new_insights_into_business_studen

unit eleven

Vocabulary development: prefixes

3 Use the following words from the text to complete the passage below.

entrepreneurs (para 1)	ventures (para 2)	industry (para 2)	demand (para 8)
advantage (para 9)	founded (para 16)	predicts (para 19)
Andrew Klein, the director of Spring Street Brewing Company,1			fourvted his

company in 1993 with the idea of bringing a Belgian beer, Wit Beer, to the American market. However, his original approach to finding the necessary capital, by using the Internet, soon made him a pioneer in this new field. He was one of the

first to understand the 2	of using the Internet as a means to attract
investment capital for new business 3				. For just $200 a month, Klein was

able to rent a site, present his products and contact investors all over the world.

Following in his footsteps, many other4		have been able to finance and
promote their own businesses in a similar way.

Today, Wit Beer can be found in several major cities in the US and Andrew Klein

5 that consumer 6 for his company's products will continue to

rise. Indeed Wit Beer already outsells some of the more exotic beers which compete in the7 .

Prefixes can sometimes be added to words to change their meanings. In the text on page 108, the word co-founder (para 8) means 'a person who founded a company with someone else'.

1 Match the following prefixes with their corresponding definitions.

1 inter- e

2 post-

3 bi-

4 pre-

5 multi-

6 ex-

amore than one; many

blater than; after

cbefore; in preparation

dformer and still living

ebetween; among a group f two; twice; double

2Match the prefixes from exercise 1 with the words below. Use your dictionary to help you.

a ..&-...lingual		e	director
	rt^klingual	f	graduate
b	date	g	personal
	date	h	husband
c	arranged	i	annual

dnational national

3 What other words do you know that can be used with these prefixes?

110

Setting Up a Business

LanguageFocus

Relative clauses Look at the following sentences from the text on page 108. The relative clause is in bold.

AThe company is compiling a library ofsoftware components that companies can then slot together, (para 16)

BApricot, which ran a version ofMicrosoft's MS-DOS operating system, had a hardware architecture peculiar to itself, (para 11)

Complete the sentences.
1 The relative clause in sentence (	.) is a defining clause. It is essential to
the meaning of the sentence.
2 The relative clause in sentence (	J is a non-defining clause. It gives us

extra information. This information is not essential to understand the main point of the sentence.

The two types of clauses are different in terms of grammar and punctuation.

•• For more information on relative clauses, turn to page 168.

Practice	1	Look at the following sentences and decide whether they are defining (D) or
	non-defining (N) relative clauses.
	1	The design that we selected was in fact the most expensive.
	2	Wayne Calloway, who is from our Glasgow office, will be
		making a presentation of the new project.	•
	3	The new investment plan, which was announced on
		Wednesday, will take five years to complete.
	4 The manager who made the mistake lost his job.
	5	This is Jane Stewart, whose company manufactures
		computer software.
	6	The Marketing Department is the one whose contribution
		has been the most significant this year.
	2	Join each pair of sentences using a defining relative clause.

Example: We signed an agreement. It will give us exclusive rights to several products.

The agreementwhich we signedwillgive us exclusive rights to severalproducts.

1 We use videos for training purposes. This is one of them.
	This is one of						.
2	I left a report on your desk last night. Have you read it?
	Have you						?
3	We interviewed some candidates. They were highly qualified.
	The candidates						.
4	A secretary's computer crashed last week. What's her name?
	What's the name						?
5	A woman introduced me to Mr Ross. She was Australian.
	The woman						.

From which sentences could the relative pronoun be omitted? Why?

I l l

unit eleven

Speaking

3 Choose the non-defining relative clause which best completes each of the sentences below.

1The firm's 300 employees, £., decided to go on strike

2The report, ..., contained many interesting ideas on how to promote our new products.

3The firm, ..., intends to expand its presence in Eastern Europe.

4 The new machinery, ..., is not as efficient as we had hoped.

5Professor Harding, ..., will be the main speaker at this year's conference.

6KBJ Optics, ..., has over a hundred patented products.

7The Chairman, ..., maintains close relations with the company's major investors.

awhose engineers are among the most brilliant in the country

bwhich cost the company over £2 m

cwhose salaries had not been increased

dwho was elected to the Board last year

ewhich was written by our Marketing Manager

fwhich has recently signed a contract with a Polish manufacturer

gwho is a specialist in American management techniques

Skills Focus

Do the questionnaire, then compare your answers with a partner.

Howdo VrAWlwm wwBumSB&wSWSimm

entrepreneur?

