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Professional English English for Business Studies A course for Business Studies and Economics students Third Edition 1 ¥ a i x ¥ Student's Book lan MacKenzie English for Business Studies A course for Business Studies and Economics students Third Edition Student's Book lan MacKenzie S CAMBRIDGE UNIVERSITY PRESS CAMBRIDGE UNIVERSITY PRESS Cambridge, New York, Melbourne, Madrid, Cape Town, Singapore, Sao Paulo, Delhi , Dubai, Tokyo Cambridge University Press The Edinburgh Building, Cambridge CB2 8RU, UK www.cambridge.ong Information on this title: www.cambridge.org/9780521743419 © Cambridge University Press 2010 This publication is in copyright. Subject to statutory exception and to the provisions of relevant collective licensing agreements, no reproduction of any part may take place without the written permission of Cambridge University Press. First published 1997 Second Edition 2002 ‘Third Edition 2010 Printed in the United Kingdom at the University Press, Cambridge A catalogue record for this publication is available from the British Library ISBN 978-0-521-74341-9 Student’s Book ISBN 978-0-521-74342-6 Teacher's Book ISBN 978-0-521-74343-3 Audio CD Set Cambridge University Press has no responsibility for the persistence or accuracy of URLs for external or third-party internet websites referred to in this publication, and does not guarantee that any content on such websites is, or will remain, accurate or appropriate. Information regarding prices, travel timetables and other factual information given in this work is correct at the time of first printing but Cambridge University Press does not guarantee the accuracy of such information thereafter. Thanks Although only one name appears on the cover of this book, Ineed to thank a great many people for their help and hard work, beginning with Cambridge University Press commissioning editor Chris Capper. Stephanie Ashford, Helen Bicknell, Anna Glinska, Joy Godwin, Graham Jones and Dominique Macabies gave helpful feedback on the previous edition, The outline of this edition was worked out with Chris Capper, Will Capel and Chris Wills. Will Capel was the development editor, while Chris Wills also made suggestions for the first half of the book and Joy Godwin for the second. Alison Silver also provided ideas throughout, and expertly and good-humouredly prepared the manuscripts for production. Martin Crowdy’s expertise was tapped for the units on accounting and finance. Alllof the editors will nd some of their ideas in the book — though | probably scoffed at them at first before ‘managing to convince myself they'd been my ideas all along! Will Capel set up most of the UK interviews, and Pete Kyle expertly recorded them, with an extraordinarily large microphone on the end of apole. One other recording was produced by James Richardson. Pete kyle also produced and edited the CDs. My thanks go to all the interviewees, who graciously gave us their time and shared their exoertise with us: John ‘Antonakis, Olga Babakina, Richard Barker, Martin Beniston, Charles Cotton, Carlo de Stefanis, Denis Frucot, Janine George, Melissa Glass, Alan Goodfellow, Anna-Kim Hyun-Seung, Lakshmi Jaya, Michael Kitson, Teresa La Thangue, Alison Maitland, Tony Ramos, Chris Smart, Krishna Srinivasan, Saktiandi Supaat and Rory Taylor. Thanks also go to the writers whose texts | have used, and the cartoonists whose work (mostly from The New Yorker) brightens up the pages. Thanks are also due to Chris Doggett for dealing with permissions, Hilary Luckcock for finding the photographs, Linda Matthews at Cambridge University Press for arranging the production schedule, Wild Apple Design who can and do turn sows' ears into silk purses (as the saying doesn’t go), and Kevin Doherty for porof-raeding. Prospective thanks go out to all ‘of Cambridge University Press's sales and marketing people. I've dedicated previous books to my children, but this time | have to revert to the equally traditional apology-to-partner paragraph: sorry, Kirsten, for the surliness that went with many months of writing a book while also working fulltime and taking on too many other ‘commitments. (Oddly, she doesn’t believe my assurances that this will never happen again!) lan Mackenzie September 2009 Contents Thanks Introduction to the learner Map of the book Management 1 Management 2 Work and motivation 3 Company structure 4 Managing across cultures 5 Recruitment 6 Women in business Production 7 The different sectors of the economy 8 Production 9 Logistics 10 Quality Marketing 11 Products 12 Marketing 13 Advertising Finance 14 Banking 15 