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SUMAR Socialising 1. The Impact of Culture on Business Telephoning 2. Telephoning across cultures Presentations 3. Planning and preparation 4.

Image, impact and making impression 5. The presentation 6. The end of the presentation 2. Meetings 7. Preparation for meetings 8. Participating in meetings 9. Ending the meeting 3. Negotiations 10. Know what you want 11. Getting what you can 12. Not getting what you dont want Management 13. What is management? 14. Types of managers 15. The management process 16. Management level and skills 4. Companies and organisations 17. Company structure 18. The external environment of organisations Production and products 19. Just-in-time production 20. Products and brands Marketing, advertising, promotion 21. The centrality of marketing 22. How companies advertise 23. The four major promotional tool 5. Market structure and competition 24. Market leaders, challengers and followers 25.Takeovers, mergers and buyouts 26. Profits and social responsibility

6. Money and finance 27. A history of money what makes the world goes round 28. The profits of labour 29. Accounting and financial statements 30. Exchange Rates 7. Banking and taxation 31. Types of banks 32. Opening an account and means of payment 33. Banking Key words and sentences 34. Taxation and how to avoid it 8. Stock market 35. Stocks and shares 36. Bonds 37. Futures, options and swaps Glossary Cheia exerciiilor

Extra Readings - Industry Profile and Career Overview from WetFeet.com


Cotton, David Keys to management, Longman, 1996 Cotton, David; Robbins, Sue Business Class, Nelson English Language Teaching, London, 1993 MacKenzie, Ian English for Business Studies, Cambridge University Press, 2001 Sweeney, Simon English for Business Communication, Cambridge University Press, 2000 Chiriacescu, Adriana; Murean, Laura; Barghiel, Virginia; Hollinger, Alexander Coresponden de afaceri n limbile romn i englez, Editura Teora, Bucureti, 1995 Geoghegan, C.G.; Geoghegan, J.Y. Engleza pentru negocieri, Editura Teora, Bucureti, 2000 Roland, Marie-Claude; Mast-Grand, Martha CV n limba englez, un pas spre angajare, Editura Teora, Bucureti, 2000

Dayan, A.; Lindsay, W.H.; Janakiewicz, A.; Marcheteau, M. Engleza pentru marketing i publicitate, Editura Teora, Bucureti, 2000 Banta, Andrei; Poreanu, Rodica Limba englez pentru tiin i tehnic, Editura Niculescu, Bucureti, 1995 Laun, Flavia E. Birotics and Telecommunication Explanatory Dictionary, Editura Dacia, Cluj-Napoca, 1996 Mnil, D.; Popa, C.; Popa, D.; Popescu, I.M.; Vlad, V.I. Mic dicionar poliglot de fizic, tehnic i matematic, Editura Acora Press, Bucureti, 1995 Le Divenach, loi Engleza n pres, Editura Teora, Bucureti, 1999 Marcheteau, Michel Berman, Jean-Pierre Savio, Michel, Engleza comercial n 40 de lecii, Editura Niculescu, Bucureti, 2001

1. Socialising

Reading The following text is about cultural diversity. Read it through once and decide which of the three statements (A, B or C) given below the extract offers the most accurate summary. 1. The Impact of Culture on Business Take a look at the new breed of international managers, educated according to the most modern management philosophies. They all know that in the SBU, TQM should reign, with products delivered JIT, where CFTs distribute products while subject to MBO. (SBU = strategic business unit, TQM = total quality management, JIT = just-in-time, CFT = customer first team, MBO = management by objectives.) But just how universal are these management solutions? Are these truths about what effective management really is, truths that can be applied anywhere, under any circumstances? Even with experienced international companies, many wellintended universal applications of management theory have turned out badly. For example, pay-for-performance has in many instances been a failure on the African continent because there are particular, though unspoken, rules about the sequence and timing of reward and promotions. Similarly, management by objectives schemes have generally failed within subsidiaries of multinationals in southern Europe, because managers have not wanted to conform to the abstract nature of preconceived policy guidelines. Even the notion of human-resource management is difficult to translate to other cultures, coming as it does from a typically AngloSaxon doctrine. It borrows from economics the idea that human beings are resources like physical and monetary resources. It tends to assume almost unlimited capacities for individual development. In countries without these beliefs, this concept is hard to grasp and unpopular once it is understood. International managers have it tough. They must operate on a number of different premises at any one time.

These premises arise from their culture of origin, the culture in which they are working, and the culture of the organization which employs them. In every culture in the world such phenomena as authority, bureaucracy, creativity, good fellowship, verification and accountability are experienced in different ways. That we use the same words to describe them tends to make us unaware that our cultural biases and our accustomed conduct may not be appropriate, or shared. SBU = strategic business unit = unitate comercial, economic strategic TQM = total quality management = managementul total al calitii JIT = just-in-time = livrare exact la momentul potrivit CFT = customer first team = MBO = management by objectives = managementul pe obiective pay-for-performance = plat pentru munca depus human-resource management = managementul resurselor umane at any one time = n fiecare moment premises = premise, locaii grasp = a pricepe, a nelege (n text) accountability = rspundere bias = tendin, orientare A. There are certain popular universal truths about management which can successfully be applied in various cultural contexts. B. Cultures are so varied and so different throughout the world that management has to take account of differences rather than simply assume similarities. C. Effective management of human resources is the key to everyone achieving their full potential.

Language Checklist Cultural diversity and socializing Welcoming visitors Welcome to My names

Arriving Hello. My names from Ive an appointment to see Sorry Im a little late / early. My plane was delayed Introducing someone This is He/shes my Personal Assistant. Can I introduce you to He/shes our (Project Manager). Id like to introduce you to Meeting someone and small talk Pleased to meet you. Its a pleasure. How was your trip? Did you have a good flight / trip / journey? How are things in (London)? How long are you staying in (New York)? I hope you like it. Is your hotel comfortable/ Is this your first visit to (the Big Apple)? Offering assistance Can I get you anything? Do you need anything? Would you like a drink? If you need to use a phone or fax, please say. Can we do anything for you? Do you need a hotel / a taxi / any travel information / etc.? Asking for assistance There is one thing I need Could you get me Could you book me a car / taxi / hotel / ? Could you help me arrange a flight to? Can you recommend a good restaurant? Id like to book a room for tomorrow night. Can you recommend a hotel?

Skills Checklist Cultural diversity and socializing Before meeting business partners and fellow professionals from other countries, you could find out about their country: The actual political situation Cultural and regional differences Religion(s) The role of women in business and in society as a whole Transport and telecommunications systems The economy The main companies The main exports and imports The market for the industrial sector which interests you Competitors You might also want to find out: Which topics are safe for small talk Which topics are best avoided If you are going to visit another country, find out about: The conversations regarding socializing Attitudes towards foreigners Attitudes towards gifts The extent to which public, business and private lives are mixed or kept separate Conventions regarding food and drink. You might also like to find out about: The weather at the relevant time of the year Public holidays The conventions regarding working hours Leisure interests Tourism Dress Body language Language.

Practice 1 Make a dialogue based on the following flow chart. If you need help, look at the Language Checklist Visitor Introduce yourself Say you have an appointment with Sandra Bates. Welcome visitor. Explain that SB will be along shortly. Offer a drink / refreshments. Say yes / Offer fax as well. Decline you only need the phone. Show visitor to the phone. Thank him/her. (a few minutes later) Thank assistant. Reply offer any other help. Ask how far it is to station. Two miles ten minutes by taxi. Offer to book one. Accept offer suggest a time. Promise to do that say that SB is free now. Offer to take him/her to SBs office. About small talk If you ask a question you should comment on the answer or ask a supplementary question.


Decline ask if you can use a phone.

Exercise 1 First words Often the first words are the most difficult. Below are some suggestions for breaking the ice. Which of the sentences could be said by a visitor, and which by the person receiving the visitor? a. Sorry, Im a little early. I hope it is not inconvenient. b. Is the weather the same in your country? c. Sorry to keep you waiting. I was rather tied up just now. d. Im pleased to be here, after a trip like that! e. Is this your first visit? What do you think of the city? f. People are very helpful here. On my way to meet you g. Isnt it cold today? h. You found us without too much difficulty, then? i. Its good of you to spare the time. j. Its kind of you to come all this way. k. I like your offices. Have you been here long? l. Did you have a good trip? m. Would you like a cup of coffee? Exercise 2 Ending the small talk If the small talk continues too long, you may want to change the subject to business matters. Here are some ways of doing it. A. With someone you know well: Lets get down to business. Or lets get started. B. With someone you dont know well: Perhaps we could talk about the subject of our meeting. Or Perhaps we could talk about the reason Im here. Which expressions would you use in the following situations? a. On a sales visit to a potential customer. b. At a weekly planning meeting with colleagues. c. At your first meeting with the new group auditors. d. At a meeting to obtain finance from a bank. e. Before making a speech at an office party.


2. Telephoning

2. Telephoning across cultures Many people are not very confident about using the telephone in English. However, good preparation can make telephoning much easier and more effective. Then, once the call begins, speak slowly and clearly and use simple language. Check that you understand what has been said. Repeat the most important information, look for confirmation. Ask for repetition if you think it is necessary. Remember too that different cultures have different ways of using language. Some speak in a very literal way so it is always quite clear what they mean. Others are more indirect, using hints, suggestions and understatement (for example not very good results = absolutely disastrous) to put over their message. North America, Scandinavia, Germany and France are explicit countries, while the British have a reputation for not making clear exactly what they mean. One reason for this seems to be that the British use language in a more abstract way than most Americans and continental Europeans. In Britain there are also conventions of politeness and a tendency to avoid showing ones true feelings. For example if a Dutchman says an idea is interesting he means that it is interesting. If an Englishman says that an idea is interesting you have to deduce from the way he says it whether he means it is a good idea or a bad idea. Meanwhile, for a similar reason Japanese, Russian and Arabs subtle countries sometimes seem vague and devious to the British. If they say an idea is interesting it may be out of politeness. The opposite of this is that plain speakers can seem rude and dominating to subtle speakers, as Americans can sound to the British or the British to the Japanese. The British have the tendency to engage in small talk at the beginning and end of a telephone conversation. Questions about the weather, health, business in general and what one has been doing recently are all part of telephoning, laying a foundation for the true purpose of the call. At the end of the call there may well be various

pleasantries, Nice talking to you, Say hello to the family (if you have met them) and Looking forward to seeing you again soon. A sharp, brief style of talking on the phone may appear unfriendly to a British partner. Not all nationalities are as keen on small talk as the British! Being aware of these differences can help in understanding people with different cultural traditions. The difficulty on the telephone is that you cannot see the body language to help you. Choose the closest definition of the following words from the text. 1. literal a. direct and clear b. full of literary style c. abstract and complicated 2. understatement a. kind words b. less strong way of talking c. clever speech 3. deduce a. reduce b. work out c. disagree 4. vague a. unclear b. unfriendly c. insincere 5. devious a. rude b. dishonest c. clever 6. pleasantries a. question b. request c. polite remarks

Language Checklist Telephoning (1) Introducing yourself Good morning, Aristo. Hello, this is from Hello, my names calling from Saying who you want Id like to speak to please. Could I have the Department, please? Is there, please?

Saying someone is not available Im sorry he/shes not available Sorry, he/shes away / not in / in a meeting / in Milan. Leaving and taking messages Could you give him/her a message? Can I leave him/her a message? Please tell him/her Please ask him/her to ring me on Can I take a message? If you give me your number Ill ask him/her to call you later. Offering to help in other ways Can anyone else help you? Can I help you perhaps? Would you like to speak to his assistant? Shall I ask him to call you back? Asking for repetition Sorry, I didnt catch (your name / your number / your company name ) Sorry, could you repeat your (name, number, etc.). Sorry, I didnt hear that. Sorry, I didnt understand that. Could you spell (that / your name), please. Acknowledging repetition Okay, Ive got that now. (Mr. Kyoto) I understand. I see, thank you. Skill Checklist Telephoning: Preparation for a call Reading background information Desk preparation Have the following available: Relevant documentation / notes Correspondence received Computer files on screen

Pen and paper Diary Check time available How much time do you need? How much time do you have? Objectives Who do you want to speak to? In case of non/availability, have an alternative strategy: Call back / be called back when? Leave a message Speak to someone else Write or fax information Do you want to: Find out information? Give information? Introduction Do you need to refer to: A previous call? A letter, order, invoice or fax? Someone else (who?) An event (what? When?) Prediction What do you expect the other person to say / ask you? how will you respond?

Exercise 1 Making a call A few common expressions are enough for most telephone conversations. Practice these telephone expressions by completing the following dialogue using the words listed below. Switchboard Conglomerate Group; can I help you?

You Could I ------ ------- Mr. Pardee, please? Switchboard Putting you ------ . Secretary Hello, Mr. Pardees ------ . -------- I help you? You ------, can you hear me? Its a ------ line. Could you --- ---up, please? Secretary IS THAT BETTER? Whos --------, please? You (your name) from (your company). Secretary Oh, hello. How nice to hear from you again. We havent seen you for ages. How are you? You Fine thanks. Could you ------- me -------- to Mr. Pardee, please? Secretary -------- the line a moment. Ill see if hes in. Im sorry, Im afraid hes not in the ------- at the ------ . Could you give me your ----------, and Ill ask him to ------you ---------- ? You Im ----- 347 8621. Thats London. Secretary Would you like to leave any -------- for him? You No thanks. Just tell him I --------- . Secretary Certainly. Nice to hear from you again. You Ill expect him to ------- me this afternoon, then. Thanks. Secretary Youre welcome. Goodbye. On speak to back message number call through office can hello hold moment bad put ring speak speaking through

Secretary Rang

Note: If you do not hear or understand the other person, say: Im sorry? or Im sorry, I dont understand. It is not polite to say: Please repeat!

DATAFILE: The Telephone


This datafile gives you many of the terms and phrases commonly used in making telephone calls. The directory Look up their number in the directory. (UK). Ill look up the number in the telephone book. (US). The number is ex-directory. (UK). The number is unlisted. (US). Ill ring Directory Enquiries. (UK). Ill ring information. (US). The receiver Can I help you? Putting you through. Im afraid hes not available at the moment. (UK). Im afraid hes tided up at the moment. Youre welcome. Goodbye. The line Hes on the other line. Would you like to hold the line? The line is engaged. (UK). The line is busy. (US). The operator (in the public telephone system) Dial 100 for the operator. (UK). Dial 0 (zero) for the operator. (US). Id like to make a reverse charge call. (UK). Id like to make a collect call. (US). Id like to make a transfer charge call. (UK). The dial Dial 123 for the correct time. (UK). Listen for the dialling tone. All lines to the country you have dialled are engaged. Please try later. (UK). The codebook Im on a long distance (or international) call. The STD code is (UK). The area code is (US). A message pad Can I tell him who called? Can I give her a message? Let me take down your number.

Remember If you do not understand, say Sorry, I didnt quite catch that. Practice 1 Use the following flow chart to make a complete telephone conversation. If you need to, refer to the Language Checklist. Caller Receptionist Good morning, Gorliz and Zimmerman. Introduce yourself. Ask to speak to Mr. Conrad Bird. Mr. Bird is not in. Ask when you can contact him. Explain that he is away offer to take a message. You want Mr. Bird to call you. Repeat your name. Give your number. Confirm the information. End call. End call.

Practice 2 In the following conversation, a Singaporean exporter plans to send goods from Singapore to Greece. He wants to have a meeting with a Greek shipping company, Intership. Suggest suitable phrases for each step in the conversation, then practice the dialogue with a colleague. Caller (Computech) Called Person (Intership) Intership, good morning.

Greeting. Introduce yourself. Check name. Confirm / correct. Offer to help. Ask for appointment with Mr. Dionis. Ask what its about. Explain that you want to discuss transport of goods from Singapore to Athens. Acknowledge ask when would be a good time. Suggest next week. Reject Mr. Dionis is away. Suggest beginning of next month. Agree. Suggest Monday 3rd. Reject On Monday Mr. Dionis is busy all day. Suggest Tuesday. Agree. Suggest 10.00 a.m. Agree ask for fax to confirm. Offer to book hotel. Agree to fax hotel booking is not necessary. Signal end of call. End call / thanks / refer to fax, etc. End call. Language Checklist Telephoning (2) Stating reason for a call

Im ringing to Id like to I need some information about Making arrangements Could we meet some time next month? When would be a good time? Would Thursday at 5 oclock suit you? What about July 21st? That would be fine. No, sorry, I cant make it then. Sorry Im too busy next week. Changing arrangements Weve an appointment for next month, but Im afraid I cant come on that day. Could we fix an alternative? Confirming information So Can I check that? You said To confirm that Can you / can I confirm that by fax? Ending a call Right. I think that all. Thanks very much for your help. Do call if you need anything else. I look forward to seeing you / your call / your letter / your fax / our meeting. Goodbye and thanks. Bye for now.

Skills Checklist Telephoning (2) Voice Speed


Clarity Volume

Structure Background information Key information Repetition, emphasis and confirmation Possible confirmation by fax Style Formal / informal Cold call / new contact / established contact In-company vs. Customer / Supplier / Outside agent Colleague / friend / business associate / public Company image Structure of a call Beginning Introduce yourself Get who you want Small talk State problem / reason for call Middle Ask questions Get / give information Confirm information End Signal end Thank other person Small talk Refer to next contact Close call Check that theres nothing else to say


Exercise 2 Changing arrangements It is not always possible to follow your original plans. You, or your contact, may want to change an appointment. Language input To apologize, say: Im afraid that . Im sorry but To suggest another time, say: Could I suggest ? What about ? Perhaps ? Below is the schedule for your week in Sydney, Australia. Just before you leave for Sydney you receive various telephone calls from the people you are going to visit. They want to change their appointments. But you do not want to change the order in which you visit them. First apologize for not managing the day they suggest, then suggest a different time on the original day. Here you have their calls: Hello? Mr. Rossi? This is the Australian Chemical Bank. Im Mr. Whitles secretary. I understand you have an appointment for 10 a.m. on Tuesday 13th. Im afraid that Mr. Whitley is rather tied up them. Could I suggest Monday instead? Yes, Im sure that will be OK. Hello, Mr. Rossi? Tim Brown, your agent. Small problem. Our meeting for Friday is all right, but Monday afternoon is likely to be difficult; someone is coming to see us who might be a useful outlet for some of your range. perhaps we could change our meeting to Tuesday afternoon? Yes, OK. Right, thats fine. Mr. Rossi? Its Jenny Kinsella here. From B.I.G. Im sorry but my colleagues cant all make it on Thursday afternoon. Could I suggest we meet on Tuesday instead? Er yes why not? OK Well, thank you very much.

Hello again, Tim Brown here again. I forgot; I have some other customers visiting on Friday morning. How about a meeting on Thursday sometime, if thats all right with you? Right. Sorry to be difficult. Thanks a lot, Mr. Rossi. Bye now. Mr. Rossi? Good morning. Im ringing for Mr. Lund of Lund and Lund Associates. Hes very sorry, but he wont be able to manage Wednesday afternoon. Could I suggest Friday afternoon instead? Well, I think that should be all right. Ill give you a cal this afternoon to confirm. Thank you. Goodbye.

Monday, 12 November Morning Arrive Sydney airport 8.30 a.m. Afternoon 3 p.m. Tim Brown (agent) at hotel Tuesday, 13 November Morning 10 a.m. Mr. Whitley, Australian Chemical Bank Afternoon Wednesday, 14 November Morning Afternoon 2 p.m. Lund & Lund Associates (Mr. William Lund) Thursday, 15 November Morning Afternoon 3 p.m. Distribution)





Friday, 16 November Morning 11 a.m. Tim Brown Afternoon flight 390, Depart Sydney 6 p.m.


Practice 3 Use the flow chart below as the basis for a telephone conversation involving a complaint. Refer to the Language Checklist if you need to. Berraondo S.A. Tao Loon Company (Sales Office) Answer. Greeting. Introduce yourself. Offer to help. Explain problem. Order HF5618 for 20 printers. Only 17 have arrived. Express surprise. This is second time you have received an incomplete delivery. Suggest possible error in order administration. Agree say you need the other three printers urgently. Delays are costing you goodwill unhappy customers. Explain stock problems. Ask for a promise of delivery date ASAP. Promise next Monday. Complain you want despatch now. Express regret not possible. Ask for fax to confirm despatch. Agree apologize. End call.

Language Checklist Telephoning (3) Stating reason for the call Im calling about Unfortunately, theres a problem with Im ringing to complain about Explaining the problem There seems to be We havent received The doesnt work. The quality of the work is below standard. The specifications are not in accordance with our order. Referring to previous problems Its not the first time weve had this problem. This is the (third) time this has happened. Three months ago We had a meeting about this and you assured us that Threatening If the problem is not resolved Well have to reconsider our position. Well have to renegotiate the contract. Well contact other suppliers. The consequences could be very serious. Handling complaints and other problems Asking for details Could you tell me exactly what ? Can you tell me ? Whats the ?

Apologizing Im sorry to hear that. Im sorry about the problem / delay / mistake Denying an accusation No, I dont think that can be right. Im sorry but I think youre mistaken. Im afraid thats not quite right. Im afraid that cant be true.

Skills Checklist Telephoning (3) If you receive a complaint: Consider your companys reputation Express surprise Ask for details Suggest action Promise to investigate Make reasonable suggestions, offers to help. Consider your customer and: Show polite understanding Use active listening Reassure customer. If you make a complaint: Prepare for the call Be sure of the facts Have documentation available Decide what you require to resolve the problem at least partially or completely. Who is to blame? Who is responsible? Are you talking to the right person? Was your order or your specifications correct?

Were you partly responsible for arrangements which went wrong, e.g. transport? Does responsibility actually lie elsewhere, i.e. with a third party? If you do not get what you want: Keep control state what you need calmly Do you need to continue to do business with the other side? If you do, keep a good relationship Express disappointment not anger Dont use threats unless you have to! Read the text, then mark the sentences that follow as True (T) or False (F).

In some countries, like Italy and Britain, conversation is a form of entertainment. There is an endless flow and if you break the flow for a second someone else will pick it up. In other countries there is a higher value placed on listening it is not only impolite to break in but listeners will consider what has been said in silence before responding. Finland and Japan are examples. If you are talking to people who are also speaking English as a foreign language, they are likely to leave gaps and silences while they search for words or try to make sense of what you have just said. So be patient and try not to interrupt, as you would hope they would be patient with you. Every country has its own codes of etiquette. For example it is common for Anglo-Saxons to use first names very quickly, even in a letter of fax or telephone call. Such instant familiarity is much less acceptable in the rest of Europe and Asia where even business partners and colleagues of many years acquaintance address each other by the equivalent of Mr. or Mrs. And the last name or job title. So stick to last names unless you specifically agree to do otherwise. Dont interpret the other persons formality as stiffness or unfriendliness. On the other hand, if business partners with an AngloSaxon background get on to first name terms straightaway, dont be surprised. Above all, one should remember that people do not usually mind if their own codes are broken by foreigners as long as they sense

consideration and goodwill. This is much more important than a set of rules of etiquette. a. For the British and the Italians it is normal to interrupt the other speaker during the conversation. b. A special importance is attached to listening in Japanese and Finnish cultures. c. One should interrupt and try to help speakers who may have difficulty in saying what they want to say. d. It is unusual for Americans and British to use first names early in a business relationship. e. It doesnt matter if you break certain social rules if it is clear that you are sensitive to other people. f. Etiquette is the critical point in telephoning between different cultures.

3. Presentations
3. Planning and preparation Language Checklist Structure (1) The introduction to a presentation Greeting Good morning / afternoon ladies and gentlemen. (Ladies and) Gentlemen Subject I plan to say a few words about Im going to talk about The subject of my talk is The theme of my presentation is Id like to give you an overview of Structure Ive divided my talk into (three) parts.

My talk will be in (three) part. Im going to divide First Second Third In the first part Then in the second part Finally Timing My talk will take about ten minutes. The presentation will take about two hours but therell be a twentyminute break in the middle. Well stop for lunch at 12 oclock. Policy on questions / discussion Please interrupt if you have any question. After my talk therell be time for a discussion and any questions. Skills Checklist Effective presentations planning and preparation Audience Expectations Technical knowledge Size Questions and / or discussion Speakers competence Knowledge Presentation technique Content What to include Length / depth (technical details) Number of key ideas Structure Sequence

beginning, middle, end Repetition, summarizing

Delivery Style Formal / informal Enthusiasm / confidence Voice Variety / speed Pauses Body language Eye contact Gesture / movement Posture Visual aids Type / design / clarity Relevance Practice Tape recorder Script or notes Room Size / seating Equipment (does it work?) Sound quality Language Simple / clear Spelling Sentence length Structure signals


Practice 1 Look at the following situations. A medical congress in Tokyo with papers on new techniques in open heart surgery. The Purchasing and Product Manager of a Taiwanese company interested in buying some production equipment from your company. An internal meeting of administrative staff to discuss a new accounting procedure. A staff meeting to discuss a charity event for earthquake victims. Imagine you have to give a brief presentation in two of the above situations. Make brief notes on the following: a. Will your talk be formal or informal? b. What are the audiences expectations in terms of technical detail, expertise, etc.? c. What is the audiences probable level of specialist knowledge? Are they experts or non-experts? d. How long will your talk be: five minutes, twenty minutes, half an hour, or longer? e. What is your policy on questions? Will the audience interrupt or will they ask questions afterwards? Will there be any discussion? f. How will you help the audience to remember what you tell them?


Practice 2 In any presentation the beginning is crucial. Certainly some things are essential in an introduction and others are useful. Here is a list of what could be included in an introduction. Mark them according to how necessary they are using the following scale: Essential 1 Useful 3 Not necessary 5

Subject / title of talk. Introduction to oneself, job title, etc. Reference to questions and / or discussion. Reference to the programme for the day. Reference to how long you are going to speak for. Reference to the visual aids you plan to use. The scope of your talk: what is and is not included. An outline of the structure of your talk. A summary of the conclusions.

Reading Read the text below and find: a. eight advantages of using visual aids b. three warnings about using visual aids 4. Image, impact and making an impression Dinckel and Parnham (1985) say that The great danger (in using visual aids) is that presenters place the major emphasis on visual aids and relegate themselves to the minor role of narrator or technician. You are central to the presentation. The visual aid needs you, your interpretation, your explanation, your conviction and your justification.

Visual aids can make information more memorable and they help the speaker. However, they must literally support what the speaker says and not simply replace the spoken information. It is also not enough to just read the text from a visual aid. There are many advantages to the correct use of visual aids. They can show information which is not easily expressed in words or they can highlight information. They cause the audience to employ another sense to receive information, they bring variety and therefore increase the audiences attention. They save time and they clarify complex information. Relegate = a retrograda, a degrada Language Checklist Using visuals Types of visual support Visual: film / video / picture / diagram / chart / pie chart / plan / map Table graph x axis / horizontal axis y axis / vertical axis left hand / right hand axis Line graph solid line dotted line broken line Equipment (slide) projector slides (B.E.) diapositives (Am.E.) overhead projector (OHP) transparency (B.E.) slide (Am.E.) flip chart whiteboard metaplan board Introducing a visual

Id like to show you Have a look at this This (graph) shows / represents Here we can see Lets look at this Here you see the trend in Comparisons This compares x with y Lets compare the Here you see a comparison between

Pie chart = diagram circular (rotund, plcint) Flow chart = schema procesului tehnologic / organigram Diagram = diagram Bar graph = diagram cu bare Table graph = grafic stil tabel Line graph = grafic cu linii overhead projector = proiector transparency / slide = slide-uri (slide) projector = dia-proiector slides / diapositives = diapozitive flip chart = panou cu foi de hrtie detaabile whiteboard = panou alb din material sintetic Describing the speed of change A dramatic A marked A significant A slight dramatically markedly significantly slightly

increase / fall

To increase / fall

Describing trends To go up To increase To rise an increase a rise


To go down To decrease To fall

a decrease a fall

To climb a climb To improve an improvement To recover a recovery To get better an upturn To level out a leveling out To stabilize To stay the same To reach a peak a peak To reach a maximum To peak To undulate an undulation To fluctuate a fluctuation

To decline To deteriorate To get worse

a decline a deterioration a downturn

To reach a low point To hit bottom a trough

Skills Checklist Using visual supports Visual must be: well prepared well chosen clear Available media Use media which suit the room and audience size. Overhead projector (OHP) - Transparencies / OHTs / slides (Am.E.) Slide projector - Slides / diapositives (Am.E.) Video / computer graphics / flip chart / whiteboard Use of visual aids Combination of OHP and flip chart with pens often good. First visual should give the title of talk. Second show structure of talk main headings. Keep text to minimum never just read text from visuals. Do not use too many visuals guide is one per minute. Use pauses give audience time to comprehend picture. Never show a visual until you want to talk about it.

Remove visual once finished talking about it. Switch off equipment not in use. Use of colour For slides, white writing on blue / green is good. Use different colours if colour improves clarity of message (e.g. pie charts.). Use appropriate colour combination: yellow and pink are weak colours on white backgrounds. Use of room and machinery Check equipment in advance. Check organization of room, equipment, seating, microphones, etc. Use a pointer on the screen (not your hand). Have a good supply of pens. Check order of your slides / OHTs, etc. You in relation to your audience Decide appropriate level of formality, dress accordingly. Keep eye contact at least 80% of the time. Use available space. Move around, unless restricted by a podium. Use gesture. Practice 3 Draw a line graph for use in a presentation. Choose any situation or subject, real or imagined. If possible draw the picture on an overhead transparency. Then present the graph as you would in a presentation. Your description should last no more than one minute. If possible, construct a graph that makes comparisons possible. Use solid, dotted or broken lines (or colours) to make the picture clear. 5. The presentation Reading Read the following passage and identify at least six recommendations about speaking technique which can help to make the message in a presentation clear.

Youre lost if you lose your audience Clear objectives, clear plan, clear signals: the secrets of presentation success. Any presentation requires a clear strategy or plan to help you reach your objectives. The aim is not to pass away twenty minutes talking non-stop and showing a lot of nice pictures. It is to convey a message that is worth hearing to an audience who want to hear it. However, how many speakers really hold an audiences attention? What is the secret for those who do? First, find out about the audience and what they need to know. Plan what youre going to say and say it clearly and concisely. A good speaker uses various signals to help hold the audiences attention and make the information clear. One type of signal is to introduce a list with a phrase like There are three things we have to consider. The speaker then says what the three things are and talks about each one at the required level of detail. For example: There are three types of price that we have to think about: economic price, market price and psychological price. Lets look at each of these in more detail. First, economic price. This is based on production costs and the need to make a profit and the speaker goes on to describe this type of price. After that, he goes on to talk about the market price and so on. Another signaling technique is to give a link between parts of the presentation. Say where one part of the talk finishes and another starts. For example, a well organized presentation usually contains different parts and progression from one part to the next must be clear, with phrases like Thats all I want to say about the development of the product. Now lets turn to the actual marketing plan. This technique is very helpful to the audience, including those who are mainly interested in one part only. Another type of signaling is sequencing of information. This usually follows a logical order, perhaps based on time. So a project may be described in terms of the background, the present situation and the future. Key words in sequencing information are first, then, next, after that, later, at the end, finally, etc. Still another technique which helps to emphasize key points is careful repetition. Examples are As Ive already said, there is no

alternative but to increase production by 100 per cent or Id like to emphasize the main benefit of the new design it achieves twice as much power with half as much fuel. A final point concerns timing and quantity of information. Psychologists have suggested that concentration is reduced after about twenty minutes without a break or a change in activity. Furthermore, audiences should not be overburdened with technical details or given too many facts to remember. It is claimed that to ask people to remember more than three things in a five-minute talk is too much. Some say that seven is the maximum number of any length of presentation. Any such calculations are probably not very reliable, but every speaker needs to think about exactly how much information of a particular type a specific audience is likely to absorb and to plan accordingly. Read the following text and identify the following: a. the relationship between the main body of the presentation and the introduction b. a recommendation on one way to divide the main body of the talk. The main body of the presentation contains the details of the subject or themes described in the introduction. All the above techniques are especially useful in making the main body easily understood. They help the audience to follow the information and to remember it. They also help the speaker to keep to the planned structure and to know exactly what stage has been reached at all times during the presentation. Clear structure doesnt just help the audience! In many presentations the main body can be usefully divided into different parts. The main parts, each with a main heading, are referred to in the Introduction. Clearly there are many ways to divide the main body of presentation and often different parts will themselves be divided into smaller sections of information: Introduction Main body of information First part Second part

Third part

Practice 4 The information below is part of a Product Managers notes for a presentation on an advertising mix for a new range of beauty products, with the brand name Cheri. He is talking to a marketing team set up to promote the new range. Use the notes to give a presentation of about 5 minutes using listing, linking and sequencing where necessary. Advertising mix for Cheri beauty products Above-the-line advertising television commercials newspaper advertising magazines youth magazines womens magazines Below-the-line advertising

in-store e.g. displays, merchandising free samples

on-pack targeted e.g. mailing coupons, competitions, joint promotions

Begin as follow: Good morning, everyone. Id like to talk about the advertising mix for the new Cheri range of beauty products. We are planning two categories of advertising, above-the-line and below-the-line. Ill talk first about Vocabulary Merchandising: Any direct efforts to encourage sales of a product, increase consumer awareness, etc. Above-the-line advertising: Mass media advertising, such as television, radio and newspaper. Below-the-line advertising: Forms of advertising at the point of sale or directly on the product, such as packaging, shop displays, etc.


