill s!ii .ndthL'r
We.lso ha!. to Nn.nrbd thatLliflerentbusnresssru.rurs
!vill'rqujrodillcrnt managomcniqualiiiL's:
Considorthc nrlnagcr whd is nrethodical,slstem.lic.nd
organizcd ls th;,talw.vs a good ihnrg?Mavbethcrearc
sitlraliurswhereit's bellL'rb be iniuiiie and flciblc. or
ni takcdccisionsqui.klv uithout kno$ing ill the ficrs.
Consid.r the lnanag.r bho is. good tean pl.rvcr,
co{pcratn'e hd supportjle.Is ihai alwaysi good lhirrg?
rlavbcthcrer.e situaiionshhe.e it's beiier tu 'ork on
J . . r r s r ' b p , - ! - l l , n o . r t , .i l f . , . . l i ,
Qualitiesor skills?
Hcre is sonrethhginterestingio thinl<nbout:noticethatin
thc textibole thoe is referenceto sivlesandquilities, not
to skills.Thisdistjlction is inrportant.Qualitiesarea part of
your.ha.acter and personaliiy- rher werepresentatbnth or
formedea.ly in youf life and you s'ill find it hard nr change
thcsethings.Skills,ho('ever arethingslo!.an lean like
how to speakanotherlanglage,or gn'ea good presentation.
Skills.nn be devcloped.nd improle.1thJoughpracticenn.t
rp, ri" Y. qu" ir .- n...h le .n | . I r
fur ir" nin!. o. .o[r' dpr.lopTell dd ,. -""-. ho .F.
Personspecification
[Ihen bokinS for can.lidatesfo. a particularjob,many
companiesproduceboth a iob specificationand a pe$on
specificahon.Thishelpsrecruitmentagenciesand/o. the
human resourced.pariment to find s!italrlepeople.The
personspecrficationivill inchde theskilisnccdcd,cxpcrieDce
neededand personalqualitiesof theidealcan.lidatc.The
eamplebelorLshoirs the finil section,p..sonal qu.litics.
PERSONSPECIFICATION
Ski,isond obilities
The idealcandldarewill be ableto demon$nte rhe followlnt
Persono,quolitiet
gusinessknowledge
The idea candid.rewill;
havea tood undeBrandiit of rhe market
k€€pup ro datewth developmentsin the lield
The ldealcandidatewill:
be ablero rranslarecompanyrrarery into indtvidual
busnessunirobjectives
be abe to balanceconf ctiig businessinrerestswithin the
ortanizational ability
The idealcandidatewill:
be a Sood adhinisrntor
be a good time-manater
be conscentiousand lhorouSh
be a Soodteam-boilder
Relation to subordinetes
The idealcaidida@will:
havean abi ry to notivrte
know when to deegateandwhen ro refef upwards
keeptood inesof communicaliof
havean open doof policy
havean abilityto conrol andgve feedbackn an
The ideal.andidatewill:
be preparedro take rkks
oe nones andtransParent
be single-mind€dand determlned
be ableto recoyerquicklf aiter a setback
suy carmunder Pre$ure
1E

20. 7 MANAGEMENTsTYLEsAND OUALITIES
., 'rFed-q . loLo vo-r.rre drdpne'g/
3 involvnqtheagreem€ntof monpeopenagroup;
democratic
4 qvinqtraningorddvicefora sperifcjobortan
Exercises
7.1 Finda word in thetext oppositethat matcheseach
definitionbelow.Thewordsappearin order.
1 expectinqotherpeopeto obeyrulescompletely
7.3 Choosethe bestadiectiv€from thosein 7.2(both
(olumns)to describ€th€semanagers.
1 ll€'sundera lotof pressureandooksworredal theUme.
Hesreally
2 Oncesh€'srnaded plan,shedoesn'tlikechanqngit 5he!a
brt
3 He rkestogel nvovedanddothlnqs,ratherthdnjusl
takingaboutthemor makingotherpeopiedothem Hes
very
4 Herdeskissountidy paperseverywherelt r€ay
5 Heproducescompllcatedruesforevery,thnq.Hs approach
r5very
6 5heshonestandopenanddoesn'ttryto hdeany,thng.
5hesvery
7.4 Makephrasesby matchingan item{romeach
on yolr own and be sef-motrvated
vsionandfailtoshoweadership
quicklyaftera setback
genera(rategy intorpecifcobjectves
up to dalewth deveopm€ntsin thefied
fe€dbackin an approprai€way
5 advisngandhelpingsomeonemoregenerallyovera
lonqertimeperod
6 exchangeof informatonbetvve€np€opl€sothatthey
workwe toqether
7 wherep€opleandjobsaredvidedintomanylevelsof
rrnport.nce
8 takingactonbeforet'sneeded,ratherthanwalingunti
proDer.soeveop
Now do the samefor the wordsin 'Personspecifiration'
9 ,ho^irg d ol o' rdre a_d allFnlor
10 ncludingeverypossble detal .nd.void ng mEtakes
t2
t1 wantingto dosomethngverymLrchsothalyolJwillnot
etany,lhngstopyou
a probemthatdelaysor nopsprogress
7.2 Changeea<hadiectiv€into anopposit€meaninq
by fillinq in the letters.lf thereisa pretix,it maybe
de-,dis-,in-6t un-,
l simple
2 centr.zed
3 co-operatve
5 d rect
6 flexibe
8 honen
9 iniuitve
10 merhodcal
1l orqanred
12 nressed
13 s!pportve
15 transparent
2 know -
3 work
5 keep
6 give
8 vanslate
7.5 Completethe teJ(taboutteamswith the wordsin
brcathing catryout feedba.k guidinq
Bsuing prcgrcss repan back tunntng
Theab ityto eadteamsisa keyskilinthemodefn
businessword.Theteame.derhasto rnovebetweena
varietyof.ppro.ches:' nstructons
andsuperuisingcloselyattimes,'? and
encour.ginqandofferinqadvice.tothertimes.
Theteamleadersof.ourseresponsblefor monitoring
overallI , butoncetheteamisupand
a , andtheobjectivesandieamrolesare
clearydefined,ihenheorshemaybeableto iakea back
seatforshortperodsof time.
Teammembersliketo fee thatth€ycan
theirroleswithoutiheleaoe,
6 aowntheirneckdLthet me.
However.theydoneedto 7 regualy,
andtheteamleaderisexpectedto glvethernconstructive
. . ontheirperformance
seepage145lorsomediscussiontopics.
centraized
co-operatve/ helplul
d recl
flexibe/ ri d
organized/ me y

21. @
o.n.rr,ringtime andwork
At the plaming siage of a project the amount of work required cm look frightening. Tomake it manageable,you
need to develop d overal time 6ame (rinescale) for rhe prcject md a schedule (tinetable) to show the dates
oi times when individual ihjngs should happen. Hopefuly, throuSh Soodiime mdagement, you will be ahead
ofschedule.Anlyat aslongasyo!'re on schedule,there'sno problem.What yo! definitelydon't want is io be
behindschedule.Thatmeffi you be mder a lot of stress,md when you'retotallysh€ssedout,your work will
suffea You nlight have to irolk long hours to caich up. And iI you're a mmage!, you probably won't get paid
overtine it'sjust cxpectedof l.ou.
Of course,it's not always your fault. There can be delays fo! all so s of reasons.ThinSs can take longer than
plannedbecauscof circumstancesbeyondyour control.ln ihat case... well, deadlinesmight becomeguidellnes.
nrl'at canyou do to improveyour time muagemeniTHclc aresomehps:
fime management tips
Usea d ary(AmE.ale.dar)topan yourl me 5ohwnre K.owand lselhef nq synemon your.omplrerproperly
pnckaqcss!.h a5Olllook ..lud€ rh( iun.t o., but m;ny A lor ot rh€ workfow in b! 5n.$ Noives e e.tron c pnperworl!
pcoplepreiera wall.harlwrh sri.kerard.ololr.oding ro :nd youneedto knowhowto acc.$ doclmenrs,moditthem,
5howdltrerenli.r vr es sharerhem andnr.h ve th.m
[4akca r.a 5ri.pan a.d rrier]tr o' r zetlrel"sksDo rheA l:5ks Deeg;re
t6r th€ mporranl,!.p!e! 5dnt,or t me cofunnlg o.es Then Do.lrrytobeaperfectionst n cv.rytlrnq rtakestim€to
yo!lltlrn LoLh€lessmporlanro.eswitlra.learm nd Donl {lerrh.9trbsolutey rghi, andI hc s money5horr.utscan
qctdsfiacledbydonglhesna,-"aiy1.!k!i6l bea.cepraberaq! ck.nd d rty'so!t on mnybeOK.liylo
Us. chccklisls. bnla.cequa tt costand time
Bui ofcourse you know all that, and you haYc alrcadv inplemented thesesuggestions.You use careful
time 'nanagement to plan your workload. You nclcr put off unpleasant tasks or lose concenkation. Becaup
of this, your work is stihulating and rewarding. You do elcrything h'ith calm and focus. At the end ot
e.ch day you go homc with a s€nseofachielenent. You say to yourself,'The world is a better plaQ todav
becauseof what I did in my job.'Right?
What do managers manage?
0perati()ns
5ettnqanda.h evn9targets
mprovnq produdvry
Conrronq,deeqatingandqivinqleedba.k
Decison rnakng
Saiistng.unomerneeds
N'lanagingqLraliry
Managing.han9e
People
Panningstaffnqneeds,andrecruitinqand!ee.ting newsratr
DeveLoplflqtheteam,5Lrppoftngandg! d ngindivdlak
Deegatinqandmonitori.g
aarryingo!t performancereviews
Rewardlngaclrevement
Irinance
P,epa,ingandneqorar.q bldqer5
^.lonirorin9rhebLdger
Maknginvestme.tde.ision5
Inforrnatiou
chi r ngand/orpirticiparig n meetngs
A.cessng iniormatononthecompanyT neMork
Readinqandwritingreportsandpropons
Ke€pingil esuptodate
5peakinq. publ., givlngpreseniatons
Careerdevelopmeut
DeveopingyoLrrsksandcornpeienc€s
Attendlng.onf€fe.ce5andsernnal!
Readingabolt rece.t deasanddeveopmentelnyoLrrfed
20