Venture capital 16 Bonds 17. Stocks and shares 18 Derivatives 19 Accounting and financial statements 20 Market structure and competition 21 Takeovers 10 15 21 26 30 38 42 47 51 56 60 64 69 73 7 81 86 1 95 100 105 Economics 22 Government and taxation 23 The business cycle 24 Corporate social responsibility 25 Efficiency and employment 26 Exchange rates 27 International trade 28 Economics and ecology Role cards Audio scripts Appendix 1: How to give a good presentation Appendix 2: Writing emails, letters and reports Acknowledgements 109 14 119 124 128 132 136 142 156 181 185 190 Contents 5 Introduction to the learner English for Business Studies is a reading, listening, speaking and writing course for learners. with at least an upper-intermediate level of English (Common European Framework for Languages level B2) who need to understand and express the key concepts of business and economics. It covers the most important areas of management, production, marketing, finance and macroeconomics. This course aims to: + present you with the language and concepts of business and economics found in books, Journals, newspapers and magazines, and on websites + develop your comprehension of business and economics texts + develop your listening skill in the fields of business and economics * provide you with opportunities to express business concepts both verbally and in writing, by reformulating them in your own words while summarizing, analysing, criticizing and discussing ideas. Most of the units contain four components: 1. Aninformative reading text giving an overview of a particular topic, introducing key concepts, and including a lot of relevant technical vocabulary, plus a variety of ‘comprehension and vocabulary exercises and discussion activities. Some of the texts come from newspapers and books about business or economics. 2. Listening activities, mostly based on interviews with business people, economists and other experts, The listening material includes British, American, Australian and South African voices, but also speakers from several European and Asian countries. Listening to Non-native speakers of English is important as much of the English you will hear in your professional ife will be spoken by people who don't have English as their first language. 3° Speaking activities including discussions, case studies, role plays and presentations. 4. Writing activities including summaries, emails, memos and reports. !f you are using this book in a class with a teacher, it will give you lots of opportunities to discuss ideas and issues with other learners (in pairs or small groups), and to develop and defend your own point of view. lf you are using this course on your own, you will still be able ta do the reading and listening exercises. You will find the answers to the exercises in the English for Business Studies Teacher's Book. hope you enjoy using this book 6 Introduction to the learner Map of the book Unit Reading Listening Speaking Writing, 1 | Management | What is management? | MBA students: Case study: ‘Summary; email What makes a good | Selecting a Chief manager? Operating Officer 2 | Workand Theory Xand Theory | MBA students: Case study: Acar | Summary; email | motivation Y; ‘Satisfiers’ and Managers and manufacturer ‘motivators’ motivation 3 | Company Wikinomics andthe | MBAstudents: Big _| Presentation: Notes fora structure future of companies; | and small companies | Presenting a presentation Company structure company 4 | Managing Managing across MBA students: Role play. | Autobiographical acrosscultures | cultures Managers, authority, | Welcoming text and cultural diversity | American colleagues 5 [Recruitment | Fillinga vacancy; Job | John Antonakis Roleplay: Ajob | Curriculum vitae applications (management interview or resume professor): Job interviews 6 | Women in You're fired! Alison Maitland Role play:Dowe | Memo or email business (The Guardian) (writer and need more women journalist): Women in | managers? business strategic issue 7 | Thedifferent [Another cupoftea |The businessmews | Discussion: Your _| Business news sectors ofthe | (David Lodge: Nice _| (radio) place inthe item | economy Work); Manufacturing economy and services 8 | Production Capacity and | Alan Goodfellow (IT | Role play: Choosing | Email | inventory; ‘The Dell__| director): Purchasing | suppliers Theory of Conflict | and low-cost Prevention’ (Thomas | manufacturing Friedman: The World {5 Flat) 9 | Logistics Pull and push ‘Alan Goodfellow: | Casestudy:Risk | Summary; report strategies; Supply- chaining (Thomas Friedman: The World {5 Flat); Supply chain work flow Inventory, Kanban | analysis