Language Checklist Structure (2) The main body Signaling different parts in a presentation: Ending the introduction So that concludes the introduction. Thats all for the introduction. Beginning the main body Now lets move to the first part of my talk, which is about So, first To begin with Listing There are three things to consider. First Second Third There are two kinds of The first is The second is We can see four advantages and two disadvantages. First, advantages. One is Another is A third advantage is Finally On the other hand, the two disadvantages. First Second Linking: Beginning a new part Lets move to (the next part which is) So now we come to Now I want to describe Sequencing There are (seven) different stages to the process First / then / next / after that / then (x) / after x theres y, last There are two steps involved. The first step is The second step is There are four stages to project. At the beginning, later, then, finally Ill describe the development of the idea. First the background, then the present situation, and then the prospects for the future. Skills Checklist Structure (2) The main body


Organization of presentation Logical progression of ideas and/or parts of presentation. Clear development. Sequential description of processes. Chronological order of events, i.e. background -- present -- future Topic Main parts A B Sections i ii. i. ii. iii. C i. Subsections a. b. a. b. a. b. c. a. b.

ii. Internal structure of the main body of a complex presentation Signaling the structure Use listing techniques. Link different parts. Use sequencing language. Signaling the structure Makes the organization of the talk clear Helps the audience to follow Helps you to follow the development of your talk. 6.The end of the presentation Reading Read the following text and identify: a. a potential problem at the end of a presentation. b. three ways to avoid the problem.

Open for questions: The silent disaster A nightmare scenario is as follows: the speaker finishes his talk with the words Any questions? This is met by total silence. Not a word. Then an embarrassed shuffling, a cough how can this be avoided? A possible answer is that if the presentation has been good and the audience is clearly interested, someone will have something to say. Another way to avoid the nightmare of utter silence is to end with an instruction to the audience. This should ensure immediate audience response. Giving an instruction is often useful in sales presentations and where the audience has special requirements. A sales presentation After talking about his or her products or services, the speaker wants the audience to explain their needs and says: Okay Ive told you about the ways Snappo can help companies like yours. Now for us to do that, we need to know more about the way you work. For example, tell me about your particular situation, tell me what in particular may interest you . This places a responsibility on the audience to respond unless of course they have a completely negative view of both the presenter and the message! Assuming they are well-disposed towards the potential supplier, it is probably in their interests to offer some information and begin discussion. A training manager Speaking to an audience of Department Managers, vicepresidents, or potential trainees, the Training Manager has outlined recommendations and explained what is available. He/she can end with: Right! Ive told you what we can offer. Now tell me what are your impressions, what are your priorities and what else do you need to know now?' Another option is for the speaker to have a question prepared. Ask something which you know the audience will have to answer. This often breaks the ice and starts discussion. It may be possible to

single out an individual who is most likely to have a question to ask you or a comment to make, or it may be apparent from earlier contact perhaps during the reception or coffee break, that a particular individual has something to say or to ask. Handling questions is thought by many speakers to be the most difficult part of a presentation. Why do you think this is? Here you have a list of the pieces of advice you need in handling questions:

Be polite. Check understanding if necessary by paraphrasing. Listen very carefully. Dont say anything youll regret later. Ask for repetition or clarification. Agree partially before giving own opinions: Yes, but Keep calm. Tell the truth (most of the time!) Practice 5 Imagine that you have given a talk on Marketing in Japan at a conference on business trends. What would you say in these situations? If you need to, refer to the Language Checklist. 1. At the end of your presentation, move to comments / discussion / questions. 2. A member of the audience suggests that you said that many small retail outlets, small shops, had actually closed down in recent years. In fact, you said this process has been going on for a long time. Politely correct the other person. 3. Ask the audience for comments on why this has happened. 4. Agree with someones suggestions, but suggest other factors. One is the increasing number of take-overs of smaller companies. 5. A member of the audience says the following: I understand that a report showed that 700 new drinks came out in Japan in 1990 and one year later 90 % had failed. Thats a pretty amazing figure Paraphrasing this, ask if in the USA or Europe that could not happen.


6. Someone suggests that in Japan there has always been an emphasis on quality and on products. In the West market research has been more developed. Agree, but say the situation is changing. 7. A speaker says something you dont understand. What do you say? Language Checklist The end of presentation Ending the main body of the presentation Right, that ends (the third part of) my talk. Thats all I want to say for now on Beginning the summary and/or conclusion Id like to end by emphasizing the main point(s). Id like to finish with A summary of the main points. Some observations based on what Ive said. Some conclusions / recommendations. A brief conclusion. Concluding There are two conclusions / recommendations. What we need is I think we have to I think we have seen that we should Inviting questions and/or introducing discussion That concludes (the formal part of) my talk. (Thanks for listening) Now Id like to invite your comments. Now we have (half an hour) for questions and discussion. Right. Now, any question or comments? So, now Id be very interested to hear your comments.


Handling Questions Understood but difficult or impossible to answer Thats a difficult question to answer in a few words. it could be in my experience I would say I dont think Im the right person to answer that. Perhaps (Mr. Holmes) can help I dont have much experience in that field Understood but irrelevant or impossible to answer in the time available Im afraid thats outside the scope of my talk / this session. If I were you Id discuss that with Ill have to come to that later, perhaps during the break as were short of time. Not understood Sorry, Im not sure Ive understood. Could you repeat? Are you asking if ? Do you mean ? I didnt catch (the last part of) your question. If I understood you correctly, you mean ? Is that right? Checking that your answer is sufficient Does that answer your question? Is that okay? Skills Checklist Structure (3) Ending the presentation A summary Restates main point(s). Restates what the audience must understand and remember. Contains no new information.

Is short.

A conclusion States the logical consequences of what has been said. Often contains recommendations. May contain new and important information. Is short. Questions Inviting questions implies that the audience is less expert than the speaker. Beware of the nightmare scenario total silence! Have one or two prepared questions to ask the audience. Keep control of the meeting. Discussion Inviting discussion gives the impression that the audience have useful experience, so is often more diplomatic. You still need to control the discussion. Inviting discussion and questions Offer the best solution. Keep control, limit long contributions, watch the time. Handling questions Listen very carefully. Ask for repetition or clarification if necessary. Paraphrase the question to check you understand it. Give yourself time to think perhaps by paraphrasing the question. Check that the question is relevant. If not, dont answer if you dont want to. Refer questioner to another person if you cant answer. Suggest youll answer a question later if you prefer. Check that the questioner is happy with your answer: eye contact and a pause is often sufficient. Keep control. Dont allow one or two people to dominate.

Be polite. Signal when time is running out Time for one last question. At the end, thank the audience.

Exercise 1 The new product Read Mr. Lopez presentation and try to match the titles (used in his rough plan) of the different parts of his presentation to the right text body. Winding-up; Introducing yourself; Delivering the message; Preparing the audience Good morning ladies and gentlemen; we havent all met before so Id better introduce myself. Im Luis Lopez from the development department of Citrus Incorporated I should say before we start that I hope youll excuse my English. Im a little out of practice Anyway, Im going to be talking this morning about a new product which we are planning to launch in two months time; its called KOOL-OUT, thats K-O-O-L dash O-U-T, and its a lemon-flavoured drink Well, Ill start with the background to the product launch; and then move on to a description of the product itself, Im going to list some of the main selling points that we should emphasize in the advertising and sales campaign. I think if you dont mind, well leave questions to the end Now firstly, as you all know, we had a gap in our soft-drink product range for the last two years; we have been manufacturing mixed-fruit drinks and orange drinks for the last ten years, but we stopped producing lemonade two years ago; I think we all agreed that there was room on the market for a completely new lemon-flavoured drink Secondly, the market research indicated that more and more consumers are using soft drinks as mixers with alcohol, so in other words, the market itself has expanded. This brings me to my next point which is that we have rather new customer-profile in mind; I must emphasize that this product is aimed at the young-professional, high-income, market and not the traditional consumer of old-fashioned lemonade. At this point we must consider the importance of packaging and design, and if you look at the video

in a moment, youll see that we have completely re-vamped the container itself as well as the label and slogan Now to digress for just a moment, the more sophisticated packaging means a high unit cost, and this may be a problem in the selling area, but well have a chance to discuss that aspect later so to go back to my earlier point, this is a totally new concept as far as Citrus Incorporated are concerned; as you see we are using both the new-size glass bottle and the miniature metal cans. Finally, lets look at the major attractions of the product. In spite of the higher price it will compete well with existing brands; the design is more modern than any of the current rival products, and incidentally the flavour is more realistic and natural its low calorie, too. O.K., so just before closing, Id like to summarize my main points again We have KOOL-OUT, a new design concept, aimed at a relatively new age and income group; its designed to be consumed on its own, as a soft drink, or to be used as a mixer in alcohol-based drinks and cocktails. It comes in both bottle and can and this will mean a slightly higher price than we are used to; but the improved flavour and the package design should give us a real advantage in todays market well, thats all I have today for the moment, thank you for listening, now if there are any questions, Ill be happy to answer them Exercise 2 The product presentation Use the phrases written below to construct a similar presentation to be given to a client. a. Now, to change the subject for a moment b. Before I finish, Id like to run through the main points again c. Ill begin by describing ---------, and then go on to ---------, and Ill end with -------- . d. In conclusion e. I want to stress f. Good afternoon. g. That brings me to the end of my presentation. h. Id like to talk about i. To return to the point I made earlier j. First, let me introduce myself; Im ------- from ---------- . k. Feel free to interrupt if you have any questions.

l. m. n. o. p. q.

Thank you for your attention. First of all Next Please excuse my rather poor English! Id like now to turn to If you have any questions, Ill be glad to answer them. At this point we have to bear in mind

Exercise 3 Can I interrupt here? While you were speaking your colleague, or your customer may interrupt to make a point. You will have to deal with it! Look at the interruptions listed below and some possible replies. Match the reply to the interruption. Interruptions a. You havent mentioned the price yet! b. Your product is more expensive than your competitors! c. Id like the exact specifications, please! d. I still dont understand the difference between the de-luxe and economy models! e. Your new model seems much heavier than the old one! Replies 1. I take your point but have you taken into account the improved durability? 2. Ill be coming to that in a moment. 3. Youre right, but on the other hand our product has a number of unique design features. 4. Our technical department will be able to give you an answer on that. 5. Let me clarify that for you. Exercise 4 Anticipating questions It is a very good policy to try to anticipate questions or problems and to deal with them before your audience raises them. Here are some examples of how you can anticipate. I can hear you say: why is this so costly? Anticipates

I wonder why its so expensive? Now, you may well ask, what does the mean by up-market? Anticipates Whats up-market? You will have noticed that I havent given any figures. Anticipates Wheres the statistical data? An obvious problem at this stage is the choice of colours. Anticipates Does it only come in black? How would you anticipate the following questions? Example: Why is it so heavy? An obvious problem is the weight. a. b. c. d. e. Why is the delivery period so long? Whats top quality specification? Do the accessories have to be so expensive? Why doesnt he mention the price? Can he prove what he says with figures?

4. Meetings
Preparation for the meeting Language Checklist Chairing and leading discussion Opening the meeting Thank you for coming (Its ten oclock). Lets start Weve received apologies from Any comments on our previous meeting?

Introducing the agenda Youve all seen the agenda On the agenda, youll see there are three items. There is one main item to discuss Stating objectives Were here today to hear about plans for Our objective is to discuss different ideas What we want to do today is to reach a decision Introducing discussion The background to the problem is This issue is about The point we have to understand is Calling on a speaker Id like to ask Mary to tell us about Can we hear from Mr. Passas on this? I know that youve prepared a statement on your Departments views Controlling the meeting Sorry Hans, can we let Magda finish? Er, Henry, we cant talk about that. Summarising So, what youre saying is Can I summarise that? You mean So, the main point is Moving the discussion on Can we go to think about Lets move on to the next point. Closing the meeting I think weve covered everything. So, weve decided I think we can close the meeting now. Thats it. The next meeting will be


Skills Checklist Preparation for meetings Chair Decide objectives. What type of meeting (formal or informal, short or long, regular or a one off, internal / external information giving / discussion / decision making)? Is a social element required? Prepare an agenda. Decide time / place / participants / who must attend and who can be notified of decisions. Study subjects for discussion. Anticipate different opinions. Speak to participants. Secretary Obtain agenda and list of participants. Inform participants and check: Room, equipment, paper, materials. Refreshments, meals, accommodation, travel. Participants Study subjects on agenda, work out preliminary options. If necessary, find out team or department views. Prepare own contribution, ideas, visual supports, etc. The role of the Chair Start and end on time. Introduce objectives, agenda. Introduce speakers. Define time limits for contributions. Control discussion, hear all views. Summarise discussion at key points. Ensure that key decisions are written down by the secretary. Ensure that conclusions and decisions are clear and understood. Define actions to be taken and individual responsibilities.

Practice 1 Suggest phrases which could be used by a chairperson in the following situations in a meeting. a. To welcome the participants to a meeting. b. To state the objectives of the meeting. c. To introduce the agenda. d. To introduce the first speaker. e. To prevent an interruption. f. To thank a speaker for his/her contribution. g. To introduce another speaker. h. To keep discussion to the relevant issues. i. To summarise discussion. j. To ask if anyone has anything to add. k. To suggest moving to the next topic on the agenda. l. To summarise certain actions that must be done following the meeting (for example, do research, write a report, meet again, write a letter, etc.). m. To close the meeting. Practice 2 1. In groups, work out a brief agenda, with an appropriate order, for a meeting of the marketing department of Axis Finance Ltd., a medium-size financial services company. Your agenda should include the points listed here: Any other business New products Minutes of previous meeting Marketing plans for next year Date of next meeting Review of marketing performance in the current year Personnel changes Chairs opening address Apologies for absence.


2. In pairs, prepare a brief opening statement by the chair to introduce the meeting above: Think about what the opening statement from the chair needs to say Use your agenda as a guide Refer to the Language Checklist Practise in pairs

8. Participating in meetings Language Checklist Discussion in meetings Stating opinion It seems to me I tend to think In my view We think / feel / believe Theres no alternative to Its obvious that Clearly / obviously Asking for opinion Id like to hear from Could we hear from ? Whats your view? What do you think about ? Do you have any strong views on ? Any comments? Interrupting Excuse me, may I ask for clarification on this? If I may interrupt, could you say ? Sorry to interrupt, but Do you think so? My impression is What? Thats impossible. We / I think


Handling interruptions Yes, go ahead. Sorry, please let me finish If I may finish this point Can I come to that later? Thats not really relevant at this stage Can we leave that to another discussion? Skills Checklist Participating in meetings Types of meeting Decision making meeting Information giving meeting Spontaneous / emergency meeting Routine meeting Internal meeting Customer / client / supplier - first meeting / established relationship Structure of decision making meetings Study / discuss / analyse the situation Define the problem Set an objective State imperatives and desirables Generate alternatives Establish evaluation criteria Evaluate alternatives Choose among alternatives The DESC stage of meeting D Describe situation E Express feelings S Suggest solutions C Conclude with decision Goal of decision making meetings Objective: to get a consensus in a time-efficient and cost effective manner

Importance of communication Two-way process Participants must be aware of others needs Full communication and understanding is essential Four elements in communication: awareness understanding empathy perception Reaching a consensus Discussion leads to consensus Consensus is recognised and verbalised by leader Decisions checked and confirmed

Practice 3 Use the skeleton outline below to recreate the entire dialogue with a partner. Choose alternative interruptions and ways of handling interruptions. The fall in sales is mainly due to the recession affecting world markets. Interrupt: ask for clarification. Polite response. (general fall of 5 % / most product areas / especially oil processing sector / also due to sale of Anglo, UK subsidiary) Interrupt: ask why Anglo was sold. Reject interruption: No time / discussed before. Try to move on to future prospects. (the outlook is just good now) Interrupt: disagree. Respond: you disagree. Forecast are much better. Interrupt: you want to talk about new markets.

Promise to discuss this later. But first Interrupt: suggest a break. Reject the idea. Reading

1. Read the following extract and answer these questions. a. What kind of meeting is the text about? b. What structure does the text describe? c. What key points is made about communication? 2. a. b. c. d. Read the text again. Do you agree with: The first sentence? Give reasons for your answer. Haynes suggestions for the steps involved in decision making? The view that communication must be a two-way process? What the writer says about consensus in the final paragraph?

The reason for having a meeting is to make a decision. Information may be given in a presentation followed by questions or discussion, but it is to get a consensus that the meeting has been arranged in the first place. Achieving this in the most time- and costeffective manner possible is a goal that everyone attending (the meeting) must share. Marion Haynes (1988) maintains that decision-making meetings need to follow a specific structure. The rational decision process includes the following steps: Study / discuss / analyse the situation Define the problem Set an objective State imperatives and desirables Generate alternatives Establish evaluation criteria Evaluate alternatives Choose among alternatives. One other aspect of decision making is the necessity for participants in the meeting to be aware of one anothers needs and perceptions. If these are not effectively communicated, if there is an

insufficient degree of understanding of one anothers requirements, then an acceptable conclusion is unlikely to be reached. There are four essential elements in decision-making: awareness, understanding, empathy and perception. It is only when we accept that communications are a two-way process that any form of communication, including decision making, will become genuinely successful and effective. Decision-making is not always an identifiable activity. Frequently the discussion can evolve into a consensus which can be recognised and verbalised by the leader without the need to put things to the vote. 3. Find words or phrases in the text which mean the same as the following: a. common agreement b. economical use of resources c. aim d. fix a goal e. what one must have f. what one would like to have g. consider other options h. way of seeing things i. seeing things as others see them j. develop k. express through speaking.

Interruptions can have different intentions: To ask for clarification To add opinion To ask for more details To change direction of the discussion To disagree. Handling interruptions: Promise to come back to a point later Politely disagree with an interruption Say the interruption is not relevant or that time is short

Politely accept the interruption and respond to it before continuing Reject a suggestion 9. Ending the meeting Reading Read the following text and identify: a. three recommendations on how a meeting should end b. what should happen after a meeting. Regardless of the type of meeting (information or decision making), it is important to close with a restatement of objective, a summary of what was accomplished, and a list of agreed action that needs to be taken. After the meeting, it is essential to follow up with action. A brief memorandum of conclusions should be written and distributed. Inform appropriate people who did not attend the meeting about essential decisions made. Finally, each meeting should be viewed as learning experience. Future meetings should be improved by soliciting evaluations and deciding what action is required to conduct better meetings. Language Checklist Ending the meeting Asking for clarification Could you be more specific? Can you explain that (in more detail)? What do you mean by ? Clarifying This means What I mean is What I want to say is To explain this in more detail

Checking that the clarification is sufficient Is that okay? / is that clearer now? Referring to other speakers As Peter has already told us Im sure Mr. Kowski knows about this Later well hear a report from Neil on Professor Gilberto is certainly aware of Delaying decisions I think we need more time to consider this. I think we should postpone a decision Can we leave this until another date? It would be wrong to make a final decision Ending the meeting Summarising I think we should end there. Just to summarise Weve covered everything, so Id like to go over the decisions weve taken So, to conclude weve agreed Confirming action Well contact John will Weve got to We need to look at Referring to next contact Well meet again next month We look forward to hearing from you Its been a pleasure to see you today and I look forward to our next meeting Skills Checklist Ending meetings Two general rules Meeting should end on time! Decision making meetings should end with decisions!

The Chair should close the meeting with: A restatement of the objectives A summary of decisions taken A summary of the action now required Reference to any individual responsibilities. After the meeting A memorandum should be sent to all participants summarising the decisions taken and the action required. The memorandum should be sent to any interested individuals who were unable to attend. The Chair should seek feedback on the meetings to try to improve future meetings. Improving meetings Motivation to change Gather information on present situation Identify specific areas needing improvement Identify alternative courses of action Practise new techniques Improvement model.

Practice 4 You are at an internal meeting to discuss increases in the price of your products. With a partner, use these prompts to make a dialogue. Try to use new language from this unit. Participant A Ask if the meeting can reach a decision on this. Respond that we need more information. Ask for clarification. Participant B


Say we need to know more about the effects of a price increase. Suggest doing market research. Agree. Suggest contacting a friend who knows about market consultancy firms. Suggest first looking at previous experience of price rises then later going to a Marketing Consultancy. Ask for general agreement. Move to next item for discussion.

Practice 5 In pairs use the outline below to create a chairs closing remarks for a meeting. To make this more realistic, add names and other details as required. Practice your closing remarks together. Indicate that the meeting is almost over. Check that no one has anything else to say. Restate the purpose of the meeting. Introduce a summary of the decisions taken. Ask if everyone is happy with your summary. Indicate that a colleague will organise a presentation next week. Fix a date for a new meeting. Thank people for coming.


5. Negotiations
10. Know what you want Language Checklist Negotiations (1) Making an opening statement Welcoming Welcome to Im sure we will have a useful and productive meeting First meeting We see this as a preparatory meeting We would like to reach agreement on One of a series of meetings Following previous meetings we have agreed on some important issues. Today we have to think about We have reached an important stage Stating your aims and objectives Id like to begin with a few words about our general expectations May I outline our principle aims and objectives today We want to clarify our positions We have a formal agenda We dont have a formal agenda, but we hope to reach agreement on There are three specific areas we would like to discuss. These are We have to decide Stating shared aims and objectives Together we want to develop a good relationship We agree that It is important for both of us that we agree on Handing over Id like to finish there and give you the opportunity to reply to this. Id like to hand over to my colleague , who has something to say about

Skills Checklist Negotiations (1) Planning and preparation Type of negotiation Towards agreement Both teams try to suit joint interests Independent advantage Each team aims to get best deal Conflict A team aims to win and make the other team lose Purpose of negotiation Exploratory (possible areas of interest) Conciliatory (resolving differences) Targets Scale (e.g. 1-10) Decide realistic maximum and minimum acceptable scores Facts and figures Prepare statistical data Know facts Prepare visuals Strengths and weaknesses List your bargaining strengths Know your possible weaknesses Calculate your bargaining position Possible concessions Plan your bargaining strategy List essential conditions Impossible to concede List possible concessions

Opening statements State general objectives State priorities State independent (not joint) objectives Be brief Practice 1 1. Suggest phrases for each of the following at the start of a negotiation. Welcome the other side. Develop small talk (trip, weather). Mention plans for lunch make your visitors feel welcome (see city centre / local restaurant). Suggest you start talking about the main subject of your meeting. Introduce a colleague. Explain general aim or purpose of the meeting. (preliminary / exploratory) Say what your side wants from the meeting. (Establish beginnings of a partnership / learn about supply systems / price variations and supply costs.) 2. Try to bring all the phrases above together in a single opening statement. Types of negotiation: Agreement-based negotiation or win-win negotiation Proposals and counter proposals (propuneri contrare) are discussed until agreement is reached. Both sides hopes for repeat business. Two parties have a shared objective: to work together in a way which is mutually beneficial. Independent advantage negotiation This type of negotiation is less based on mutual benefit, but on gaining the best deal possible for your side. Each team thinks only about its own interests. Winlose negotiation

This type is the negotiation to resolve conflict, for example in a contractual dispute. Here, it is possible that each party regards the other as an opponent and seeks to win the argument. A typical structure of a negotiation: Suggestion Counter suggestion Agreement Confirmation Practice 2 1. Mark the seven points below (how to prepare a negotiation) in the right order. The first is already marked as an example. Identify your minimum requirements. Prepare your opening statement. Decide what concessions you could make. Know your own strengths and weaknesses. Know your role as part of a team. Prepare your negotiation position know your aims and objectives. 1 Prepare any figures, any calculations and any support materials you may need.

2.Match each of the four aspects of good preparation on the left with why they are important on the right. a. Knowing your aims i. means you can support your and objectives argument. b. Knowing your own strengths and ii. helps clear thinking and weaknesses purpose. c. Preparing any figures, calculations iii. creates reasonable and other materials expectations. d. Preparing an opening statement iv. helps you to know the market, the context in which you want to work.

11. Getting what you can Reading 1. Read the following extract. According to the writer, are these statements about negotiating true (T) or false (F): a. Decide on the most important and less important issues. b. Try to guess what the other side thinks. c. Note answers to the questions you ask. d. Deal with issues in isolation, one at a time. e. Make concessions and get a concession in return. f. Tough bargaining can combine with a spirit of cooperation. g. If there are problems, you have to accept or reject what is on offer. Effective negotiation requires clear thinking and a constructive approach It is necessary to have a clear understanding of what for you are the most important issues and at the same time what for you are less important. Try to identify aspects in the second category where the other side will be very happy to gain concessions. Give what is not so important for you, but is valuable for the other side. To do this, you have to do the following: Check every item of what the other side wants. Ask how important items are and look for flexibility. Do not guess their opinions or motives you could be wrong, or they wont like your speculation. Note the other sides answers, but dont immediately say what you think. Avoid being forced into considering one issue alone, consider two or three at once aim for an agreement to a package.

If there are big differences between the two parties, you have a choice of these options: to accept, to reject, or to carry on negotiating. If you decide to carry on, then the options in the next round are: To make a new offer To seek a new offer from the other party

To change the shape of the deal (vary the quantity or the quality, or bring in third parties) Begin bargaining.

Your bargaining should be governed by three principles: be prepared, think about the whole package, and be constructive. In preparing, you must identify the issues, and prepare your bargaining position. You need: An essential conditions list issues where you cannot concede anything A concessions list issues where you can make concessions To grade the concessions from the easiest to the most difficult, where you need most in return. As for the package, you must look for agreement in principle on a broad front (zon cu elemente diferite). When the time comes for compromise, each party will concede on one issue if they win a concession on another. The final principle is to be positive and constructive. You should be fair and cooperative, even during difficult bargaining. This approach is mot likely to move the negotiation towards a settlement that both sides feel is to their advantage. 2. Read the text again. Identify the following: a. How to respond to what the other side wants. b. Three ways to change a deal. c. Three actions to prepare for bargaining Language Checklist Negotiations (2) Bargaining We can agree to that if On condition that So long as Thats not acceptable unless

Without Making concessions It you could we could consider So long as we could agree to On condition that we agree on then we could Lets think about the issue of We could offer you Would you be interested in ? Could we tie this agreement to ? Accepting We agree. That seems acceptable. Thats probably all right. Confirming Can we run through what weve agreed? Id like to check what weve said / confirm I think this is a good moment to repeat what weve agreed so far. Summarising Id like to run through the main points that weve talked about. So. Ill summarise the important points of our offer. Can we summarise the proposal in a few words? Looking ahead So, the next step is We need to meet again soon. In our next meeting we need to So, can we ask you to ? Before the next meeting well We need to draw up a formal contract. Skills Checklist Negotiations (2) Bargaining in negotiations Concessions rules A key principle in negotiation is to give a little and get a little at the same time.

Ask for concessions All concessions are conditional Conditions first If then Its a package Give whats cheap to you and valuable to them.

During the negotiation Main speaker Create a joint, public and flexible agenda. Question needs and preferences. Dont talk too much. Listen. Dont fill silences. Build on common ground. Explore alternatives What if ? Be clear, brief and firm. Follow concession rules. Support speaker Wait till the Chair or your main speaker brings you in. Be clear, brief and firm. Follow the concession rules. Support your main speaker - Agree (nod, Thats right ) - Emphasise (This point is very important) - Add forgotten points (And we must remember ) - But dont make concessions for your main speaker. - Listen. - Dont fill silences. Practice 3 Make sentences which include concessions based on the prompts below. The first is done for you as an example. a. a better warranty / quicker payment terms We could offer a better warranty if you would agree to quicker payment terms.

b. c. d. e. f. g.

free delivery / large order free on-site training / small increase in price 5 % discount / payment on delivery extra 50, 000 compensation / agreement not to go to law promise to improve safety for staff / agreement on new contracts better working conditions / shorter breaks

Practice 4 You and a partner are representatives of Beck Instruments and Ojanpera Inc., a machine tool maker. Ojanpera is in discussion with Beck Instruments to buy a machine, the BI 25. Use the flow chart below to negotiate some aspects of an agreement for the sale of the BI 25. Ojanpera Offer to buy the machine if BI can give a good price. Ask for a discount. Say a discount could be possible if Ojanpera agrees to pay for shipping costs. Agree, if the discount is attractive. Offer 4 % discount. Ask for 6 % discount. Unfortunately, you cant agree, unless Ojanpera pays for the installation. Agree. Confirm your agreement. Practice 5 The following letter is from Gibson Trust Ltd. To the Ministry of Urban Development summarising the points agreed in the negotiation between them and outlining the next steps. Complete the spaces in the letter with appropriate words given below. Enclosed developed specified examined excluded signed

Beck Instruments Say that your prices are very competitive.

Agreed drawn up confirm included

GIBSON TRUST LIMITED Units 9-12 East Side Monks Cross Industrial Estate BRISTOL BSI4 6TR Telephone 01272 547777 Fax 01272 547701 Neil Finch Ministry of Urban Development 140- 144 Whitehall London WCI 4RF May 2 200 Dear Neil, Re: Meeting in Bristol, April 30 --- Railway Land Sale I am writing to (a) _______ points (b) _______ in the above meeting, held to discuss the sale of government owned railway land to Gibson Trust Limited. We would like to confirm through this letter and the (c) ________ drawings that the property (d) ______ in the above sale consists of the land presently occupied by the station buildings and also the former car parks to the east of the station, the offices to the west and the warehouse alongside the traks. The government-owned housing on the north side of the railway lines is (e) _______ . We also agree that the station will be renovated by the Transport Department and that the government will be responsible for running an eventual museum and paying a rent of 100,000 per year to Gibson Trust. The remaining land will be (f) _________ by Gibson Trust and later sold off separately. The development is intended to be for commercial and residential use. The eventual use of the land should be (g) _______ in the contract.