22. A ORGANIZINGTIME AND WORK
Exercises
8.1 Fillin the missingletters.
1
, Theprotectisgoingv€rywe . n facl,we're
of schedule.Theworki w isorqanrzedefficenty,
andwe hdved bigwallch withni
shown9th€dffer€ntnagesof theprolectandwhat
€veryoneshouldbedonq I likeourteameader she
hasestablshedthegeneraqu nes{orolr work,
butsheeavesit upto usto pr trzeourlaskson
a d.y to daybasis.Ofcourse,therearealways
chd ngesto la €,butsofarwe'vebeen.blelo
m t thosechalenges.lts a gre:lexpeience.irnd
theworkst atngandr€w nq lts givenmed
rea5 e oTarh ment.
qo ng to payrn€tim€-and-a-half.
6 Ths red y snt important- we'Ll loo
muchtme fw€do I Letslusteav-ot
- - L d
. o 1 a , , ! t o . . r d F d _ / a . o L d
aroundtwoweeksonourpannedschedulebydonq t
8 | gotdistractedthsafternoonl'l haveto
5
Please l€nworkngdaysfordeivery
LdnweekI 5x holrs overtme.They're
tonrghr
t mebystayng dte.t th,"olfce
ll managershaveconslraintsonther tme - somany
lasksseernurgenlandvrla,andyet nooneperson
8.3 Lookat'What do managersmanage?'opposite.
1 Fid d word that s usedin lwo ways:
a)a pan of how to spendmofey,andb)the rnoneyitlelf
2 Frnda iorm. wordthat s lsed n thef eldof human
resources10nean: specitcknowledgeandrklls nother
words.knowledgedndsk k that arels€d for a particular
taskrna partc!larlob
4.4 Readthe text about del€gating, th€n antwer the
Thework d n th s projects iar biggerthan
anyoneexpectedThereSa ot 01!nexpected
od so4 rfar 's /ef Ine .on n9 roLonpere
Thrnqs:renotgoingwe . n iaci,we're d
schedLreWe miqhtevenm ssthe de,
Everyoner totalyst ed Peopleare
t a k n g s h - c s a n d q u a l r t ys s u f f e f i n gl t s l u n s o
lrunratng,and t3 notevenour{ault ils entrey dLe
to (rc! cesb d our conlro Theonly
waywe rego ng io f nishthiswork wirhn the given
t me lr eby f nd nq somekLndol q|] and
d r s o u t o n . l k n o wt s nl i d e a ,b u t w h a le s e
cantackLelhemall Deegalionislheanswer
Once youve apponleclthe personresponsiblelor lhe
pa(icularlask yo! needto briefthemrhoroughly.How
muchautonomyareyougoingto allowlhem?Howollen
shouldlheyreportbacktoyolrwth progr€ss!pdates,and
inwhatdetail?Andwhoese needsIobeinthetoop?Alter
ali,itsnoljuslyouwhoneedstoknowwhatshappening
Convowillbe a keyissLreWhathappensif iheyhil an
unexpectedsnag?YoucanI takealltheresponsbilityaway
fromthem lguringout soltons to problernswi be a
chaLlengeanda motvaliontorlhem.Howeveryoudoneed
io makesurethattasksarecompletedslrccessfLry
Finda word fromthe text that means:
1 limrs
2 de. with
3 qivenecessaryiniorrnaton
4 (fourwatd) hepatlaf agroupofpeopethdthdsnformatlon
5 (infarnal)Nabter-|
6 (phrasaivert bengabeto lfderstand;solvng
8.2 Completethe sentenceswith th€ v€rbsin the box.
Th€yar€all usedwith time expressions.
allaw fin.l nakeup put in
speno waste
1 Howmucht medoyou
booksaboutmdnagement?
2 knowyou'rebLrsy,bul wonderif youcould
........somet metomorrowto checkmy
3 That3it. We haveto f nishfow. We ve
I rne
8.5 Readthe followingsentenceanddecid€it it's
grammaticallycorrect.
Anceyau veappointedthercspansibiefar theparticulartask,
yauneedta brief then thorcuqhly
Comparewith thethird sentencein the text above.
seepage146for somedis(ussiontopics.

23. Planningand setting objectives
What is a plan?
A no r b r _/ ! h o n . , i . ^ n ' r y p ha l h ( l 0 ) c r - ) h d p " - , r .
strategy(2 5 years),which in tur. shapesits plans(1year).
, hasobj.cliveswhich canbe neasuied.
l, answcrsqucstionsthai stakeholders(egsharehoidcrs,
banks,cmployees)will ask.
I builds ir oplions.
'1 idcntificsandquantifiesrisks.
a showshow to minimize thoserisks(.nd pelhapsincludes
a coningcrlcyplarlfor Nhai happensif thingsBowrong).
a alios'sprogrcssio beme.sured.
Othe. points to noic arcl
', That ilie.e is a costto planninSin i..ms ofmanagemeni,
time and .esearch.
,i That all plansmakcassumptions,.lihough thcscareoften
not statedcxplicitly.
' -hdt
rh,1, .r' om' .cr) .t
"'rfi.
llpe-
"Ibuinc-"
Flanning(cgprojcctmanag€mentis. distinctbusincss
functionin its own right).
Elements of a plan
AcompreheDsivcbusinessplan for a largecompanymight
involveihe f(nlowhg:
1, IDtcrnalanalysis:this colors thc strcngihsand tlcakncsses
of thc organizatioll,historicalp$formance,tr.nds in the
businessactivityand cutrcntroso!rccs.
', Extcnralanalvsis:this covcrsmarkcts,clstomcrs,
ll., c"mp'tinun.rd.l.dr,liIon. lhcg.ncr.rlbu.in.ss
o Gap aDalysis:this stariswiih the kcy issucsraiscdnr the
first two pointsabove,and highlighislhoseareaswhere
thereis a gapbetwcenwhercyou arc now and wh€reyou
a Action plan:what necdsto bc donc to closethegaps?Do
producisneedto be improved?Docstcchnologyned to
be upgraded?Do stafinccd to be rctrain.d?
', Resolrceassessmeni:rlhat theactionpld needsin terms
ofhumar resources,matcrialresourccs(egplani, space
nlsidebuildnrgs,equipment),lTrcsourcesand financial
//r TarSeisrspecificta.getsfor financialrciunN, costs,market
share,sales,grorrih, cusiomersatisfaciion,quality,etc.
u, Financialissuesrcashflow forecasls,projeciedprofiiand
loss(P&L).
Look at ihe Contentspageof thc businessplan on thenght.
It is theknld of plan thai a sma or nedium'sized business
mightproduce io defineits shategvSoingfoMard. Theplan
might alsobeneededto show to a bark if new tunding is
BusinessPlan:Contents
1 summaryand mainconclusions
2lntroduction
2.1 Currentsituation
2.2 Needforchange
3 Internalanalysis
3.1 Internastrengths
3.2 Internaweaknesses
4 Marketanalysis
4.1 Externaloppoatunites
4.2 Externalthreats
5 Marketingplan
5.1 Newproductideas
5.2 Prcingissues
5.3 Salestargetsandmarketsharetargets
5.4 Geographicaldversification
5.5 lmprovementsto distrblt of channel
q 6 A.lwarti<i^^ .imnr nn<
6 Operationalplan
6.1 N-"wplantandequpment
6.2 Effciencyof productionprocess
6.3 ProduCrivitylssues
6 4 l.lo:< f^r <:vi^^ .^d<
6.5 Outsourcingproposals
6.6 Qualityissues
7 Financials
7.1 Cashflowforecast
7.2 Profitandlossforecast
8 Resourcerequirements
8.1 Humanresources
8.2 Capitalinvestment
8.3 tT
9 Appendices
22