and MRP; Leica’s | supply chain | Map of the book 7 Unit Reading Listening Speaking Writing 10 | Quality Total Quality Denis Frucot (hotel | Role play: Ahotel | Email Management Manager}: Customer | chain in trouble care and quality in a hotel 11 | Products Products and brands | Melissa Glass Case study: Report (juice bar director: | Researching a Smoothiesanda | product concept juice bar 12 | Marketing The product life Melissa Glass Case study: Description of cycle; Marketingis | Promoting ajuice bar | Promotinganew | distribstion everything product channels (Regis McKenna Harvard Business Review) 13 | Advertising | Advertising and viral _| Radio commercials Scripting aradio | Summaries; radio marketing commercial commercial 14 | Banking Banks and financial | Tony Ramos (HSBC): | Role play. Minutes of a institutions; The Commercial banking; | Microfinance meeting subprime crisis and. | Anna-kim Hyun- the credit crunch Seung (expert on business ethics): Microfinance 15 | Venture capital | A business plan Chris Smart (venture [Role play: Investing | Summary capitalist): Investing | in startups instart-ups 16 | Bonds Bonds; How to profit |TeresalaThangue | Case study Report from bonds (The (Financial Services _| Investing in funds Guardian and The | Authority): Bonds Independent) and subprime | mortgages 17 | Stocks and Stocks and shares; | A financial news Role play: Investing shares Hedge funds (Geraint | report (radio) Anderson: Cityboy) acclient’s money 18 | Derivatives Spread-betting (Times | Teresa La Thangue Role play: Financial Training memo Online) Hedge funds and | instruments structured products 19 | Accounting | Google Inc.'s financial_| Richard Barker Role play: and financial | statements (Seniorlecturerin | Presenting a statements accounting): Valuing | company's results | assets 8 Map of the book and taxation government (Milton (senior lecturer Taxation and Unit Reading Listening Speaking Writing 20 | Market Market structure Charles Cotton | Case study: Briefing structure and (T consultant}: Encouraging document competition Companies and clusters | clusters 21 | Takeovers Takeovers, mergers | Rory Taylor Roleplay: Isthis | Summary and buyouts (Competition company restricting Commission}: Market | competition? investigations 22| Government | The role of Michael Kitson Presentation’ Presentation or report Keynesianism and monetarism the business cycle; Keynesianism and Rose Friedman: | in international government, Free to Choose) macroeconomics): | spending Government intervention 23| The business | What causes the Michael Kitson: Discussion: cycle business cycle?; | Consumption and | Government. intervention 24 | Corporate social Profits and social ‘Anna-Kim Hyun- Role play: Problems | Report and the Tobin Tax; Developing Africa transaction tax responsibility | responsibility Seung: Socially ata clothes responsible manufacturer investment; Stakeholder groups 25 (Efficiency and | Reorganizing the ‘Anna-Kim Hyun- Role play: Report | Jempioyment | postal service Seung: Efficiency, | Reorganizing the the number of postal service employees, training and productivity 26 | Exchange rates | Exchange rates Michael Kitson: Case study: Summary Currency flows Acurrency 27 | international Education and Michael Kitson: Free Presentation: Far Presentation or trade protection Haoon | trade and exceptions | and againstfree _| report Chang, economist) trade | 28 | Economics and_| The economies Martin Beniston Role play: Summary ecology of climate change (professor of climate | Recommending an (Christian Goller, science): Climate | energy policy economist) policy _| Role cards 142 Audio scripts 156 ‘Appendix 1: How to give a good presentation 181 ‘Appendix 2: Writing emails, letters and reports 185 Map of the book 9 ida Management Q Consider what the functions of management are (© Discuss what makes a good manager Lead-in To what extent is effective management something you are born with, as opposed to a set of skils that can be taught? Which business leaders do you admire for their managerial skills? What are these skills? Do managers have a good reputation in your country? Or are they made fun of in jokes, cartoons and television series? if 80, why do you think this is? “Hey, tire bret! Whore do yg my ideas” + Which of the five famous managers below do you find the © The New Yorker most interesting and impressive? ‘Akio Morita co-founded a company in Tokyo in 1946, and later changed its name to Sony. He moved to the US, where he had the original ideas for the Walkman and the video cassette recorder. Sony acquired music and film companies, and developed video games While Jack Welch was Chief Executive Officer (CEO) of General Electric in the 1980s and 1990s, its market value increased from $14 billion to more than $410 billion. He fred 10% of the company’s managers each year Steve Jobs was first the co-founder and later the CEO of Apple. He was fired from his own company (!) in 1985, and co-founded Pixar Animation Studios, but rejoined Apple in 1997, and helped develop the iPod and the iPhone. 