Our next meeting will be on May 15 at 10 a.m., at which development plans will be (h) ______. Soon after this, contracts will be (I) ______ . Then we will need time to consider the contracts but hopefully they will be (j) ______ by the end of September. Do contact us if you have any comments or alterations you would like to make to this summary. Thank you once again for a very constructive meeting and we look forward to seeing you again on May 15. Your sincerely, Jill Kearne Chief Negotiator Encs. (I)

12. Not getting what you dont want What type of negotiator are you?

1. Your aim in a negotiation is a) to find the greatest area of agreement in the joint interests of both parties. b) To win and to make the other side lose. c) To find the best deal for your side. 2. When the other side is talking you a) use the information you are hearing to identify weaknesses in the other party. b) Plan what you are going to say next. c) Listen with maximum attention. 3. You think that a) part of the available time must be spent socialising and getting to know the other side.

b) Goodwill is important but the speed of the meeting should be quick and businesslike. c) The meeting should get down to business as soon as possible and reach quick decisions. 4. When you speak in a negotiation you a) make bold and forceful statements, possibly banging the table. b) Make carefully considered statements in a calm, controlled voice. c) Are occasionally forceful and inflexible. 5. If the other side disagree with you, you a) try hard to find a creative position by modifying your position. b) Repeat your demands and will not concede your objective is to make the other side give in. c) Reshape your offer without fundamental changes. 6. If the other side state an opinion you disagree with, you a) tentatively suggest an alternative. b) Ask for clarification and explanation. c) Ridicule it with sarcasm. 1 a)3 b)2 c)2 4 a)1 b)3 c)2 2 a)1 b)2 c)3 5 a)3 b)1 c)2 3 a)3 b)2 c)1 6 a)3 b)2 c)1

If you score 15 or more you are a creative negotiator. 11-14 you negotiate to independent advantage. 7-10 you are a fighter! Less than 7 you should get a gun licence! Reading Match each of the following to a phrase in the text with a similar meaning: a. highlight the disadvantages of failing to reach a deal b. think of new benefits for both sides c. alter parts of what is on offer d. take a break to consider positions

e. f. g. h.

have the negotiation in a different place change the individuals involved ask an independent person to come and help you reach agreement have an informal meeting to talk things over.

Dealing with conflict Conflict may sometimes be an unavoidable step on the road towards agreement. However, in some cases conflict leads to the break down of negotiations as one or both sides realise that agreement is not possible. In many cases this is better than agreeing to something which would be against the interests of the people concerned. When conflict arises, there are several possible actions which may help to resolve conflict in a negotiation: Leave the problem, go on to a different topic and return later to the point at issue Summarise progress and areas of agreement Emphasise the benefits available to both sides Emphasise the loss to both sides of not reaching agreement Restate the issue and wait for a response Change the package Invent new options for mutual gain Offer conditional concessions Adjourn (a amna, a suspenda) to think and reflect Fix an off-the-record meeting (ntlnire neoficial) Change location Change negotiator (personal chemistry?) Bring in a third party (mediator?) Consider walking away. Practice 6 In pairs, use the given prompts to suggest a response to the statements. Situation 1 The problem is that we have never offered the kind of warranty you are looking for.

Suggest leaving the point and returning to it later after discussing other issues, i.e. training for technical staff. Situation 2 Theres a number of issues on the table. We seem to be a long way from an agreement. Suggest changing the package on offer (variables include price, shipment costs, payment terms). Situation 3 The price you are asking is rather high, quite a lot higher than we were expecting. Send a signal that you could offer better payment terms. Situation 4 There are several problems. We think there is quite a lot of negotiation ahead before we can agree on a common strategy. Suggest advantages of reaching agreement: more global influence, better prospects for the future. a. b. c. d. e. Below are five strategies in dealing with conflict. Use them in making statements. Adjourn to think and reflect. Summarise progress and areas of agreement. Leave the problem, discuss something else, come back later to the problem. Emphasise the loss to both sides of not reaching agreement. Offer a conditional concession.

Practice 7 Below are four offers or request. Reject each one, using the information in the prompts. Situation 1 Let me make a suggestion. If you agree to buy 100 units every month for the next twelve months, well agree a 10 % discount. You dont know how many units you will need in six and twelve months. It might be more or less. Situation 2

The price we are offering excludes installation costs but does include a twelve months guarantee. Other suppliers offer free installation and a two year parts and labour warranty. Situation 3 I think the absolute minimum investment in advertising must be $40,000, otherwise we cannot reach enough of our market. Its not much to ask for. You cannot spend more than your budget. Situation 4 Now, some excellent news: wed like to increase our order. Right now you are sending us 350 boxes a month. We need at least 500, demand is very high Your order books are full, the plant is working at capacity. Practice 8 Suggest what you could say in the following situations. Situation 1 After a long negotiation, you have reached agreement and now plan a meal in a local restaurant with the other party in the negotiation. Situation 2 Your efforts to reach agreement have been unsuccessful. It is late. End the negotiation but offer some hope that in the future you might manage some cooperation with the other side. Situation 3 A colleague has asked you to cooperate on a project, but after long discussion you feel you cannot participate because of fundamental disagreement. It is important that you continue to work together in the other areas. Situation 4 You want to repeat an order with a supplier but they are trying to increase prices by 20 %. You cannot agree to this. End your discussion.

Situation 5 A customer is asking you to supply goods in a month. This is physically impossible. End the discussion. Language Checklist Negotiations (3) Dealing with conflict I think we should look at the points we agree on We should focus on the positive aspects We should look at the benefits for both sides It is in your interests to resolve the issue What do you think is a fair way to resolve this problem? We hope you can see our point of view Let us explain our position Could you tell us why you feel like that? I think we should look at the whole package, not so much at individual areas of difficulty. Perhaps we could adjourn for a little while. I think we need to consider some fresh ideas Rejecting Im afraid we cant Before agreeing to that we would need Unfortunately I dont think it would be sensible for us to I think if you consider our position, youll see that Ending negotiations So, can we summarise the progress weve made? Can we go through the points weve agreed? Perhaps if I can check the main points So, the next step is What we need to do now is Its been a very useful and productive meeting. We look forward to a successful partnership.

Breaking off negotiations I think weve gone as far as we can. Im sorry, but I dont think were going to agree a deal. Its a pity we couldnt reach agreement this time. Unfortunately we appear unable to settle our differences. It would be better if we looked for some independent arbitrator. Skills Checklist Negotiations (3) Dealing with conflict Show understanding of the other sides position Highlight advantages of agreement Dont Be sarcastic Attack Criticise Threaten Blame Types of negotiators Hard Negotiates to win Makes demands Principled Looks for common benefits Makes offers Soft Looks for agreement Accepts whats on offer Fighter Win-lose Rejecting

Do ask questions listen summarise build on common ground explain your feelings

Independent advantage win-win

Creative negotiator looks for agreement

Ask for an adjournment. Discuss options. Remember your limits. Decide if your interests are being met: if not, reject the proposal on offer, or suggest alternatives.

After the negotiation Compare the result with your objectives, targets and limits. Examine the process of the negotiation: The planning the strategy team roles the issues. Learn from failure: What went wrong and why? Identify weaknesses and errors Discuss and plan ahead. Build on success: Recognise success Praise people Develop teamwork and partnership. Negotiating Conditions Examples $8.50 per unit at least 10,000 units 30 days after invoice 20 June 2003 -2 % if over 10,000 units 5 % for each month of delay 50 % charge if cancelled less than six weeks beforehand sole rights over all East Coast states 3 % of turnover on licensed goods 5 % on sales in the territory -2 % if paid within 20 days first option for 12 months after contract

Conditions Unit price Minimum quantity Credit period Delivery date Bulk discount Penalty clause Cancellation clause Exclusivity Royalty on sales under licence Commission Early settlement discount Option period

Method of payment Warranty period DATAFILE: Negotiation

irrevocable letter of credit 18 months warranty from completion

Below are the stages of negotiation and some expressions which you may find useful at each stage: Conversation (1) Im sure/confident we can reach agreement. (optimistic) Im sure theres room for negotiation. We have a lot to discuss. Lets see how we get on. (cautious) Presenting your position (2) This is our position. This is how we see it. We think the following is reasonable/appropriate. Our approach is this. Questioning the others position (3) How do you/ explain your attitude? / justify ? Account for? Arrive at? Why do you want? Why such a / high charge? / long delivery period? / low discount? Refusing to accept (4) Im sorry, I cant accept 2 %. Youll have to do better than that, Im afraid. Im afraid its not enough. Other firms offer more than 2 %. Refusing to move (5) Im afraid I cant agree to / that. / increase the rate. / lower the price. / shorten delivery.

Weve done our best for you. We have maintain a policy. I have my instructions. Suggesting a compromise (6) May I make a suggestion? If you then we may be able to We may be able to but only if you Unless you there is no question of our being able to Reaching agreement (7) Lets just go through the terms. Lets summarize the conditions. Exercise 1 Your turn to negotiate! Now you have the opportunity to negotiate. To help you with each answer you are given some information in the script below and a number which refers back to the Datafile. Supplier Well, lets get started. You know, with this delivery problem Im sure theres room for negotiation. You (1: cautious) Supplier Right, well this is how we see it. We can deliver the first machine in ten weeks, and install it four weeks after that. You (3: long delivery period) Supplier Well, these are in fact the usual periods. Its pretty normal in this kind of operation. Did you expect we could deliver any quicker? You (2: 6 weeks maximum delivery; 4 weeks installation) Supplier I see what you mean, but that would be very difficult. You see we have a lot of orders to handle at present, and moving just one of these machines is a major operation. Look, if I can promise you delivery in eight weeks, does that help? You (4: too late) Supplier Ah-ha! Well, look er You want the machine in six weeks. Now that is really a very short deadline in this business. You

said that you couldnt take it any later, but couldnt your engineers find a way to re-schedule just a little, say another week? You (5: refuse) Supplier Well, you really are asking us for something that is very difficult. Ive already offered you seven weeks. Ill have to consult with my colleagues and come back to you, but I cant see what we can do. You (6: if deliver in 6 weeks perhaps talk about further order) Supplier Well, on that basis I suppose we might be able to look at some kind of arrangement. In fact, if you can promise another order I think we could accept your terms. You (7: 6 weeks delivery; 4 weeks installation; decision on next order by 26th of this month) Supplier Exactly. If you could confirm this in writing I Exercise 2 Ten rules for negotiating Dr Ed Zap is holding a two-day seminar on negotiating techniques. At the end of the first morning he gives the group his ten rules for negotiating. Here they are. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Find out how many points are to be negotiated. Start from an extreme position. Assume the other person owes you a concession. Never concede without exchange. Never give what you can sell. Exaggerate the value of your concessions, minimize the value of his. If he insists on principle, expect a concession in return. Only threaten what you are prepared to carry out. Dont show disrespect to your opponent. If youre happy with the result, dont shout Ive won!

Read Dr Zaps rules and then look at the remarks in list A. These remarks are not good for negotiating. Instead, use phrases from list B. which one would you use in each case? A. a. You see? I knew Id win!


1. If you increase the order, then we may be able to reduce the price. b. I know what you want to discuss, so lets start. 2. Very well, but if you cant give discounts Im sure you can extend c. I can reduce the price. Does that help? 3. If you cant accept this, I may have to reconsider my position. d. Delivery? Thats no problem; no extra charge. 4. I think we can agree on these terms. f. Its against your policy to give discounts? OK. 5. Im afraid that will not be possible. g. What a ridiculous idea! Dont be stupid! 6. May we go through the points to be discussed before we begin? h. Another half per cent? Yes, thats very generous offer youre making. 7. Half per cent is very small amount i. This is my final offer. If you refuse, Ill cancel everything. 8. Delivery? Well it may be possible but only if Exercise 3 When things get difficult In their negotiation exercises the managers on Dr Zaps seminar sometimes find themselves in difficult situations. As they are all from English-speaking countries they know what to say. Could you give me a moment to do some calculations? Certainly! Would you excuse me a minute? Would you like me to go through that again? Im sorry, could you go through that again? I dont think were talking about the same thing. Thats right! Were talking at cross-purposes. Can we say its agreed, here and now? Ill have to come back to you on this. Where does the January figure come from? Im just looking. Could you bear with me a moment? So what is the basis of calculation? Im sorry, I dont have the figures to hand.


Which expression would you use in the following cases? a. The other person does not seem to understand your explanation of the payment schedules. b. He wants you to agree a definite price today, but you need to consult your boss at the office before committing yourself. c. He suddenly asks you what discount you would make for a very large order indeed. You need a minute to work it out. d. You are rather surprised at the high charge for transport. e. He suddenly asks the price of similar products in the range. You have the price list in your briefcase somewhere. f. You think he has just made up the figure for installation costs! g. He has already explained the commission system twice but you are still not really clear about it. Understanding contracts

Exercise 4 Vocabulary for contracts The words below are often used in connection with contracts. Use some of them to complete the sentences which follow. You may need to put certain words in the plural. Terminate clause draw up condition binding Section party provide for compromise comply with/abide by Litigation out of court breach court term void agreement arbitration valid

a. A contract is an ---------- between two ----------- . It is divided into ---------- , ------------ , and ------------ . b. The contract --------- ---------- any problems between the two parties. The conditions of the contract are --------- on both parties. If one party does not ----------- ----------- the clauses, this is called a --------- of contract. c. In the case of a dispute, many contracts provide for ----------, but in some cases the dispute results in ---------- . Most parties reach a

--------- without going to --------- , and the dispute is settled ------------- ---------- . d. Some contracts are for a fixed period, or --------- ; also, there are ways in which the parties can end, or ---------, the contract. Exercise 5 Licensing terms You have asked a US firm if you could make one of its products under licence, in your own country. Here is part of their answer. But what do the legal terms really mean? Replace the underlined terms with the phrases listed below. Weve checked with our legal department. Yes, we are the patent holders for the XT7. We are prepared, in fact, to grant you a licence to make it in your own territory on these conditions: there would be a fee on agreement and then a royalty of 5 % with a minimum annual royalty of $50,000. The term would be four years, with the possibility of renewal on expiry. And, of course, in the event of any infringement, as our licensee you would have to apply for an injunction on the infringers production. Let you have yearly bottom limit illegal copying Official manufacturer have the legal rights over copiers Further years period country Ask for a ban when it ended permission An immediate payment 5 % to pay

6. Management
13. What is management? Discussion


What do you think makes a good manager? Which four of the following qualities do you think are the most important? A being decisive: able to make quick decisions B being efficient: doing things quickly, not leaving tasks unfinished, having a tidy desk, and so on C being friendly and sociable D being able to communicate with people E being logical, rational and analytical F being able to motivate and inspire and lead people G being authoritative: able to give orders H being competent: knowing ones job perfectly, as well as the work of ones subordinates I being persuasive: able to convince people to do things J having good ideas Reading This text summarizes some of Peter Druckers views on management. As you read about his description of the work of a manger, decide whether the five different functions he mentions require the four qualities you selected in your discussion, or others you did not choose. Peter Drucker, the well-known American business professor and consultant, suggests that the work of a manager can be divided into planning (setting objectives), organizing, integrating (motivating and communicating), measuring, and developing people. First of all, managers (especially senior managers such as company chairmen and women and directors) set objectives, and decide how their organization can achieve them. This involves developing strategies, plans and precise tactics, and allocating resources of people and money. Secondly, managers organize. They analyse and classify the activities of the organization and the relations among them. They divide the work into manageable activities and then into individual jobs. They select people to manage these units and perform the jobs. Thirdly, managers practice the social skills of motivation and communication. They also have to communicate objectives to the people responsible for attaining them. They have to make the people

who are responsible for performing individual jobs form teams. They make decisions about pay and promotion. As well as organizing and supervising the work of their subordinates, they have to work with people in other areas and functions. Fourthly, managers have to measure the performance of their staff, to see whether the objectives set for the organization as a whole and for each individual member of it are being achieved. Lastly, managers develop people both their subordinates and themselves. Obviously, objectives occasionally have to be modified or changed. It is generally the job of a companys top managers to consider the needs of the future, and to take responsibility for innovation, without which any organization can only expect a limited life. Top managers also have to manage a businesss relations with customers, suppliers, distributors, bankers, investors, neighbouring communities, public authorities, and so on, as well as deal with any major crises which arise. Top managers are appointed and supervised and advised (and dismissed) by a companys board of directors. Although the tasks of a manager can be analyzed and classified in this fashion, management is not entirely scientific. It is human skill. Business professors obviously believe that intuition and instinct are not enough; there are management skills that have to be learnt. Drucker, for example, wrote over 20 years ago that Altogether this entire book is based on the proposition that the days of the intuitive manager are numbered, meaning that they were coming to an end. But some people are clearly good at management, and others are not. Some people will be unable to put management techniques into practice. Others will have lots of technique, but few good ideas. Outstanding managers are rather rare. Vocabulary a. Complete the following sentences with these words. Achieved Resources board of directors communicate manageable performance setting supervise innovations


1 Managers have to decide how best to allocate the human, physical and capital .. available to them. 2 Managers logically have to make sure that the jobs and tasks given to their subordinates are .. . 3 There is no point in . objectives if you dont them to your staff. 4 Managers have to . their subordinates, and to measure, and try to improve, their . 5 Managers have to check whether objectives and targets are being . . 6 A top manager whose performance is unsatisfactory can be dismissed by the companys . . 7 Top managers are responsible for the . that will allow a company to adapt to a changing world. b. The text contains a number of common verb-noun partnerships (e.g. achieve objectives, deal with crises, and so on). Match up these verb and nouns to make common collocations. Allocate decisions Communicate information Develop jobs Make objectives Measure people Motivate performance Perform resources Set strategies Supervise subordinates 14. Types of Managers We have been using the term manager to mean anyone who is responsible for subordinates and other organizational resources. There are many different types of managers, with diverse tasks and responsibilities. Managers can be classified in two ways: by their level in the organization so-called first-line, middle, and top managers

and by the range of organizational activities for which they are responsible so-called functional and general managers. Management Levels First-Line Managers. The lowest level in an organization at which individuals are responsible for the work of others is called first-line or first-level management. First-line managers direct operating employees only; they do not supervise other managers. Examples of first-line managers are the foreman (maistru) or production supervisor (ef de producie) in a manufacturing plant, the technical supervisor (ef de echip) in a research department, and the clerical supervisor (ef de birou) in a large office. First-level mangers are often called supervisors. Middle Managers. The term middle management can include to more than one level in an organization. Middle managers direct the activities of lower-level managers and sometimes also those of operating employees. Middle managers principal responsibilities are to direct the activities that implement their organizations policies and to balance the demands of their superiors with the capacities of their subordinates. Top Managers. Composed of a comparatively small group of executives, top management is responsible for the overall management of the organization. It establishes operating policies and guides the organizations interactions with its environment. Typical titles of top managers are chief executive officer, president and senior vice-president. Actual titles vary from one organization to another and are not always a reliable guide to membership in the highest management classification. Functional and General Managers The other major classification of managers depends on the scope of the activities they manage. Functional Managers. The functional manager is responsible for only one organizational activity, such as production, marketing, sales,

or finance. The people and activities headed (a conduce) by a functional manager are engaged in a common set of activities. General Managers. The general manager, on the other hand, oversees (a supraveghea) a complex unit, such as a company, a subsidiary, or an independent operating division. He or she is responsible for all the activities of that unit, such as its production, marketing, sales, and finance. A small company may have only one general manager its president or executive vice-president but a large organization may have several, each at the head of a relatively independent division. In a large food company, for example, there might be a grocery-production division, a refrigerated-products division, and a frozen-food-products division, with a different general manager responsible for each. Like the chief executive of a small company, each of these divisional heads would be responsible for all the activities of the unit. chief executive officer = director executiv senior vice-president = vice-preedinte senior (mai important dect cel Junior) president = preedinte executive vice-president vice-preedinte executiv chief executive = director sau administator al unei firme 15. The Management Process Planning Plans give the organization its objectives and set up the best procedures for reaching them. In addition, plans become the guides by which the organization obtains and commits (a angaja) the resources required to reach its objectives, members of the organization carry on activities consistent with (concordant cu) the chosen objectives and procedures, and progress toward the objectives is monitored and measured, so that corrective action can be taken if progress is unsatisfactory. The first step in planning is the selection of goals for the organization. Then objectives are established for the subunits of the organization its divisions, departments, and so on. Once the

objectives are determined, programs are established for achieving them in a systematic manner. Of course, in selecting objectives and developing programs, the manager considers their feasibility and whether will be acceptable to the organizations managers and employees. Plans made by top management for the organization as a whole may cover periods as long as five or ten years. In a large organization, such as a multinational energy corporation, those plans may involve commitments (angajamente) of billions of dollars. Planning at the lower levels, by middle or first-line managers, covers much shorter periods. Such plans may be for the next days work, for example, or for a two-hour meeting to take place in a week. Organizing Once managers have established objectives and developed plans or programs to reach them, they must design and staff an organization able to carry out those programs successfully. Different objectives will require different kinds of organizations. For example, an organization that aims to develop computer software will have to be far different from one that wants to manufacture blue jeans. Producing a standardized product like blue jeans requires efficient assembly-line techniques, whereas writing computer programs requires teams of professionals systems analysts, software engineers, and operators. Although they must interact effectively, such people cannot be organized on an assembly-line basis. It is clear, then, that managers must have the ability to determine what type of organization will be needed to accomplish a given set of objectives. And they must have the ability to develop (and later to lead) that type of organization. Leading After plans have been made, the structure of the organization has been determined, and the staff has been recruited and trained, the next step is to arrange for movement toward the organizations defined objectives. This function can be called by various names: leading, directing, motivating, actuating (impulsionare, stimulare), and others. But whatever the name used to identify it, this function involves getting the members of the organization to perform in ways that will help it achieve its established objectives.

Whereas planning and organizing deal with the more abstract aspects of the management process, the activity of leading is very concrete; it involves working directly with people. Controlling Finally, the manager must ensure that the actions of the organizations members do in fact move the organization toward its stated goals. This is the controlling function of management, and it involves four main elements: Establishing standards of performance. Measuring current performance and comparing it against the established standards. Detecting deviations from standard goals in order to make corrections before a sequence (succesiune, ir) of activities is completed. Taking action to correct performance that does not meet those standards. Through the controlling function, the manager can keep the organization on its chosen track, keeping it from straying (a se deprata, a se abate) from its specified goals. 16. Management Level and Skills Managers at every level plan, organize, lead, and control. But they differ in the amount of time devoted to each of these activities. Some of these differences depend on the kind of organization in which the manager works, some on the type of job the manager holds. Managers of small private clinics, for example, spend their time quite differently from the way the heads of large research hospitals spend theirs: Managers of clinics spend comparatively more time practicing medicine, and less time actually managing, than do directors of large hospitals. The technical supervisor of research physicists at AT&T Bell Labs will have a job that in some respects is quite different from that of a production supervisor on a General Motors assembly line. Yet both are first-line managers. And yet there will also be important similarities in the jobs of all these managers. Other differences in the ways managers spend their time depend upon their levels in the organizational hierarchy. Robert L.

Kats, a teacher and business executive, has identified three basic kinds of skills: technical, human, and conceptual. Every manager needs all three. Technical skill is the ability to use the procedures, techniques, and knowledge of a specialized field. Surgeons, engineers, musicians, and accountants all have technical skills in their respective fields. Human skill is the ability to work with, understand, and motivate other people, as individuals or in groups. Conceptual skill is the ability to coordinate and integrate all of an organizations interests and activities. It involves the managers ability to see the organization as a whole, to understand how its parts depend on one another, and to anticipate how a change in any of its parts will affect the whole. Kats suggests that although all three of these skills are essential to a manager, their relative importance depends mainly on the managers rank in the organization. Technical skill is most important in the lower levels. Human skill, by contrast, is important for managers at every level: because they must get their work done primarily through others, their ability to tap (a capta, a aborda) the technical skills of their subordinates is more important than their own technical skills. Finally, the importance of conceptual skill increases as one rises through the ranks of a management system based on hierarchical principles of authority and responsibility. It depends mainly on the managers rank in the organization.

7. Companies and Organizations

17. Company structure Vocabulary Match up the words on the left with the definitions on the right 1 autonomous 2 decentralization 3 function A a system of authority with different levels, one above the other B a specific activity in a company, e.g. production, marketing, finance C independent, able to take decisions without consulting a higher authority

4 hierarchy 5 line authority 6 report to 7 subordinates

D people working under someone else in a hierarchy E dividing an organization into decisionmaking units that are not centrally controlled F the power to give instructions to people at the level below in the chain of command G to be responsible to someone and to take instructions from him or her

Reading Read the text below, about different ways of organizing companies, and then label the diagrams, according to which of these they illustrate: Line structure / functional structure / matrix structure / staff structure





Most organizations have hierarchical or pyramidal structure, with one person or a group of people at the top, and an increasing number of people below them at each successive level. This is a clear line or chain of command running down the pyramid. All the people in the organization know what decisions they are able to make, who their superior (or boss) is (to whom they report), and who their immediate subordinates are (to whom they can give instructions).

Some people in an organization have colleagues who help them: for example, there might be an Assistant to the Marketing Manager. This is known as a staff position: its holder has no line authority, and is not integrated into the chain of command, unlike, for example, the Assistant Marketing Manager, who is number two in the marketing department. Yet, the activities of most companies are too complicated to be organized in a single hierarchy. Shortly before the First World War, the French industrialist Henry Fayol organized his coal-mining business according to the functions that it had to carry out. He is generally credited with inventing functional organization. Today, most large manufacturing organizations have a functional structure, including (among others) production, finance, marketing, sales, and personnel or staff departments. This means, for example, that the production and marketing departments cannot take financial decision without consulting the finance department. Functional organization is efficient, but there are two standard criticisms. Firstly, people are usually more concerned with the success of their department than that of the company, so there are permanent battles between, for example, finance and marketing, or marketing and production, which have incompatible goals. Secondly, separating functions is unlikely to encourage innovation. Yet, for a large organization manufacturing a range of products, having a single production department is generally inefficient. Consequently, most large companies are decentralized, following the model of Alfred Sloan, who divided General Motors into separate operating divisions in 1920. Each division had its own engineering, production and sales departments, made a different category of car (but with some overlap (suprapunere, ntreptrundere), to encourage internal competition), and was expected to make a profit. Business that cannot be divided into autonomous divisions with their own markets can simulate decentralization, setting up divisions that deal with each other using internally determined transfer prices. Many banks, for example, have established commercial, corporate, private banking, international and investment divisions. An inherent problem of hierarchies is that people at lower levels are unable to make important decisions, but have to pass on responsibility to their boss. One solution to this is matrix management, in which people report to more than one superior. For example, a

product manager with an idea might be able to deal directly with managers responsible for a certain market segment and for a geographical region, as well as the managers responsible for the traditional functions of finance, sales and productions. This is one way of keeping authority at lower levels, but it is not necessarily a very efficient one. Thomas Peters and Robert Waterman, in their wellknown book In Search of Excellence, insist on the necessity of pushing authority and autonomy down the line, but they argue that one element probably the product must have priority; four-dimensional matrices are far too complex. A further possibility is to have wholly autonomous, temporary groups or teams that are responsible for an entire project, and are split up (a se diviza, a se mpri) as soon as it is successfully completed. Teams are often not very good for decision-making, and they run the risk or relational problems, unless they are small and have a lot of self-discipline. In fact, they still require a definite leader, on whom their success probably depends. Describing company structure

The most common verbs for describing structure are: Consists of contains includes Is composed of is made up of is divided into e.g. The company consists of five main departments. The marketing department is made up of three units. Other verbs frequently used to describe company organization include: To be in charge of to be responsible for To support or to be supported by to assist or to be assisted by To be accountable to e.g. The marketing department is in charge of the sales force. The five department heads are accountable to the Managing Director. This is an example of part of a company organization chart:


Board of Directors with a Chairman (GB) or President (US) Managing Director (GB) or Chief Executive Officer (US) Production Marketing Finance Research & Development Financial Management Personnel Accounting

Market Sales Research Northern Region

Advertising Promotions Southern Region

Now write a description of either the organization chart above, or a company you know, in about 100-150 words.

18. The External Environment of Organizations The many rapid changes taking place in the external environment of organization require increasing attention from managers. The direct-action component of the environment consists of the organizations stakeholders that is, the groups with direct impact on the organizations activities. External stakeholders include customers, suppliers, governments, consumer and environmental advocates, special interest groups, labor unions, financial institutions, the media, and competitors. Internal stakeholders include employees, shareholders, and the board of directors.

Managers must balance the interests of the various stakeholders for the good of the organization as a whole. They may be able to use the network of relationships among the stakeholders and the organization to influence stakeholders individually. For their part, stakeholders may unite in coalitions to exert over (a exercita, a face uz de influen) the organization. Individual stakeholders may also hold conflicting stakes (interes, participare) in an organization. The indirect-action component of the environment consists of their factors that influence the organization indirectly. Not only do these factors create a climate to which the organization must adjust, but they have the potential to move into the direct-action environment. Demographic and lifestyle variables mold (a forma, a modela)an organizations labor supply and customer base, and changes in values are at heart of every other social, economic, political, and technological change. Managers must distinguish between and adjust to structural and cyclical changes in the economy. In addition, they must contend with (a lupta cu) the growing influence of special interest groups in politics, and technological developments also fuel the competition between organizations. Technological advances in communication and transportation have made the international environment increasingly important. Greater international competition has made the U.S. lag (a ntrzia, a rmne n urm) in competitiveness critical, and has also blurred (a ntuneca, a pune n cea) the distinction between the private and public sectors. The environment determines the extent to which (gradul n care) organizations face uncertainty and to which they are dependent on others for vital resources. In turbulent environments, organizations must devote more of their resources to monitoring the environment. The natural-selection, resource-dependence, and industrialorganization models provide alternative views of the relationship between organizations and the environment. Managers especially at higher levels must monitor the external environment and try to forecast changes that will affect the organization. They may use strategic planning and organizational design to adjust to the environment.