24. 9 PLANNINGAND SETTINGOB.|ECTIVES
Exercises
9.1 Finda word in the text oppositethat matcheseach
definitionbelow Thewordsaooearin order.
1 a thoseDeoDe whohaveaninterestn thesuccessoi a
4 qrad!alchangesor deveopments,tendences
9.4 Rewriteth€ senten(esusinga verb+ anadjective
from exercise9.3.Keepthe samemeaning.
1 Wewillgoabov€thetarqetwehadarthebeginnng.
pan,systernororganizatio Wewili our . ........1!l!al target
2 (tuvawords)a cautseoI actionth.t youwilltakeif 2 Wewil gobeowouryeanytargel
som€thingbadhappensinthefuture . . we w -......... . . targel
3 bel€fsthdtareusedasthebass{or3n dea.butwhich J we dF(rdFdo ,lcn (fe pl. r for rl_Fre.. .hree)€r's
maynot be correct. W€ decdedto the ...
5 (farmal)laws
6 makespeoplenotcesomethingandthinkaboutit
7 a factoryor burdingwhereanindustriaprocesstaket
pl.,e.. d dl rts'e.w n..h *.y
8 lh: g lrdl yourrytoacqeve
9 (n^7owords)phraseoitenusedn a businesscontexito
mean'n thetuture'
Nowdo the samefor the 'conten$' pageopposite.
10 predrction
9.2 one verbfrom eachgroupdoer not 90 with the
nounat the €nd.crossit out.
checkany unknownwordsin a dictionary
1 cut,esttnate,tmplenent,rccovet aosls
2 access,achieve,getholdof wthhold lnfo.maton
3 cansi.let,keepopen,meet,5u99e5t optons
4 bebasedan,<atryaut, da,make researd
5 identify,mininize,quantift,rcach tiskt
6 boast,farecast,generate,5etup sales
9.3 Matcha groupof verbs1-3anda groupof
adie<tivesa{ to the nounsbelow.
Checkanyunknownwordsin a dictionary
1 achieve,exceed,falshortof,meet,reach
2 carify,dealwth,dscus!,explore,locuson,raise,iackle
3 conreupwth, goaheadwih, mpement,keepto,plt
plan
4 Wew ll hdv€to stopourpl.nsforthefuture(dthoughwe
mlghtcontnuewiththemate,
Wewillhdveto
p|ans
5 Th€issuethattheyw.ntedueto consdersvery
Therssuethatthey svery
9.5 Matcha groupof verbsl-3 anda groupof
adie(tivesa-<to the nounsbelow
1 arrange,follow,9oaccordingto, revise,stckto
2 achieve.failin,fufil,meet,reach,set
3 .pprove,c!t, increase,plan,redLrce.5tickto,subm1
a clear,key,limired,long-tem,majoroverall,prmary,specilic
b annual,draft,fxed,limted, ow t ght,marketing
c ambitious,busy,strct,tight.!1/eeky
'
objective schedule I I bldgel
9.6 Rewrirerh€sentencesusinga verb+ anadjective
from exercise9.5.Keepthe samemeaning.
I At thispointwejustneedto decideourg€neraobjectives
At thispoiniwejun needto our
. ooleclves.
) Weri ,{ leep(ot'e sc'eorle- r_Fre.onyt-ste_o.gl'
a ambitlous,contngency,deiaied,fve-point,long'term,
realstic,nrategc,threeyear
b ambitous,annua,high,nital.reaistc,sales
c basic,c€ntral,complex,irucal,main,side,!nresolved,vital
iil l- tarset l-1L-rpl.n |!l issue
theschedule t5 very
3 | h.ve to givea provislonabudgetsothal theycanmakea
de.ison.(i canbechanqedater.)
I h"ve to
budget.
Seepag€ 147for some dilcussiontopics.
"Drnr,I inkIak Pldn B.'

25. Leading and motivating
What is leader5hipin business?
Clearly, an entrepreneur shows leadership. They siart iheir
own business,andthenbuild it up from scratch.But the
headof a ieam,deparimentor lalgc organizationcm also
showleadelstup.what do thesepeoplehavein comlon?
A good $ay io ansa'e! this is to look at the difference
betweenleadershipandmaagcmcni. Tosimplify greatly:
irr Leaderslook at the big picture,wclcomechange,ale good
at motivatingand influencjng,andivork well alone(or at
the headoi teams).
1 Managerslook at the deiails,welcomestability,.re good
at supervising,andwolk well asteammembers.
In addition,managelstcnd io gct theirauthorityfrom their
role(abosswith subordin.tes),a'hilc leadersgettheir
a(ihority from their personaliryPcoplejust tunr io l..ders
fo. guidance,regardlessofthei! position.Thevhale. quality
Eight characteristicsol a good leader
I Vision:this meansgcnc.atingideasabori the wny ahead,
and thenScitirg buy- (= commitmentto a shared8oa1)
from otherpeople.
ll Moiivation:as{'cll asoblious thin8sIike salary this
nr luJc-prJFp.Jppr.cr.ru.ni-d (co$,nitio'.
Motivation
A survey by Kabsn
Consultlngaakedpeople
Ina wlde|angeol Industry
sectoGwhetmedelhem
teel good al work. Hereare
the resulis:
Emotionalintelligence:this us€dto be calledempathyor
intuition. It meds 'reading people' knowing what they
Empoweringothers:tellpcoplervhatyou expecthom
them,gile themthe toolsiheyneedto succeed,and then
get out of theirway.Leam to listen,nothingis more
empoweringthm b€inghead.
Beingtrustworthy:your behaviourshouldbe consistent
rlith yourbeliefs,othetrise peoplewon't trustyou.
Actionsspeaklouder thm aords.
Takingrisksand managingchange:leadersneedio be
changeagenis- in a fasFmovingworld, any organizahon
thatsiandsstill will fail. Butchangebringsrcsistance.
Leadershaveio explainwhy changeis necessa!,
establisha process,involveeveryone,providc support,
communicatetheoutconesandsharethe bencfits.
Focrsand follow-through:this involvesseitingpriorities
anddoinll whal you sayyou will do. Unfortunately,many
lea.tersarepoor finishcrs.
Asenseof humour:thcabilityto laugh.t yoursclfis.
good ilay to b.ing othcrsalongwiih yo!.Ii dcnonshates
a degreeof self-knolvlcclge.
Noticelhe dominanceotthe lop thr€ecalegorles:
A senseofachevement,andhavingthatachievemeni
recognizedappeffto bestrongmolivatorc.Positiveworking
relatonshipsareaso importantNolicealsolhai financial
rewardwasonlyrankedsixthThislsquitesurprising.
Theresearchersthenaskedpeoplewhatmadethemleel
badatwork Herethemostcommonresponsebytarwas
'a negatveexperiencewlh colleagues.A rangeofolher
factorswerea somenlioned:ackot recognilion,company
po lics stress,boringwork,elc temslhatwerementoned
essoftenincluded:ackofsupport,havlnga badboss,lack
of d rectonandunsatisfactoryevelsol pay.Thesed d noi
seemto belmportantdemotivalors.
TheEsearchersdrewthefollowingconclusionsabout
motivation:
Ina task-orientedbusnessword,it3 mportantto
remernberthatrelaiionshpsandthe'er.otiona' dimensnf
to workareverymportant.
Recognitionandpositvefeedbackaretheoxygenof
Employees.sk,'Whalsinit for me?'Blsinestsuccessand
customers.tisfactiondidnotappearasrnotvationalfacloK.
Motivationanddemotivationarenotequalandexact
opposites.Forexample,whle aclrievementwasthe
stronqestmotvator,fdLlurewasrarelymentionedasa
24

26. Exercises
I0.1 Finda word in the first two sectionsol the text
oppositethat matcheseachdetinitionbelow.Thewords
appearin order
/wa aonls[ ar t'e begrn-rng
7 rhrcewards(he^holertJaton._olt-srorFpadoI i
3 theway n whchsomeones nvolvedinanaclivity;positon
undeGtandinghowotherpeop€feel
5 knowedgethat|5b.sedonfeelingsratherthanfa.ts
6 ovrnasomeonemorccontrclov€rth€irlifeandwork
8 results
'10.2Thetext mentions'praise,appreciationand
r€cognition'asbeinga partof motivation.which oneof
theseisthe strongestmotivator?
10.3 Learn€rsof Englishoften usethe word
'sympathetic'whentalkingaboutsomeonesuchas
a goodl€aderPuta tick(/) bythe detinitionwhich
matcheshow a native.tpeak€rusesthisword.
1 friendy,nce
2 wi n9to understandsomeone3probemsandhelpthem
1O.4Makephrasesfromthe'Motivation'sedion ol the
text by matchingan itemlrom eachcolumn.
I posiiv€= achievement(morivalor)
2 neqatve 'eeobaclf'on yourbo., 'n ol vdlorr
3 senreol recogntion(demotiv.tor)
4 lackof
5 company
6 physca
7 task'
8 f nancia
experienc€swth colleaques(demotivator)
orient€dbu,n€ssword
10.5 Completeeachsentencewith the corect form of
the word in italics.Som€timesyou will needto usea
negativetorm (de-,ur-).
a tbthe. .. . ....................companylnihef eld
b t3 themarket
c SheshowedexceLlent ability
a Senseof achevements probablythenumberone
t offeredno few challeng€s.I was
1O IEADING AND MOTIVATING
changen
b Thissituationisout ol control
I reach,succeedingettLng
a fan-movingworldsnl
It5compietely
sansly
a A lobwelldonegvesmea qreatfeelingof
b Myworkngcondtionsareteribe.Theyrelun totaly
a Shesgoodat separatjngdcompexprobleminloitsparts
shesvery
b Onllrewrole.
"greewill yoL
There'sa kindol buzzarcunda good nfluencer.Theydont
moan,blameand complan. Theyseewhalneedsdoing
andthensladtalkingto otherstolry1ogelagreementand
aclion-
10.5 Readthe text aboutinfluencing,then answerthe
I eadersdregoooarrr' renc,r9 people.ltsa hiddelsk.ll
L - vFy mpofl"rl orl ole1 rgro'edlrlJercTgm€y
rakelhe iormol persuadingpeopl€to adopltheirideas
inspirngpeope to achievece ain goals,or crcating
Inlluencingrequiresa mixol interpersonal,communicalion
presenlalionandass€rtvenesssk ls Andmoslimportanlly
you needto be abe to adaptand modilyyourpersonal
stylewhenyou see the eii€ctits havingon othersYou
can'tlorceyour deasonotherpeope - theyhaveio teel
acknowledgedundefsloodandappreciated.
Finda word trom thetext that meansi
2 abrlyroe<pessyo-rrdeas'rr.rllya1dconfderly
4 (infonal) Ieelingol p easureor excitement
,nfo.mallcompLar_1an a_1oynq way
Se€page 147for some discussiontopics.

