A Challenge From the Nimble Newcomers

A new model of international companies is emerging that is driven by networks, global links and adaptability

In the debate over globalisation, large multinational corporations, especially those from the US, European and Japanese origin, are often portrayed as omnipotent villains.

But these companies arc themselves facing a serious challenge from a new type of business, according to John Mathews, professor of management at the Macquarie Graduate School of Management in

Sydney, Australia.

In Dragon Multinational: A New Model for Global Growth, he examines some of the companies that have emerged outside the US-Europe-Japan triad over the past decade. "Periphery" companies, such as Taiwan-based Acer, Mexico's Cemex and Indian-based steel company Ispat International, have used novel organisational structures to establish strong global positions quickly. In fact. Prof Mathews points out, for such latecomer companies, organisational innovation is not so much an option as a necessity.

These companies are a far cry from the traditional structure, based on a corporate headquarters that strictly controls subsidiaries around the world. The new companies have a networked character and, because of that, they have been able to take advantage of the opportunities presented by all the links of the global economy.

Prof Mathews points out that these companies are not based on a new piece of technology or a new process, even though they are adept at using net-based systems as part of their accelerated internationalisation. They are defined by the decentralisation of their structure and by the fact that they were "born global," with an eye on the international marketplace from inception. Old-style companies tend to look overseas only when they have outgrown home markets.

In this framework, the central office acts as a coordinator rather than a controller. The network is held together by common technology, strategic goals and attitudes. Stan Shih, head of the Acer group, describes the new multinational form by using the Chinese characters meaning "circle of dragons with no leading dragon."

The picture that emerges goes against the grain of much of the globalisation debate. That debate tends to present globalisation as driven by a handful of monolithic global companies, working to create a uniform world in their image. But those traditional companies are going to have to struggle to keep up with more nimble cell-based groups, Prof Mathews believes. The command-and-control structure is, he says, simply not suitable for the emerging global economy.

Is the argument convincing? Certainly, there are difficulties with the model that Mathews describes The cellular nature of the group creates problems with raising capital externally, for example. Another issue is that most of these companies are led by a particularly competent and visionary individual; how much of each company's success can be attributed to the leader is an open question.

Nevertheless, it is important food for thought, especially for anyone who wants a new perspective on the arguments about globalisation. One suspects that there is still a good deal of life in the model of die hierarchy-based company — but Dragon Multinational makes the case that serious alternatives are emerging.

The Financial Times

Exercise 6. Translate the text into Russian orally.

Limited Appeal

One giant step across Europe may find few imitators

IТ IS a grand title with a grand idea behind it. The idea of a Societas Europaea (SE), a company based and regulated in the European Union as a whole, rather than a single nation, has been around for at least 30 years. But it was not until September 11th this year that Allianz, Europe's biggest insurer, became the first big company to opt for pan-European status, announcing the move as part of a merger and business re-structuring. The legal groundwork for SE status was put in place only in October last year with the passage of EU legislation which, in theory, allows this new animal to operate seamlessly across the 28 countries of the European Economic Area (the EU and three neighbouring countries).

But there has hardly been a rush to sign up: only a handful of firms, headed by Strabag, an Austrian road-builder, have done so. One reason is continued uncertainty about tax treatment and aspects of corporate governance, as well as the slowness of some European countries to adapt their national laws. Moreover, for smaller European firms, setting up a limited company under British law is cheaper than opting for SE-status - and arguably allows the same freedoms.

Allianz decided on the SE structure as the best way to take over and integrate RAS, a 55.4%-owned insurance subsidiary in Italy, into its other European businesses. By creating a European company, and making an offer in Italy for the balance of RAS shares, Allianz avoids the irksome task of squeezing out reluctant shareholders at a later date - which it would have to do under German takeover law.

The Economist

Exercise 7. Translate the text into English in writing.

Коркунов и Риттер

Российский производитель дорогих конфет и немецкая компания, выпускающая элитный плиточный шоколад, создали альянс

На шоколадном рынке появилось российско-немецкое предприятие. Одинцовская кондитерская фабрика, принадлежащая предпринимателю Андрею Коркунову, и немецкая компания «Альфред Риттер Гмбх & Ко.» объявили о создании альянса. Эксперты оценивают союз как перспективный. «Этот шаг усилит позиции обоих участников, - полагает Ирина Седова, менеджер кондитерских проектов консалтинговой компании «Бизнесе Аналитика». - «Риттер» начинает выпуск своей продукции в России, а «Коркунов» получает инвестиции для расширения производства». И все логично, так как союзники работают на разных сегментах рынка шоколада: немцы - в нише шоколадных плиток, а «Коркунов» - в нише конфет в коробках.