8. Production and products

Vocabulary a. Match up these words with the definitions which follow. Capacity Location component inventory lead time plant subcontractor outsourcing or contracting out

1. any company that provides goods or services for another one 2. any of the pieces or parts that make up a product, machine, etc. 3. buying products or processed materials from other companies rather than manufacturing them 4. the (maximum) rate of output that can be achieved from a production process 5. the buildings, machines, equipment and other facilities used in the production process 6. the geographical situation of a factory or other facility 7. the stock of any item or resource used in an organization (including raw materials, parts, supplies, work in process and finished products) 8. the time needed to perform an activity (i.e. to manufacture or deliver something) b. After it has been decided what to manufacture, operations managers have to decide where to manufacture the different products, how much productive capacity their factories and plants should have, and how much inventory to maintain. Read the 15 sentences below, and classify them under the following six headings. Some sentences may fall under two headings. A The consequences of insufficient capacity B The consequences of excess capacity C The advantages of large facilities D The disadvantages of large facilities E The advantages of having a large inventory F The disadvantages of having a large inventory

1. A long lead time may allow competitors to enter the market. 2. Average fixed cost per unit drops as volume increases because each succeeding unit absorbs part of the fixed costs, giving economies of scale. 3. Finding staff and coordinating material flow become expensive and difficult. 4. If lead time increases, some customers may go to other suppliers. 5. Lost sales and market share are usually permanent. 6. The working environment might worsen and industrial relations deteriorate. 7. There are costs of storage, handling, insurance, depreciation, the opportunity cost of capital, and so on. 8. You can be more flexible in product scheduling, and have longer lead times and lower cost operation through larger production runs with fewer set-ups. 9. There is always a risk of obsolescence, theft, breakage, and so on. 10. You can meet variation in product demand. 11. You may be under-utilizing your work force. 12. You have protection against variation in raw material delivery time (due to shortages, strikes, lost orders, incorrect or defective shipments, etc.) 13. You may be forced to produce additional less profitable products. 14. You can take advantage of quantity discounts in purchasing. 15. You may have to reduce prices to stimulate demand. 19. Just-in-time production Read the text below, and insert the eight words defined in vocabulary a) in the spaces. component outsourcing inventory plants lead time subcontractor

Capacity Location

Manufacturing companies are faced with a make-or-buy decision for every item or (1) . they use (as well as for every

process and service). Do they make it themselves or do they outsource (a contracta lucrri n afara companiei), and buy from a (2) ? If a company assembles products supplied by a large number of subcontractors (furnizor intermediar), they face the problem of how much (3) . they require. In Just-In-Time (JIT) production also called lean production, stockless production, and continuous flow manufacture nothing is bought or produced until it is needed. Each section of the production process makes the necessary quantity of the necessary units at the necessary time which is when it is required by the next stage of the manufacturing process, or by distributors or customers. The JIT system is usually credited to Taiichi Ohno, who was vicepresident for manufacturing with Toyota in Japan in the early 1950s although he stated that he got the idea from American supermarkets! JIT is wholly contrary to the European and American logic of encouraging greater productivity, and welcoming production that exceeds the agreed schedule or quota, and stocking extras in case of the future problems. JIT minimizes the cost of holding inventories, which are regarded negatively, as avoidable costs, rather than as assets. The large Japanese manufacturing companies have long practised (4), and generally use extensive networks of small subcontractors. Of course, if a single subcontractor fails to deliver a component on time, the whole production process is sabotaged, but the Japanese industrial system relies on mutual trust and long-term relationships. Small suppliers often attempt to situate their facilities close to the (5). of a larger company with which they work. The Japanese also prefer small, specialized production (6). with a limited (7).. , in which, wherever possible, all the machines required for a certain job are grouped together. This avoids all the waiting and moving time involved in sending half-finished item from one department to another, although it often requires flexible, multi-skilled employees. JIT thus greatly reduces transportation and inventory costs, and should ensure that there is no waste from overproduction, or from idle workers waiting for parts. It allows increased productivity because of shortened throughput time (timpul de prelucrare a materialelor). If factories are equipped so that set-up times are short, very small production runs (etape de producie) are possible. Any quality problems or product defects should be noticed more quickly,

production (8) (timpul de conducere a produciei) are reduced, and the firm can react more rapidly to demand changes. 20. Products and brands Read the following text, and write a brief heading for each paragraph. 1 Marketing theorists tend to give the word product a very broad meaning, using it to refer to anything capable of satisfying a need or want. Thus services, activities, people (politicians, athletes, film stars), places (holiday resorts), organizations (hospitals, colleges, political parties), and ideas, as well as physical objects offered for sale by retailers, can be considered as products. Physical products can usually be augmented (a spori, a crete) by benefits such as customer advice, delivery, credit facilities, a warranty or guarantee, maintenance, aftersales service, and so on. 2 Some manufactures use their name (the family name) for all their products, e.g. Philips, Colgate, Yamaha. Others, including Unilever and Procter & Gamble, market various products under individual brand names, with the result that many customers are unfamiliar with the name of the manufacturing company. The major producers of soap powders, for example, are famous for their multibrand strategy, which allows them to compete in various market segments, and to fill shelf space in shops, thereby leaving less room for competitors. It also gives them a greater chance of getting some of the custom of brand-switchers (cei care schimb mrcile pe care le cumpr). 3 Most manufactures produce a large number of products, often divided into product lines. Most product lines consist of several products, often distinguished by brand names, e.g. a range of soap powders, or of tooth-pastes. Several different items (different sizes or models) may share the same brand name. Together, a companys items, brands and products constitute its product mix. Since different

products are always at different stages of their cycles, with growing, stable or declining sales and profitability, and because markets, opportunities and resources are in constant evolution, companies are always looking to the future, and re-evaluating their product mix. 4 Companies whose objectives include market share and market growth generally have long product lines, i.e. a large number of items. Companies whose objective is high profitability will have shorter lines, including only profitable items. Yet, most product lines have a tendency to lengthen over time, as companies produce variations on existing items, or add additional items to cover further market segments. Additions to product lines can be the result of either upmarket or down-market, i.e. making items of higher or lower quality. This can be carried out in order to reach new customers, to enter growing or more profitable market segments, to react to competitors initiatives, and so on. Yet, such moves may cause image problems: moving to the lower end of the market dilutes (a slbi, a dilua) a companys image for quality, while a company at the bottom of a range may not convince dealers and customers that it can produce quality products for the high end. Line-filling adding further items in that part of a products range which a line already covers might be done in order to compete in competitors niches (ni), or simply to utilize excess production capacity. Vocabulary Find words or expressions in the text which mean the following. 1 the possibility of paying for a product over an extended period 2 a promise by a manufacturer or seller to repair or replace defective goods during a certain period of time 3 a surface in a store on which goods are displayed 4 consumers who buy various competing products rather than being loyal to a particular brand 5 the standard pattern of sales of a product over the period that is marketed 6 the extend to which an activity provides financial gain 7 possibilities of filling unsatisfied needs in sectors in which the company can produce goods or services effectively 8 the sales of a company expressed as a percentage of total sales in a given market

9 the set of beliefs that the public at large holds of an organization 10 a small, specialized, but profitable segment of a market

9. Marketing, Advertising, Promotion

Vocabulary Match up the words or expressions on the left with the definitions on the right. 1 distribution channel A all the companies or individuals involved in moving a particular good or service from the producer to the consumer B an idea for a new product, which is tested with target consumers before the actual product is developed C attributes or characteristics of a product: quality, price, reliability, etc. D dividing a market into distinct groups of buyers who have different requirements or buying habits E places where goods are sold to the public shops, stores, kiosks, market stalls, etc. F possibilities of filling unsatisfied needs in sectors in which a company can profitably produce goods or services G someone who contacts existing and potential customers, and tries to persuade them to buy goods or services H collecting, analysing and reporting data relevant to a specific marketing situation (such as a proposed new product)

2 to launch a product 3 market opportunities 4 market research 5 market segmentation 6 packaging

7 points of sale

8 product concept


9 product features 10 sales representative

I to introduce a new product onto the market J wrappers and containers in which products are sold

21. The centrality of marketing Look quickly through the following text and decide which paragraphs are about these subjects: - company-to-company marketing - identifying market opportunities - the marketing mix - the selling and marketing concepts - the importance of market research Most management and marketing writers now distinguish between selling and marketing. The selling concept assumes that resisting consumers have to be persuaded by vigorous hard-selling techniques to buy non-essential goods or services. Products are sold rather than bought. The marketing concept, on the contrary, assumes that the producers task is to find wants and fill them. In other words, you dont sell what you make, you make what will be bought. As well as satisfying existing needs, marketers can also anticipate and create new ones. The markets for the Walkman, video games, personal computers, and genetic engineering, to choose some recent examples, were largely created rather than identified. Marketers are consequently always looking for market opportunities profitable possibilities of filling unsatisfied needs or creating new ones in areas in which the company is likely to enjoy a differential advantage, due to its distinctive competencies (the things it does particularly well). Market opportunities are generally isolated by market segmentation. Once a target market has been identified, a company has to decide what goods or service to offer. This means that much of the work of marketing has been done before the final product or service comes into existence. It also means that the marketing concept has to be understood throughout the company, e.g. in the production department of a manufacturing company as much as in the marketing department itself. The company must also take account of

the existence of competitors, who always have to be identified, monitored and defeated in the search for loyal customers. Rather than risk launching a product or service solely on the basis of intuition or guesswork, most companies undertake market research (GB) or marketing research (US). They collect and analyze information about the size of a potential market, about consumers reactions to particular product or service features, and so on. Sales representatives, who also talk to customers, are another important source of information. Once the basic offer, e.g. a product concept, has been established, the company has to think about the marketing mix, i.e. all the various elements of a marketing program, their integration, and the amount of effort that a company can expend on them in order to influence the target market. The best-known classification of these elements is the 4Ps: product, place, promotion and price. Aspects to be considered in marketing products include quality, features (standard and optional), style, brand name, size, packaging, services and guarantee. Place in a marketing mix includes such factors as distribution channels, locations of points of sale, transport, inventory size, etc. Promotion groups together advertising, publicity, sales promotion, and personal selling, while price includes the basic list price, discounts, the length of the payment period, possible credit terms, and so on. It is the job of a product manager or a brand manager to look for ways to increase sales by changing the marketing mix. It must be remembered that quite apart from consumer markets (in which people buy products for direct consumption) there exists an enormous producer or industrial or business market, consisting of all the individuals and organizations that acquire goods and services that are used in the production of other goods, or in the supply of services to others. Few consumers realize that the producer market is actually larger than the consumer market, since it contains all the raw materials, manufactured parts and components that go into consumer goods, plus capital equipment such as building and machines, supplies such as energy and pens and paper, and services ranging from cleaning to management consulting, all of which have to be marked. There is consequently more industrial than consumer marketing, even though ordinary consumers are seldom exposed to it. Comprehension

Look at the following diagrams from Marketing Management by Philip Kotler. 1 The first diagram contrasts the selling and the marketing concepts. Fill in the four spaces with the following words or expressions: Coordinated marketing Market Customer needs Profits through customer satisfaction
Starting point Factory Focus Products Means Ends Selling & promoting Profits through sales volume

a. The selling concept

(1) .. (2) . (3) .. (4)

b. The marketing concept

How companies advertise

Advertising informs consumers about the existence and benefits of products and services, and attempts to persuade them to buy them. The best form of advertising is probably word-of-word advertising, which occurs when people tell their friends about the benefits of products or services that they have purchased. Yet, virtually no providers of goods or services rely on this alone, but use paid advertising instead. Indeed, many organizations also use institutional or prestige advertising, which is designed to build up their reputation rather than to sell particular products. Although large companies could easily set up their own advertising departments, write their own advertisements, and buy media space themselves, they tend to use the services of large advertising agencies. These are likely to have more resources, and more knowledge about all aspects of advertising and advertising media than a single company. The most talented advertising people generally prefer to work for agencies rather then individual companies as this gives them the chance to work on a variety of advertising accounts (contracts to advertise products or services). It is also easier

for a dissatisfied company to give its account to another agency than it would be to fire its own advertising staff. The client company generally gives the advertising agency an agreed budget; a statement of the objectives of the advertising campaign, known as a brief; and an overall advertising strategy concerning the message to be communicated to the target customers. The agency creates advertisements (the word is often abbreviated to adverts or ads), and develops a media plan specifying which media newspapers, magazines, radio, television, cinema, posters, mail, etc. will be used and in which proportions. (On television and radio, ads are often known as commercials.) Agencies often produce alternative ads or commercials that are pre-tested in newspapers, television stations, etc. in different parts of a country before a final choice is made prior to a national campaign. The agencys media planners have to decide what percentage of the target market they want to reach (how many people will be exposed to the ads) and the number of times they are likely to see them. Advertising people talk about frequency or OTS (opportunities to see) and the threshold effect (efectul de pronire) the point at which advertising becomes effective. The choice of advertising media is generally strongly influenced by the comparative cost of reaching 1,000 members of the target audience, the cost per thousand (often abbreviated to CPM, using the Roman numeral for 1,000). The timing of advertising campaigns depends on factors such as purchasing frequently and buyer turnover (new buyers entering the market). How much to spend on advertising is always problematic. Some companies use the comparative-parity method (metoda comparativ-analogic) they simply match their competitors spending, thereby avoiding advertising wars. Others set their ad budget at a certain percentage of current sales revenue. But both these methods disregard (a nu ine seama, a neglija) the fact that increased ad spending or counter-cyclical advertising (reclam anticiclic) can increase current sales. On the other hand, excessive advertising is counter-productive (antiproductiv) because after too many exposures people tend to stop noticing ads, or begin to find them irritating. And once the most promising prospective customers have been reached, there are diminishing returns, i.e. an ever-smaller increase in sales in relation to increased advertising spending.

Vocabulary Find the terms in the text which mean the following. 1 free advertising, when satisfied customers recommend products to their friends. 2 advertising that mentions a companys name but not specific products 3 companies that handle advertising for clients 4 a contract with a company to produce its advertising 5 the amount of money a company plans to spend in developing its advertising and buying media time or space 6 the statement of objectives of an advertising campaign that a client works out with an advertising agency 7 the advertising of a particular product or service during a particular period of time 8 a defined set of customers whose needs a company plans to satisfy 9 the people who choose where to advertise, in order to reach the right customers 10 the fact that a certain amount of advertising is necessary to attract a prospective customers attention 11 choosing to spend the same amount on advertising as ones competitors 12 advertising during periods or seasons when sales are normally relatively poor Discussion Which of the following claims do you agree with? 1. Advertising is essential for business, especially for launching new consumer products. 2. A large reduction of advertising would decrease sales. 3. Advertising often persuades people to buy things they dont need. 4. Advertising often persuades people to buy things they dont want. 5. Advertising lowers the publics taste. 6. Advertising raises prices.

7. Advertising does not present a true picture of products. 8. Advertising has a bad influence on children.

In a well-known survey, the Harvard Business Review asked 2,700 senior business managers whether they agree with these statements. The survey produced some unexpected results. Which of the following percentages do you think go with which of the statements above? 41% 49% 51% 57% 60% 72% 5 The four major promotional tools Insert the following words in the text below. Advertising Maturity aimed awareness channel loyalty medium tactics target trial 85% 90%

The basic idea behind the marketing concept that you make what you can sell rather than sell what you make does not mean that your product will sell all by itself. Even a good, attractivelypriced product that clearly satisfies a need has to be made known to its (1). Customers. During the introduction and growth stages of the standard product life cycle, the producer (or importer, and so on) has to develop product or brand (2). , i.e. inform potential customers (and distributors, dealers and retailers) about the products existence, its features, its advantages, and so on. According to the well-known Four Ps formulation of the marketing mix (product, place, promotion and price), this is clearly a matter of promotion. Since budgets are always limited, marketers usually have to decide which tools advertising, public relations, sales promotion, or personal selling to use, and in what proportion. Public relations (often abbreviated to PR) is concerned with maintaining, improving or protecting the image of a company or product. The most important element of PR is publicity which (as opposed to advertising) is any mention of companys products that is not paid for, in any (3). : read, viewed or heard by a companys customers or potential customers, aimed at assisting sales. Many

companies attempt to place stories or information in news media to attract attention to a product or service. Publicity can have a huge impact on public awareness that could not be achieved by advertising, or at least, not without an enormous cost. A lot of research has shown that people are more likely to read and believe publicity than advertising. Sales promotions such as free samples, coupons, price reductions, competitions, and so on, are temporary (4). Designed to stimulate either earlier or stronger sales of a product. Free samples, for example, (combined with extensive advertising), may generate the initial (5). Of a new product. But the majority of products available at any given time are of course in the (6).. stage of the life cycle. This may last many years, until the product begins to be replaced by new ones and enters the decline stage. During this time, marketers can try out a number of promotional strategies and tactics. Reduced-price packs in supermarkets, for example, can be used to attract price-conscious brand-switchers, and, also, to counter (a contracara) a promotion by a competitor. Stores also often reduce prices of specific item as loss leader, which bring customers into the shop where they will also buy other goods. Sales promotions can also be (7).. at distributors, dealer and retailers, to encourage them to stock new items or larger quantities, or to encourage off-season buying, or the stocking of items related to an existing product. They might equally be designed to strengthen brand (8). Among retailers, or to gain entry to new markets. Sales promotions can also be aimed at the sales force, encouraging them to increase their activities in selling a particular product. Personal selling is the most expensive promotional tool, and is generally only used sparingly, e.g. as a complement to (9).. . As well as prospecting for customers, spreading information about a companys products and services, selling these products and services, and assisting customers with possible technical problems, salespeople have another important function. Since they are often the only person from a company that customers see, they are an extremely important (10) of information. It has been calculated that the majority of new product ideas come from customers via sales representatives. Summarizing Complete the following sentences to summarize the text above.

1 When a new product is launched, the producer has to .. 2 Promotion is one of the four . ; sales promotions are one of the four different . 3 The advantages of publicity include .. 4 The four stages of the standard product life cycle (excluding the prelaunched development stage) are . 5 Reasons to offer temporary price reductions include . 6 Sales promotions need not only be aimed at customers; . 7 Apart from selling a companys products, sales representatives . Discussion What kind of sales promotions are you receptive to? coupons giving a price reduction? free samples? discounts for buying a large quantity? price reductions in shops? packets offering 20% Extra? competitions? Vocabulary There is a logical connection among three of the four words in each of the following groups. Which is the odd one out, and why? 1 advertising competitors publicity sales promotion 2 advertising agency advertising campaign media plan word-ofmouth advertising 3 advertising manager brand-switcher marketing manager sales rep 4 after-sales service guarantee optional features points of sale 5 brand awareness brand loyalty brand name brand preference 6 competitions coupons free samples line-stretching 7 credit terms discount list price packaging 8 decline growth introduction product improvement 9 focus group interviews internal research media plan questionnaire 10 packaging place product promotion

10. Market structure and competition

24. Market leaders, challengers and followers Read the following text and write short headings for each paragraph. 1 . In most markets there is a definite market leader: the firm with the largest market share. This is often the first company to have entered the field, or at least the first to have succeeded in it. The market leader is frequently able to lead other firms in the introduction of new products, in price changes, in the level or intensity of promotions, and so on. 2 Market leaders usually want to increase their market share even further, or at least to protect their current market share. One way to do this is to try to find ways to increase the size of the entire market. Contrary to a common belief, wholly dominating a market, or having a monopoly, is seldom an advantage: competitors expand markets and find new uses and users for products, which enriches everyone in the field, but the market leader more than its competitors. A market can also be expanded by stimulating more usage: for example, many households no longer have only one radio or cassette player, but perhaps one in each room, one in the car, plus a Walkman or two. 3 .. In many markets, there is often also a distinct market challenger, with the second-largest market share. In the car hire business, the challenger actually advertises this fact: for many years Avis used the slogan Were number two. We try harder. Market challengers can either attempt to attack the leader, or to increase their market share by attacking various market followers. 4 .. The majority of companies in any industry are merely market followers, which present no threat to the leader. Many market

followers concentrate on market segmentation: finding a profitable niche in the market that is not satisfied by other goods or services, and that offers growth potential or gives the company a differential (distinctiv, deosebit) advantage because of its specific competencies. 5 A market follower, which does not establish its own niche is in a vulnerable position: if its product does not have a unique selling proposition there is no reason for anyone to buy it. In fact, in most established industries, there is only room for two or three major companies: think of soft drinks, soap and washing powders, jeans, sports shoes, and so on. Although small companies are generally flexible, and can quickly respond to market conditions, their narrow range of customers causes problematic fluctuations in turnover and profit. Furthermore, they are vulnerable in a recession when, largely for psychological reasons, distributors, retailers and customers all prefer to buy from big, well-known suppliers. Vocabulary Find words in the text which mean the following. 1 a companys sales expressed as a percentage of the total market 2 short-term tactics designed to stimulate stronger sales of a product 3 the situation in which there is only one seller of a product 4 companies offering similar goods or services to the same set of customers 5 a short and easily memorized phrase used in advertising 6 the division of a market into submarkets according to the needs or buying habits of different groups of potential customers 7 a small and specific market segment 8 a factor which makes you superior to competitors in a certain respect 9 a businesss total sales revenue 10 a period during which an economy is working below its potential 25. Takeovers, mergers and buyouts Vocabulary Match up these words with the definitions below.


Backward integration to diversify (diversification) synergy Forward integration horizontal integration to merge (a merger) to innovate (innovation) a raid a takeover bid vertical integration 1 designing new products and bringing them to the market 2 to expand into new fields 3 to unite, combine, amalgamate, integrate or join together 4 buying another companys shares on the stock exchange, hoping to persuade enough other shareholders to sell to take control of the company 5 a public offer to a companys shareholders to buy their shares, at a particular price during a particular period, so as to acquire a company 6 to merge with or take over other firms producing the same type of goods or services 7 joining with other firms in other stages of the production or sale of a product 8 a merger with or the acquisition of ones suppliers 9 a merger with or the acquisition of ones marketing outlets 10 combined production that is greater than the sum of the separate parts Reading

Leveraged buyouts One indication that the people who warn against takeovers might be right is the existence of leveraged buyouts. In the 1960s, a big wave of takeovers in the US created conglomerates collections of unrelated businesses combined into a single corporate structure. It later became clear that many of these conglomerates consisted of too many companies and not enough synergy. After the recession of the early 1980s, there were many large companies on the US stock market with good earnings but low stock prices. Their assets were worth more than the companies market value. Such conglomerates were clearly not maximizing stockholder value. The individual companies might have been more efficient if liberated from central management. Consequently, raiders (persoan agresiv, acaparatoare) were able to borrow money, buy badly116

managed, inefficient and under-priced corporations, and then restructure them, split them up, and resell them at a profit. Conventional financial theory argues that stock markets are efficient, meaning that all relevant information about companies is built into their share prices. Raiders in the 1980s discovered that this was quite simply untrue. Although the market could understand data concerning companies earnings, it was highly inefficient in valuing assets, including land, buildings and pension funds. Asset-stripping selling off the assets of poorly performing or under-valued companies proved to be highly lucrative (avantajos, profitabil). Theoretically, there was little risk of making a loss with a buyout, as the debts incurred (datoriile fcute) were guaranteed by the companies assets. The ideal targets for such buyouts were companies with huge cash reserves that enabled the buyer to pay the interest on the debt, or companies with successful subsidiaries that could be sold to repay the principal, or companies in fields that are not sensitive to a recession, such as food and tobacco. Takeovers using borrowed money are called leveraged buyouts or LBOs. Leverage (raportul dintre creane i capital) means having a large proportion of debt compared to equity capital. (Where a company is bought by its existing managers, we talk of a management buyout or MBO.) Much of the money for LBOs was provided by the American investment bank Drexel Burnham Lambert, where Michael Millken was able to convince investors that the high returns on debt issued by risky enterprises more than compensated for their riskiness, as the rate of default (rata neonorrii plii) was lower than might be expected. He created a huge and liquid market of up to 300 billion dollars for junk bonds (obligaiuni cu risc). (Millken was later arrested and charged (a fi acuzat) with 98 different felonies (crime, acte penale), including a lot of insider dealing (operaiuni ale unui iniiat, a unei persoane angajate n respectiva firm), and Drexel Burnham Lambert went bankrupt (a da faliment) in 1990.) Raiders and their supporters argue that the permanent threat of takeovers is a challenge to company managers and directors to do their jobs better, and that well-run businesses that are not undervalues are at little risk. The threat of raids forces companies to put capital to productive use. Fat or lazy companies that fail to do this will be taken over by raiders who will use assets more efficiently, cut costs, and increase shareholder value. On the other hand, the permanent threat of a takeover or a buyout is clearly a disincentive (mijloc de intimidare)

to long-term capital investment, as a company will lose its investment if a raider tries to break it up as soon as its share price falls below expectations. LBOs, however, seem to be largely an American phenomenon. German and Japanese managers and financiers, for example, seem to consider companies as places where people work, rather than as assets to be bought and sold. Hostile takeovers and buyouts are almost unknown in these two countries, where business tends to concentrate on long-term goals rather than seek instant stock market profits. Workers in these companies are considered to be at least as important as shareholders. The idea of a Japanese manager restructuring a company, laying off (a concedia temporar) a large number of workers, and getting a huge pay rise (as frequently happens in Britain and the US), is unthinkable. Lay-offs in Japan are instead a cause for shame for which managers are expected to apologize. Summarizing Complete the following sentences, which summarize the text above. 1 The fact that many large conglomerates assets were worth more than their stock market valuation demonstrated that 2 Raiders bought conglomerates in order to 3 Raiders showed that the stock market did not 4 Raiders were particularly interested in 5 Investors were prepared to lend money to finance LBOs because 6 Raiders argue that the possibility of a buyout 26. Profits and social responsibility In the 1920s, many large American corporations began, on a wide scale, to establish pension funds, employee stock ownership, life insurance schemes, unemployment compensation funds, limitations on working hours, and high wages. They built houses, churches, schools and libraries, provided medical and legal services, and gave money to charities (acte filantropice). Since this is fairly surprising behavior for business corporations, there must be a good explanation. In the Generous Corporations, Neil J. Mitchell argues that the reason for many of these actions, most of which clearly did not bring immediate cash benefits, was that large corporations had a legitimacy

problem. The existence of large corporations showed the classical economic theory of perfect competition to be inadequate. Consequently large corporations introduced welfare capitalism (capitalism social) as a way of creating favorable public opinion. Rational capitalists starting with Henry Ford, also realized that a better paid work force would be more loyal, and would be able to buy more goods and services, and that a better educated work force would be a more efficient one. Of course, pure free market theorists disapprove of welfare capitalism, and all actions inspired by social responsibility rather than the attempt to maximize profits. Since the benefits of such initiatives are not confined to (a se limita la) those who bear the costs, Milton Friedman has criticized them for being unbusinesslike, and for threatening the survival not only of individual corporations but also the general vitality of capitalism. In a newspaper article titled The social responsibility of business is to increase its profits, he argued that: In a free enterprise, private-property system, a corporate executive is an employee of the owners of the business. He has direct responsibility to his employers. That responsibility is to conduct the business in accordance with their desires, which generally will be to make as much money as possible, while of course confirming to the basic rules of the society, both those embodied in law and those embodied in ethical custom. Thus executives should not make expenditures on reducing pollution beyond the amount that is required by law or that is the best interest of the firm. Nor should they deliberately hire less-qualified, long-term unemployed workers, or workers from ethnic minorities suffering from discrimination. To do so is to be guilty of spending the stockholders (or the customers or the employees) money. Friedman does not consider the possibility that stockholders might prefer to receive lower dividends but live in a society with less pollution or less unemployment and fewer social problems. An alternative view to the stockholder model exemplified by Friedmans article is the stakeholder (cei care dein un interes) model, outlined, for example, in John Kenneth Galbraiths book, The New Industrial State. According to his approach, business managers have responsibilities to all the groups of people with a stake in or an interest in or a claim on the firm. These will include suppliers, customers, employees, and the local community, as well as the stockholders. A

firm which is managed for the benefit of all its stakeholders, will not, for example, pollute the area around its factories, or close down a factory employing several hundred people in a small town with no other significant employers, and relocate production elsewhere in order to make small financial savings. Proponents of the stakeholder approach suggest that suppliers, customers, employees, and members of the local community should be strongly represented on a companys board of directors. Vocabulary Find words or expressions in the text which mean the following. 1 institutions or organizations that provide help for people in need 2 acceptability, according to law or public opinion 3 the situation when there are a large number of sellers and buyers, freedom to enter and leave markets, a complete flow of information, and so on 4 a condition of general well-being (and government spending designed to achieve this) 5 menacing, endangering 6 liveliness, health, energy, strength 7 an economic system in which anyone can attempt to raise capital, form a business, and offer goods or services 8 complying with or following (rules, etc.) 9 expressed, given a material form 10 supporters, people who argue in favour of something

11. Money and Finance

27. A history of money what makes the world go round Money it jingles in your pocket, it rustles in your wallet and it clinks in your piggy-bank. Money makes the world go round, but whats it? Its a store of value or a measure of wealth. Money is anything that is generally accepted as payment for goods and

services. This is a wide definition and, over the centuries, money has appeared in all shapes and sizes; cowrie shells in ancient China, huge stone discs on a South Pacific Island or beads (Wampum) for the North American Indians.

Jingle = a zorni Rustle = a foni Clink = a zngni Piggy-bank = puculi Cowrie = scoic, ghioc Beads = mrgele, mtnii Wampum = colier de scoici From Chickens to Plastic At the end of the day, of course, it doesnt really matter what shape or size the money takes, as long as everyone recognises it and accepts it in payment. But, over the course of history, money has predominantly been associated with metals, in particular gold, silver and copper. Bartering (troc) Before metal money become the usual means of exchange, people would swap (schimba) goods and services in a process known as bartering Ill swap you ten chickens for your goat. This kind of exchange does not really encourage trade, as all sorts of problems arise; are all the chickens of the same size? If Ive only got five chickens, can I buy half a cow? Obviously, precious metals are a practical alternative to payment in kind (n natur). Four Essential Qualities For money to be practical and efficient it should possess these qualities: Durability in prison, cigarettes may become a medium of exchange but theyre easy to break and quickly dry up; in other words, they dont last.

Portability in some parts of Africa your wealth is measured in cattle. This is fine if youre trading locally, but if money isnt easy to carry, how can trade develop? Divisibility small units make life much easier imagine trying to buy a hot dog in New York if the $100 bill was the lowest unit of currency! Intrinsic value money should have some worth in itself, otherwise it wont inspire confidence. Coins We first read of coins in the Kingdom of Lydia in the 7th century BC. Their coins were of equal weight and therefore of equal value, simplifying trade. Stamping a design onto the coins is called minting; Alexander the Great introduced the practice of stamping a picture of the sovereigns head on the coins, an idea that was soon copied. Coins however, were not always as valuable as they seemed they were often clipped or shaved by unscrupulous individuals or debased by the state. The Romans, with the economic pressure of the Punic wars, began a long process of debasement, mixing more and more copper in with the silver, so that the intrinsic value of the coin was far lower than the marked face value. Mint = a bate moned Debase = a devaloriza Debasement = devalorizare Clipped = retezat, scurtat Shaved = redus Paper Money Bank notes were first introduced by the Chinese in the 10 th century. They were later used by governments in dire financial straits (n dificulti mari financiare) caused by things like having to finance a war, for example. The English colonies in North America made important strides in the use of bank notes. For various political and economic reasons, the Colonists often found themselves short of coinage. To get round this problem, they used first wampum, then tobacco, rice and whisky or brandy not exactly the most practical solution. The first paper money issue was by the Massachusetts Bay Colony in 1690. The practice was frowned upon and eventually

banned by the mother country, but the inventive money-making instincts of the new United States of America meant that, during the 19th century, most of the money used was in the form of paper dollars. The first fully printed note in England was issued in 1855 until that time the cashier had to write the name of the payee and sign each note individually. At first, bank notes were redeemable for gold on Bank of England notes you will see written I promise to pay the bearer on demand the sum of If you took a ten-pound note to the Bank they used to have to give you ten pounds in gold coin. Britain left the gold standard in 1931 and thus the notes are no longer backed by gold. Strides = progrese, pai Short of coinage = lips de monezi Ban = a interzice, a scoate n afara legii Frown upon = a nu fi de acord cu ceva Redeem = a compensa, rscumpra Plastic money Nowadays many transactions are carried out with plastic money such as credit cards. The newest are called smart cards and carry small silicon chips that can record every transaction on the card. Research into the cards of the future continues, but the latest development is e-cash, cash to be used across the Internet youll be able to spend money from the comfort of your armchair. If only earning the damn stuff was so easy! MONEY TALK the language of cash Money is so central to our lives that it has spawned (a prolifera) a wealth of specific terminology, idioms and sayings. Great thinkers in all ages have had something to say about it; governments are elected on the strength of how they plan to manage it, empires rise and fall because of it. The Root of All Evil


Money is so important to us people even say it makes the world go round that it has acquired many nicknames, such as bread, dough, dinero, mazuma, spondulicks, rhino, gravy, dosh, lucre or simply the necessary. Small amounts of it are chickenfeed or peanuts. (n slang: lovele, bitari, parale, bani, ctig) So what are you thinking about now? A penny for your thoughts! Oh, I see, you like the look of that new jacket itll cost you an arm and a leg. Im afraid, or, to put it another way, youll have to pay through the nose for it. You may like it so much you insist that moneys no object but dont forget: money doesnt grow on trees, so dont live beyond your means! If you do go ahead and buy that jacket, your friends will tell you that you might as well flush it (the money) down the toilet. So, if you cant afford it, buy the cheapo version: you can bet your bottom dollar that nobody will be able to tell the difference. Of course your attitude to money depends, to a certain extend, on how well off you are. You may be experiencing a liquidity problem or a cashflow problem at the moment; in other words, youre strapped for cash, broke, or even flat broke. Perhaps you dont have a dollar to your name, you dont have a red cent and you havent got a bean, in which case youre as poor as a church mouse! If, on the other hand, youve got plenty of money then youre filthy rich, or stinking rich or rolling in it perhaps you had some good business ideas and put your money where your mouth is or cashed in on a golden business opportunity and managed to get rich quick, so now youre laughing all the way to the bank. Youve got money to burn; youre earning megabucks and, now that you know its power, you believe what people say money talks! In spite of this, you might be so careful with money that people think youre mean or stingy (zgrcit). Perhaps theyll call you a miser behind your back; in the US youd be called a tightwad (calic, avar). You might reply that money doesnt grow on trees but then others might say that you cant take it with you (when you die) and so they spend money as if it were going out of fashion. In this case, money burns a hole in their pocket, and you would be the first to remind them that a fool and his money are soon parted. If, on the other hand, you look after the pennies, then the pounds will look after themselves.