27. lnsuranceand risk management
Everybusnlessfacesrisks,andmmy of theseareinsurabte.
lnsurancemav be obligator)ro. optional,bur it is cerrainly
a part ofprudenirisk management.Thereareil{o basic
typesof businessisuance: liability i$umce dd propertv
Liability insurance
Liability insurancecovcrsdamagecausedio otherpeople.
An employeetuight suffera work rclatcdaccidenr,o! a
visiior might slip on a polishedfloor and brcakm arm.
In eithercase,theycansueyo! and {'ill trv to p!o!e
negligcnce(= failure to takeeno!8h care).Thclc is also
product liabiliiy insuranc€(in casesomeonesucsyou aficr
usn18a product),andprofessionalindenlnityinsuanc.
(AmE malpracticeinsu.ance)in casea clientsuesvou for
makinga costlymistakcwhile advisint rhem.
Property insuran<e
Propertyinsurancecovcrsdamageto rheinsureds o{,n
proPerty.Dam.ge miBhtbc cnusedb), fire,landansm,crc.
Thecohpany might alsonccdautomobileinsurancc.
Somepolici€sincludeihe serviccsofa lawyer (AmE
attorney)in drccv€ntihat youlc sued,while othersdon't.
And it's impo.tant to remcmbcfthatyour p(neciion is
limited to thc maximumon thc Folicy.lfa court awar.ls
damagesthatcxcccdthis fiSurc,then]'ou'reliablefor the
Policies
wlen you takeouta insurancepolicy (iecontract),you
makea regllar paymenicalleda'premiuh'to an insurer.
Thepolicy stateshow much will bepaid and under which
ctcumstances.Readit carefullt checkthe smallprint, and
h particularcheckanyexclusionclarses.After a year,before
the conhacicxpires,you willbe scnta renewalnorice.
tnsuranceis availablethroughscveralchannels:agenrs(who
work direcilvfor oneinsurancecompany),independent
brokers(who scarchfor thebestpolicvamongstm.nv
alternati!es)anddile.t selling(oftcnover the Internet).
Atcnts andbrokcrswork on conimission.
claims
If vou needto makea claim,yor fill out a form andwaii for
it to bc pro.essed.Ifthc insurance.ompany suspectsthat
you'reunderinsured,o! cl.iming too much money,theycan
ippointJ 1o..idiu{tcr/Aml .li,m, ..LlJUstpr,ln p In inp
thc situaiion.Ercniually,theypa),out and yot receiveyour
If an insurerfeelsihat thcy havetakonon too much risk,thcn
theycanto io a reins!rancccompanyb providccovcf fof
Strategic risks
Operational risks
Financialrisks
Failure of compliance
(with new laws)
Integraton probemsarisingfrom a mergeror acquisiton.
Changesinthe marketsuchasa newcompetitoror changesin demand,
New technologresthatthreatenyour businessmode.
Poltical/ Economicinnabilrtyin anexport market.
Brcakdow,nof keyequipment.
Supplychainproblems:latedeliver!qualityissues,erc.
lT failurc:lossof data,damagedueto virusesor hackers.
Pooraccountingthat failsto showthe realfnancjalsituation.
Employeeissues:recruitrnentdiffcuhies,lackofpeope withthe rightskillset,etc.
Cashflow (ie iquidity)prcblems.
Baddebt
Increasedbankchargeson a loan(moreexpensivecredit).
Changesin torcign exchangerates.
Embezlement(= whensomeonestealsmoneyfrom ther own cornpany).
New employmentlegislation-
New heahhand safetylegislation.
26

28. 4 torrnalprot€ctondgann lossor damage
6 (twowordslmakesa decislonto gvesomeone
cornpensaton
7 (twawords)se.lansat a contractthatsaywhat snt
coveredbythecontract
8 fiwowords)writtenrernind€rthata contractisqoi.gto
endsoonandyournustpayif youwantit to co.linue
9 (phtasalveb)gre noneydstheresut oi ani.surance
clam
10 moneythatsomeonerecevesbecauseoi damagethey
Nowdo the samefor wordsin '8ut youcant insure
a9ainst'opposite.
11 (rwowordr)moneythatw ll nevefbecolectedirom
t2 (tatndlt ,tF ptatvF af obA),-g a taw
11.2 Makephrasesby matchingan itemfrom each
column.
I be €oallv- forihedLfiefence
2 trvto prole
damages
3 a*a,d - obtigedlodosoTetiirg
wantessI . . . . , B u tn a n y
Exercises
11.1 Finda word in the text opposit€that matcheseach
detinitionbelow.Thewordsapp€arin order.
1 s€nsib€andcare{ul
2 "gdl'e"oo's,b 7 fo 'on
"t
,ng
3 st.rt a legalprocessto getmoneyfrornsomeone
11.4 Underlin€the correctwordsin italics.
1 Howmuchisth€insurdnceto/o, yourcar?
2 Doyouhaveinsurdnceforl to dnyoneto drvethecar?
3 Youhdveto takeout/ rakeupbuidingandcontents
insurancedsa conditorol themo(gage
4 Thispolicyprovid€sinsu'arceagan* / in favoutaf lotsal
danrdqebyl upto €5,000.
5 We'vensureda ourlTequpmentfor/ wrthovera m lion
6 Canyoucaimth€d.m.geb// o, yourinsurance?
7 Ihey did/ nade . cair' for/ of danages
8 lhere sd riskto / of consLrme6b/ / fromtheseproducts
Wew I haveto wthdrawthernfrornthenrarket.
9 Weareat / w,thrskto be/ af bengsued.
l0 Youshouldqo1ocourt/ thejudge yarhaea ight /
11.5 Completethistext aboutriskmanagementwith
thewordsin the box.Checkanyunknownwordsin a
dictionary
contingencyplan damagelimltation escalationprc.edurc
exposu.eta lsk .enedialaction r6k.ssessmenfs
I1 INSURANCEAND RISKMANA6EMENT
Somecompanieshavea risk-takingcLrlt!rc,whileothers
case,theseniormanagersoi arcecompaniesarelikely
to prepareregular'z
movingeventsandlake 5
4 be Liable
5 takeout
6 takeon
8 check
thesmallprint
rypicalloolhereisa riskmap.Thishasprcbabilityonthe
horzontalaxisand mpactonthevertcaaxis,Keyrisksare
bralstorn€do-dlhenportedontle rap
-'e port19
processhelpsto clarfytherisks,andthenleadsonto a
discussonabolt riskmanagement,
Someri5ksc.n b€reducedof elminated,otheKwi haveto
beaccepted.Forthosen thelattercategory,thecompany
needsto havea
j (=back-
uppan)forwhenlhinqsgowronq.ThscoLrd involvesome
initialmeasurega5thesituationdeterorates,andihenan
LWneTemores€nor
manage6takeresponsibility)f t turnsinto. crsis.
Andcrisesdohappen- managersh.veto respondto fast-
11.3 Crossout the itemwhichhasa differentmeanin9
1 ta dispute,file,put in,subnit a da n
2 Ia neet,pay,reject,settle a.ain
3 considerable,high,potential,seiout significant tisk
4 Ia avaid,face,run,take a I tk
5 io asses'measuremnimize,weighup he $ks
(intendedto improvethe situaton)on ihe spot.In a wo6t
case$enario,thewhole thingjust be.omesa
Seepage147for somediscussiontopics.