Одинцовская кондитерская фабрика уже успела занять достойные позиции на рынке шоколадных конфет, на фоне именитых конкурентов - таких, как столичный «Красный Октябрь» с его вековыми традициями и швейцарская компания «Нестле», обосновавшаяся на куйбышевской фабрике «Россия». Причин для такого успеха несколько. Во-первых, компании повезло с моментом выхода на рынок. До августовского кризиса ниша элитных шоколадных конфет, на которую претендовал Андрей Коркунов, была полностью занята западными компаниями. Но кризис до того напугал иностранцев, что те оставили поле битвы. И появившаяся продукция Коркунова оказалась единственной в дорогом сегменте. Во-вторых, на российском рынке шоколада еще не было именных торговых марок. Надпись «А. Коркунов» на конфетных коробках резко выделяла одинцовскую продукцию на фоне «ассорти» разных фабрик и придавала ей имидж немассового продукта.

Однако немассовость продукта имеет свои недостатки: объемы продаж не позволяют получить достаточных финансовых ресурсов для расширения производства. А между тем спрос на одинцовские конфеты растет быстрее предложения, особенно в регионах: по данным компании, при нынешних мощностях она способна удовлетворить лишь 60% заявок региональных дистрибьюторов.

Так что «Альфред Риттер и Ко.» появился со своим инвестиционным предложением очень вовремя. «Благодаря сотрудничеству с «Риттером», - говорит Андрей Коркунов, -мы сможем расширить свою долю на региональных рынках до двадцати пяти процентов. Кроме того, это позволит нам увеличить объемы экспорта. Например, уже появилась возможность прорыва на рынки Канады и США, нужно только увеличить производство».

Всего в совместный проект будет вложено 20 млн долларов, половина из которых - германские. В итоге мощность производства увеличиться до 22 тысяч шоколадной продукции в год. В результате оборот Одинцовской фабрики вырастет с 50 млн долларов до 100 млн в будущем. Коркунов не исключает и возможности продвижения своей продукции в Германию, для чего ему пригодятся наработанные связи «Риттер».

Анастасия Матвеева

Эксперт

Exercise 8. Translate the following texts orally.

Text 1

French Twist?

IN THIS summer of corporate love, the unwanted embrace of Pechiney, a French aluminium company, by Alcan, its Canadian rival, could become a thorny romance.

Alcan's offer recalls a friendly menage a trots attempted in 1999 between Alcan, Pechiney and Alusuisse of Switzerland, which was rudely interrupted by offended European antitrust officials. Even so, Alcan went ahead with the purchase of Alusuisse.

Will this new, hostile attempt to complete the earlier threesome - thereby creating an aluminium giant to rival America's Alcoa - fare any better? Pechiney's board has rejected Alcan's offer as much too low, and is said to be seeking an alternative "white knight" buyer.

On its face, Alcan's pursuit of Pechiney makes sense. Along with the economy, the aluminium business has been in a slump; consolidation is in order.

Alcan has yet to raise its bid, but is expected to do so. It has been playing to French pride, and to French unions' aversion to job cuts. Full-page ads in Le Figaro argue for the deal by highlighting Alcan's long history in France and the Quebecois firm's "francophone culture." So how will the EU's antitrust watch dogs respond this time? In the years since Alcan's 1999 bid, the team headed by the competition commissioner, has been buffeted by a series of successful legal challenges to its merger-blocking decisions.

In one case, the European Court of First Instance declared baldly that the European Commission's merger analysis was "vitiated by a series of errors of assessment." Whether this will be enough to make it go easy on today's deals remains to be seen. Alec Burnside of Linklaters, a law firm, thinks that the commission is likely "to bounce back and show that the system still has teeth."

Already, it is looking hard at a bid by GE, which it once stopped from buying Honeywell, for Instrumentarium, a Finnish medical-equipment maker. The commission will certainly worry about the risk of collusion in a consolidated aluminium industry — a realistic fear in an industry already more integrated than for other metals, says Magnus Ericsson of Raw Materials Group, a consultancy. On the other hand, Alcan has learned from its earlier rebuff. It has come up with a plan to shed assets in Germany to pacify the commission.

Moreover, its bid will be helped by the continuing pain in the industry, deriving in part from growing competition from aluminium suppliers in China and Russia. This new competition makes it harder to believe that a merged firm would wield excessive market power.

In the end, the decision may rest with Pechiney's shareholders and, above all, its executives. If they try to construct an elaborate defence on antitrust grounds, perhaps the bid can be blocked. But this would probably be victory at a price: Pechiney might prevent itself from making any future acquisitions of its own.

The Economist

Text 2