The profits of labor Roman soldiers were given part of their pay in salt, as it was so valuable at least thats the excuse the Senate gave! At the time it was called their salario, and it is for this reason that we still use the word salary to describe the regular monthly payment made to employees especially white-collars workers. If you receive your pay every week, then you receive wages on payday, in the form of a paycheck in the US, or a paypacket in the UK. You may find that some of your money is taken from you before you even see it, that is it is deducted at source; in the US these deductions are known as deducks or ducks. They may be for tax and also, in the UK, National Insurance, which means that your takehome pay may be a lot less than you expected! Those who are unlucky enough not to have a job will be on the dole receiving unemployment benefit in the UK or on welfare in the US. If you pay money for your retirement then your company runs a pension scheme. If you work more than your normal hours, then youre paid overtime. If your company has been doing well, you may get a bonus. If youre one of the bosses of a newly-privatised monopoly, your employees may call you a fat cat, and part of your pay may take the form of share options; when you started to work for the company you were given a golden hello and, regardless of the companys performance, you will be given a golden handshake when you leave. Perhaps youre the kind of boss that never stops complaining about your employees; if so remember: if you pay peanuts you get monkeys! You and your fellow top-managers are likely to enjoy a range of fringe benefits or perks like a free car, house and even private education for your children. This is in lieu of money, and means that you have a high standard of living without having to declare hundreds of thousands of pounds at the end of the tax year. All the expenses the company incurs on your behalf are also tax deductible for the company, so it doesnt lose out either. When the time comes to retire, sooner rather then later, for the lucky few who can choose early retirement, you may decide to take your company pension in a lump sum and finally you can go on that world cruise!

White-collars workers = funcionari On the dole = ajutor de omaj, subvenie de la stat On welfare = ajutor social Share options = Fringe benefit / perks = beneficiu suplimentar In lieu of money = n loc de bani Incur = a face, a crea Lump sum = sum global / unic, plat unic Borrowing Many of us go to the bank at some point to ask for a loan it is often said that a bank manager is someone who lends you an umbrella when the sun is shining and who asks for it back when it starts to rain. The simplest way to borrow is with an overdraft, or by using the facilities offered by a credit card; but to borrow large sums youll probably negotiate a loan with your bank; you can either borrow a fixed amount or agree a credit limit. If youre buying a house, then youll want a mortgage. If the bank refuses to lend you money, you might resort to borrowing from a finance company or even the local loan shark to pay off your IOUs (I Owe You). For any loan, you should look at the Annual Percentage Rate which takes into account the various charges which will be included in your repayments. Borrowing from a loan shark can involve exorbitant interest rates. If youre being gouged in this way, then you may end up being unable to make the repayments. Your debt may be sold to a debt collector or you may receive a visit from the bailiffs in the UK. If youve been buying something in instalments or on a hire purchase (HP) scheme, defaulting on the repayments will probably lead to a visit from the dreaded repo (repossesssion) man. Gouged = escrocat, tras pe sfoar Bailiff = inspector Dreaded = de temut Forgery With the invention of money came forgery. Modern counterfeit notes can be extremely difficult to spot and new

developments in the production of notes are soon copied by the forgers. Heres a quick guide to recognizing a counterfeit Bank of England note: The feel of the paper: it should be crisp and slightly rough in the heavily printed areas. The watermark: you shouldnt be able to notice it until you hold the note up to the light; then you can see a picture of the Queen. The thread: all genuine notes have a thread embedded in the paper. Recent notes have a windowed thread which does not appear as a continuous line until the note is held up to the light. Quality of printing: pure, clear colours and sharp, well-defined lines. Spot = a identifica, a distinge Counterfeit notes = bancnote contrafcute Forgers = falsificatori Crisp = fragil Embedded = introdus IDIOMS Hard Times If youve fallen on hard times, you might tell people that you need to watch your spending, your money or your pennies. In the States, you might say that you have to watch every dime. Perhaps your bank account is in the red, so you decide to control your spending and keep track of your expenses more closely. This will certainly involve cutting down on expenses in general, budgeting your money, tightening your belt and saving your pennies. Almost certainly you will have to cut the frills (unneccessary expenditure), trim (reduce) the budget and go back to basics. If an unexpected expense comes up that you have to meet, you might decide to dip into your savings, or scrounge the money somehow. If, on the other hand, you splash out on something extravagant, you might justify the expense by telling people that youve got enough saved up, that youve been saving for a rainy day or that youre lucky enough to have a nest egg that youve finally decided to use. Frills = fasoane, lucruri care nu sunt necesare Scrounge = a aprli, a terpeli

Splash out = a se arunca

29. Accounting and financial statements Vocabulary a. Match up the terms on the left with the definitions on the right. 1. Bookkeeping A calculating an individuals or a companys liability for tax 2. Accounting B writing down the details of transactions (debits and credits) 3. Managerial accounting C keeping financial records, recording income and expenditure, valuing assets and liabilities, and so on 4. Cost accounting D preparing budgets and other financial reports necessary for management 5. Tax accounting E inspection and evaluation of accounts by a second set of accountants audit 6. Auditing F using all available accounting procedures and tricks to disguise the true financial position of a company 7. creative accounting G working out the unit cost of products, including materials, labour and all other expenses b. Match up these words with the definitions below 1. Assets A a companys owners 2. Depreciation B all the money received by a company during a given period

3. Liabilities C all the money that a company will have to pay to someone else in the future, including taxes, debt, and interest and mortgage payments 4. Turnover D the amount of business done by a company over a year 5. Creditors (GB) accounts payable (US) E anything owned by a business (cash investments, buildings, machines, and so on) that can be used to produce goods or pay liabilities 6. Debtors (GB) accounts receivable (US) F the reduction in value of a fixed asset during the years it is in use (charged against profits) 7. Overheads (GB) overhead (US) G sums of money owed by customers for goods or services purchased on credit 8. Revenue or earnings or income H sums of money owed to suppliers for purchases made on credit 9. Shareholders (GB) stockholders (US) I (the value of) raw materials, work in progress, and finished products stored ready for sale 10. Stock (GB) inventory (US) J the various expenses of operating a business that cannot be charged to any one product, process or department Reading Insert the words in vocabulary b) in the gaps in the text below. Accounting and financial statements In accounting it is always assumed that a business is a going concern, i.e. that it will continue indefinitely into the future, which means that the current market value of its assets is irrelevant, as they are not for sale. Consequently, the most common accounting system is historical cost accounting, which records (1) at their original purchase price, minus accumulated depreciation charges. In times of inflation, this understates the value of appreciating assets such as land, but overstates profits as it does not record the

replacement cost of plant or (2) . The value of a businesss assets under historical cost accounting purchase price minus (3) .. is known as its net book value. Countries with persistently high inflation often prefer to use current cost or replacement cost accounting, which values assets (and related expenses like depreciation) at the price that would have to be paid to replace them (or to buy a more modern equivalent) today. Company law specifies that (4) . Must be given certain financial information. Companies generally include three financial statements in their annual reports. The profit and loss account (GB) or income statement (US) shows (5) .. and expenditure. It usually gives figures for total sales or (6) . And costs and (7) . The first figure should obviously be higher than the second, i.e. there should be a profit. Part of the profit goes to the government in taxation, part is usually distributed to shareholders (stockholders) as dividend, and part is retained by the company. The balance sheet shows a companys financial situation on a particular date, generally the last day of the financial year. It lists the companys assets, its (8) , and shareholders (stockholders) funds. A businesss assets include (9) as it is assumed that these will be paid. Liabilities include (10) , as these will have to be paid. Negative items on financial statements, such as creditors, taxation, and dividends paid, are usually enclosed in brackets. In accordance with the principle of double-entry bookkeeping (that all transactions are entered as credit in one account and as debit in another), the basic accounting equation is Assets = Liabilities + Owners (or Shares) Equity. This can be rewritten as Assets Liabilities = Owners Equity or Net Assets. This includes share capital (money received from the issue of shares), share premium (GB) or paid-in surplus (US) (any money realised by selling shares at above their nominal value), and the companys reserves, including the years retained profits. Shareholders equity or net assets are generally less than a companys market capitalisation (the total value of its shares at any given moment, i.e. the number of shares times their market price), because net assets do not record items such as goodwill. The third financial statement has various names including the source and application of funds statement, and the statement of changes in financial position. This shows the flow of cash in and out of the business between balance sheet dates. Sources of funds include

trading profits, depreciation provisions, sales of assets, borrowing, and the issuing of shares. Applications of funds include purchases of fixed or financial assets, payment of dividends, repayment of loans, and in a bad year trading losses. The profit and loss account (GB) or income statement (US) calculul rezultatelor, al pierderilor i a profitului The balance sheet bilanul contabil Net Assets activul net Share capital capitalul acinilor Share premium (GB) or paid-in surplus (US) prim suplimentar din aciuni Companys reserves rezervele firmei The years retained profits profitul pstrat dintr-un an Goodwill clientela; fondurile comerciale; vad Source and application of funds statement / the statement of changes in financial position situaia surselor i a aplicrii fondurilor / situaia schimbrilor din situaia financiar Vocabulary There are ten gaps in the two statements which follow. According to the information in the previous text, decide where the following headings should appear: Called-up share capital cash in hand and at bank Corporation tax debtors depreciation turnover Freehold properties historical cost net assets overheads

The Arsenal Football Club PLC

Profit and Loss Account for the Year Ended 31st May 1994 1994
[1 .] (income from football and related



activities: gate receipts, broadcasting, ground advertisements, prize money) Costs and [2 ], less other income (costs include salaries, [3 ], auditors remuneration, and lease payments; other income includes Interest Receivable) Profit on Ordinary Activities before Transfer Fees Transfer fees payable Profit on Ordinary Activities before Taxation Taxation Profit after Taxation Retained for The Financial Year (14,951,737) (12,804,538)

6,519,943 (889,588) 5,630,355 (1,596,226) 4,034,129

2,537,151 (54,259) 2,482,892 (750,000) 1,732,892

Arsenal Football Club PLC Balance Sheet 31st May 1994

1994 28,478,922 1993 18,982,931

Fixed Assets (including [4 .], leasehold properties, plant and equipment, and motor vehicles; all recorded at [5 ] minus depreciation) Current Assets Stocks; (including [6 .], Instalments on executive boxes); and [7 .] Creditors Amounts falling due within one year (including [8 .] and social security)





Total Assets less Current Liabilities Long Term Liabilities Amounts falling due after more than One year (including debenture Subscriptions) [9 ..] Capital and Reserves [10 ] Share premium account Building reserve Profit and loss account (years profit added to previous balance) Shareholders Funds



(17,893,500) (11,923,100) 10,329,557 56,000 237,201 846,000 9,190,356 10,329,557 6,295,428 56,000 237,201 846,000 5,156,227 6,295,428

30. Exchange rates While reading the text, decide which paragraph could be given the following headings. Floating exchange rates Intervention and managed floating exchange rates Supporters of fixed and floating rates The abolition of exchange controls The period of gold convertibility The power of speculators and the collapse of the EMS Why many business people would prefer a single currency

The Bretton Woods agreement of 1944 established fixed exchange rates, defined in terms of gold and the US dollar. Between 1944 and 1971, many currencies were pegged against (fixat, stabilizat dup) the US dollar, i.e. their parties with the US dollar were fixed. In this period, a US dollar was a promissory note issued by the United States Treasury. If anybody requested it, the Treasury had to exchange the note for 1/35th of an ounce of gold. Under this system, overvalued

or undervalued currencies could only be adjusted with the agreement of the International Monetary Fund. Such adjustments are called devaluations and revaluations. The Bretton Woods system of gold convertibility and pegging against the dollar was abandoned in 1971, because following inflation, the Federal Reserve did not have enough gold to guarantee the American currency. Gold convertibility was replaced by a system of floating exchange rates. (Today, the US dollar the unofficial world currency is merely a piece of paper on which is written In God We Trust. God, not gold!) a freely (or clean) floating exchange rate is determined purely by supply and demand. Theoretically, in the absence of speculation, exchange rates should reflect purchasing power parity the cost of a given selection of goods and services in different countries. Proponents of floating exchange rates, such as Milton Friedman, argued that currencies would automatically establish stable exchange rates, which would reflect economic realities more precisely than calculations by central bank officials. Yet, they underestimated the impact of speculation, and the fact that companies and investors frequently follow short-term money market trends even if these are contrary to their own long-term interests. In the late 1970s and early 1980s, the American, British and other governments deregulated their financial systems, and abolished all exchange controls. Residents in these countries are now able to exchange any amount of their currency for any other convertible currency. This has led to the current situation in which 95% of the worlds currency transactions are unrelated to transactions in goods but are purely speculative. Enormous amounts of money move round the world, chasing high interest rates or capital gains, as investors including rich individuals, companies and pension funds seek to maximize the value of their assets. In London alone, over $300 billion worth of currency is traded on an average day the equivalent of about 30% of the value of the goods Britain procedures each year. Banks make a profit from the spread (marj) between a currencys buying and selling prices. Few governments, however, leave exchange rates wholly at the mercy of market forces. Most of them attempt to influence the level of their currency when necessary. Managed (or dirty) floating exchange rates are more common than freely floating ones. In 1979, most Western European governments joined the EMS (European Monetary System), with its ERM (Exchange Rate Mechanism). This

established parties between member currencies, and a margin of plus or minus 2 %. If the rate diverged by more than this amount from the central parity, governments and central banks had to intervene in exchange markets, buying or selling in order to increase or decrease the value of their currency. Yet, government policy can easily be defeated by the combined action of international speculators. For example, on a single day in September 1992 the Bank of England lost five billion pounds in a hopeless attempt to support the pound sterling. For weeks, all the worlds financial institutions and rich individuals had been selling their pounds, as everyone except the British Government believed that ever since it joined the ERM in 1990, the pound had been seriously overvalued. When the British central bank ran out of reserves and could no longer buy pounds, the currency was withdrawn from the ERM and allowed to float, instantly losing about 15% of its value against the D-mark. The next year, speculators attacked the French franc, the Belgian franc, the Danish krone and the Spanish peseta. In August 1993, the European Monetary System was more or less suspended. Many manufacturers are in favour of fixed exchange rates, or a single currency. Although it is possible to some extend to hedge against (a se asigura mpotriva) currency fluctuations by way of futures contracts, forward planning is difficult when the price of raw materials bought from abroad, or the price of your products in export markets, can rise or fall by 50% in only a few months. (Since exchange controls were abolished, currencies including the US$ and the pound sterling have in turn appreciated by up to 100% and then depreciated by more than 50% against the currencies of major trading partners.) Other supporters of fixed exchange rates or a single currency include extreme conservatives who want to return to something like the gold standard, as well as people on the left who believe that speculators have too much power. Supporters of flexible rates include monetarists who want countries to follow strict monetary rules, as well as Keynesians who want to be free to devalue in the attempt to reduce unemployment. These are both rather surprising alliances, which put into doubt the planned timetable for the introduction of a Single European Currency.


Comprehension Are the following statements True or False? 1 Gold convertibility was abandoned because there was too much gold. 2 It is now impossible to exchange dollars for gold. 3 Only a pegged currency can be devalued or revalued. 4 A floating currency can either appreciate or be devalued. 5 Central banks sometimes attempt to decrease the value of their currency. 6 The EMS was designed to stabilize exchange rates. 7 To speculate is to take risks; to hedge is to try to avoid risks. 8 Under the system of floating exchange rates, currencies can depreciate 100% in a short time.


1. Match up the half-sentences below. 1. To peg a currency against something means to A. the amount of a countrys money that residents were able to change into foreign currencies. 2. A clean floating exchange rate B. fix its value in relation to it. 3. Exchange controls used to limit C. make a profit by making capital gains or by investing at higher interest rates. 4. Speculators buy or sell currencies in order to D. is determined by supply and demand. 5. Market forces means E. trying to insure against unfavourable price movements by way of futures contract. 6. Hedging means F. the determination of price by supply and demand (the quantity available and the quantity bought and sold). 2. Which six of these verbs are defined below?

Abolish Establish

adjust appreciate fluctuate peg

convert suspend

diverge revalue

1 to make changes to something 2 to change something into something else 3 to end something permanently 4 to end something temporarily 5 to go up or down (in quantity, value, etc.) 6 to move away from what is considered normal

12. Banking and taxation

Vocabulary Match up these terms with the definitions below. Cash card cash dispenser credit card home banking Loan mortgage overdraft standing order Current account (GB) or checking account (US) Deposit account (GB) or time or notice account (US) 1 an arrangement by which a customer can withdraw more from a bank account than has been deposited in it, up to an agreed limit; interest on the debt is calculated daily 2 a card which guarantees payment for goods and services purchased by the cardholder, who pays back the bank or finance company at a later date 3 a computerized machine that allows bank customers to withdraw money, check their balance, and so on 4 a fixed sum of money on which interest is paid, lent for a fixed period, and usually for a specific purpose

5 an instruction to a bank to pay fixed sums of money to certain people or organizations at stated times 6 a loan, usually to buy property, which serves as a security for the loan 7 a plastic card issued to bank customers for use in cash dispensers 8 doing banking transactions by telephone or from ones own personal computer, linked to the bank via a network 9 one that generally pays little or no interest, but allows the holder to withdraw his or her cash without any restrictions 10 one that pays interest, but usually cannot be used for paying cheques (GB) or checks (US), and on which notice is often required to withdraw money 31. Types of banks Read the text below and write short headings (one or two words) for each paragraph 5 .. Commercial or retail banks are businesses that trade in money. They receive and hold deposits, pay money according to customers instructions, lend money, offer investment advice, exchange foreign currencies, and so on. They make a profit from the difference (known as a spread or a margin) between the interest rates they pay to lenders or depositors and those they charge to borrowers. Banks also create credit, because the money they lend, from their deposits, is generally spent (either on goods or services, or to settle debts), and in this way transferred to another bank account often by way of a bank transfer or a cheque (check) rather than the use of notes or coins from where it can be lent to another borrower, and so on. When lending money, bankers have to find a balance between yield and risk, and between liquidity and different maturities. 5 Merchant bank in Britain raise funds for industry on the various financial markets, finance international trade, issue and underwrite securities, deal with takeovers and mergers, and issue government bonds. They also generally offer stockbroking and portfolio management services to rich corporate and individual clients. Investment banks in the USA are similar, but they can only act as

intermediaries offering advisory services, and do not offer loans themselves. Investment banks make their profits from the fees and commissions they charge for their services. 5 .. In the USA, the Glass-Steagall Act of 1934 enforced a strict separation between commercial banks and investment banks or stockbroking firms. Yet, the distinction between commercial and investment banking has become less clear in recent years. Deregulation in the USA and Britain is leading to the creation of financial supermarkets: conglomerates combining the services previously offered by banks, stockbrokers, insurance companies, and so on. In some European countries (notably Germany, Austria and Switzerland) there have always been universal banks combining deposit and loan banking with share and bond dealing and investment services. 5 A countrys minimum interest rate is usually fixed by the central bank. This is the discount rate, at which the central bank makes secured loans to commercial banks. Banks lend to blue chip borrowers (very safe large companies) at the base rate or the prime rate; all other borrowers pay more, depending on their credit standing (or credit rating, or creditworthiness): the lenders estimation of their present and future solvency. Borrowers can usually get a lower interest rate if the loan is secured or guaranteed by some kind of asset, known as collateral. 5 In most financial centres, there are also branches of lots of foreign banks, largely doing Eurocurrency business. A Eurocurrency is any currency held outside its country of origin. The first significant Eurocurrency market was for US dollars in Europe, but the name is now used for foreign currencies held anywhere in the world (e.g. yen in the US, DM in Japan). Since the US$ is the worlds most important trading currency and because the US has for many years had a huge trade deficit there is a market of many billions of Eurodollars, including the oil-exporting countries petrodollars. Although a central bank can determine the minimum lending rate for its national currency it has no control over foreign currencies. Furthermore, banks are not obliged to deposit any of their Eurocurrency assets at 0% interest with the central bank, which means that they can usually offer better rates to borrowers and depositors than in the home country.

Commercial / retail bank banc comerciale / banc de depozit Merchant bank / Investment bank banc comercial / de investiii Vocabulary a. Find the words or expressions in the text which mean the following. 1 to place money in a bank; or money placed in a bank 2 the money used in countries other than ones own 3 how much money a loan pays, expressed as percentage 4 available cash, and how easily other assets can be turned into cash 5 the date when a loan becomes repayable 6 to guarantee to buy all the new shares that a company issues, if they cannot be sold to the public 7 when a company buys or acquires another one 8 when a company combines with another one 9 buying and selling stocks or shares for clients 10 taking care of all a clients investments 11 the ending or relaxing of legal restrictions 12 a group of companies, operating in different fields, that have joined together 13 a company considered to be without risk 14 ability to pay liabilities when they become due 15 anything that acts as a security or a guarantee for a loan b.The text contains a number of common verb-noun partnerships (e.g. to lend money, to finance international trade). Match up the verbs and nouns below to make common collocations. Charge Do Exchange Issue Make Offer Pay Raise Receive advice bonds business currencies deposits funds interest loans profits


security issues

32. Opening an account and means of payment At the Bank Opening an account Mr. X I would like to open an account with you. Bank Clerk Very well, sir. Here is a form youll have to fill in. Mr. X There may be a problem. You see, Im a foreign resident. Bank Clerk This is quite all right, sir. Quite a large number of our clients are foreigners. Do you want to open a current account or a deposit account? Mr. X Well, Im going to stay and work here for a while, and Id like my salary to be paid into my account. But I dont want to have to give notice before I can withdraw money. Bank Clerk Its obviously a current account you need. Mr. X How long will take to open an account? Bank Clerk Doesnt take long, sir. Let me see Today is Thursday, if you can complete this form today, your cheque-book will be ready for you on Tuesday. Mr. X Fine. So, my salary could be paid in at the end of the month. Bank Clerk No doubt, sir. Mr. X There are two questions Id like to ask. Will this be the only place where I can cash a cheque? Bank Clerk Oh, no, sir. You can have them cashed at any of our branches. Mr. X Good. And what about statements of account? How frequently does one get them? Bank Clerk Normally, once a month. But we shall send one out after each transaction if you want us to.

General Information: When do/are you open? How late do you stay open? When do you close? What are your opening hours? In the US: Does this bank have an ATM (Automatic Teller Machine bancomat) In the UK: Do you have a cash point/dispenser? The ATM ate/kept my card. The cash dispenser wont give me my card back. If you want to use bank services you may have to queue (UK) or stand in line (US) and wait for the next available teller (US) or clerk (UK): When their desk is free, a light will come on: Next, please. Please step down (US). Im open over/down here. Queue / stand in line = a sta la coad Teller / clerk = funcionar la ghieu You can then tell him or her what you want: I want/need/would like to cash a check. Id like to cash these travelers checks, please. Can you change a ten-pound note, please? Id like ten dollars worth of quarters, please. I need a roll of quarters. If you have an account there: Id like to make a deposit. Id like to withdraw some money from my account. Id like to make a withdrawal. If you want to withdraw some money from abroad: Id like to transfer some money from an overseas bank account. Before the clerk gives you any money, she/he will ask: How would you like that? Any preference? Large or small bills (US) notes (UK)?

Your reply: It doesnt matter (which denomination) All twenties, please. Just tens and twenties, please. Five, tens and three fives, please. No small bills/notes, please. If you want to transfer some money, the clerk will say: Are you a customer here? First of all, I need some ID, please. May I see some identification? Do you have a bank card with you? Id like the name and address of your bank, your account number and your sorting code, please. Please fill in this form. Im afraid youll have to go to the enquiries desk (biroul de informaii). Or, if youre cashing a check: Could you endorse this (sign it on the back), please. Perhaps youre withdrawing money with a credit card: Enter your PIN number, please (PIN: Personal Identification Number). If you have foreign currency: Do you handle foreign exchange here? Is there a foreign exchange desk? Id like to change/buy some foreign currency. Whats the current exchange rate, please? How many marks to the dollar, please? And the reply: The exchange rate is 1,5 marks to the dollar. Im afraid the rate has gone up today. You might want to know: Do I have to pay bank charges (comision) on top of that? Is that inclusive of commission?

Are there any additional expenses? What commission do you charge? Maybe youre staying in an Anglophone country for more than a year and you want to open a bank account there: Id like to open a deposit/checking/ savings account, please. Id like to apply for a loan. Id like to get a safety deposit box (safe de depuneri). Whats the interest rate on this account? Could you explain the service charges on this account? Could I have a new checkbook, please? Id like to apply for a bank/cheque/credit/cash card, please. Means of payment. Id just had a phone call from the bank. They couldnt cash in Ds cheque. They were told there were insufficient funds on his account. Im surprised. That would be the first time. Can you remind me of the amount? Its not a large sum: only 135 pounds. This is all the more surprising. He is not the kind of person to overdraw his account. What sort of a cheque did he make out? Im looking into his file Now It was a giro cheque. Usually he pays us by bank cheque for small amounts, and by draft for large sums. It makes more sense. Just give him a ring, will you? Im sure hell settle immediately. Ill do that. Something else. Ive had very bad information about B, you know, the reseller (vnztor) who wanted immediate delivery. I see who you mean. Its his first order with us? Thats it. Hes already had a current account cancelled and has a reputation for being a slow payer. If so, insist on payment with the order (plata la comand). Delivery is out of the question until the sum has been paid into our account. Well, I think thats all. Oh yes! One more thing, the drafts to be discounted Means of payment. Key sentences.

His account is overdrawn (in the red). Cecul su este descoperit. The settlement is long overdue. Plata ar fi trebuit s fie fcut demult. Whats his current account number? Care este numrul contului su curent? Charge it to my account. Scoatei suma din contul meu. Settle the amount by money order if you find it more convenient. Pltii suma prin mandat potal dac considerai c este mai practic. The cheque was made out to his order. Cecul era fcut la ordinul su. He intends to open a deposit account at one of our branches. El are intenia s deschid un cont pentru depuneri la una din sucursalele noastre. I think I remember it was a bearer cheque. Cred c mi amintesc, era un cec la purttor. Normally, that payment-in ought to have been recorded on my last statement of account. Normal, acea plat (vrsmnt) ar trebuie s figureze pe ultimul meu extras de cont. For sight withdrawals, you simply have to go to counter no.3 Pentru retragerile la vedere, ajunge s mergei la ghieul nr.3 She will pay us by instalments over six months. Ea ne va plti n rate ealonate pe ase luni. I have kept the stub (counterfoil) of the cheque which I issued on March 6th. Am pstrat talonul cecului pe care l-am emis pe 6 martie. The holder of the credit card must inform our nearest office in case of loss or theft. Titularul crii de credit trebuie s informeze imediat biroul nostru cel mai apropiat n caz de pierdere sau de furt. Thanks to your credit card, you may rent a car without leaving a deposit. Datorit crii dumneavoastr de credit vei putea nchiria o main fr s lsai o garanie. How is it that this cheque has not been endorsed? Cum se face c acest cec nu a fost andosat? I suppose youd rather be paid in cash?

Presupun c preferai s fii pltii cu bani ghea. The draft will fall due at the end of the month. Trata ajunge la scaden la sfritul lunii. Why havent you presented this draft for acceptance yet? De ce nu ai prezentat nc aceast trat la acceptare? How long will it take to have the sum transferred to my account? Ct dureaz s virai suma n contul meu? It has been rejected for non-conformity of the signature (because the signature was not true). El a fost refuzat din cauza nepotrivirii semnturii (din cauz c semntura nu era cea adevrat). This is not the first time he has issued bad cheques (dud checks; cheques that bounce). Nu este prima dat cnd el emite cecuri fr acoperire. 33. Banking Key words and sentences The banks have played a prominent role in the development of modern economy since the very beginning of commercial activities. Their branches have become a familiar sight on many city streets, but also in villages, as more and more people now bank with any one of the national or local banks. Banks offer their services both to private individuals and to businesses. One can open a current account or a deposit account with them. The former will enable a person to use a cheque for payment instead of hard cash, whereas the latter will bring a small interest. People can ask their bank to pay recurring expenses for them, such as subscription, rents, telephone, gas or electrical bills. Valuables or deeds can be left in custody in a bank safe on payment of certain charge. The bank will obtain foreign currencies, issue travellers cheques and letter of credit payable at their branches or at correspondent banks. Besides, banks will operate transactions on the stock exchange for you and give advice on investments. They also lend money, generally on a short term basis: thus they can allow overdraft facilities or personal loans; if your credit rating is good and if you can offer some sort of security, they may consider longer term credit. Most of this applies to business discounting of their bills Bills of

Exchange (drafts), or even Promissory Notes. In the field of foreign trade, the banks can help by financing or advising their clients. They can be referred to by either party for status enquiries in business transactions. Recurring expenses = cheltuieli recurente Valuables / deeds = acte, valori Overdraft = cont debitor, descoperire de cont Be referred to = a fi ndrumat

Definition A cheque is signed by the payer and payable to the payee or to his order. A draft (or bill of exchange) is drawn by the creditor on the debtor and payable to the drawer or to a third party after acceptance by the drawee. Un cec este semnat de pltitor i se pltete beneficiarului sau la ordinul su. O trat este tras de creditor asupra debitorului i se pltete trgtorului sau unei tere pri dup acceptare de ctre tras.

Bank. Key sentences.



4. 5.

An interest is charged on all banks services. Se percepe dobnd pentru toate serviciile bancare. You had better ask for an overdraft before your account is overdrawn (in red). Ar fi bine s cerei un descoperit nainte de a vi se epuiza contul. I always deposit my valuables and my wifes jewels in a bank safe before leaving for a long holiday. Depun ntotdeauna obiectele mele de valoare i bijuteriile soiei la o banc nainte de a pleca ntr-o vacan de lung durat. Where can I cash this cheque (check U.S.)? Unde pot ncasa acest cec? Remember to record all withdrawals on counterfoils (U.S. stubs) in your cheque-book.











Nu uitai s nregistrai toate retragerile pe talonul carnetului dumneavoastr de cecuri. They offered me to refund a 2,000 personal loan over a 30-month period. Ei mi-au propus s rambursez un mprumut personal de 2.000 de lire n treizeci de rate lunare. When writing out or endorsing a cheque, one must be careful to avoid any erasure. Cnd se redacteaz sau se andoseaz un cec, trebuie s se evite orice terstur. She made out so many dud (bad) cheques that no bank will trust her with a cheque-book. Ea a ntocmit attea cecuri fr acoperire, nct nici o banc nu-I va mai ncredina un carnet de cecuri. Dont forget to have these bills discounted by the end of this month. Nu uitai s scontai aceste efecte la sfritul lunii. Recently a trader sued his banker after he could no longer have his bills discounted. Recent, un comerciant a intentat un proces bncii sale dup ce na mai avut posibilitatea s-i sconteze efectele de comer. The clearing-house will centralize all the operations dealing with the exchange of bills and cheques between banks. Camera de decontri/oficiul de cliring va centraliza toate operaiunile care se refer la schimbul interbancar de efecte de comer i cecuri. The U.S. investment banks have just raised their prime rate by point to 6,75%. Bncile de investiii americane tocmai au crescut rata de baz (a dobnzii) la 6,75% mrind-o cu un sfert de punct. The increase in the price of short-term money has been confirmed whereas longer term rates remain stable. S-a confirmat creterea preului pentru mprumuturile pe termen scurt, n timp ce ratele (dobnzii) pe termen lung rmn stabile. The Prime Rate (fine rate, blue-chip rate, [B.E.] base rate) is the rate granted by U.S. banks to their clients with the highest rating. Rata de baz reprezint rata acordat de bncile americane clienilor care prezint cel mai mic risc. The spell of monetary stability has lasted since the begining of the year.