Have you got what it takes to run your own bi .

For each of the following questions, tick the answer which comes closest to what you feel about yourself.

1 Are vou a self-starter?					d and motivate oth
G	a	/ only make an effort when I want to.			Once something is moving I'll join in.
"3	b	If someone explains what to do, then I			I'm good at giving orders when I know
		can continue from there.			what to do.
G	c	/ make my own decisions. I don't need	•	c	I can persuade most people to follow
		anyone to tell me what to do.			me when I start something.
		I get on with almost everybody.	Q a		I like to take charge and to obtain
			•	b	results.
		I have my own friends and I don't			I'll take charge if I have to but I prefer
		really need anyone else.			someone else to be responsible.
		I don't really feel at home with other	•	c	Someone always wants to be the leader
		people.			and I'm happy to let them do the job.

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Qa / tend to get confused when unexpected problems arise.

Qb I like to plan exactly what I'm going to do.

• c I just like to let things happen.

•a I'm willing to work hard for something I really want.

•b I find my home environment more stimulating than work.

•c Regular work suits me but I don't like it to interfere with my private life.

•a / am quite happy to execute other people's decisions.

•b I often make very quick decisions which usually work but sometimes don't.

•c Before making a decision, I need time to think it over.

•a / always evaluate the exact dangers of any situation.

Qb I like the excitement of taking big risks.

Qc For me safety is the most important thing.

Qa The biggest challenge for me is getting a project started.

Q b l f l decide to do something, nothing will stop me.

•c If something doesn't go right first time, I tend to lose interest.

•a For me, job satisfaction cannot be measured in money terms.

•b Although money is important to me, I value other things just as much.

•c Making money is my main motivation.

criticism?

•/ dislike any form of criticism.

•If people criticise me I always listen and may or may not reject what they have to say.

3 c When people criticise me there is usually some truth in what they say.

Setting Up a Business

/ try to be honest, but it is sometimes difficult or too complicated to explain things to other people.

•I don't say things I don't mean.

•When I think I'm right, I don't care what anyone else thinks.

aI prefer to delegate what I consider to be the least important tasks.

•b When I have a job to do I like to do everythingmyself.

•c Delegating is an important part of any job.

•a Stress is something 1 can live with.

•b Stress can be a stimulating element in a business.

•c 1 try to avoid situations which lead to stress.

15	Ho
•	a	/ believe that my success will
		depend to a large degree on
•		factors outside my control.
	b	1 know that everything depends on
		me and my abilities.

•c It is difficult to foresee what will happen in the future.

16If the business was not making a profit after five years, what would you do?

Q a give up easily.

•b give up reluctantly.

•c carry on.

Scoring: Use the key on page 160 to calculate your score. Then check on the next page to see how you rate as an entrepreneur.

unit eleven

44 or above

You definitely have the necessary qualities to become the director of a successful Ibusiness. You have a strong sense of leadership, you can both organise and

motivate and you know exactly where you and your team are going.

between 44 and 22

You may need to think more carefully before setting up your own business. Although you do have some of the essential skills for running a business, you

* ill probably not be able to deal with the pressures and strain that are a part of the job. You should perhaps consider taking some professional training or finding an associate who can compensate for some of your weaknesses.

below 22

Managing your own business is not for you. You are better suited to an environment where you are not responsible for making decisions and taking risks. To operate successfully you need to follow well defined instructions and youu prefer work that is both regular and predictable.

Listening	Cargolifter is a company that is producing a new generation of airships for
	cargo transportation. You will hear a company spokesman answering questions
	about the different stages that were involved in starting the company.
	1 Before you listen, number the different stages of the project in the order in
	which you think they happened.
	a Conduct a feasibility study.
	b Get the idea of using an airship to transport heavy goods.
	c	Identify the market.
	d Construct the assembly plant.
	e Seek investment from major
		companies.
	f	Identify a problem,
	g	Create the company.
	h	Invite private investors to join
		the project.
	2	!^ Listen to the cassette and check

your answers.

W r i t i n g Setting up a successful business requires careful preparation and planning but also involves a degree of risk-taking. There are a number of questions that all entrepreneurs must ask themselves concerning the products or services that they intend to sell, the competition that they will face, the structure of the business itself and the sources of finance that they will need to open their new venture. This means that all of these parameters must be defined in a business plan: a document that shows how the entrepreneur will organise his or her business, how much he or she expects to sell and where the capital will come from. Once this information has been put down on paper, the entrepreneur can then choose an appropriate form for the company, register it with the authorities and open for business.