10 Uniti agement Governor of California, Carlos Ghosn, born in Brazil, but a French and Lebanese citizen, became the CEO of the Nissan car company in 2001. In 2005, he also became CEO of Renault. At Nissan, he converted huge debts into huge profits r Listening: What makes a good manager? Listen to two MBA (Master of Business Administration) students at the Judge Business School at Cambridge University talking about management. Who says the things about managers in the table below — Carlo (the first speaker) or Olga (the second)? ‘A good manager should: follow the company’s goals 1 2 help subordinates to accomplish their own goals and objectives 3_help young colleagues to develop 4 know how to lead people 5 know how to motivate people |6 make 2 maximum profit for the owners (the sharehalders) |7. meet the targets they have been set 8 successfully execute plans and strategies Discussion: What makes a good manager? What do you think are the three most important characteristics of a good manager? Are there any qualities or characteristics you would add to the ones mentioned by the MBA students? In 1998, Meg Whitman joined a start-up company called eBay in Silicon Valley as President and CEO. She resigned ten years later, when it was a hugely successful business, planning to run for anagement Unit 11 Management Carlo de Stefanis (trom Italy) Olga Babakina (from Russia) Reading: What is management? Read the text summa Which of the qu ing the different functions of management. ies mentioned in the Listening exercise do you think are particularly necessary for the five tasks described by Peter Drucker? sponsible for performing individual m teams. They make dec of companies, public sector institutions and s rofit organizations, sports tea! ften depends on the quality of their ing the work 0 see whet of the tasks cr. Drucker was ar and consultant wi often called things like “The Fath r the organizati idual member of it are cop both their Drucker suggested th can be divided into five t objectives), organizing, é mmuni and developing peop! + First of all, senior managers and ide how their organization a manag’ any’s top managers also have t der the future, and modify or change the enn vations that will al planning (setting co ing (motivatin ting], measuring p sary, and nd c sine: tributors, ban! nplish them. This invo communities authorities, and strategies, ple c ny crisis that arises locating resources of people a manager can be organize yse and s fashion f the and the c. There They divide the work into pe learnt, but manageable activities and then into individual ne people perform these tasks are 3 nent techniques ots of techn motivation and communi communicate objectives to the peo nt managers are quit jor attain nem. They have to make the pe Writing Write a brief summary of each of the five tasks listed by Drucker. 12 Uniti Management Vocabulary 1 Match up the following words and definitions. 1 consultant A aplan for achieving success 2 crisis B anew idea or method 3 innovation © aperson with a less important position in an organization 4 objective (noun) Da person who provides expert advice to a company 5 promotion E asituation of danger or difficulty 6 public sector F something you plan to do or achieve 7 strategy G the section of the economy under government control 8 subordinate H when someone is raised to a higher or more important position 2 The text contains a number of common verb-noun combinations. Use the word combinations in the box to complete the sentences below. allocate resources deal with crises. make decisions” measure performance —_set objectives. supervise subordinates _ 1 After an organization has__________, ithas to make sure that it achieves them 2. Managers have to find the best way to __all the human, physical and capital___ available to them: 3 Some people_________ better on their own while others work better in teams. 4 Managers the work of their______and try to develop their abilities 5 Managers_______the_____of their staff to see whether they are reaching their targets. 