Aceast perioad de stabilitate monetar dureaz de la nceputul anului. 16. The policy of expensive money is meant to fight inflation. Politica dirijat mpotriva creterii preurilor este destinat combaterii inflaiei. 17. but it has immediate repercussions on corporate income statements. dar acest lucru are repercursiuni imediate asupra conturilor de venit i pierderi ale ntreprinderilor. 18. The Central Bank acts as banker to the government and to other banks, and as the central note-issuing authority. Banca central funcioneaz n calitate de bancher pentru guvern i alte bnci i ca autoritate central de emisiune monetar. Banking. Key sentences. 1. Id like to change French francs into pounds. A vrea s schimb franci francezi n lire. 2. Your account is in the red (overdrawn). Contul Dumneavoastr este epuizat. 3. Should I (must I) endorse the cheque? Trebuie s andosez cecul? 4. He has opened a giro account. El a deschis un cont-cec potal. 5. My salary is paid into my account every month. Salariul meu este vrsat n contul meu n fiecare lun. 6. The holders of such deposit accounts must give seven days notice before withdrawal. Deintorii de astfel de conturi de depuneri trebuie s ntiineze (banca) cu apte zile nainte pentru a-i retrage banii. 7. Savings accounts earn an interest. Conturile de economii aduc o dobnd. 8. The last withdrawal dates back to the 27th of last month. Ultima retragere este din 27 luna trecut. 9. He wanted me to make out a blank cheque. El voia s fac un cec n alb. 10. Im not sure I kept the stub. Nu sunt sigur c am pstrat talonul. 11. Why not endorse the cheque to his (her) name?

De ce s nu andosez cecul pe numele lui (ei)? 12. My bank will lend me part of the sum. Banca mea o s-mi dea cu mprumut o parte din sum. 13. He will find it hard to repay his loan. i va fi greu s ramburseze mprumutul. 14. Why has his (her) overdraft been discontinued ? De ce nu i s-a mai dat descoperitul? 15. He should not have borrowed so much. Nu ar fi trebuit ca el s mprumute att. 16. This is the 5th bad cheque (dud cheque) weve had this month. Este al cincilea cec fr acoperire care mi se d luna aceasta. 17. Please go to counter 6. V rog s mergei la ghieul 6. 18. Please give me the rest in 5-pounds notes. Dai-mi restul n hrtii (bancnote) de 5 lire. 19. The statement has still not reached me. Extrasul (de cont) nu a ajuns nc la mine. (nu mi-a parvenit nc) 20. I have to (I must) replenish my account. Trebuie s-mi reaprovizionez contul. 21. She hasnt drawn on her account for 3 weeks. Ea nu a mai scos din contul su de trei sptmni. 34. Taxation and how to avoid it Vocabulary Which terms do the following sentences define? 1. The tax people pay on their wages and salaries is called Capital transfer tax income tax wealth tax 2. A tax on wages and salaries or on company profits is a/an Direct tax indirect tax value-added tax 3. A tax levied at a higher rate on higher incomes is called a Progressive tax regressive tax wealth tax 4. A tax paid on property, sales transactions, imports, and so on is a/an Direct tax indirect tax value-added tax 5. A tax collected at each stage of production, excluding the alreadytaxed costs from previous stages, is called a/an

Added-value tax sales tax value-added tax 6. Profits made by selling assets are generally liable to a Capital gains tax capital transfer tax wealth tax 7. Gifts and inheritances over a certain value are often liable to a Capital gains tax capital transfer tax wealth tax 8. The annual tax imposed on peoples fortunes (in some countries) is a/an Added-value tax capital gains tax wealth tax 9. Making false declarations to the tax authorities is called Fiscal policy tax avoidance tax evasion 10. Reducing the amount of tax you pay to a legal minimum is called Creative accounting tax avoidance tax evasion Income tax impozit pe venit Wealth tax impozit pe avere Direct tax impozit direct Indirect tax impozit indirect Progressive tax impozit progresiv Regressive tax impozit regresiv Value-added tax TVA Sales tax impozit pe vnzri Capital gains tax impozit pe plusul de capital Capital transfer tax impozit pe transferul de capital Fiscal policy politic fiscal Tax avoidance evitare fiscal Tax evasion evaziune fiscal Tax tax, impozit Taxation impozit, impozitare Tax shelter protecie fiscal Tax haven paradis fiscal Tax-deductible deductibil fiscal Excise duties accize, impozit de fabricare Reading

Read the following text and decide which paragraphs could be given the following headings. Advantages and disadvantages of different tax systems

Avoiding tax on profits Avoiding tax on salaries Tax evasion The functions of taxation

Taxation (and how to avoid it!) The primary function of taxation is, of course, to raise revenue to finance government expenditure, but taxes can also have other purposes. Indirect excise duties, for example, can be designed to dissuade (a preveni, a schimba prerea) people from smoking, drinking alcohol, and so on. Governments can also encourage capital investment by permitting various methods of accelerated depreciation accounting that allow companies to deduct more of the cost of investments from their profits, and consequently reduce their tax bills. There is always a lot of debate as to the fairness of tax systems. Business profits for example, are generally taxed twice: companies pay tax on their profits (corporation tax in Britain, income tax in the USA), and shareholders pay income tax on dividends. Income taxes in most countries are progressive, and are one of the ways in which governments can redistribute wealth. The problem with progressive taxes is that the marginal rate the tax people pay on any additional income is always high, which is generally a disincentive to both working and investing. On the other hand, most sales taxes are slightly regressive, because poorer people need to spend a larger proportion of their income on consumption than the rich. The higher the tax rates, the more people are tempted to cheat, but there is a substantial black or underground economy nearly everywhere. In Italy, for example, self-employed people whose income is more difficult to control than that of company employees account for more than half of national income. Lots of people also have undeclared, part-time evening jobs (some people call this moonlighting) with small and medium-sized family firms, on which no one pays any tax or national insurance. At the end of the 1986, the Director of the Italian National Institute of Statistics calculated the

size of the underground economy, and added 16.7% to Italys gross national product (GNP) figure, and then claimed that Italy had overtaken Britain to become the worlds fifth largest economy. To reduce income tax liability, some employers give highlypaid employees lots of perks (short for perquisites) instead of taxable money, such as company cars, free health insurance, and subsidized lunches. Legal ways of avoiding tax, such as these, are known as loopholes in tax lows. Life insurance policies, pension plans and other investments by which individuals can postpone the payment of tax, are known as tax shelters. Donations to charities that can be subtracted from the income on which tax is calculated are described as taxdeductible. Companies have a variety of ways of avoiding tax on profits. They can bring forward capital expenditure (on new factories, machines, and so on) so that at the end of the year all the profits have been used up; this is known as making a tax loss. Multinational companies often set up their head offices in countries such as Liechtenstein, Monaco, the Cayman Islands, and the Bahamas, where taxes are low; such countries are known as tax havens. Criminal organizations, meanwhile, tend to pass money through a series of companies in very complicated transactionsin order to disguise its origin from tax inspectors and the police; this is known as laundering money.

Comprehension According to the text, are the following statements True or False? 1 Taxes can be designed both to discourage and to encourage spending. 2 The same amount of money can be taxed more than once. 3 Progressive taxes may discourage people from working extra hours. 4 Sales taxes are unfair because poor people spend more than the rich do. 5 The Italian government knows that about one seventh of national income escapes taxation. 1. Loopholes are a common form of tax evasion.

2. If you pay a lot of your income into a pension fund or a life insurance policy you never have to pay tax on it. 8 A company that makes an unusually large profit during a tax year might quickly decide to spend it, for example, on a new factory or equipment.

Vocabulary Find words in the text that mean the following. 1 reducing the value of a fixed asset, by charging it against profits 2 something which discourages an action 3 an adjective describing a tax that is proportionally higher for people with less money 4 spending money to buy things, rather than saving it 5 working for yourself, being your own boss 3. a tax on incomes that pays for sickness benefit, unemployment benefit, and old-age pensions 4. non-financial benefits or advantages of a job 8 a way to delay the payment of tax to a later time 9 an adjective describing expenditure that can be taken away from taxable income or profits 10 a country offering very low tax rates to foreign businesses

13. Stock Market

35. Stocks and shares Companies Individuals and groups of people doing business as a partnership, have unlimited liability for debt, unless they form a limited company. If the business does badly and cannot pay its debts,

any creditor can have it declared bankrupt. The unsuccessful business people may have to sell nearly all their possessions in order to pay their debts. This is why most people doing business form limited companies. A limited company is a legal entity separate from its owners, and is only liable for the amount of capital that has been invested in it. If a limited company goes bankrupt, it is wound up and its assets are liquidated (i.e. sold) to pay the debts. If the assets dont cover the liabilities or the debts, they remain unpaid. The creditors simply do not get all their money back. Most companies begin as private limited companies. Their owners have to put up the capital themselves, or borrow from friends or a bank, perhaps a bank specializing in venture capital. The founders have to write a Memorandum of Association (GB) or a Certificate of Incorporation (US), which states the companys name, its purpose, its registered office or premises, and the amount of authorized share capital. They also write Articles of Association (GB) or Bylaws (US), which set out the duties of directors and the rights of shareholders (GB) or stockholders (US). They send these documents to the registrar of companies. A successful, growing company can apply to a stock exchange to become a public limited company (GB) or a listed company (US). Newer and smaller companies usually join over-the-counter markets, such as the Unlisted Securities Market in London or Nasdaq in New York. Very successful businesses can apply to be quoted or listed (i.e. to have their shares traded) on major stock exchanges. Publicly quoted companies have to fulfil a large number of requirements, including sending their shareholders an independently-audited report every year, containing the years trading results and a statement of their financial position. The act of issuing shares (GB) or stocks (US) for the first time is known as floating a company (making a flotation). Companies generally use an investment bank to underwrite the issue i.e. to guarantee to purchase all the securities at an agreed price on a certain day, if they cannot be sold to the public. Companies wishing to raise more money for expansion can sometimes issue new shares, which are normally offered first to the existing shareholders at less than their market price. This is known as a rights issue. Companies sometimes also choose to capitalize part of their profit, i.e. turn it into capital, by issuing new shares to

shareholders instead of paying dividends. This is known as a bonus issue. Buying a share gives its holder part of the ownership of a company. Shares generally entitle their owner to vote at a companys Annual General Meeting (GB) or Annual Meeting of Stockholders (US), and to receive a proportion of distributed profits in the form of a dividend or to receive part of the companys residual value if it goes into liquidation. Shareholders can sell their shares on the secondary market at any time, but the market price of a share the price quoted at any given time on the stock exchange, which reflects (more or less) how well or badly the company is doing may differ radically from its nominal value. Vocabulary Find words in the text which mean the following 1 having a responsibility or an obligation to do something, e.g. to pay a debt 2 a person or organization to whom money is owed (for goods or services rendered, or as repayment of a loan) 3 to be insolvent: unable to pay debts 4 everything of value owned by a business that can be used to produce goods, pay liabilities, and so on 5 to sell all the possessions of a bankrupt business 6 money that a company will have to pay to someone else (bills, taxes, debts, interest and mortgage payments, etc.) 7 to provide money for a company or other project 8 money invested in a possibly risky new business 9 the people who begin a new company 10 the place in which a company does business: an office, shop, workshop, factory, warehouse, and so on 11 to guarantee to buy an entire new share issue, if no one else wants it 12 a proportion of the annual profits of a limited company, paid to shareholders Alternative terminology


Americans often talk about corporations rather than companies and about an initial public offering rather than a flotation. Another name for stocks and shares is equities, because all the stocks or shares of a company or at least all those of a particular category have equal value. Two terms for nominal value are face value and par value. Other names for a bonus issue are a scrip issue (short for subscription certificate) and a capitalization issue, and in the US, a stock dividend or stock split. Vocabulary Match up the following words and definitions. Blue chip Defensive stock Growth stock Insider share-dealing Institutional investors Mutual fund Market-maker Portfolio Stockbroker 1. a company that spreads investors capital over a variety of securities 2. an investors selection of securities 3. a person who can advise investors and buy and sell shares for them 4. a stock in a large company or corporation that is considered to be a secure investment 5. a stock in an industry not much affected by cyclical trends that offers a good return but only a limited chance of rise or decline in price a stock which usually has a high purchasing price and a low current rate of return that is expected to appreciate in capital value 6. a wholesaler in stocks and shares who deals with brokers 7. financial organizations such as pension funds and insurance companies which own most of the shares of all leading companies (over 60%, and rising) 8. the use of information not known to the public to make a profit out of buying or selling shares

36. Bonds Companies finance most of their activities by way of internally generated cash flows. If they need more money they can either sell shares or borrow, usually by issuing bonds. More and more companies now issue their own bonds rather than borrow from banks, because this is often cheaper: the market may be a better judge of the firms creditworthiness than a bank, i.e. it may lend money at a lower interest rate. This is evidently not a good thing for the banks, which now have to lend large amounts of money to borrowers that are much less secure than blue chip companies. Bond-issuing companies are rated by private rating companies such as Moodys and Standard & Poors, and given an investment grade according to their financial situation and performance, Aaa being the best, and C the worst, i.e. nearly bankrupt. Obviously, the higher the rating, the lower the interest rate at which a company can borrow. Most bonds are bearer certificates, so after being issued (on the primary market), they can be traded on the secondary bond market until they mature. Bonds are therefore liquid, although of course their price on the secondary market fluctuates according to the changes in interest rates. Consequently, the majority of bonds on the secondary market are traded either above or below par. A bonds yield at any particular time is thus its coupon (the amount of interest it pays) expressed as a percentage of its price on the secondary market. For companies, the advantage of debt financing over equity financing is that bond interest is tax deductible. In other words, a company deducts its interest payments from its profits before paying tax, whereas dividends are paid out of already-taxed profits. Apart from this tax shield, it is generally considered to be a sign of good health and anticipated higher future profits if a company borrows. On the other hand, increasing debt increases financial risk: bond interest has to be paid, even in a year without any profits from which to deduct it, and the principal has to be repaid when the debt matures, whereas companies are not obliged to pay dividends or repay share capital. Thus companies have a debt-equity ratio that is determined by

balancing tax savings against the risk of being declared bankrupt by creditors. Governments, of course, unlike companies, do not have the option of issuing equities. Consequently they issue bonds when public spending exceeds receipts from income tax, VAT, and so on. Longterm government bonds are known as gilt-edged securities, or simply gilts, in Britain, and Treasury Bonds in the US. The British and American central banks also sell and buy short-term (three months) Treasury Bills as a way of regulating the money supply. To reduce the money supply, they sell these bills to commercial banks, and withdraw the cash received from circulation; to increase the money supply they buy them back, paying with newly created money which is put into circulation in this way. Rating company firm de rating Debt financing finanarea debitului Equity financing finanarea aciunilor Investment grade gradul riscului de investiie Debt-equity ratio raia debit-aciuni Public spending chletuieli publice Receipts ncasri, venituri Treasury bonds certificate de trezorerie pe termen lung Treasury bills certificate de trezorerie pe termen scurt Vocabulary Match up the words or phrases on the left with the corresponding ones on the right. 1 investors 2 issuing bonds 3 principal 4 maturity 5 pension funds 6 buy-and-hold investors 7 non-payment 8 price appreciation 9 price depreciation A the amount of a loan B borrowing money C date at which the money will be returned D fall in interest rates E keep their bonds till maturity F default G profits on the sale assets H providers of funds I retirement money

10 capital gains

J rise in interest rates

Vocabulary Match up the expressions on the left with the definitions on the right. 1 equity financing A a security whose owner is not registered with the issuer 2 debt financing B easily sold (turned into cash) 3 bearer certificate C the rate of interest paid by a fixed interest security 4 liquid D the rate of income an investor receives taking into account a securitys current price 5 par E issuing bonds 6 coupon F issuing shares 7 yield G nominal or face value (100%)

37. Futures, options and swaps Vocabulary Match up the following words and definitions. 1 Futures A contracts giving the right, but not the obligation, to buy or sell a security, a currency, or a commodity at a fixed price during a certain period of time 2 Options B contracts to buy or sell fixed quantities of commodity, currency, or financial asset at a future date, at a price fixed at the time of making the contract 3 Commodities C a general name for all financial instruments whose price depends on the movement of another price 4 Derivatives


D buying securities or other assets in the hope of making a capital gain by selling them at a higher price (or selling them in the hope of buying them back at a lower price) 5 Hedging E making contracts to buy or sell a commodity or financial asset at a pre-arranged price in the future as a protection or insurance against price changes 5. Speculation F raw materials or primary products (metals, cereals, coffee, etc.) that are traded on special markets

Reading Select ten or eleven of the following words that you would expect to find in an introductory text about futures and options. Assets beer bush call commodities contracts Copper currencies discount store foodstuffs hedge Liabilities plastic phone raw materials shout Spot market supermarket tea Now read the text, and see if you find the words you selected. Futures Every weekday, enormous amounts of commodities, currencies and financial securities are traded for immediate delivery at their current price on spot markets. Yet there are also futures markets on which contracts can be made to buy and sell commodities, currencies, and various financial assets, at a future date (e.g. three, six or nine months adead), but with the price fixed at the time of the deal. Standardized deals for fixed quantities and time periods (e.g. 25 tons of copper to be delivered next June 30) are called futures; individual, non-standard, over-thecounter deals between two parties (e.g. 1.7

billion yen to be exchanged for dollars on September 15, at a rate set today) are called forward contracts. Hedging and speculating Futures, options and other derivatives exist in order that companies and individuals may attempt to diminish the effects of, or profit from, future changes in commodity and asset prices, exchange rates, interest rates, and so on. For example, the prices of foodstuffs, such as wheat, maize, coca, coffee, tea and orange juice are frequently affected by droughts, floods and other extreme weather conditions. Consequently many producers and buyers of raw matrials want to hedge, in order to guarantee next seasons prices. When commodity prices are expected to rise, future prices are obviously higher than (at a premium on) spot prices; when they are expected to fall they are at a discount on spot prices. In recent years, especially since financial deregulation, exchange rates and interest rates have also fluctuated widly. Many businesses, therefore, want to buy or sell currencies at a guaranteed future price. Speculators, anticipating currency appreciations or depreciations, or interest rate movements, are also active in currency futures markets, such as the London International Financial Futures Exchange (LIFFE, pronounced life). Options As well as currencies and commodities, there is now a huge futures market in stocks and shares. One can buy options giving the right but not the obligation to buy and sell securities at a fixed price in the future. A call option gives the right to buy securities (or a currency, or a commodity) at a certain price during a certain period of time. A put option gives the right to sell an asset at a certain price during a certain period of time. These options allow organizations to hedge their equity investments. For example, if you think a share worth 100 will rise, you can buy a call option giving the right to buy at 100, hoping to sell this option, or to buy and resell the share at a profit. Alternatively, you can write a put option giving someone else the right to sell the shares at

100: if the market price remains above 100, no one will exercise the option, so you earn the premium. On the contrary, if you expect the value of a share that you own to fall below its current price of 100, you can buy a put option at 100 (or higher): if the price falls, you can still sell your shares at this price. Alternatively, you could write a call option giving someone else the right to buy the share at 100: if the market price of the underlying security remains below the options exercise price or strike price, noone will take up the option, and you earn the premium. Swaps Options are merely one type of derivative instrument, based on another underlying price. Many companies nowadays also arrange currency swaps and interest rate swaps with other companies or financial institutions. For example, a French company that can borrow francs at a preferential rate, but which also needs yen, can arrange a swap with a Japanese company in the opposite position. Such currency swaps, designed to achieve interest rate savings, are of course open to the risk of exchange rate fluctuations. A company with a lot of fixed interest debt might choose to exchange some of it for another companys floating rate loans. Whether they save or lose money will depend on the movement of interest rates. Call option opiune de achiziie Put option opiune de vnzare Exercise price / strike price pre de exerciiu Swap schimb Summarizing Complete the following sentences 1 The difference between futures and forward contracts is . 2 Producers and buyers often choose to hedge because . 3 Speculators can make money on currency futures if 4 If you believe that a share price will rise, possible option strategies include 5 On the contrary, if you think a share price will fall, possible option strategies include

6. The risk with currency and interest rate swaps is that Vocabulary Find words in the text that are in an obvious sense the opposite of the terms below. Appreciate Hedging call discount drought spot market strike price floating


Acceptance acceptare (trat) Acceptor tras, acceptor Allow credit a acorda un credit All-time high un record de cretere a cursului All-time low un record de scdere a cursului Amount o sum, un total Amount to a se ridica la, a ajunge la Arrears datorii, restane, arierate Articles of Association statutul societii Assess, to estimate a evalua, a estima Assessment, an estimate o evaluare, o estimare Assets activul Auction o vnzare prin licitaie Austerity austeritate Back a susine financiar Bad cheque, dud check cec fr acoperire Bad debt o crean nepltit Balance of account un sold de cont Balance of Payments balana de pli

Balance of Trade balana comercial Bank clerks funcionari bancari Bank (A.E. discount) rate rata scontului Bncii centrale Bank account cont bancar Bank tellers casieri (la banc) Bank wickets ghiee ale bncii Banking regulation reglementri bancare Banknotes (A.E. bills) bancnote Bargain a negocia Barrier o barier Barter / counter-trade troc Base rate / prime rate tax preferenial / rata de baz Be in the black a fi creditor Be in the red a fi descoperit/ n deficit Bear un speculator de burs (care mizeaz pe scderea cursului) Bear an interest a produce o dobnd Bearer un purttor Bearer cheque cec la purttor Benefit un avantaj Bill, a check (US) o not de plat Bills facturi, note de plat, efecte bancare Bills of Exchange (B.E.), drafts cambii, polie, trate Bite a avea efect Blank cheque cec n alb Blue chips aciuni ale marilor companii Board of directors consiliul de administraie Bond o obligaiune Bonus issue, shares / stock dividends aciuni gratuite, dividente nominale Boom un avnt (perioad de succes) Boost a relansa Borrow a lua cu mprumut Borrower cel care ia cu mprumut Branch sucursal Brand o marc comercial Break even a echilibra conturile Bring down a micora, a diminua Brisk activ, animat Buck bancnot sau bancnote de un dolar (A.E. familiar)

Building society o banc popular de economii pentru cumprare de locuine Bull un speculator de burs (care mizeaz pe creterea cursului) Bullion lingou din metal preios Buoyant susinut, bine orientat Buy forward a cumpra la termen Bylaw prevedere regulamentar Cap taxes a fixa un plafon pentru impozite Cash a cheque a ncasa un cec Cash flow flux de numerar Cash point un aparat distribuitor de bancnote Cashier casier n uniti economice Ceiling plafon, nivel maxim Central Bank banca central Change francs into pounds a schimba francii n lire Charge tax, pre, cheltuieli Cheque-book carnet de cecuri Cheque-book (A.E. checkbook) carnet de cecuri Chief executive officer / managing director director general Clearance sale o vnzare la solduri Clearing-house camer de compensare/decontare/oficiu cliring Close nchidere Close down a avea un curs sczut la nchidere Coin money a bate moned Coins monede, bani metalici Collapse a se prbui Collateral garanie, gaj / garant, girant, gir Collect a ncasa, a percepe (impozite) Commercial / retail bank banc comerciale / banc de depozit Commodity o marf (de larg consum) Compete with sb. a concura cu cineva, a face concuren cuiva Competitive competitiv Composite rate rat compus Contribution cotizaie, contribuie Convergence criteria criterii de convergen Cost accounting contabilitate analitic / analiza costurilor Cost effective- rentabil, care i merit preul Cost of living costul vieii Council tax impozite locale Counter ghieu

Counterfeit a contraface, a falsifica, a face bancnote false Credit a sum to an account a vira o sum ntr-un cont Credit an account a credita un cont Credit rating evaluare a solvabilitii clientelei Credit squeeze restrngere a creditului Credit standing situaie financiar, gradul de solvabilitate Creditor creditor Crisis o criz Cross out a bara Crumble a se prbui Curb a frna, a stpni Currencies devize Current / checking account cont curent Current account deficit un deficit al balanei de pli curente Current account; account current cont curent Custom-made fcut pe/la comand Customs vam Dabble on the Stock Exchange a juca la Burs Deal o tranzacie Dealer un dealer Debit a sum from an account a debita o sum dintr-un cont Debit an account by a sum a debita un cont dintr-o sum Debt o datorie Debtor un debitor Decline a decdea, o scdere Deeds acte, contracte Default a nu onora Default on a payment a nu onora o plat Defaulter ru platnic Defer a amna, a ntrzia Deficit un deficit Deflation deflaie Delay a amna, a ntrzia Demand cerere Deposit a depune Deposit / time / notice account cont de depunere Deposit account cont de depunere la scaden, de depozit Deposit bank banc de depuneri Depositor depuntor Depreciation amortizare, depreciere

Deregulation dereglementare Devaluate a devaloriza Devalue a devaloriza Dip a scdea, a descrete Direct debit debitare direct Directive o directiv Discontinue a nceta (de a mai face ceva), a ntrerupe Discount a sconta (o poli) Discount a draft a sconta o trat Discount bank banc de scont Dividends dividente Downturn, a downswing un regres Draw on an account a scoate dintr-un cont, a retrage dintr-un cont Draw on sight a trage la vedere Draw on someone a trage (o trat) asupra cuiva Drawee tras Drawer trgtor Drop, to fall, to come down a scdea, a se micora Dull inactiv Duty o tax Earn an interest a produce o dobnd Earnings ctiguri, venituri (salariale) Ease a se relaxa Encash a ncasa un cec (la banc) Endorse a andosa Endorse a cheque a andosa un cec Endorsement andosare Enquiry, inquiry cerere de informaii Equities aciuni ordinare Erasure tergere, terstur Exceed a depi Exchange schimb Exchange broker agent de schimb Exchange bureau birou de schimb Exchange rate rat de schimb Executive administrator Expenses cheltuieli, pli Face value valoarea nominal Fall back a se replia Fall due a sosi la scaden

Fall, drop in prices o scdere a preurilor Federal Reserve Bank (the Fed) (A.E.) banca federal de rezerve, banca central a S.U.A. Fee un onorariu Figure o cifr File for bankruptcy, to file under chapter 11 (US) a-i depune bilanul, a cere falimentul Fill in a form a completa un formular Finance, to fund a finana, a acorda fonduri Financial backing (support) susinere financiar, sprijin financiar Firm ferm Flat rate rat uniform Float (a currency) a face/ a lsa s oscileze o moned strin Float a company a lansa o societate Flourish a prospera Foot the bill a achita nota de plat Forecast, an outlook o previziune Foreign / overseas trade comer exterior Foreign resident rezident strin Forge a falsifica, a contraface (bancnote, documente) Forgery contrafacere, falsificare, falsuri (bancnote, documente) Free trade liber schimb Fringe benefit beneficiu suplimentar (n afara salariului) Futures market piaa tranzaciilor la termen Gain a ctiga / un ctig, o plus-valoare Gilt-edged securities valori/titluri fr risc (obligaiuni de stat) Giro cecuri potale Giro account cont-cecuri potal Give notice a da un preaviz Globalise a se extinde la scar mondial Go belly up (US) a da faliment Go into administration a fi supus unei proceduri de lichidare juridicar Go into liquidation a intra n lichidare Go on a welfare a se nscrie la asisten social Go public a intra la Burs, a fi acceptat la Burs Go up, to rise a crete, a urca, a se mri Goods, wares produse, mrfuri Grant a acorda, a aloca / o alocaie, un ajutor financiar Grant a loan a acorda un mprumut

Grant credit a acorda un credit Greenbacks dolari (americanism familiar) Gross Domestic Product Produsul Intern Brut Gross National Product Produsul Naional Brut Hard cash bani ghea Hedge a se acoperi (risc) Hike prices (US) a mri, a crete preuri Historical cost accounting contabilitatea costurilor de achiziie / istorice Holder titular (carte de credit) Holder of an account, account holder deintor al unui cont Home savings plan plan de economii pt. (construcia de) locuine Home trade comer intern Hot money bani fierbini (capital atras din strintate de dobnzi ridicate sau de un climat politic sigur) In cash n numerar In custody n custodie In real terms n bani constani In the red, overdrawn epuizat, descoperit (un cont) Incentive un stimulent Income statement (A.E.)/operating statement (B.E.) cont de exploatare, cont de profituri i pierderi Income tax impozit pe venit Index a indexa Index-linked indexat Inflation inflaie Inflationary inflaionist Inheritance tax drepturi de succesiune Interest dobnd International Monetary Fund (I.M.F.) Fondul Monetar Internaional (F.M.I.) Investment (B.E. merchant) bank banc de investiii Investments investiii Invoice factur Issue a emite Jack up a mri preuri Jewels bijuterii Joint account cont comun Junk bonds obligaiuni fr valoare Kickstart the economy a impulsiona economia

Leave a deposit a lsa o garanie Legal tender ofert legal, curs legal Lend a da cu mprumut Lending rate rata de mprumut Level off a se relaxa Leverage capacitate de influen / raportul dintre creane i capital / creterea rentabilitii capitalului unei societi ca urmare a contractrii de datorii Leveraged buyout rscumprarea unei societi datorit creterii rentabilitii capitalului ca urmare a contractrii de datorii Levy a percepe, a impune (o tax, un impozit) / o tax Liabilities pasivul Liquidation lichidare Listed company societate pe aciuni Loan shark un cmtar Loans mprumuturi Look up, to pick up a se redresa Loss o pierdere Loss-making, unprofitable nerentabil Lump sum settlement plat forfetar, plat global Make o marc (de fabric), fabricaie Maturity (of a loan) scadena unui mprumut Mercantile Exchange Bursa de mrfuri Merchant bank o banc comercial Merchant bank / Investment bank banc comercial / de investiii Mint institut britanic de emisiune monetar/ Monetria Statului Monetary monetar Monetary supply mas monetar Money order mandat potal Mortgage ipotec Mutual Fund societate de investiii cu capital variabil Note bancnot divizionar Offset a contrabalansa, a compensa Open up a avea un curs ridicat la deschidere Opt-out clause o clauz excepional Order o comand Outlet un debueu, un punct de desfacere Outstanding neachitat, ntrziat (la plat) Overdraft descoperire n cont, sold debitor Overdraw (an account) a descoperi, a epuiza un cont

Overdue expirat, ntrziat, scadent Overheads, fixed costs cheltuieli fixe Overheat a supranclzi Over-the-counter market pia de titluri fr valoare Pace beneficiar Paper money bani de hrtie, bancnote Pawn a gaja, a amaneta Pawnbroker cmtar Pay (in) cash a plti n numerar, a plti cu bani ghea Pay as you earn (PAYE) plata prin prelevare direct de la surs Pay back, to repay a rambursa Pay into an account a vrsa ntr-un cont Payee beneficiar Pay-in slip foaie de depunere sau de vrsmnt Payment by installments plat n rate Payment in cash plat n numerar Payment-in virament (ntr-un cont) Pick up the tab a achita nota de plat Plough back profits a reinvesti profiturile Plummet a merge foarte prost, a avea greuti mari Policy o politic, o strategie Portfolio un portofoliu (de valori) Postpone a ntrzia, a amna Premise locaie Price index un indice de pre Prime rate (A.E.) rat de baz Private limited company societate cu rspundere limitat Privatise a privatiza Production, output producie Profit margin o marj de profit Promissory note bilet de ordin, cambie, titlu de gaj, obligaiune Pundit un expert Purchase o achiziie, o cumprare Qualified majority majoritatea calificat Quid (B.E.) bancnot sau bancnote de o lir (familiar) Quota o cot-parte Quote a cota Quoted or listed company societate cotat la burs Rally a se reface, a se ntri Recover a se restabili, a-i reveni, a se reface

Recurring care se repet, periodic, recurent Recurring expenses cheltuieli recurente Reduce, to cut back a reduce Refund a rambursa Registrar of companies registrul de comer Regulation regulament, reglementare Remittance vrsmnt Rents chirii Repay, to pay back a rambursa Residual value valoare rezidual Restrict a impune o restricie Retail price index indicele preurilor cu amnuntul Revalue a reevalua Revenue venituri Rights issue emisiuni rezervate acionarilor Rise in prices o cretere a preurilor Running costs cheltuieli variabile Safe cas de bani Savings economii, bani economisii Savings account cont de economii Savings Bank cas de economii Security titlu de valoare Sell at a premium a vinde sub preul pieei Sell short a vinde la termen, a subevalua Setback o cdere, o involuie, un regres Settle a echilibra un cont, a plti Settlement plat Share a mpri, a participa mpreun Share o aciune Shoot up a crete vertiginos Short term pe termen scurt Shortage o penurie Shortfall o lips, o insuficien Sight withdrawal retragere la vedere Single market o pia unic Slacken, to slow down a ncetini, a frna Slash a reduce radical Slide a scdea Slow payer ru platnic Slump a scdea masiv

Small amount, small sum sum mic Solvency solvabilitate Spending cheltuieli Spin-off o schimbare radical Spot market piaa tranzaciilor cu plata pe loc Spread / Margin marj, margine Squeeze a presa, a constrnge Stagflation stagflaie, (stagnare economic + inflaie) Stagnate a stagna Stake participare, interest Standard of living standardul de via Statement of account extras de cont bancar Steady stabil Stimulate a sitmula Stock Exchange Bursa de Valori Stock market o pia bursier Stock, securities valori, titluri Stockbroker un agent de schimb/burs Stub, counter-foil cotor, talon, matc (de chitan, cec etc.) Subscribe a subscrie Subscription abonament Subside a subveniona Sue a face un proces, a chema n instan Sum o sum Summit o ntlnire de vrf Supply / provide sb. With sth. ofert, a furniza ceva cuiva Survey un studiu, o anchet Swap swap (operaie de schimb ntre dou devize prevzut pentru o anumit perioad) Target o int Tariff un tarif vamal Tax a impune taxe, a impozita Tax allowance scutire de taxe Tax break o reducere/ scdere de impozit Tax collector un perceptor Tax haven un paradis fiscal Tax relief degrevare de impozit Taxpayer un contribuabil Telegraphic money order mandat telegrafic Thrive, to prosper a prospera

Tighten ones belt a strnge cureaua Trade a face comer Trade bank banc comercial Trade gap un deficit comercial Transfer a transfera, a vira Travellers cheques (A.E. travelers checks) cecuri de cltorie Treasury tezaurul public Trend o tendin Trust a avea ncredere, a ncredina Turnover volumul afacerilor Underwrite garantarea subscrierii unei emisiuni Upturn, an upswing o redresare, o ascensiune Valuables obiecte de valoare Valuables / deeds acte, valori Value added tax tax pe valoarea adugat Venture capital capital de risc Veto sth. a-i exprima dreptul de veto fa de ceva Volatile nervos, febril Wind up a lichida Withdraw a retrage Withdrawal prevelare, retragere Write out (to make out) a cheque a trage, a ntocmi un cec Yield a aduce, a produce venit Yield randament Yield an interest a produce o dobnd

Cheia exerciiilor Module 1

Reading Summary B is the best. The other two are, according to the text, wrong. Practice 1 a model version of the dialogue Visitor: Hello, my names Henrik van der Linden from Amtel. I have an appointment with Sandra Bates.