114

Setting Up a Business

I Read these extracts and decide which sections of the checklist they come from.

concentrating on getting

first

city area and ex

. Eventually it

Retail outlet selling a wide range of specialist teas and tea-related giftware. Sales will be made direct to customers and also by mail order.

manjSible to set up shops in locations around the country.

registered as a limited

1000 euros per

in the local press and free press. will be complemented by flyers distributed directly through letterboxes to residents in thearea.

r	Businessplan checklist
cV	i Details of the business
	Name of business

CType of business (limited company, partnership etc.)

	c	2	Personal details
			Relevant work experience
	c	3	Personnel
			Number of people / job function
	c	4	Product / service
			Description
	c
		5	Market
	f
			Describe your market.
	r		Who are your customers?
	c		Is your market growing, static
			or in decline?
			Who are the main competitors?
	c		What are the advantages of
			your product or service over
	r		the competition?

Two full-time sales staff for the shop. One personal assistant to do secretarial work and general office administration.

6 Marketing

What sort of marketing or advertising do you intend to do?

7 Premises / machinery / vehicles

Where do you intend to locate the business and why?

What sort and size of premises will you need?

What machinery / vehicles do you require?

8 Objectives

What objectives do you have for the business?

2 Work in small groups. You have decided to set up your own business together and have approached the bank for advice. They have asked you to prepare a business plan. Decide what type of business you are going to set up, then discuss each of the points listed in the business plan. When you have finalised all the details of your business, prepare a written plan to give to the bank.

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unit

12 Corporate Alliances

andAcquisitions

Key vocabulary IP l As business and the world economy become increasingly competitive, more and more companies have to strengthen their operations to remain profitable. Companies can go about this in a number of ways, including the following.

	Joint venture: Two or more companies agree to collaborate and jointly invest in a
	separate business project. This type of deal allows the partners to combine their
	strengths in one specific area.
	Merger: Two companies, often in the same industry, come together to form one
	company. Companies merge for many reasons, for example, to increase market share
	and cut costs in certain areas, such as research and development.
	Acquisition or takeover: One company accumulates enough of another company's
	shares to take over control and ownership.
Lead-in	1 Read the following extracts from the financial press. In pairs, decide whether
	each one refers to (a) a joint venture, (b) a merger or (c) an acquisition.

rn Hearst Corp Walt Disney C ^ H ^

and Peterson Pub	Q u l d
discussing a dea^t

(D Poland may call offtalks on the sale ofnewsstandchainRuchtoFrance's Hachette distribution service ifitfails to make a firm financial offersoon.

General Motors is to start buildingits Chevrolet Blazer, a sports utility vehicle, in the factories of ElabugaAvtomobilny Zavod (EIAZ) in Tartarstan, an autonomous part ofRussia. This businessproject will be owned by EIAZ and GM,

which plans to invest as much as $250 m in the plant.

"st as Daewoo Electronics

^ a ' r f " a n B a e Soon-Hun thought
he had agreed a deal to buy
Thomson Multimedia, the
consumer electronics arm of
Thomson, he heard that It had	banking assets.
refused his offer.

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Corporate Alliances and Acquisitions

2 US You will hear Margareta Galfard, Director of Communication for Volvo in France, talking about why the merger between the major automotive companies, Renault and Volvo, failed. Listen and decide if the following statements are true (T) or false (F).

1The reasons why the merger failed are very simple to understand.

2The shareholders were afraid that Volvo would lose its Swedish identity.

3The shareholders feared that Renault was trying to take over their company.

4The Swedish management were keen for the merger to go ahead.

3 Can you think of any other reasons why a merger might fail?

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unit twelve

When egos" collide

In the acquisitions jungle,

alpha* males are deal-breakers

Perhaps business schools should add anthropology* to the curriculum; the parallels between the behaviour of corporate

5 executives and that of great apes are uncanny*. The spectacular collapse of the supposed alliance of drug giants GlaxoWellcome and SmithKline Beecham is a textbook

10example.