29. Manufacturingand engineering
Manufacturing
Manufacturingis the transformatjonof raN materialsinto
fnlishcdproducts.It happ.nsh fachnies,plants(= large
. ! r i J ' n d n i l . / u . - d ' o r ' f . . i . . . , - 1 p . . e . . - . ' n J
Theaud 'manufacturing'is oftcnassociitedrLith indrsiries
iike aukrs,ch.mi.als, non and sl..l. Thesen ustries,base.t
on nnss produ.tion, rere.nrccnajor emplolers n areaslike
Anrcrica's'RustBelt' (lllnrois,ltu1i.rr.,Ii.higin, Ohid and
England's'WestMi.llands' rcgiors.sso.irte.i lrith renliil!
. vrilalrlc.oal, labou an.l nrland1.{en!.rvs(=..nalt.ln the
perlod.ficf lhc S€condWb,ld hf thcscn rstriLs prori.l.d
jobsror lirtc numbersofbluc.oll.r ('orkers,sorknrg in
sennc,u,cll"pa1(1jobsnnd trct.ctcd trt lnions. During
th€ l970sffd 6{hthesenldrsiirs trccarncunproii.bl. in
A'tr.ic. fnd Europe.P(lluciior nrcthodsNerL.in.r€.singlv
ouklatcd,and this tr_peof hciv! n ustr! srLit.hedto othcr
.ountrics,pa icul.r y l.if.rn.
lf l.'pani fc$ appRD.ht{,nr.nufn.turinE.ntrg.d It had
rn.ry l.,bcls,brl T(rlotnl)r({lncnonSvn.nr rL.s thc nron
conrnon.Kcvclcnr.ftsof this.tfrc.ch $crcclimnr.tionof
!!.st(, (.jrci.g inlnory k fls, .rndincrcasnrtcfli.i.nL!
lhk{gh thcsinrplificiii(nrind st.)ndi,diziinnrof pr)..sscs
inLl p(,.odu(s. 4nny of thc c.r' .on.epts nill m use
ioda! arelapineseso.dssu.has'kaizen'(continuous
improement)and 'kanban'(.heckinginventotr levelswith
sinplc js!al signals).
Tljs n.r.approach led to a.enaissancein manufactlring alt
oer therrorld, and eloh.ed int.rmodern-dayphiiosophies
suchas Lcanivlmfacturing andjust-In-Tine (lIT) These
areasar. exploredin xnit 16.
No$a.lals ihe term 'nin!faciuring
has. mlch wi.ier
s.ope Ii nrchldesiercsp.cc, autonotne, biotech,chemicals,
ck)ihingand fooiiveaaelectronics,food and belerages,
pater and printing,pharnaceuticais,plasticsand polymers,
shipbuilding.steelin.1 textiles.
Engineering
If. conlprni m.rkcsnrass-p()ducedprcducc, il s g.n.fally
refered (r asa'man(f..t!ring (ompany'. lf ir's rcsponsiblc
kr.oniflc projecis$ ith a high dctrcc ofcunomization,ii's
, n , , .1 1 ,r , 1 1 1 rI r . i . . - . ' , ,1 r r . n , , , ' n Fi . I n t L. ) .
f r , , , I n i . A . i] n r l * , .n . , 1 . ,r . . , . . . . 1 , . , .. , ' ! .
bulldlng.rndtcstingthings.Enitinccrsarcias.init.dlryhos,
ind h'h! thnrgs{!.k.
r sintiflfd b..ikdown of thenrrf! b n.h$ of.n6inf.rirA
comme(a aid res,deird bli d.!s
bf dg€s.rc.ds {AmE h,Bhwayt.dins
power p.odud on a.d d st.blr o.
n-€kneindlstriaprccesesmoreeft. e.t
pbdlcts e6lefto manufacrlreandmore
qla ityin(easlngproductvily
aLtomobiesanc.aft.heaing aid .oo n!
sl3lemsr.dun.alequpmem r.d ma.n n.r r
plast.spantspharmi.eltcrs
agncuturalchehcals.loodproce$ne
databdesa.d opeatng
embedded.omp!re6 n
andcontrol.g ndlnria
landmanagemeniwater.rndsewige
sydemspo !t o., wnnedsPosa
ststems,.omp!lerg.aphrcs,
everyoayprccu.tsmo. bris
28

30. 12 MANUFACTURINGAND ENGINEERING
Exercises
'12.1Finda word in the t€xt oppositethat matcheseach
definitionbelow Thewordsappearin ord€r.
1 (tuvowardl na].uasubnances,belorebeingmadeinto
somernrn9..
2 rcdsubstancethdtformsonmetawhent getsoldorwet
12.4 Matchthre€verbs(onelrom eachcolumn)with
a similarmeaning.Theyarealltypicalactiviti€sof an
en9rneer.
manag-o
establsh
exdmin€- carryout
sup€tuse -qo oue,3 wolkngcass. .....
4 organizdtionsthatrepres€ntthework€rsina padicular
industry
5 rorrode' FroJgrobPL.ef.l
6 a thet€msn onepartic!arpaceistock
puttogether
getrd of
beincharqeof
weqn!p
7 . I thethingsthata paaricularsublectdealswith;range
8 nformationthathasb€ens€paratedintodfferentgroups
Now do lhe samefor the wordsin 'Typesof engineering'
opposite.
9 walsblilt acrossa rverto createa lake
10 m.chnesortoosthatdoa specaljob(NOT'equipmenl')
11 the pfocessof getlingrd of somethng
12 fixedf rmy anddeeplyin lomethng ese
worKng oroer
In genefal, are the v€rbs in th€ third column more {ormal
12.5 Complet€the text with the words in the box.
2 wel pad
3 heavy
5 contin!o!s
6 wide
7 residental
8 consistent
12.2 Makephrasesby matchingan itemtrom ea.h
chan formanycarparts.Andthebqgestforgelntheworld
isBharatForge.inPune,nda
Thecompanywasfolndedin 1961,and n theearly
decadesganeda repltationforquaityand
Then,n 1988,it spenta huge
- rt3thefrrnstepIntheslppy
-. , - ..threcr
German-enqneeredpant. Alongwlth th s investmeniin
^ { m- . . . a f p o w e .
Tradltionally,Bhaf.tForgeh.d employed. pooryeducated
t . ort ^od 'r s-anForepd(,tgt-e.r
wth white-colarcollegegradlates.
Whentheoutsourdngwavehi the.uto partsndustryin
rhe1990s,Bh..aB".w pla_r^as6
andrcadyto compete.
Morcrccently,it hasbequna straiegyof acquisitionsin
EurcpeandChina.t,{ostof itsproductionsstil ln nda,
withits7................. .. . . andlow abourcosts,but
theadditionofsmallplantsnearerto thecustornerreduces
supplychain3 -.. -,.....
seepage147for somediscussiontopics.
job(proieciedbyunont
industry(egsteel)
concepts(ofa philosophy)
produclon(methodsn indultry)
quaity(ofindustalproductt
mprovemenl(='kaizen')
scope(ofa subjectoractvity)
buldings(incvilenqineering)
12.3 t,nderlinethe corre<twordsin itali<s.
1 Machnes,especialylargeones,ae caedequipnent/
machnery;a theloole,machinesandclothes,etcthatyou
needfora partic!arjobarecaledequipment/ ma.hinery.
2 A seriesof actonsth.t havea pa(icuarreslltisaprocess/
procedureta wayof doinqsomethinq,especialyihecorrect
or usuaway,isaproce$/p/ocedure.
3 Us€lessmaiefalsandparlsthatareeftafi€r6processs
finshedarecalledpoliuilo/r/ waife;damagecal]sedlo ihe
environmentbyturmfLrlchemicalsiscalledpol/utio,/ waste.
A lorgeisa placewheremetalisheatedandthenpoured
e@nomiesaf scale nould rellability tisk
tun upgtade up andtunnlng wo*tarce
Productionand operations 29

31. @,*o"afactory
Study ihe diagrm of m automobile plmt nd the notes that explain what is happening in the ditrerent
deas- It is based loosely on the Volvo Trucls plmt in Gothenbug Sweden, md someof rhe vo€abdary
below is speciJicto the automobile industry. (Checkin a dictionary if necessary)The assembly line staits
on rhe left fld moves io the right, md veious assemblystatlons along the line are shoM by small sqrares
i. Goo& reception:ircm heE in@mi.q good! are
dinributed throuqhout the factory.Traroponto
the statiohsrak* placeeitherbyforklift truc& or
onconpute.cont.olledautonated@rie6that
followmaondi. raikhiddeninthefler
2, Storaqearea:parls.nd
componentethat dont 9odiE<ily
to th. a$embly linearestored
here.Jbe.e ir none.d for a brge
wareholR a ,urtnn.Tine
method5me.n thar there isvery
linle inlentory in the pla.t.
a. this ir wheE the Gbs(=the front pan of the
ttuck whee the drirer 5tu)aredeliv€r€d,
theyarive ona daily(hedulejon likeallthe
other comro.e.b Hee itemseuchaelhe @b
arelNered downusinqderhe.d.ran6. and
the ntte6 hake surerhartheydock
(=join tosdher) coredry. rhe/re securedin
olacewith bolls 6ndnute.smallercon@nents
.r€ .tta.h€d with s.res. ThefitteR h.w .
rangeor 5panne6(AmEwenchet to help
7. othe.components(eqplpes,valvet
wning,t nkr tyret are.t€ch€dat
difie.€nr ttations downthe llne byteams
of skill.d tittes. At the endol ewry
stationthere6.n intomationbo.rd
rellingthefineu howrh€y'rcdoinq
tidewi4, andh@many unibstili
r€mainto bebuiltduringthe.udent
i0. fin.r.a,6lled Theo.sn,
Garel.xation.Ea forworkeE.
Ithsegreenplanttandevenlre.s,
l.crori.'.a 3oppl.n.nr.d
withvadou<omponen$.
e.glnc fiansmi$ion ..d
axl6 arealljoinedto the
3. Thisisthe rtlrt of the
backboneof thetruck
(=thecha$is)arepoduced
4. Theengine arejoined to
the ftansmlsaonlyrtemsat
delivered- tully tened -
This particular factory is a very modem fac ity md rhe
finished hucks ar€ tailored to specific customei orders. lf
there arc no problens the plani can achie€ very high levels
of ituoughput perhaps 200bucks .oling off the line every
However sometimesthe lire h6 io stop md the machinery
is idle. Of couse the mchinery i.sdesigned for healT use,
bur lherch tll dlwdy5be somesea! and leal Asimp e
rnechanical fault may be easy io fix, bui if a key piece of
equipment is out of order then ifs a very senous problem.
Delays are very expensive,particularly when there is a tuI]
order book and the plant is working at maximum capaciry
The system rclies on regda. mainienance so that downtime
30