Receptionist: Oh, yes, Mr Van der Linden. Welcome to Datalink. Ms Bates will be along in a few minutes. Shes just finishing a meeting. Can I get you something to drink? Visitor: No thanks, Im fine. Er, but I wonder if I could use the phone? Receptionist: Yes, of course. And anything else if you need to send a fax or anything Visitor: No, its okay, just the phone. Receptionist: Right, well you can use this one. Visitor: Thanks. (dials) Hallo, (fade) (a few minutes later) Visitor: (fade in) Au revoir. (click) Thank you very much. Receptionist: Not at all. If theres anything else you need, please ask. Anything Visitor: Yes, I was wondering how far is it to the station? Receptionist: Its about two miles ten minutes by taxi. Shall I book one? Visitor: Er, yes, thank you. that would be good. Can we say four oclock? Receptionist: Right, Ill do that. Oh, I think Ms Bates is free now. Shall I take you to her office? Visitor: With pleasure. Thanks. Exercise 1 First words Visitor: a, d, f, g, i, k // the person receiving the visitor: b, c, e, h, j, l, m Exercise 2 Ending the small talk a) B; b) A; c) B; d) B; e) A Module 2 Reading find words 1 literal a. direct and clear 2 understatement b. less strong way of talking 3 deduce b. work out 4 vague a. unclear 5 devious b. dishonest 6 pleasantries c. polite remarks Exercise 1 Making a call

(in order): speak to; through; office; can; hello; bad; speak; speaking; put; through; hold; office; moment; number; ring; back; on; message; rang; call Practice 1 a model answer Reception: Good morning, Gorliz and Zimmerman. Lara Camden: Hello, my names Lara Camden from Bulmer Cables Ltd. Please could I speak to Mr. Conrad Bird? Reception: Im sorry, but Mr. Bird is not in at the moment. Lara Camden: I see. Er when do you think I could contact him? Reception: Well, at the moment hes away. Would you like to leave a message? Lara Camden: Yes, perhaps you would ask Mr. Bird to call me? My names Camden, Lara Camden, on 0181 299 462. Reception: Right, thats Lara Canden on 0181 299 462. Okay? Lara Camden: Yes, er Camden. CAMDEN. Reception: Oh yes, sorry! Ive got that now. Lara Camden: Thank you. I look forward to hearing from Mr. Bird. Reception: Its a pleasure. Thanks for calling. Bye for now. Practice 2 a model example of the conversation Intership: Intership, good morning. Computech: Hello, my names Alex Hall from Computech Arcos in Singapore. Intership: Sorry, did you say Alex Hall from Computech Arcos? Computech: Yes, thats right. Intership: Okay, how can I help you, Mr. Hall? Computech: Well, Id like an appointment with Mr. Dionis. Intership: Can you tell me whats about? Computech: Certainly. Id like to discuss the transporting of goods from Singapore to Athens. Intership: I see. When would be a good time for you to come here? Computech: May I suggest next week? Intership: Im sorry, next weeks not possible Mr. Dionis is away next week. How about the beginning of the next month? Computech: Yes, that would be okay. Could we say Monday 3 rd of May? Intership: Er, unfortunately Mr. Dionis is busy all day on that Monday. He could make it Tuesday 4th. Computech: Thats fine. Shall we say ten a.m.? Intership: Yes, thats a good time for us. Erm can I ask you to confirm by fax? And would you like us to book you a hotel?

Computech: Ill fax and thank you but no, the hotel booking isnt necessary. I think thats everything, for now Intership: Right, many thanks, we look forward to your fax to confirm the meeting. Goodbye, Mr. Hall. Computech: Bye for now. A model of a fax message of confirmation: Computech Arcos Lorong One Toa Payoh Singapore 1253 Telephone: ++65 350 574 Fax: ++65 250 552 Fax to: Mr. Dionis (Intership S.A.) Fax Number: 30 1 657677 From: Page 1 of 1 Date: 19 April 19

Re. Meeting with Mr. Dionis With reference to our phone conversation of this morning I write to confirm my appointment with Mr. Dionis next month. Subject: Transport of goods from Singapore to Athens. Date of Meeting: Tuesday 4th May at 10 a.m. I also confirm that I will make my own hotel arrangements. I look forward to meeting Mr. Dionis next month. Best regards Exercise 2 Changing arrangements See language input. Practice 3 Tao Loon: Hello, Sales Office here. Luisa: Hello, my names Luisa Dominguez. Im ringing from Spain from Berraondo Company. Tao Loon: How can I help you, Ms Dominguez?


Luisa: The problem concerns a printer order. Let me give you the order number its HF5618. Its its for twenty printers. The problem is that only seventeen have arrived. Tao Loon: Really? Im surprised to hear that. Luisa: Well, Im afraid its the second time we have received and incomplete delivery and nobody told us there would only be seventeen. Tao Loon: Well, no, I think it was probably an administration mistake. Luisa: Yes, Im sure. Now, we need the other three printers urgently. Delays are causing us problem with our customers. They are rather unhappy. Tao Loon: Okay, er, at the moment we have some stock problems. Luisa: Well, can you give me a delivery date its very urgent. Tao Loon: Right let me see. We can promise you a despatch next Monday. Luisa: No, Im sorry, thats not good enough. We need despatch now. Tao Loon: Im sorry thats not possible. But well despatch on Monday, I assure you. Luisa: Well, will you please send a fax to confirm that. Tao Loon: Of course. And I do apologize for the problem. Luisa: Right, goodbye for now. Tao Loon: Goodbye. Reading a. True; b. True; c. False; d. False; e. True; f. False Module 3 Practice 1 Tokyo medical congress a. Probably very formal. b. High expectations in terms of technical support, a fair amount of detail and clearly a lot of expertise. c. High level of specialist knowledge audience are experts. d. Depends on congress organization probably less then an hour. e. Depends on congress organization probably questions follow. f. Use of visual supports with key information, plus later publication of Congress Proceedings

Purchasing and Product Managers of a Taiwanese company a. Probably semi-formal. b. High expectations in terms of technical support, a fair amount of detail and clearly a lot of expertise. c. High level of specialist knowledge at least the Product Manager will be very expert, the Purchasing Manager perhaps less so. d. Depends on objectives and on complexity of equipment. Could be a very long presentation, even a whole day or a one hour presentation might be enough. e. Probably interruption are encouraged to make everything clear as the presenter goes along. f. Use of visual support, photographs, diagrams, or the actual machine itself. Follow-up documentation will also be available. Internal meeting / administrative staff a. Informal. b. Reasonably high expectations in terms of speakers knowledge. c. The audience will probably have good background knowledge but have come to learn about a new system. d. Probably short thought it might be half a day! e. Interruptions encouraged. f. Probably illustrations, possibly handouts. A staff meeting / charity event a. Informal. b. Low expectations. c. The audience have come to hear ideas. d. Probably short five or ten minutes? e. Interruptions encouraged. f. Keep to clear simple structure making one or two important points. Practice 2 Subject / title of talk. 1 Introduction to oneself, job title, etc. 4 Reference to questions and / or discussion. 2 Reference to the programme for the day. 4 Reference to how long you are going to speak for. 3 Reference to the visual aids you plan to use. 5 The scope of your talk: what is and is not included. 4 An outline of the structure of your talk. 1 A summary of the conclusions. 4

Note: There are no hard rules about what should be included. Most suggestions here are open to discussion and variation, depending on circumstances. Reading a. Visuals make information more memorable Help the speaker Show information which is not easily expressed in words Highlight information Cause audience to employ another sense to receive information Bring variety and therefore increase audiences attention Save time Clarify complex information b. Presenters sometimes place the major emphasis on visual aids and relegate themselves to the minor role of narrator or technician Visuals must support what the speaker says It is not enough just to read what the visual says Reading Find out about the audience. Find out what they need to know. Plan what youre going to say. Say it clearly and concisely. Introduce information using lists. Give a link between parts of the presentation. Provide a logical sequencing of information. Use careful repetition of key information. Dont give too much information or too many fact. Reading a. The main body of the presentation contains the details of what was introduced in the introduction. b. See figure included in the text. Practice 4 a model of presentation Good morning, everyone. Id like to talk about the advertising mix for the new Cheri range of beauty products. We are planing two categories of advertising, above-the-line and below-the-line. Ill talk first about above-the-line advertising. There are three kinds: these are television commercials, secondly, newspapers newspaper

advertising. The third kind is magazines. There are two basic types we aim at: youth magazines and those aimed specifically at the womens market. Now, below-the-line advertising: there are three methods here also: the first is in-store advertising, then theres on-pack promotions and finally targeted mailing. So, in-store advertising: what does it mean? Basically, displays in the shop, merchandising, and that sort of thing. The second below-the-line advertising is on-pack promotions there are many kinds, most obviously things like coupons, competitions, joint promotions and free samples. The last kind of below-the-line advertising is targeted mailing, using a mailing list. That completes the overview of what we can do to launch the product, so Reading a. No response from the audience. b. A truly successful and interesting talk will avoid the problem. The speaker can give an instruction to the audience especially in sales presentations. To have question prepared to ask the audience, or identify someone whom you know will have something to say. Handling questions Difficulties may arise because: 5 questions / discussion is relatively unstructured 5 the speaker has less control 5 speaker has to switch into listen and answer mode 5 it may be difficult to hear, to understand, to answer or to distinguish between an opinion and a question. Practice 5 model answers 1. So, that concludes what I want to say, so now Id like to ask you for your comments, opening up discussion, or perhaps you have a question or two? 2. Er, in fact what I said was this process has been going on for a very long time. Im sorry if I was not clear on this point. 3. I wonder if anyone can suggest why this has happened or if anzone has any comments on it? 4. Yes, youre right, but can I suggest one or two other factors? One is the increasing number of take-overs of smaller companies 5. So are you saying that in the USA or Europe that could not happen?

6. Yes, I agree, but the situation is changing. 7. Sorry, I dont quite follow you. Can you say that again put it another way ? Exercise 1 The new product Introducing yourself Good morning ladies and gentlemen; we havent all met before so Id better introduce myself. Im Luis Lopez from the development department of Citrus Incorporated I should say before we start that I hope youll excuse my English. Im a little out of practice Preparing the audience Anyway, Im going to be talking this morning about a new product which we are planning to launch in two months time; its called KOOL-OUT, thats K-O-O-L dash O-U-T, and its a lemon-flavoured drink Well, Ill start with the background to the product launch; and then move on to a description of the product itself, Im going to list some of the main selling points that we should emphasize in the advertising and sales campaign. I think if you dont mind, well leave questions to the end Delivering the message Now firstly, as you all know, we had a gap in our soft-drink product range for the last two years; we have been manufacturing mixed-fruit drinks and orange drinks for the last ten years, but we stopped producing lemonade two years ago; I think we all agreed that there was room on the market for a completely new lemon-flavoured drink Secondly, the market research indicated that more and more consumers are using soft drinks as mixers with alcohol, so in other words, the market itself has expanded. This brings me to my next point which is that we have rather new customer-profile in mind; I must emphasize that this product is aimed at the young-professional, high-income, market and not the traditional consumer of old-fashioned lemonade. At this point we must consider the importance of packaging and design, and if you look at the video in a moment, youll see that we have completely re-vamped the container itself as well as the label and slogan Now to digress for just a moment, the more sophisticated packaging means a high unit cost, and this may be a problem in the selling area, but well have a chance to discuss that aspect later so to go back to my earlier point, this is a totally new concept as far as Citrus

Incorporated are concerned; as you see we are using both the new-size glass bottle and the miniature metal cans. Finally, lets look at the major attractions of the product. In spite of the higher price it will compete well with existing brands; the design is more modern than any of the current rival products, and incidentally the flavour is more realistic and natural its low calorie, too. Winding-up O.K., so just before closing, Id like to summarize my main points again We have KOOL-OUT, a new design concept, aimed at a relatively new age and income group; its designed to be consumed on its own, as a soft drink, or to be used as a mixer in alcohol-based drinks and cocktails. It comes in both bottle and can and this will mean a slightly higher price than we are used to; but the improved flavour and the package design should give us a real advantage in todays market well, thats all I have today for the moment, thank you for listening, now if there are any questions, Ill be happy to answer them Exercise 2 The product presentation See the model presentation and use the words in italics. Exercise 3 Can I interrupt here? A 2; b 3; c 4; d 5; e 1 Exercise 4 Anticipating questions (suggestions) a. I can hear you say b. Now you may well ask, what does he mean by c. An obvious problem is the cost of the accessories. d. You will have noticed that e. Now you may well ask Module 4 a. b. c. Practice 1 Welcome, everybody. Thank you for coming. We are here today to talk about (and to decide ; to look at) We have an agenda with three points. (Youve all seen the agenda. Id like to ask if anyone has any comments on it.) d. I think Mr. Kano is ready to tell us something about (Can I ask to open with his remarks.) e. If you dont mind, can we let Mr. Kano finish? (Sorry, , I cant allow us to consider that question just yet)

f. Thank you for that g. Now, can I ask Ms Perez de Sanchez to tell us her views h. Er, can we try to keep to the topic I think we have gone away from it a little. i. Id like to sum up the main points. (So let me summarize that. You say that ) j. Would anyone like to say anything else on this? (Does anyone have anything to add to that?) k. I think we ought to move on to the next topic on the agenda. l. So, before the next meeting, Ill send out a report on this one, Mr Kano will prepare () and will then fix a new date, some time next month. m. Thank you. thats everything. Thats it for today. Practice 2 1. A model of Agenda Axis Finance Limited Marketing Group: Year-end meeting Time: Place: Participants: Finish:

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

Agenda Apologizes for absence Minutes of previous meeting Chairs opening address Personnel changes Review of marketing performance in the current year New products Marketing plans for next year Any other business Date of next meeting

2. The chairs opening statement: a model Okay I think we should begin. Thanks for coming and as you know this is we are here for our annual meeting. As you know from the agenda there are four main issues to discuss. The first to review is the

personnel changes. Secondly, well look at the marketing performances in the current year. Then well discuss about new products. And finally, well examine the marketing plans for the next year. So any comments, any suggestions, or is everyone happy with the agenda? Okay, then lets start with item one on the agenda. I think Mr. Smith has prepared a statement on the personnel changes so Ill hand over to him. Practice 3 a model conversation A: The fall in sales is mainly due to the recession affecting world markets. B: Er, can you tell us exactly how much sales have gone down? A: Well, its a general fall of around 5 % in sales for most product areas. Also, specifically in the oil processing sector, we have much lower sales, mainly because we sold our UK subsidiary, Anglo Oils. B: Can we talk about the decision to sell Anglo Oils A: Well, no, Id rather not go into that. We discussed that in previous meetings. Id prefer to talk about future prospects. The outlook is very good just now B: What? Id say things look quite bad. A: Im very surprised you say that. In fact, sales forecasts are much better now. Anyway, let me tell you B: Sorry, I think Id like to hear more about new markets. A: New markets? Yes, but can we talk about new markets later? I have some important information on that. But first B: Wait, dont you think we should take a short break have a coffee? A: Take a break? Weve only just started! Reading 1. a. Decision making meetings. b. The structure of decision making: see the bulleted points in the second paragraph. c. Communication has to be a two-way process to be successful. 2. a. Not all meetings are to make decision as implied in the first sentence of the text. Decisions may already have been made, so a meting is called to tell people about the decision (an information giving meeting). b. An alternative description of the structure of decision making is the DESC model, which is included in the Skills Checklist.

c. In many instances of communication, a message is given and it is sufficient that it is comprehended, without even an acknowledgement (a recorded message, for example). However, this may be slitting hairs: the point is that in meetings at least an acknowledgement or agreement is expected. It seems fair to say that in most cases, communication is a two-way process. d. It is true that often an agreement, or a consensus, can be arrived at without a formal vote: it is the leaders responsibility to make clear what the consensus is and ask if everyone accepts it. 3. a. consensus b. time- and cost-effective manner c. goal d. set an objective e. imperatives f. desirables g. evaluate alternatives h. perception i. awareness / empathy j. evolve k. verbalize Reading a. a restatement of objectives 5 a summary of what has been accomplished 5 a summary of what action must be taken after meeting b. Meetings should be part of a learning experience, so future meetings can be improved by asking participants to evaluate meetings. Practice 4 a model conversation A: Can we reach a decision on this? B: Well, I I think er, I think we need more information. A: Hmm. Can you explain say exactly what sort of detail you think we need? B: Well, I feel first of all, we need to know more about the effects of a price increase. A: Perhaps we should, er, commission some market research? B: Yes, I agree. Thats right. We could ask Hamid to recommend someone.

A: Well, I think before that we could look at our own experience of price rises. Then later we can perhaps ask a marketing consultancy. Does everyone agree with that proposal? All: (murmur of agreement) A: Okay, lets move to the next item on the agenda. Practice 5 a model example So, weve almost finished. Does anyone have anything else to say? Well, we had to decide on action regarding training courses. To summarize, to confirm our decision, weve agreed a $10,000 budget. And also that Peter is going to identify three possible training organizations. Is everyone happy? Is that okay? Now, Peter will organize a presentation for next week, on the 14th at 2 p.m. until then, thanks everyone for coming. Thats it for today. Exercise 1 Chairing a meeting Chairman Id like us to reach a decision today about item 1. The issue is falling sales in the Italian market. Henry will explain the background to this, and the present situation. Henry Thanks. Well, as you know, in Italy weve always so thats how things are at the moment. Chairman Thank you, Henry. Now, lets look at possible courses of action. Bob Could I just say something ? The Italian market isnt as important to us as the Russian orders. I was in Moscow last week, and learnt some pretty interesting things about the way things are moving out there. Chairman Lets keep to the immediate subject, which is the Italian market. Arnold Sorry to interrupt, but if we launch a new advertising campaign in Italy it would cost a fortune! You said yourself that we havent enough money to advertise on every television in Europe! Chairman Lets not jump too far ahead at this stage. Bob My own feeling is this : in years of experience, in many different markets throughout the world, Ive often found that, when and you know, if I could pass on my experience to the younger people here, Id say that the only way to sell in Italy is to go there and see the market for yourself, instead of asking your agents to do it. Chairman Sorry to interrupt you, Bob, but Id like to know if the others agree. What do you think about this, Walter? Walter Im not too sure about this . My own feeling is that if

Bob I dont know why you dont ask me. Ive been to Italy so many times recently. Chairman Could you let Walter finish? Id like to have his view on this . Walter Well, Id like to say that for the last two years we havent had a stand at the Milan Trade Fair. I understand that the Fair has produced lots of contracts in the past. Chairman Thats an interesting point, Walter . Lets summarize what weve said so far. Bob thinks we depend on the agents too much, and Walter suggests that the Trade Fair is important. Exercise 2 Formal meetings a. address; approve; move; second; carried; casting; on b. true: 1, 2, 6, 7 false: 3, 4, to second means to give formal support to the motion for presentation to the board, 5 to abstain means to decide no to vote Exercise 3 Could I ask you a question? You: Im afraid I cant comment at the moment. You: A statement will be issued shortly. You: Im sorry, but I cant comment at this stage. You: Yes, Im pleased to be in your country. You: I cant tell you anything before the statement is issued. You: I would rather not answer that question at present. You: I did not say that at all. Module 5 Practice 1 a model a. Well, welcome to Its very good that you could come to see us here. b. I hope you had a good trip? Not too long ? Did you get a taxi when you arrives here? c. At lunchtime well be able to show you a little bit of the city have something to eat in a local restaurant. d. Well, shall we make a start? e. Okay, well, can I ask Luke Fox, from our Marketing Department, to begin our discussion with some opening remarks. I think youve met James already this morning, and a little while ago too?


Firstly, we see this meeting as an exploratory session, I think its best for both of us that we look at some general questions. g. Wed like to establish the beginnings of a partnership It would be particularly interesting for us to learn about your supply systems about price variations and about supply costs. Practice 2 1. Identify your minimum requirements. 2 Prepare your opening statement. 7 Decide what concessions you could make. 3 Know your own strengths and weaknesses. 4 Know your role as part of a team. 6 Prepare your negotiation position know your aims and objectives.1 Prepare any figures, any calculations and any support materials you may need. 5 2. a. Knowing your aims and objectives ii. helps clear thinking and purpose. b. Knowing your own strengths and weaknesses iv. helps you to know the market, the context in which you want to work. c. Preparing any figures, calculations and other materials 5 means you can support your argument. d. Preparing an opening statement iii. creates reasonable expectations. Reading 1. a. T b. F Better not to guess (though privately you might to some extend). c. T d. F Issues are best dealt together with other issues, in a package. e. T One should usually be prepared to make concessions. f. T g. F No, one can keep on talking and find a way round the problem. 2. a. Check what they say without commenting, at least not immediately. b. Vary the quantity or the quality, or bring in third parties. c. Be prepared, think about the whole package, be constructive. Practice 3

5 We can give you free delivery with a larger order. 5 We provide free on-site training for only a small price increase. d. We can give 5 % discount if you agree to payment on delivery. e. We can offer you an extra 50,000 compensation in exchange for your agreement not to go to law. f. We promise to improve safety for staff provided that we reach agreement on new contracts. g. The company will introduce better working conditions if the staff accept shorter breaks. Practice 4 Ojanpera: Well, were happy to buy a machine if you can give us a good price. Beck: Im sure we can. As you know our prices are very competitive. Ojanpera: Even so, Im sure you can allow us a discount? Beck: Okay, well a discount could be possible if you agree to pay for the shipping costs. Ojanpera: That sounds okay, if the discount is a good one. Beck: How about 4 %? Ojanpera: 6 % would be better. Beck: Im sorry, we cant manage that unless you pay for the installation. Ojanpera: Okay, our engineers will take care of that. Beck: Okay then, so to confirm: a 6 % discount but you pay all the shipping and installation costs. Ojanpera: That sounds all right. Practice 5 GIBSON TRUST LIMITED Units 9-12 East Side Monks Cross Industrial Estate BRISTOL BSI4 6TR Telephone 01272 547777 Fax 01272 547701

Neil Finch Ministry of Urban Development 140- 144 Whitehall London WCI 4RF

May 2 200 Dear Neil, Re: Meeting in Bristol, April 30 --- Railway Land Sale I am writing to (a) confirm points (b)agreed in the above meeting, held to discuss the sale of government owned railway land to Gibson Trust Limited. We would like to confirm through this letter and the (c) enclosed drawings that the property (d) included in the above sale consists of the land presently occupied by the station buildings and also the former car parks to the east of the station, the offices to the west and the warehouse alongside the tracks. The government-owned housing on the north side of the railway lines is (e) excluded . We also agree that the station will be renovated by the Transport Department and that the government will be responsible for running an eventual museum and paying a rent of 100,000 per year to Gibson Trust. The remaining land will be (f) developed by Gibson Trust and later sold off separately. The development is intended to be for commercial and residential use. The eventual use of the land should be (g) specified in the contract. Our next meeting will be on May 15 at 10 a.m., at which development plans will be (h) examined. Soon after this, contracts will be (i) drawn up. Then we will need time to consider the contracts but hopefully they will be (j) signed by the end of September. Do contact us if you have any comments or alterations you would like to make to this summary. Thank you once again for a very constructive meeting and we look forward to seeing you again on May 15. Your sincerely,

Jill Kearne Chief Negotiator Encs. (I) Reading a. emphasize the benefits available to both sides b. invent new options for mutual gain c. change the package d. adjourn to think and reflect e. change location f. change negotiator (personal chemistry?) g. bring in a third party (mediator?) h. fix an off-the-record meeting Practice 6 Situation 1 The problem is that we have never offered the kind of warranty you are looking for. Since we have a difficulty here, may I suggest we leave the problem of the warranty and come back to it later? Perhaps we could talk about training for our technical staff? Situation 2 Theres a number of issues on the table. We seem to be a long way from an agreement. Can I suggest a lower price, but link this with us paying the shipment costs or agreeing to different payment terms? Situation 3 The price you are asking is rather high, quite a lot higher than we were expecting. Well, if it would help, we could agree to longer payment terms Situation 4 There are several problems. We think there is quite a lot of negotiation ahead before we can agree on a common strategy. The benefits of reaching agreement are considerable. We will have more global influence and better prospects for the future. Strategies in dealing with conflict Strategy 1 I think were not really making much progress. Perhaps it would be better to leave this point for a while and come back to it later. Could we talk about a different aspect to the deal, perhaps the question of delivery?

Strategy 2 I think it is important to think about what could happen if we do not reach agreement. The most obvious consequence will be that we will both lose market share. The only winners will be our competitors. It could be serious for both of us. Strategy 3 There seem to be a number of problems, but Id like to summarize the positive elements issues where we have made progress. First, we agree that we have to settle the dispute between us, we understand how important this is. Second, we agree that the terms of our original agreement need to be changed. Third, we also agree that the change will depend on the different market conditions which affect our products These are important points of progress. Strategy 4 Can I suggest we take a short break? I think it will help if we look at some of the issues that are dividing us. Perhaps we will see areas where we can make a fresh offer. Strategy 5 The point at issue, Mr. Cinis, is quite simple. We can offer you an extra 5 % discount, but only if the order is increased by 20 % over the next three years.

Practice 7 Situation 1 Let me make a suggestion. If you agree to buy 100 units every month for the next twelve months, well agree a 10 % discount. Unfortunately, I cant say how many well need in six months and certainly not in twelve. I cant take the risk on such a large order at this stage. Situation 2 The price we are offering excludes installation costs but does include a twelve months guarantee. Im afraid thats not really acceptable. You know that other suppliers offer free installation and two year parts and labour warranty? Situation 3

I think the absolute minimum investment in advertising must be $40,000, otherwise we cannot reach enough of our market. Its not much to ask for. Its a pity but its still more than our budget. I cant go that high. Situation 4 Now, some excellent news: wed like to increase our order. Right now you are sending us 350 boxes a month. We need at least 500, demand is very high Well, Im glad youre having a lot of success with our products, but the bad news is that our order books are full, and the plant is working at full capacity. Were a bit stuck Im afraid Practice 8 Situation 1 Its been a long meeting, but finally Im very glad were able to reach agreement. I think it would be good if we could go on to a restaurant now, wed be pleased if you can join us. Situation 2 Im sorry our efforts to reach agreement have not been successful. I suggest we stop here, but I hope that in the future we might work together on something. Situation 3 Unfortunately I feel it would be better if I dont join you on this project, but no doubt therell be plenty of other things well work on. Situation 4 Id like to repeat our order, but not on those terms. Im sorry, we cant agree to this. I think well go elsewhere, but thanks anyway. Situation 5 Im sorry, but it really is physically impossible. We cannot supply goods in so short time. Its just impossible. Sorry we cant help you. Exercise 1 Your turn to negotiate Suggested replies: Lets see how we get on. Why such a long delivery period? This is our position. We need delivery of six weeks maximum, with four weeks for installation. Im sorry, but I cant accept eight weeks. Youll have to do better than that, Im afraid. Im afraid I cant increase the delivery period any further. I have my instructions. May I make a suggestion? If you can promise delivery in six weeks, then we may be able to talk about further order. Lets go through the terms: six weeks for delivery and four weeks for installation; and the decision about the next order to be taken by the 26th. Agreed?

Exercise 2 Ten rules for negotiating a 4; b 6; c 1; d 8; e 2; f 5; g 7; h 3. Exercise 3 When things get difficult 5 Would you like me to go through that again? B. Ill have to come back to you on this. C. Could you give me a moment to do some calculations? D. What is the basis of calculation for transport? E. Im just looking. Could you bear with me a moment? F. The figure for installation costs? What is the basis for calculation? G. Im sorry, could you go through it again? Exercise 4 Vocabulary for contracts 5 agreement; parties; sections; clauses; conditions. b. provides for, binding; abide by/comply with; breach c. arbitration; litigation; compromise; court; out of court d. term; terminate. Exercise 5 Licensing terms (in order): have the legal rights over; let you have; permission; country; an immediate payment; 5 % to pay; yearly bottom limit; period; further years; when it ended; illegal copying; official manufacturer; ask for a ban; copiers.

Module 6 Discussion A personal choice of qualities: D, F, H, and J. Vocabulary a. 1 resources 2 manageable 3 setting, communicate 4 supervise, performance 5 achieved 6 board of directors 7. innovations 5 Common collocations include: allocate resources (or people); communicate information or decisions; develop strategies (or people or subordinates); make decisions; measure performance; motivate people; perform jobs; set objectives; and supervise subordinates.

Module 7 Vocabulary 1 C; 2 E; 3 B; 4 A; 5 F; 6 G; 7 D Reading A functional structure B matrix structure C line structure D staff position Describing company structure Here is a short description of the organization chart illustrated. The chief Executive Officer reports to the President and the Board of Directors. The company is divided into five major departments: Production, Marketing, Finance, Research & Development, and Human Resources. The Marketing Department is subdivided into Market Research, Sales and Advertising & Promotions. The Finance Department contains both Financial Management and Accounting. Sales consists of two sections, the Northern and Southern Regions, whose heads report to the Sales Manager, who is accountable to the Marketing Manager.