There was a clear business logic to the union of the two Pharmaceuticals giants. The deal gave the companies a drugs

15 research and development budget more than twice the size of their closest rivals, Novartis and Merck, and the combination of their complementary research

20 technologies could have left them streets ahead of* the competition; cost-cutting alone could have saved $1 bn. But because these two great beasts of the jungle (the

25 CEOs of the corporations) chose to throw sand in each other's faces, the deal is off, at least for now.

Corporate egos cause problems but 30 they seem to be inevitable in a

business culture that prizes drive, determination and leadership above all. Having the strength of personality and the ability to

35 outmanoeuvre* others is a fundamental prerequisite to climb

to the top of the corporate ladder. So with a power-hungry alpha male at the top of each company, it is not

40 surprising that every time a megamerger is announced, there's a high probability of a boardroom bust-up. Nicholas Bates, head of Human Resources Management at the

45 European Business School, says many senior businessmen actually go off the top of the scale on personality tests. 'Some of them are almost psycho-pathological and would have

so no hesitation taking everyone down with them. Some are verging on* paranoid.' Nevertheless these are precisely the sorts of personalities that companies want because they

55 can transform a business; the problems only appear when they have to get together with peers in their organisation who don't share their views. Then clashes are

60 inevitable.

Europe's most spectacular and public bust-up was between automotive giants Volvo and Renault. In September 1993 Volvo and Renault

65 announced they were to tie the knot, with Volvo holding a minority 35% stake. However, three months later Volvo shareholders and senior management rejected the marriage

70 plans because of concerns that the deal undervalued Volvo, and was turning into a Renault takeover,

without Renault paying the acquisition premium. Simmering*

75 resentment over chairman Pehr Gyllenhammer's dictatorial management style at Volvo added spice to the management revolt. The divorce is reputed to have cost

so Volvo several hundred million dollars and forced the resignation of Gyllenhammer after more than two decades in the driving seat. Egos play such a large role when

85 two giant corporations come together that it is hard to make them work unless one personality is prepared to take a back seat or step down. The $26 bn marriage

90 between Swiss giants Ciba and Sandoz to form Novartis in 1996 is often held up as a textbook example of how mega-mergers can work. It is successful, but much of

95 that success is dependent on the fact that key personnel were ready for retirement, or were prepared to relinquish* old roles in favour of new opportunities in other

100 scenarios.

Compromise* is essential if mergers between two powerful corporations are to work to the advantage of both parties and their

105 shareholders. Otherwise friendly discussions break down and can easily turn into all-out war. In the corporate jungle, the question is now whether the imperatives of

110 shareholders can control the egos of managers, to force through deals that deliver them the financial return they expect. This is where independent directors ought to play

115 a part, although they rarely do.

TheEuropean

	*an ego: a person's opinion about him / herself
	'alpha: the highest mark in an exam
	'anthropology: the study of people
118	'uncanny: strange and difficult to explain
	'streets ahead of: much better than

*to outmanoeuvre: to gain an advantage by having a better plan 'verging on: almost, nearly

'simmering: just hidden below the surface 'to relinquish: to let s.b. else take

'compromise: agreeing, while accepting some things you don't like

Reading

Vocabulary

Corporate Alliances and Acquisitions

I Read the text opposite about failed mergers, which uses the Volvo-Renault deal as an example, and see if it mentions any of your suggestions from Lead-in 3.

2Read the text again and answer the questions.

1According to the author, why should Glaxo Wellcome and SmithKline Beecham have gone ahead with their alliance?

2Why didn't the deal go through ?

3What does Nicholas Bates say about the personalities of many senior businessmen?

4What reason does the author give for the success of the Ciba-Sandoz merger?

5What according to the author makes a successful merger?

I Choose the best definition for the word in italics in the sentences from the text.

1The parallels between the behaviour of corporate executives and that of great apes are uncanny, (line 3)

a similarities

b differences

c distinctions

a

2 The spectacular collapse of the supposed alliance of drug giants Glaxo Wellcome and SmithKline Beecham is a textbook example, (line 9)

a unusual

b interesting

c perfect

3The deal gave the companies a drugs research and development budget more than twice the size of their closest rivals, (line 17)

a competitors

b partners

c friends

4Corporate egos cause problems but they seem to be inevitable in a business culture that prizes drive, determination and leadership above all. (line 30)

a unavoidable

b impossible

c likely

5 Having the strength of personality and the ability to outmanoeuvre others is a fundamental prerequisite to climb to the top of the corporate ladder, (line 36}

a step

b problem

c requirement

6The problems only appear when they have to get together with peers in their organisation who don't share their views, (line 57)

a people who hold higher positions		b people who hold lower positions
c people who hold similar positions.
7 Then clashes are inevitable, (line 59)
a solutions	b strong differences of opinion		c long discussions

8In the corporate jungle, the question is now whether the imperatives of shareholders can control the egos of managers, (line 109)

a urgent demands b instructions c strong personalities

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