32. Exercises
2 peoplewho put togeth€rof fepairmachine!or equipment
13.1 Finda word in the text oppositethat matcheseach
definitionbelow.Thewordsappearin order
1 largefactorywhereanindustrialprocesshappens
(tnforma,asufiix(=lettersattheendof a word)used
withmanynounsandadjectivesto meanSpeakingof or
'referringto'
perodof worktime n a placewheresomepeople
workduringthedayandsomeworkatnght
Howbig sthesteelbaf?
It's100centimetresrl by15centirnetres2w by
1ocentmetres:h
l'msorrythenoiseinthefactoryisveryoudlDidyousay
thdtthea s 100centirnetres?
Yes,andthe5w is15andthe6h is10.
OK,thatmeansthatthearcaof the7cr
150% e cenlimetres.
That'sight.
13 INSIDEA FACTORY
edupto thenearenkiograrn.
5 d fferencesbetweenth ngsthat shouldbe the same
6 a buidingusedfora partcuiarpurpose
7 madespeciay forsomeone'spartcularneed
8 theamoLrntof workihat sdoneina pa icularperiodof
t m e
1 0
I
8:
B:
8: tt'qw s82kq,'or
9
1 0
/phrasal.e/b aovrngsr-.adilyorr
lseda ot
12 theperiodof timewhena machineisntworking
13.2 Studythe languagebox below'lt showslanguage
tor describingobjectrin a fa<toryCheckanyunknown
wordsin a dictionary
notbeingused(machinesorfactoriet
(threewords)damagewhchhappenswhensomethingis
13.3 Studythe languageboxbelow.lt showslanguage
for des<ribingproblemsandadjustmentsin a factory
Checkany unknownwordsin a dictionary
A balt haswo*ed bose.
A bladehassnappedoff.
Ihe sctewshavecane loose.
Theleverhasjanmed.
Thepaftsharerunaut.
ltslength/ width/ height/ depth/ thicknessis30 cm
Its 30 cn long/ wide/ high/ deep/ thick
Its2 m longby 1.5m wideby 1.2m high.
Thepipeb 75cm)ndiametel
Theareaaf thecross-se<lianis4 squaremetres
Thevolune(capacivis8 cubicmetrcs.
It weighs2Akg- roundedupta thenearcstkilogran.
lE wetghtis20 kg.
Weneedta dismantletheunit.
Canwe lengthen/ shorten/ widen/ tighten/ laosenit?
Gn wespeedit up?Canweslowit dawn?
|t'swotkingOK,but now we needta resetthemachines.
shapes
1r5Ildt (ulad. sqrat.,.tKula,kaund).rc<1anquld.
cylindrical,L+haped,shapedlikethelettetL.
Covefthe languageboxabovewith a pie<eof paper.
Now lookat the diagramat the top ol the next.olumn
andfill in the missinglettersin the dialoguebelow.
Now matchtheseverbswith the delinitionsbelow:bu6t,
beiamned, run out seizeup, tnap off, wotk loose.
1 not haveanymore eft
2 breakofi with a shortloudnos€
3 breakopensuddeny
4 becomenot firmlyfxed
5 nolongerworkb€causesomethnqi5noppingtheparts
6 suddenlystopworking
seepage147for tomediscussiontopics.
Productionand opefations 3l

33. Procurementand purchasing
Procurement or purchasing?
Thehord'pro.uremen'nean. find,n6d-d p-rchr..1B
suppliesor equipment,espe.ialtythingsth6tare difficulfto
get'. The woid 'purchasing iside that definition is a formal
woid foi'buying'. Thejob iitle 'purchasingmanager'is
still used,altholgh thesedaysthis personmight be calleda
'supply chainman.ger'and havebroaderresponsibiliticsfo!
soucing, logistics, etc.
Procurement
Procurcmcntis a crucialfunctionin business- it's p.obably
the a.eawlt.€ costsavingscanbe mademosteasily.
i Fnldhg suppliers:you may makedirectcontaci{ith
potentialsupplicrs,o! you may lse public adlertising in
the fom of a Rcquestfor lnfomation (RFl),a Reqlestfor
Qroiation (RIrQ),or a Reqrestfor ProposalGr-P).
I Baclgroundrcscarch:oncea numberofpossibleslppliers
havebeenfound,you needtu discoler moreinformation
abort thcir productquality and alsothcir trackrecard
fd insiallation,mainten.nceand warranties.Youmay
examnlcproductsamplesand perhapscarrv out some
Negotiation:you ncgotiateprice,availability,
customizatimpossibilitics,deliveryschedules,etc.
A contr.ct is dr.wn up.
!ulfilmcni: ihc supplierprepares,shipsand dclivrrs ihe
prcduci.Any nlstallaiionand trainingis carnedout.
Weoftenthink of procurem€ninr a manufaciuringconiext,
invohing all ih. itemsthatgo to makeup the finished
p.oduci (ie raw materjals,compon€nisandparts).But ii
happensi'r everybusiness,and includesihe purchaseot
n wide l'arietyof goodsand serlices- f.on low value
itemslike officesupplicsto compler and costlyiietuslike
Proclrementis the areaof businessmostopenb co.ruption:
.ilher a backhanderfrom a supplierto a manage.asa thank
you for beingchosen,or.ollusion betweenthe two to falsify
pri.es, qualjty levels,et.. TheEU hasa very st icisystemof
.ompetitive tendering(=biddjng) io avoid theseproblems,
aDdmany companiesalsooperatea threeL'ay checkof
papemork. Thisinvolvesall invoicesand deh'eriesbeing
verifiedby a purchasingmanageathe accomtspayable
depa ment md the plant manager
Globalsourcing
The related tem 'sourcing' neans 'finding and e-atuatint
supplierJ.'Outsourcing'is subcontra.tjng$'ork to cxtcmaL
companies.Iftheseexiemaicompaniesarein &other
comio, thenitt 'globalsou.dng' (or 'ofishoring').
Clobaiso{rcinljis conboveGialbecauseofiis impactonjobs
- a lalgenumberorproductionand back-ofiiccjobsarelost
onshore.However,if thecompanybcconesnorc succcssful
asa lesultof its lowercosts,ihenne{ jobs(egn salcs,
markethg,.onsulting,projectmanagcment)canbc crcated
onshole.And certainjobsarenearlv.lways belterdoncbv
onsholestaff thoserequiringcreativityandflcxiblcthinknlt.
Offshorccomte.partstendto rigorousLyfollow instructions.
TM reccnttrcndsin globalsorrcing havcbeenl
Themov.m.nt offshoreof lT{triven setuicesec(rs like
banking,tcl.communicationsandnedja (ienotjust
Ne.l.shoringraiherthanoffsho.ing,for lcasonsofpolitical
prcssurc,high fuelcosts,logisiicsand mnnagcment
Drawba(ks
CompLexityof
communicationsbetween
peopleof different
cutturesdispersedaround
thewortd
fxtratransportitioncosts
(ojl pricesaffectshipping
:osis)
Extracosts(egtravet
andlivingexpenses)for
offshoreworkersvisiting
Issuesof securiwof data
andprivacywhenother
companiesgetjnvotved
Globalsourcing
Benefits
Bigreductionin labour
costs
SuperiorseMcelevets
(eg24-hoursupport)
Abilityto undertake
smaLter(prevjousLy
unprofitabte)pjecesof
Improvedaccessto skitts
Synergyfromworking
with a partner
(ega transformationof
businessprocessesarjsing
fromnewideasandnew
waysof wo*ing)
32