6 Top managers have to be prepared to ifthey occur and then have to_____quick Case study: Selecting a Chief Operating Officer Three companies are looking for a senior manager ~ a Chief Operating Officer who will be responsible for managing the company's day-to-day operations, and making sure that all operations are efficient and effective. Company A is a cigarette ‘manufacturer that has to ‘modemize its production systems in order to ‘become profitable, in an industry that has, an increasingly bad reputation. Company C is a private ‘television channel whose objective is to Company B is a software developer that employs a lot broadcast programmes ‘that get as big an audience as possible, in order to maximize advertising revenue. of young, creative, talented and rather undisciplined people. t Unitt 13 Which of the following candidates might be the most suitable for the positions on page 13? Here are some extracts from their letters. Candidate 1 My skills involve helping businesses achieve their objectives. Throughout my career have ensured that my subordinates successfully executed the strategies developed by senior management, delivered results and maximized revenue. Candidate 2 Isee my main skills as being able to communicate with and motivate people, to help them develop and accomplish their objectives, while also working effectively in teams Candidate 3 At this stage in my career, | see myself in a challenging new position that involves setting objectives and deciding how the organization can achieve them. | would then concentrate on measuring the performance of the staff. Candidate4 My career demonstrates an ability to analyse problems, find solutions and implement them. I also have strong communication skills and experience in explaining difficult decisions to employees, investors, journalists, and so on. Writing Imagine you work for a recruitment agency or a headhunting firm. Write an email of 50-100 words to your boss recommending your choice of candidates for the positions above and outlining the reasons. 14 Unit 1 Management Work and motivation Discuss the importance of motivation Q Compare and then summarize various theories of motivation © Consider the best way to motivate people in specific situations Lead-in One of the most important responsibilities of a manager is to motivate the people who report to him/her. But how? What Kind of things motivate you? Which of these motivators would be important for you in your choice of a job? Classify them in order of importance. good remuneration (salary, commission, bonuses, perks) good working relations with your line manager and colleagues good working conditions (alarge ight, quiet office; efficient secretaries) [1] job security the possibility of promotion a challenging job responsibility contact with people a belief in what the organization does a eamesame Nk uh 2 job in hich you can makea ference Cine Tanne OTT ‘opportunities to travel (business class!) long holidays/vacations What other important motivators would you add to this list? Discussion: Attitudes to work Which of the following statements do you agree with? People dislike work and avoid it if they can. Work is necessary to people's psychological well-being. People avoid responsibility and would rather be told what to do. People are motivated mainly by money. Most people are far more creative than their employers realize People are motivated by fear of losing their job. People want to be interested in their work and, given the right conditions, they will enjoy it 8 Under the right conditions, most people will accept responsibility and will want to realize their own potential Nousunes Work and motivation Unit 2 © The New Yorker 15 Reading: Theory X and Theory Y ‘The statements on the previous page can be separated into two groups reflecting two very different ways in which employers can treat their employees. Douglas McGregor, an American expert on the psychology of work, summarized these two approaches and named them Theory X and Theory Y. Read the text below and classify the statements according to which theory they support. Bren B a a im A bien ibility) and self-actualization (personal if In The Human Side of Enterprise, Douglas Tespo McGregor outlined two opposing theories of growth and fulfilment) that can be purst ‘work and motivation. What he calls Theory X basic needs are satisfied. is the rather pessimistic approach to workers ‘McGregor is widely considered to have laid and working which assumes that people are the foundations for the modem people-centred lazy and will avoid work and responsibility if view of management. However, Maslow spent a quently, workers have to be year studying a Californian company that used d, and told ‘Theory Y, and concluded that there are many ed, people who are not