34. Exercises
'14.1 Finda word in the text opposite that matchesea<h
d€finition below. The words appear in od€r.
1 a wr ften nai€m€ntof €xactlyhow muchmoney
,I4 PROCUREMENTAND PURCHASING
'14.4Complet€thewordsby addinga pr€positionat the
besinning(asa prefix).
Ina businesscontext.wecanusethewordI snoTeio
mean'in/from anothercountry',th€word'? shoreto mean
'in/frcm vourowncountry',andthewordI shoreto
rcferto a countrythat sgeograohcalv clos€to yourown,or
to a regonoryourowncountry
somelhingw con
2 tuvoward)ar oraanization3successesandfailuresover
time
3
4
8
9
extendedperodsof iesting
suppyingthe thingsthai hav€beenord€r€d
moneythat you pay legally.ndsecretyto get something
oone;Droe
secr-atactvitiesof peope who work iog€therto do
som€thng d shonen
(forma,procelsof nvting suppliersto bid ior a contract
Now do the samefor the wordsin 'Globalsourcinq'
documentsforgoodsorworkdone
ihe nternaloperalion!of an ofganizatlonlhai
arenot accessib€or vsibe to the gen€ralpubic 14.5 Studythe wordsin listsA-E.Checkany unknown
wordsin a didionary Thenanswerthe questionsbelow.
A ro
give(somebody),askior,get,pr€par€,
provide(somebodywith).submit,accept
R r^ drawup,male,accept,consder,
- --
pul forward,oudrne,retect,subrnt
c to
nvrte,bidfor,putsornethingolt to,
announce,suom[,pu!In,awarc,wn
key,externa,arge.foregn, eading,
D a/.n major.outside,over9eas,prncpa,
offshore
E a/ an lengthy,unguccessfLil.protracted,
lruites9,prolonqed,unprodLrctve
11 extraeffectswhenpeopleor businessescornbineandwork
IOgetner
12 disadvantages
14.2 Completethe sentenceswith the mostappropriate
word from the box.
I
estinate prcposal quatationlquote tendel
1 lf youtellsomeonehowmuchaJobwil!con,andyorl
rnityoursefto thatamount,thenyougivethema/ an
f yoLJtelisomeonehowmuchajobwil cost,butyou
reservetherightto changelhearnount(egif circumstances
changeortheworktakeslongerthanexpected),thenyou
givethema/an
lf youproducea formapanfora morecomplexprolect,
te ingtheclstomerhowyouwillcarryit outandhowmuch
10 startto doa pieceof work
itw lcost,thenyoumakea/an
lf youdothesameas n #3,butin responseto a
pLrbllcnvtatjonto bidforthejob,andincompeiiton
wth othersinrarcompanles,thenyouputlna/ an
14.3 Completethe simplified explanation below with
these words: sourci'fg, procurcment, pwchasing.
listA, basedonwh€th€rthesuppleror
(a)tender
suppler
negotaton
1 Divdethewordsin
1"qroup:
Dividethe wods in listB,basedonwhetherthesuppleror
Dividethe wordsin In C,basedonwhetherthesupperor
1''groupl
2'" gro!p:
Dvidethe wordsin kt D, basedon the meanng.
li group:
5 Dividethe
2'" group:
wordsin istE,basedon the meanng.
seepag€147tor somediicussiontopi.s.
Productionand operations 33

35. Supply <hain management and logistics
What is the sqpplychain?
Thesrpdv clrainis the florr ofparts and ra$.m.terials trom
thcir point of origil to the ractor! gntes,thenthtuugh the
factorvaswork nlpro.ess,and iinail! olr oi the f.cnrr as
iinish.d goodsto bc deh.ered b ihc lhal customer
A modernmanuracluriig ope,iti.D nighi hile hhdr€ds
ot suppliersprcridile differ-Antpirts and.onurents, ind
eachof thesesupplicrsq'ill n1t!m h.n. their oI srpflie6
pfoyidinqsimflcrpirts,,'a$nrnicrials,.icT}is,s the
lpsirea,n enll of lhc supph..hanr Snnilarl;tlredorstre.n1
cnd of thechinr might.onsist of dislritr!toF, nhltiple
c!noDrers,et., ind ill nr ole bitch.s of goodsbenril
shit}.d it dlfffr.ni linresto diffcrcnl placcs
Supply chain management
lluring ih. ilholc pir,..ss, fronr beginnifg t()cnd. inrcnr(B
ir'|.rls.rnd too(15)fc.ds lo b! snnc(l rn $!r.housL's
tfd dislrib!ti(nrc$t.cs.r thon hnnsfoitcd ns rL.L1.d
All ol ih s involres .r h!.:c iD(trnl ot comfulcnz.d
ifn)rn.ljon .rhrl thc locnti(nrof inrulort jts .f..r.d
.rrin lior'.rl lh. n.t foirl, el(. Ihrsifi(nnritnnrhisl()tr.
s r.',.r1,r.hss nr.rn! ditt.f.fl .(nrf.ni. nnd I I nchlo,ls:
s!tt (rs,.ust(rn.rs, lhi p.|1 l(i8isti(froki(rsnnd the
.rirrt,r'lLLrr' llsclt. Ihc .Dnngenreft ol thi nloDDlr r
.rlli(iil lo lh. s!...ss (ii (he h!siness
I n( rotnl)tf Yu) ol log?l)(.r
50,supph ch.rlr nnnagemeni(SCI) nakes suie t] t rhe
risht itemsareiI the right placcat the right time.nd nl the
rlght quantitics.Thereareofroursc rviderstr.tegi. issues:
Ho$ man supplie6 shouldthcrebe?And where?
iihereshouldihe ptull,cti(nr iacjlities,distflbutron
.enbesan.lrlrehoGes be locatcdl
l'hat distributionchannelsshouldbe !sedl
lVhi.h logistics.omp.nies shoul({te used,both (p*ream
.nd !l.nvnstrenni?
Ho (an 1Tbe $ed b ifteg.nt. ill the pro.esses,nrke
thetunrcr. cfli.ient, fl:g !rf poicntirlbottlenecks,gi!e
.lerr signils oi deNrnd do$nstr.nn. etc?
II(nr is(ish llo$ nndpihent io.llthe partlesinvolved
in the n,tph chnin!.ing to bc nnuged?
Ih. .lm oi SCNIis lo.olhbor.rtt,r!ith .ll lhcsupplv.hain
pirincr n, inro. lhclisibilitvind !clo.itv oi invcniorv
Logistics
Ihc $od loijisii.s'rci.s to t]l pr.ct c.l iss!.s surorndifB
trnnsportiti(D,$rrchousifg in(l inr(nn)N ni.rniBcnr.fi.
'lrcrcih.r.ls rn el.rul lo.!s it' nr,( or l(ss n
s nonlD f(n SCfvl,bul il ..rn !Lnr h.rrr.f rnl|m.rLii).us,
it.lling Dr.iieri.rlslr..r sit. r lo sitr ll ifsld. .r .omp.ny .rt
Lliiiircnl sriges ol thf Lrusircssfn).ess lhf trrn loljisti.s'
r .rl{i r$fd nr in.rlkr.onprri.s whcre '!!fply
.h.rin
Nrnrg.nrrt seefrs nn) Srrn(l
Ir i,n(nrr rrdkfials hrn(llir!giIiirk rhc t].r0rr: g(nxlsafc
pl.r.,l {r' t)rllcrsan{l n!^.,1 ,!rr,nrl ,n, Ln llili ol,.ls.
l i,trol. i,trcr!), rilrag.uu,r ir o.,r'srngc usi,,sIT.
TIir nr hrl(1 rhc rbilis r, d.r k ir(.tr)in rfunsir.
l r i . ' J I , , , - , r , i ' . , I r , |
" | ' ' | , , ,
I r . i r i . . . tr i . r , - , ,
{rl' $ pur.hring,trd phlr Iul.rg.n!!rr.
lr itrr,,lr.srcl,onl olnrcxtrsol urr'txnr: rn. (,ringIla:ial
c.r-9,,rnln,e)i {r'r (rLjdr.onrnrerl {ar k..l op .D ftrp .l
.rch orlt,)r 'oi.l (un, o. rr!.L sirhlnil.N) j iil (|ing
Nrgons/'Iieight.rN).
. It inrohcs ! (le.in,r rrlr.ther or not ro rs. i tl,'r{r
par$ logisLicl,unl.f (ilPL). These (rnpr.n s pnnj.k.
nt.gnred pi.k-rDd-pa.k- rearhousilg and.lis|iburn .
th.r can al$ a.t xs fonrar.ling igen$ r) handlc hifpn,g
{u
i, lt iDolves ,doidiit{ irenr fiun onc Dexns ol taDspoi
andlo!.ln,gonioarod,er'lhn.aD bed.disLribuLion
..r!e of a {f.ho!e. Tl,e.c rf. rlrrc. posibir'!es:
Hub and spoke corsolidation Deconsolidatjon
l1irtr(n(s b,nhnrburntrlind
(n,r|lr'rrlg,rnl.
E>
Ir i,,c1n,ltRlrNc l()s(ri(s (n,
rhcngoo(l . rlurDc{l!) rh.
mrnull.Lu.r (ithd lreuu*,(n
.Ntonlel l cluD{. o. ofe|kl'li.rl
inlrnkr rr ih..craileB. or ourl^rcd
mo.lur(lin: rhar .rtr ,r) 1(rrg.r .lll.
tr'lat-pr.tt aG A nxetf oi {.aLl.l
brclqnt]nta..e t.rpme.lJa/.
.e.talla.atian ..nbinetli.taane
antl then 'ofted 1.t l.tgpt shtDnent
.leli@tyta. raiet|) l.t e.onant af
at detnnatbns t1.'span
:i@."@
-
rt'l'l.ll]tll
l+