looking for responsibility jievement at work. There will always they can. Const closely supervised and controll ‘what to do. They have to be both thre: for example with losing their job, and rewarded and acl with incentives, probably monetary ones such be people with little self-discipline, who need as a pay rise or bonuses. Theory X assumes that _security and certainty and protection against the most people are incapable of taking responsibility burden of responsibility, so it is impossible to for themselves and have to be looked after. It simply replace the ‘authoritarian’ has traditionally been applied, for example, the ‘progressive’ Theory Y. by managers of factory workers in large-scale manufacturing. ‘Theory Y, on the contrary, assumes that most people have a psychological need to work, and given the right conditions ~ job security, financial rewar y self-motivated by the sat good job. Theory ¥ is probably more applicable to skilled professionals and what Peter Drucker called ‘knowledge workers’ ~ managers, specialists, programmers, scientists, engineers ~ than people in unskilled jobs. ‘McGregor's two theories are based on Abraham Maslow’s famous ‘hierarchy of needs’. Theory X relates to the basic, ‘lower order’ needs at the bottom of the hierarchy, such as financi security, while Theory Y relates to ‘higher order’ such as esteem (achievement, status and heory X with sfaction of doing a nee Comprehension Read the text again and answer these questions. 1 According to Theory x, why do employees have to be closely controlled? 2. According to Theory Y, why should employers give their workers responsibilities? 3 Why did Maslow criticize Theory Y? 16 Unit2 Work \d motivation Management Writing Now write a summary of Theories X and ¥, using no more than 50 words for each. Discussion + Inyour working experience, even if itis only weekend or temporary summer holiday jobs, have your supervisors seemed to believe in Theory X or Theory Y? + What would you do to try to motivate subordinates who did not want to take responsibilities at work, and who had uninteresting, repetitive jobs? Reading: ‘Satisfiers’ and ‘motivators’ Another well-known theorist of the psychology of work, Frederick Herzberg, has argued that good working conditions are not sufficient to motivate people. Read the text and find out why. It is logical to suppose that things like good labour relations, good working conditions, job security, good wages, and benefits such as sick pay, paid holidays and a pension are incentives that motivate workers. But in The Motivation to Work, Frederick Herzberg argued that such conditions ~ or ‘hygiene factors’ ~ do not in fact motivate workers. They are merely ‘satisfiers’ or, more importantly, ‘dissatisfiers’ where they do not exist. Workers who have them take them for granted. As Herzberg put it, ‘A reward once given. becomes a right.’ ‘Motivators’, on the contrary, include things such as having a challenging and interesting job, recognition and responsibility, promotion, and so on. Unless people are motivated, and want to do a good job, they will not perform well. However, there are and always will be plenty of boring, repetitive and mechanical jobs, and lots of unskilled workers who have to do them. How Comprehension Are these sentences true or false? can managers motivate people in such jobs? One solution is to give them some responsibilities, not as individuals but as part of a team. For example, some supermarkets combine office staff, the people who fill the shelves, and the people who work on the checkout tills into a team and let them decide what product lines to stock, how to display them, and so on. Other employers encourage job rotation, as doing four different Tepetitive jobs a day is better than doing only one. Many people now talk about the importance of a company’s shared values or corporate culture, with which all the staff can identify: for example being the best hotel chain, or hamburger restaurant chain, or airline, or making the best, safest, most user-friendly, most ecological or most reliable products in a particular field. Unfortunately, not all the competing companies in an industry can seriously claim to be the best. 1. Herzberg argued that ‘hygiene factors’ motivate workers. 2. Challenging jobs and responsibilty are hygiene factors. 3 Some unskilled jobs will always be boring and repetitive. 4 Workers might be motivated by having responsibilities as part of a team. 5 Job rotation can make a day's work more interesting. 6 You can always motivate workers by telling them that they work for the best company in the field Work and motivation Unit2 17