36. Exercises
'15.1
Finda word in the text opposite that matcheseach
definition below. Th€ words aDDearin order.
I dtaneanerstageina process
3 groupsof thingsthataremade(ordealtwith)together
5
7 (phrasalverb)*aw atent on to something
Inegcornrngoutof it
l. 9e bJild.ng'o'.roriq good
ftwo n?ords)bu ld ngslrsedfor ihe srorageoi goodswhich
w lldrprbF ,hipp€dro.prd ourer:
(fau wor.ls) exretnaltr'Tlt that provde specialist
servcessuchastransportationandwarehousing
t 7
t 8
8 d€laysinonestageoi a processthatmakethewhoe
processtakelonger
Nowdo the samefor the wordsin 'Thecomplexityof
logisti(s'opposite.
9 comingtowardsorarrivingat (ega factoryorairport)
10 fforma,goodsforsae
11 takinggoodsoffavehcle
12 fthreelrordi)thedesignof the
wheel,wth a centralpaftand
13 f atwoodenstructLir-.susedformovingor stoinqheaw
goods
14 (twowords)ehicesw th specialequipmentatthefrcnt
forliftnqa,rdrrov19l^eavyobtefls
l5 followtheprogfessof
16 (phrcsaivetb)anangedintoa neatpie
backseciionsof irucksthat canbe separated,andare
usedlor cary ng heavl,objects
processof siariingwith a argequantty of goods,
sortng thema(cordingto d ffereft deninations,and
ihen re-packaqingthemwth new shippn9 iabes
1s.2 Readthe definitionsand.ompletethe examples
with oneof th€sewordst.argo,frcight.
1 goodscarriedbyshp oralrcraft[+ofl
Ev.a"..lple:a shipcarryinga ot ail
2 qoodscarriedbyshp,tran or arcraft;ihesystemof movlng
rneseqooos
Exaraple: ...................................servltes
15.3 Makephrar$ by matchingan itemfrom each
aqent
qoo0s
s!pp v----
2 f nished
3 f na
4 logistics
5 d nr bulion
6 forwardng
15 SUPPLYCHAINMANAGEMENTAND LOGISTICS
15.4 Completeth€ text aboutlogisticsusingthe words
in the box.
balancing ensuting forecasting handling
seleding watehoustng
atthe ghttime.
Demand' andplanning
Determiningthequanttyof goodsthatneedto beordercd
'Logistic!'isa tem thatisusedinmanydiffercntways.
Usinqa broaddefinitionit canincludeal of thefollowing:
therightproductisat th€ight pace
Inventorymanagementand materials3
Keepngthesupplychan ilowinq,withnoboltenecks,by
" rhequarrtyo' r(e'1saro 'e'ent
locatonsanddifi€rentstagesn theprocess.
Communicationte(hnology
theorqanrzatronto rlssuppliers
withlT,lor exampleto provdelnlormatonabouidemand
patternslo facilrtateJust-n-Timede very.
Transportation
6 thebenmeansol iransportation
(ieair,rail,ship,truck).
Pufthasing
:*L
'
-ffi
withsuppiersaboutprice,avaab ity,
Locatinganddesigningfaciltiesthatalowefficientstorage
anddistribution
Alltheaboveactivitiesmustbecoordnatedpropery.
hevitablytherewillbetrade-offs- essof onethingand
moreof somethingels€ inord€rto achievethebest
seepage147for somediscussioniopi(s.
::=-;-4-
l i i i r
##il
,vl,
1b,rJ,t bt $ebBnaw, "
Pfodudionand operaiions 35

37. @
.*" production
The Toyota Production System (TPS)
TPSis thebasisof modem manufactuing. It was developed
at Toyota at the end of the 70sand during the 80s,but is now
used right acrcssindsiry T"S focuseson two thinSs: adding
value and eliminating waste. Value is defined as any item
or fealu.e for which a cstomer is willing to pay-Anything
elseis wasteand hastobe removed.TPSidentifiesseven
1 Overproduction: ploducing too much, or too soorLor too
quicll).Oerproductioni mitumr/edby usrnga'puU'
system; this meam ihat work isn't performed unless the
part is required downstream so in the end produ€ts are
madeonly asa dirst resultofcustomeractiviry.
Materialshandling:insideandoutsidethe plant-
-t Movement;performingtask manuallythar€ouldbe
?, Waiting:idie time betweenwork stationsalongthe
5 OverprocessingrdoinSmore thanthecustomerrequjred
or is willing to pay for
tj Inv€ntoryrexceedingone-pieceflow.One'piecenow (also
kflown as'continuousflow') is when iiemsareprocessed
oneata timc and thenmoveddirectlyto the nextpro.ess.
i Defecis:rework,repan,or wastein its simplestform.
Defecisarerigorouslyanalyzedto makesurethatthey
don't happcnagain(ie 'error-proofing'
thesystem).
Just-ln-Time(JlT)
In is a closely related concept.Here, paits and components
are delivered orny as they're needed: at ihe iight time, in
the righl domts and in ihe ight *quence. Delivery to lhe
factory gate should be Jn, as should delivery to individual
work stations on the assembly line. The aim of IIT are:
minimizing inventory produong item at a rate set by
the customei, eliminating any urnecessary lead time, md
generaly optimizing the flow of materials from supp[ers
through prcduciion and up to the point of saleof the
A1lof theseideasarer€cycledin the modem concepiof'lean
production'(lean= with litde fat).A leanmanuliactureris
constantly tryin8 to leduce manpo'vet materials, money,
machines,time,space,mjstakesandeffort.
Kaizen
Behindall the techniquesdescribedaboveliesthe ideaof
'kaizen'.
This israpanesefor'confinuous improvement'
- makingchangcsli| smnll.incrementalirep>.tlir ir jeer
asbeingdonethroughteamwork,peruonaldisciplineand
rnvolvingworkcrsdrrectlyin the procesrof improvin8
quality.Apracticalimpiementationof ka'zenis'the five
S'approachto workplaceorganization.S€ebelow Thisis
deriv€dfrom five Japan€sewordsbeginninSwiih 'S',and
Englishhanslationshavetried io find five 'S' words.
52: Set ln Order
arrang€everythrn9
ina neat,tidy.nd
53. Shrre
Oncetheworkareahas
beensonedandsetin
order,cleanit upsothat
everythingshineslClean
theareaitsell,aswellas
equipmentandtools.
54: Standardize
Createclear,smpleand
vsualstandardsfor51-53
Example1:shadowsonwork
surf.cesandinsidesiorageboxes
showwhichtoolsshouldbewhere.
Example2:a re-ordercard(calleda
'kanban
) sattachedto an iemand
pa(edsomewhereafteriheitem
isused.Thisgivesavsua
signalwhena newltern
isneeded.
S1:Sort
Revieweverything
separarngwnairs
neededlromwhaiis
not.Removeanythnq Pdnciple:a placefor
everything,andeveMhingin
|t5p|ace
Keyideas:discipline,simplicity,
pride,standardizationand
repeatability
55.sustarn
and mprove51-54.
36

38. 16 IEAN PRODUCTION
Exercises
'!6.1 Finda word in thetext opposite that matcheseach :6.: Fill in the gaps with a different form of the word
I r oaord i -" ^f"-r a -dcf -e r(- ^o.rgo. b"r1g plural),verbor adjective.
definitionbelow.Thewordsaooearin order. in brackets.Thenew form maybea noun(singularor
r rd . i, rLo ^"r o^lp.h, q .-:d"
4 makrnqsom€thng aqan 2 li is rnport.n o male. detaed
5lrynqtoavod(orprotectaqann)futuremstakes (.nayze)of wh ch iemsandfeatLrresaddva!e, andwh ch
doni There3 no pont maknq
6 takento a place(eqhouse,offce,factory)andg vento (mprove)f the.lnomer !n t ,! ingto payfor them
I n . bady rln fartory.m.ny proc€ies are
!sed
2 the contnuousrnovementol something
7 (rwoworctl timethat mln be a owedfor .omp et on of
ar operalon or process
8 a lhe workersthat areneededto do a p.rticularlind oi 4 w th lll
I TPShashada b q mpaclon ( ndlstry)
processesrn mafy secroEor rne
(econom,:)Generaly,it hasmademanlfacturng rnuch
(,v.ste)afd eves of invenlory.r€
(de ver)to the fdctoryqateor
(assembe)l ne rsrnddeon y wlren
Now do the samefor the wo rds in The five Ss opposite. 1r. it Complete th€ text about the 'Theory of constraints'
10 hdved bright,attractNeappear.ncerprocluce(orrel€cl) with the words in the box.
r g n r
9 Increasng graduay
8 clean|]p
1 0 h a n de
I 1 th ngsthdtyouhod n yourhandanduse1()do .
12 (two wotds).anranetswhereth ngsarekeptunlrltheyre
15.2 Make phrasesby matching an item {rom each
I add wane (iroma process)
2 bew rno . 1a!L(m.nuavr
3 delv€r valle(to. prod!.t)
bartlene(kbtan.h .ustamrze.lshape straight
rub-,rsr€mbrersynchrannatian
t t , l + t l - - t
t t l , l t a t
t r t t t t t t
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