Module 8 Vocabulary a. 1 subcontractor 2 component 3 outsourcing or contracting out 4 capacity 5 plant 6 location 7 inventory 8 lead time b. 1 A and E 2 C 3D 4 A and E 5 A and E 6D 7F 8E 9F 10 E 11 B 12 E 13 B 14 C and E 15 B and F Reading 1 component 2 subcontractor 3 inventory 4 outsourcing

5 location 6 plants 7 capacity 8 lead times Reading 1. What is a product? / The definition of a product. 2. Brand names. 3. Product lines and product mixes. 4. Line-stretching and line-filling. Vocabulary 1 credit facilities 2 warranty or guarantee 3 shelf 4 brand-switchers 5 (product) life cycle 6 profitability 7 opportunities 8 market share 9 image 10 niche Module 9 Vocabulary 1A 2I 3F 4H 5D 6J 7E 8B 9C 10 G Reading Paragraph 1 the selling and marketing concepts Paragraph 2 identifying market opportunities Paragraph 3 the importance of market research Paragraph 4 the marketing mix Paragraph 5 company-to-company marketing Comprehension 8. Customer needs; 2. Market; 3. Coordinated marketing; 4. Profits through customer satisfaction Vocabulary 1 word-of-mouth advertising 2 institutional or prestige advertising 3 advertising agencies 4 an account 5 an advertising budget 6 a brief 7 advertising campaign 8 target customers or target market 9 media planners 10 the threshold effect 11 the comparative-parity method 12 counter-cyclical advertising Discussion The numbers of respodents who agreed with the statements were as follows: 1. 90% 2. 72% 3. 85% 4. 51% 5. 41% 6. 49% 7. 60% 8. 57% Reading 1 target 2 awareness 3 medium 4 tactics 5 trial 6 maturity 7 aimed 8 loyalty 9 advertising

10 channel Summarizing 1 When a new product is launched, the producer has to inform customers about its existence and develop brand awareness. 2 Promotion is one of the four elements of the marketing mix; sales promotions are one of the four different promotional tools. 3 The advantages of publicity include the fact that it is much cheaper than advertising, and can have a better impact, because it seems that people are more likely to read and believe publicity than advertising. 4 The four stages of the standard product life cycle (excluding the prelaunched development stage) are introduction, growth, maturity and decline. 5 Reasons to offer temporary price reductions include attracting priceconscious brand-switchers, offsetting a promotion by a competitor, and, for stores, attracting customers by way of loss leaders. 9. Sales promotions need not only be aimed at customers; they can also be used with distributors, dealers and retailers, and with a companys sales force. 10. Apart from selling a companys products, sales representatives bring information back to a company from its customers, including ideas for new products. Vocabulary 1. competitors 2 word-of-mouth advertising 3 brand-switchers 4 points of sale 5 brand name 6 line-stretching 7 packaging 8 product improvement 9 media plan 10 packaging

Module 10 Reading 1 Market leaders 2 Expanding markets 3 Market challengers 4 Market followers 5 Establishing a niche / Dangers faced by market followers Vocabulary 1 market share 2 promotions 3 monopoly 4 competitors 5 slogan 6 market segmentation 7 niche

8 differential advantage 9 turnover 10 recession Vocabulary 1 to innovate (innovation) 2 to diversify (diversification) 3 to merge (a merger) 4 a raid 5 a takeover bid 6 horizontal integration 7 vertical integration 8 backward integration 9 forward integration 10 synergy Summarizing 1 The fact that many large conglomerates assets were worth more than their stock market valuation demonstrated that they were clearly not maximizing stockholder value, i.e. giving their stockholders the maximum possible return on their investment. 2 Raiders bought conglomerates in order to strip them of their assets, i.e. to restructure them, split them up, and resell the pieces at a profit. 3 Raiders showed that the stock market did not necessarily value companies assets correctly, especially land, buildings and pension funds. 4 Raiders were particularly interested in companies with large cash reserves, companies with successful subsidiaries that could be sold, and companies in fields that are not sensitive to a recession. 5 Investors were prepared to lend money to finance LBOs because they received a high rate of interest which more than compensated for the risk that the bonds would not be repaid. 11. Raiders argue that the possibility of a buyout forces company managers and directors to do their jobs well, and to use their capital productively. Vocabulary 1 charities 2 legitimacy 3 perfect competition 4 welfare 5 threatening 6 vitality 7 free enterprise 8 conforming 9 embodied 10 proponents Module 11 Vocabulary 1B 2C 3D 4G 5A 6E 7F Vocabulary 1 shareholders or stockholders 2 earnings or income 3 liabilities 4 turnover 5 assets 6 depreciation or amortization 7 debtors or accounts receivable 8 creditors or accounts payable 9 stock or inventory 10 overheads or overhead

Reading 1 assets 2 stock or inventory 3 depreciation or amortization 4 shareholders or stockholders 5 earnings or income 6 turnover 7 overheads or overhead 8 liabilities 9 debtors or accounts receivable 10 creditors or accounts payable Vocabulary Financial statements 1 turnover 2 overheads 3 depreciation 4 freehold properties 5 historical cost 6 debtors 7 cash in hand and at bank 8 corporation tax 9 net assets 10 called-up share capital Reading A The period of gold convertibility. B Floating exchanges rates. C The abolition of exchange controls. D Intervention and managed floating exchange rates. E The power of speculators and the collapse of the EMS. F Why many business people would prefer a single currency. G The introduction of the single European currency. Comprehension 1 False 2 False 3 True 4 False 5 True 6 True 7 True 8 False Vocabulary 1. 1B 2D 3A 4C 5F 6E 2. 1 adjust 2 convert 3 abolish 4 suspend 5 fluctuate 6 diverge

Module 12 Vocabulary 1 overdraft 2 credit card 3 cash dispenser or ATM 4 loan 5 standing order or direct debit 6 mortgage 7 cash card 8 home banking 9 current or checking account 10 deposit or time or notice account Reading 1 Commercial banking 2 Investment banking

3 Universal banking 4 Interest rates 5 Eurocurrencies Vocabulary 1. 1 deposit 2 foreign currencies 3 yield 4 liquidity 5 maturity 6 underwrite 7 takeover 8 merger 9 stockbroking 10 portfolio management 11 deregulation 12 conglomerate 13 blue chip 14 solvency 15 collateral 12. Common collocation include: charge interest; do business; exchange currencies; issue bonds; make loans; make profits; offer advice; offer loans; pay interest; raise funds; receive deposits; underwrite security issues Vocabulary 1B 2A 3A 4B 5C 6A 7B 8C 9C 10 B Reading A The functions of taxation. B Advantages and disadvantages of different tax systems. C Tax evasion. D Avoiding tax on salaries. E Avoiding tax on profits. Comprehension 1True 2True 3True 4False 5False 6 False 7True Vocabulary 1 depreciation 2 disincentive 3 regressive 4 consumption 5 self-employed 6 national insurance 7 perks 8 tax shelters 9 tax-deductible 10 tax havens Module 13 Vocabulary 1 liability 2 creditor 5 to liquidate 6 liabilities 3 bankrupt 4 assets 7 to put up capital

8 venture capital 9 founders 10 premises 11 underwrite 12 dividend Vocabulary 1 mutual fund 2 portfolio 3 stockbroker 4 blue chip 5 defensive stock 6 growth stock 7 market-maker 8 institutional investors 9 inside share-dealing Vocabulary 1H 2B 3A 4C 5I 6E 7F 8D 9J 10 G Vocabulary 1F 2E 3A 4B 5G 6C 7D Vocabulary 1B 2A 3F 4C 5E 6D Summarizing 1 The difference between futures and forward contracts is that futures are standardized deals and forwards are individual over-the-counter agreements between two parties. 2 Producers and buyers often choose to hedge because this allows them to guarantee prices for several months. 3 Speculators can make money on currency futures if they correctly anticipate exchange rate appreciations or depreciations or interest rate changes. 4 If you believe that a share price will rise, possible option strategies include buying a call, which you will be able to sell at a profit, and writing (selling) a put, which will never be exercised, so you earn the premium. 5 On the contrary, if you think a share price will fall, possible option strategies include buying a put, so you will be able to sell your shares at above the market price, and writing a call, which will never be exercised, so you earn the premium. 6 The risk with currency and interest rate swaps is that the exchange and interest rates may change unfavourably. Vocabulary Appreciate depreciate Call put Discount premium Drought flood Floating fixed Hedging speculation

Spot market futures market Strike price market price The word premium is used twice with two different meanings in the text. At a premium means above the nominal or market price; premium also means the price of an option contract.

Extra Readings
(Industry Profile and Career Overview from WetFeet.com)

Advertising & PR Industry

Advertising and public relations are like a microwave and a freezer: totally different, but they work together really well. In fact, many

large advertising agencies offer PR services. Both industries deliver words and pictures, but what they really sell is intangibles, such as image and reputation. They are paid to persuade people: to buy goods or services, to vote for a political cause or candidate, or to invest in a company. They often base advertising or publicity campaigns on market research, which is typically gathered by independent companies that specialize in customer interviews, focus groups, and surveys. In broad terms, an advertising agency is a marketing consultant. It helps the client (a manufacturer of consumer products like Nike, perhaps, or a service-oriented company like Charles Schwab & Co.) with all aspects of its marketing effortseverything from strategy to concept to execution. Strategy involves helping the client make highlevel business decisions, like what new products the client should develop or how the client should define or brand itself to the world. Concept is where the agency takes the clients strategy and turns it into specific ideas for advertisementssuch as a series of ads featuring extreme athletes for a soft-drink maker whose strategy is to make inroads in the teen market. Execution is where the agency turns the concept into realitythe production of the actual ads: the print layout, the film shoot, the audio taping. Full-service agencies also handle the placement of the ads in newspapers, magazines, radio, and so onso that they reach their intended audience. Sometimes the agency works in conjunction with the clients marketing department; other timeswhen the client doesnt have a marketing department the agency takes on that role. But thats only a strict definition of what people in advertising do. In broader terms, the industry includes everything from PR agencies (which try to place news items about clients in the media) to direct marketers (who send out all that annoying junk mail) to Internet advertising and design firms (which create pop-up or banner ads or design websites for clients). Many of the biggest and most successful agencies have units that focus on each of these activities. PR firms, on the other hand, generally try to persuade media to publicize their messages as news. When they represent truly newsworthy clients, such as political candidates, getting publicity is easy, and the challenge is to put their client's spin on how a news item

is presented in the media. When the client is less newsworthy, such as a company that wants publicity for its products without buying an ad, the job is more difficult. PR professionals write creative, and sometimes not so creative, press releases that dress up company messages as topical news, in the hope that it will be run as such on the front page or reported at the beginning of the evening news on television. PR firms also provide services such as speech writing, ghost writing, investor relations, and damage controlthe term for limiting bad publicity that results from misadventure: the plane that crashes, the car that bursts into flame, the pain pill that poisons people, the computer chip that can't add numbers correctly, the political candidate whose past catches up with him. Trends Consolidation Like so many other industries, advertising and public relations firms have experienced a lot of consolidation in recent years, as companies join forces to lower costs and stay competitive in the global marketplace. In advertising, bigger size means more clout with media outlets, and therefore lower advertising costs. This trend is also a result of the fact that by owning several different advertising agencies, a single holding company can control several competing accounts without conflict of interest. Account Planning Account planningalso known as strategic planningwas developed in English ad agencies in the 1960s and 1970s. It took a while, but in recent years the American advertising industry has discovered account planning in a big way. Account planning is a discipline that aims at increasing understanding of the consumer. Today, account planning is such an integral part of many American ad agencies that its the account planners who do most of the strategizing on behalf of clients, rather than the account management staff. Other New Media

The Internet is not the only new medium when it comes to advertising. It seems that people are jaded by the overload of ads in traditional media, like television or newspapers, and often wont even pay attention to ads. As a result, advertisers are now trying to get your attention through nontraditional advertising media like the movies, where product placement has become a permanent part of business. Other nifty places where you can now see ads: on bus rooftops (ads atop buses reach the professional market that works in office towers, apparently) and at the bottom of golf holes. Beer ads have even begun to show up on disinfectant cakes in mens room urinals, of all places. Targeted Marketing Computer databases let advertisers store detailed information about each of their customers. On-demand printing lets advertisers customize brochures to individual customers. E-mail and automated direct mailing let advertisers reach individual customers economically. So, for the first time, the advertising industry is learning how to create ads like smart bombs, capable of delivering a customized message to a precise target. That means that technological expertise is increasingly important within advertising agencies and, to a lesser extent, PR firms. How It Breaks Down Though boutique agencies are growing in number and revenue, the big names continue to handle most of the accountsand earn most of the dollars. They also are the primary source of employment opportunities. In addition to the size of the firm, you'll need to think about its location, its client list, and the kind of advertising it does: branding vs. promotional, general vs. specific industries, all media versus specific media. Big Global Networks In the past decade, global has become the way to go. Several huge global marketing and media conglomerates now dominate the advertising industry. These include Omnicom, the WPP Group, the Interpublic Group, Cordiant, Havas, and Publicis Groupe. They are joined by advertising agencies that have expanded their operations by opening offices around the world and by acquiring other marketing and media companies. These include the Grey Global Group.

Together, these firms own many of the major players in traditional and interactive advertising. Omnicom, for example, owns BBDO Worldwide, DDB Worldwide, and TBWA Worldwide. Cordiant owns Bates Worldwide. Havas Advertising owns Euro RSCG Worldwide and Arnold Worldwide Partners. The WPP Group owns Ogilvy & Mather and J. Walter Thompson. Interpublic owns McCann-Erickson Worldwide, Lowe (The Partnership), FCB Group, Deutsch, and Campbell-Ewald. And Publicis Groupe owns Publicis Worldwide and Saatchi & Saatchi Worldwide, and recently acquired Bcom3 Group, which owns Leo Burnett Worldwide and DArcy Masius Benton & Bowles (the latter no longer exists under this name, but has been folded into Publicis). In the old days, being big meant being corporate and account-driven. Though thats still often the case, its not the rule it once was. One reason is that advertising has changed, with many advertisers now recognizing the value of catchy creative work. Another is that big companies now own what were until recently independent shops known for strong creative. Omnicom, for instance, owns Goodby Silverstein, and Interpublic owns the Lowe Group. Smaller Shops While a lot of hot shops have been snatched up by the big global holding companies, there are still plenty of smaller shopssome with as few as five employees. Often these are creative boutiques agencies started by people from bigger agencies who have hung out their own shingle in order to follow their vision of what makes good advertising. At smaller agencies, the boundaries between different departments are often not as pronounced as at larger agencies. While the staff at bigger agencies is divided by client, in a smaller agency people will often be working on several accounts at once. Mad Dogs & Englishmen in New York and Butler, Shine & Stern in Sausalito, California, are two of the hundreds of smaller shops. Interactive Agencies Interactive agencies specialize in online marketing and advertising. This includes everything from concepting, designing, and placing banner ads to designing corporate websites to developing e-commerce

solutions for corporations. This segment of the industry has been devastated in recent times. As Corporate America cut back on advertising expenditures, online-ad click-through rates plummeted resulting in dismal online-advertising revenues. But the segment looks to be on the rebound, as advertisers try out new online strategies with a newly realistic perspective on what advertising on the Internet can and cannot do. Public Relations Firms that specialize in providing PR services include Edelman, Ketchum PR, and Hill and Knowlton (owned by WPP). Internally, one difference between PR and ad agencies is that PR firms tend to organize themselves around practice areas, such as public affairs, investor relations, labor relations, crisis management, entertainment, media relations, consumer-product marketing, and corporatereputation management. Smaller PR firms, like ad agencies, may specialize in a particular field, such as the Internet, health care, telecommunications, or consumer-product marketing. Nonagency Opportunities Beyond the traditional ad and PR agencies, there are a number of other job sources in this field. Research firms, such as IRI (Information Resources, Inc.), Nielsen (of TV-ratings fame), Gallup, and J.D. Powers all measure the success of agency campaigns. Other firms specialize in certain aspects of the advertising world, such as direct marketing or promotions. Although some of these are independent, others are owned by big players. Also, large corporations usually have marketing communications (marcom) departments, which create and produce brochures, product sheets, and other so-called marketing collateral. Marcom departments also often write and distribute press releases and perform other PR functions. Typically, marcom work is not on the creative edge, but on the other hand, you won't lose your job if you can't come up with a brilliant idea every week. Some corporations create and produce some or all of their own advertising. For example, Charles Schwab & Co. and MasterCard both have in-house ad departments. Usually, these will be more corporate

in feel and will produce advertising thats not as exciting as that of general agencies. Job Prospects The advertising industry has taken a big hit due to recent economic events, particularly the decline of the dot coms and the overall recession. Remember all those expensive dot-com Super Bowl ads from a few years back? A lot of those companies are no longer in businessand, like their more-traditional bricks-and-mortar Corporate America cousins, those that are still around are much less willing to plunk down millions of dollars on advertising. The ad and PR industries are going through a difficult cycle currently, and as a result, jobs in the industry are scarce. Add in the fact that its exceedingly difficult to start in this industry in anything but an entrylevel position, and you end up with a whole lot of competition for relatively few low-paying jobs. So, if you want to work in advertising, be prepared to start at the bottom and work your contacts to get interviews. While some of the bigger agencies do recruit on campus for entry-level account-management hires, most entry-level hires are not recruited. The easiest routes into the marketing and business side of advertising are entry-level media positions and administrative assistant positions. They dont pay that well and they involve lots of grunt work, but youll get a chance to show your stuff and get promoted. If youre a creative, you cant get a job in advertising without a book of your work. For entry-level copywriting or artdirection positions, this means designing and producing mock advertisements. The first thing job seekers should know about advertising: It isn't easy to break into, and it doesn't pay well when you start. Second, expect to work in New York City, Chicago, San Francisco, or Los Angeles, where the biggest agencies are headquartered. In PR, too, you'll typically start at the bottom (an internship is a favorite way to break into the industry), and you probably won't make a huge salary to start, but the work can be interesting and rewarding.

Focus group = a group of consumers brought together to give opinions about products, adverts etc.

(Market) survey = a study of the state of the market. Account = customer who does a large amount of business with a firm and has an account. Press Release = sheet giving news about something which is sent to newspapers and TV and radio stations so they can use the information Speech writing = scrierea discursurilor Ghost writing = the writing of a book or a story for another person who then says it is their own work Investor relations = the relations with investors the person who gives money to a company, business or bank in order to get profit Holding company = companie holding / a company which owns more than 50 % of the shares in another company / company which exists only or mainly to own shares in subsidiary companies (Am. Proprietary company) Strategic planning = previziune strategic / planning the future work of a company Boutique agency = agenie tip boutique (de mici dimensiuni) Marketing collateral = auxiliare de marketing Dot coms = a company that primarily does business via the Internet

Inroads = atac, nval Take on = a-i asuma Pop-up = care sare, se mic rapid / a book, card, toaster etc that is designed to make something suddenlz spring out of it. Newsworthy = important or interesting enough to be reported as news Spin = a way of providing information that makes it seem to be favourable for a particular person or political party Topical news = tiri de actualitate Report = a face un reportaj To be run = a circula, a ine, a aprea n ziar Misadvanture = accident, moarte accidental To catch up with = a ajunge din urm pe cineva Clout = puterea sau autoritatea de a influena decizia altora Media outlets = pia de desfacere media Jaded = istovit, epuizat Nifty = grozav, stranic Ads atop = reclame pe acoperiuri

Mens room urinals = closet On-demand printing = tiprituri la cerere Customize = to lok special or unique To a lesser extend = ntr-o mai mic msur Revenue = venit Fold up = if an organization folds or folds up it closes becose it does not have enough money to continue Snatched up by = a fi apucat, nhat To hung up your own shingle = to start your own business, especially as a doctor or a lawyer Cut back = a micora, a reduce Click-trough = care se acceseaz prin click-ul mouse-lui computerului Rates = cotaii Plummet = to suddenly and quickly go down in value or amount To be on the rebound = a-i reveni Come up with = a concepe, a veni cu ceva (o idee) In-house = interior Due to = datorit To plunk down = a arunca Bricks-and-mortar corporates = cldiri, companiile care i desfoar activitatea n mod tradiional Add in = a aduga Currently = n prezent, acum Exceedingly = grozav de, extrem de, foarte Hires = slujb, angajare Grunt work = the hard, uninteresting part of a piece of work (donkeywork) Mock = model, simulare Mock-up = model of a new product for testing or to show to possible buyers Internship = poziie intern Rewarding = plin de satisfacii Advertising Ads seem to be everywhere: filling magazines, on billboards lining the road, and showing up at regular intervals on television. Their object: to market and sell goods and services. According to Ad Age, a trade

magazine, companies spent close to $80 billion dollars on advertising in 1998. Careers in advertising can be lucrative. You might go into the business side of account or account planning; the creative side, where you'll create ads (many people interested in visual arts, design particularly graphic designand editorial and writing careers join ad agencies as creatives) or media planning or production. Some people interested in advertising may find they prefer public relations, where you'll have a similar goal, though your means will be quite different. An advertising agency is a marketing consultant. It helps a clienta manufacturer of consumer products such as Nike, or a serviceoriented company such as Charles Schwab & Co.with its marketing efforts, from strategy to concept to execution. Strategy involves helping a client make high-level business decisions, such as how to brand a new line of suntan lotions. The agency takes a client's strategy and turns it into a specific concept for advertisements such as a series of ads featuring extreme athletes for a soft-drink maker with a strategy of making inroads in the teen market. Execution is where an agency turns a concept into realitythe production of actual ads: the print layout, the Web design, the film shoot, or the audiotaping. Execution also involves placing the ads buying space in newspapers, on television, or in subway stations. Account-driven agencies' ads usually focus on product benefits, while creative agencies' ads focus on brand image. As a result, accountdriven agencies end up with accounts such as Energizer batteries, for which an "Energizer Bunny" campaign extolled the product's long life. Creative agencies end up with accounts where lifestyle or image is more important, such as Old Navy, which uses retro clothing styles to connect with its teen and twenty-something market. Advertisers play a role in shaping the ads that shape our culture. The work you do will be determined partly by the type of agency you're in and your role within it. You'll work in one of five departments account management, account planning, media, production, or creative.

Account management is the clients' primary contact. There you'll juggle a number of projects, and ensure that they come in on time, on budget, and on strategic target. In account planning, you'll try to understand consumer behavior and use your knowledge to devise strategies for clients. Media decides where to place ads, and in which mediumradio, television, print, or Webwhen, and for how long. Production involves physical creation of the ads, either in-house or outsourced. If you're a creative, you'll be responsible for turning strategies into concepts that can be made into finished adsfor example, showing well-dressed people driving up to a discount store to highlight a change in product selection. Creative departments also create summaries of what an ad will contain. storyboardscartoon-style

Some larger agencies contain traffic departments to handle the flow of projects between departments; new-business departments, which keep track of possible new clients and gather resources in preparation for pitches; and public relations departments, which direct publicity programs. To succeed in advertising, you need to be creative, organized, motivated, good with people, tactful, culturally aware, decisive, resilient, and able to handle deadlines and stress. You'll also have to be able to work individually and in a team environment, understand buying and selling patterns, understand and incorporate technology, and appreciate creativity. For a career in account planning, you'll also have to be capable of carrying out qualitative and quantitative research. Good media planners are detail-oriented, good at math, and have a thorough understanding of marketing. On the creative side, you've got to be able to handle pressure and deal with the frustration of having clients who may not understand or appreciate your creative vision.


Lucrative = profitabil Suntan lotion = loiune pentru bronzat Extol = a preui foarte mult Juggle = a jongla Devise = a inventa a plnui / to plan or invent a way of doing something, especially something complicated and clever Pitches = to try to make a business agreement, or to sell something by saying how good it is Sales pitch = what a person says about a product to persuade people to buy it Resilient = rezistent Public Relations "Some are born great, some achieve greatness, and some hire public relations officers," said the historian, Daniel J. Boorstin. His point? In public relations, your job is to make your client seem great without anybody knowing you were trying. Of course, those in PR do more than make their clients seem great. They speak on behalf of client organizations; help mitigate harmful publicity when, for instance, the federal government sues a client for, say, antitrust violations; and generally represent a client to the media in order to get the most favorable publicity possible. You might think of PR as a specialized area of marketing and akin to advertising, which incorporates a similar client-oriented structure. And in many sectors it's a fast-growing field. PR, which is also known as communications, is all about relating (or communicating) to the publica relationship generally mediated by the press. Unlike an advertising agency, a PR agency communicates a company's message to the press, rather than directly to the client's target market. The objective in PR is to use the press to reach the target market because, when mediated by a supposedly objective third party, the message will become more powerful. Because of their role in generating media coverage, PR professionals are sometimes thought of as disingenuous, deceitful, hucksterish flacks trying simultaneously to pull the wool over the eyes of their

clients and the public at large. That's inaccurate. The fact is, in today's business world, every company, CEO, celebrity, and association wants to show the best possible face to the public, and all of them are using public relations to do so. PR serves those fighting to legalize medical marijuana, as well as the Internet start-up seeking funding from investors. Michael Jordan consults with PR pros to figure out how he can best maintain his image; so does Intel, seeking to maintain its image. When you read something in the newspaper about the phone company, it's likely that a PR pro was behind the scenes, either pitching the story or furnishing the reporter with statistics to write it. Day to day, PR pros "pitch" story ideas to reporters, trying to elicit coverage of subjects important to their clients. They also serve as company spokespeople, plan and hold events intended to generate publicity, and develop strategies that will spark media interest. An actress's appearance at an awards ceremony wearing nothing but a potholder, for instance, could be a PR ploy to get her in the papersa well-considered one, perhaps, if the woman happens to be Madonna, but less effective if the woman is Nancy Reagan. Usually, you'll spend much of your day working with the media. You'll make phone calls, issue press releases, and plan events. Reporters will complain, perhaps, but in a world glutted with information, they rely on public-relations practitioners for information they don't have the time or budget to gather themselves. Those with more experience in PR will write speeches, strategize the best time to announce a new product, work alongside an advertising agency to position products in the mind of the public, develop and publish newsletters, and manage crises, endeavoring to put a positive spin on events for a client organization. And along with representing the client to the public, PR practitioners will represent the public to the client, helping the client understand what the public wants, needs, and is concerned about. Those who do well in PR have strong communication skills, are articulate both with the written and spoken word, are able to understand a variety of people, are confident, and quick studies

you'll need to learn quickly what your clients do in order to communicate their messages effectively. PR professionals should also be quick thinkers and persuasive. While there are some behind-the-scenes opportunities such as research that could accommodate introverted types, most jobs in the PR field require assertiveness and an outgoing personality. One insider says that if you know you're shy, PR probably isn't the best career choice for you. A public relations professional who is afraid of the public won't be able to represent his or her clients authoritatively. Mitigate = to make a situation or the effects of something less unpleasant, harmful, or serious Antitrust (violations) = which attacks monopolies and encourages competition Akin to = foarte asemntor cu Huckster(ish) = someone who uses very strong, direct selling methods, sometimes dishonest Flack = strong criticism To pull the wool over the eyes of somebody = to deceive someone by not telling the truth Elicit = to succeed in getting information or a reaction from someone, especially when it is difficult Spark = a strni interesul cuiva n ceva Potholder = a piece of thick material used for holding hot cooking pans Ploy = a clever method of getting an advantage, especially by deceiving someone Issue = a emite Glutted = ncrcat, plin de Practitioners = someone who regularly does a particular activity Endeavor = a ncerca din greu Assertive(ness) = behaving in a confident way so that people notice you Authoritative(ly) = n mod autoritar, plin de ncredere i care impune respect Outgoing = liking to met and talk to new people


Account Management Account management combines sales with customer service. Account management professionals work with clients to ensure theyre getting the most out of the products and services their employers selland to persuade clients to continue to do business (preferably more and more business) with their employers over time. In high tech as well as in more traditional manufacturing industries, this means making sure that clients are happy with your companys products. And many serviceoriented businesses such as advertising and public relations agencies provide similar support to their customers. What You'll Do Account management acts as a liaison between a company and its clients. Account managers work closely with customers to determine the customers' needs. Then they make sure their company develops products or services to meet those requirements. You can think of account managers as corporate jugglers. They create budgets and schedules, enforce deadlines, and explain clients' agendas to their staffs and management. They also identify and solicit new customers. Account managers coordinate everything and everyone. They make sure no details fall through the cracks. Clients can depend on them to protect their interests. Account managers keep a careful eye on projects in development. They let customers know how their accounts are progressing and are the first to hear about problems. When something blows upsuch as when deadlines arent met or, in the advertising industry, when a client hates what the agencys creatives have put togetherthey do their best to smooth things over and maintain a good working relationship. Account managers work in many different industries. Examples include employment agencies, consultant firms, Web-design companies, and advertising and public relations firms. Any company that serves other businesses hires account managers tonesses hires account managers to needs are being met.

In advertising, a business hires an agency to come up with an ad campaign. The account manager works with the client to determine the type and scope of the campaign. He or she then communicates those concepts to the ad agency's creative team. As the project progresses, the account manager makes sure the campaign meets the client's specifications. Who Does Well Account managers need to be detail oriented. Organization is a key part of the job. You will be expected to keep on top of every aspect of the project. Good communication skills are also necessary. Account managers interact with clients, creative staff, and management. Promises made to customers must be kept. You can't offer more than your company can deliver. You need to know exactly what services you can provide and how quickly a project can be completed. An experienced account manager understands that knowledge is power. Clients expect the account management team to understand the needs of their businesses. You will need to learn as much as you can about your clients. The more industry insight you bring to the table, the better. Read up on changing business trends and strategies. Your knowledge base will attract new accounts and keep the ones you already have. Unfortunately, all projects do not go as planned. Sometimes a client won't like the work that has been done. It's up to the account manager to fix the problem. He or she will talk to the client, find out what's wrong, and try to come up with a solution. Some clients will be harder to work with than others. You may need to hold a client's hand as you walk him or her through a project. When a deadline looms, long hours may be required. Whatever the case, an account manager seeks the best solution for his or her client and employer. Business Development

Business development (also known as biz dev) is exactly what it sounds like: It involves figuring out how to build or develop a business. You can find business development jobs in all industriesat everything from tech start-ups to huge pharmaceuticals companies. What the work entails depends on how established a company is and what its business model is. What You'll Do Business development people constantly ask: "What ten things will have the biggest positive impact on my company's business, and how can we make them happen?" Their objective is to expand the market reach or revenue of their companies in ways that make the most of their companies' resources and capabilities. Biz dev executes the company's strategy by "doing deals" with complementary businesses. Exactly what that means varies from company to company. A deal might be a co-branding initiative, a technology- or content-licensing arrangement, an e-commerce partnership, or some combination of the three. Who Does Well Business development involves varying degrees of sales and strategy. In some companies, biz dev people may focus on getting new corporate sales accounts, while in others they may lead new product development. At larger companies such as AOL Time Warner, Cisco, or Microsoft, one of biz dev's many responsibilities may be to decide which smaller companies the company should acquire next to ensure that it retains its market strength in the future. Working in business development is an excellent way to become adept at business strategy while gaining hands-on experience in negotiating deals and managing partner relationships. Business development jobs are also highly cross-functional, requiring close collaboration with various internal and partner-company teams such as sales, engineering, and marketing to ensure that a deal is consummated. With its focus on strategy, biz dev steers the direction of a company the deals forged today determine what the rest of the company will be working on tomorrow.

General Management Do you have a corporate vision? Understand how an industry operates and how to improve it? Know how to manage and motivate employees? If so, consider a career in general management. What General Management Is General managers (GMs), also known as executives, or the executive team, run a company's business. They include the chief executive officer (CEO), chief operating officer (COO), president, and others. Their knowledge about an industry and their ability to provide direction can mean the difference between an organization's success and failure. They are involved in planning and policy making at almost every level, including both the long-term strategy and its dayto-day execution. A GM decides what products to produce, which markets to go after, and the company's general philosophy. GMs are also expected to raise money, keep a company profitable, and answer to shareholders. What You'll Do For the most part, general managers control how an organization operates. They develop corporate structures and policies, direct and coordinate employee activities, find and develop alliances with suitable business partners, raise money to grow their organizations, and make systematic changes, as needed, to keep their businesses profitable. GMs are expected to see and understand the big picture. The health of a company rests firmly on their shoulders. They develop strategies that will make their organizations successful, year after year. GMs also need to be their companies' biggest advocates. They communicate the value of their organizations to the outside world. Employees, strategic partners, shareholders, and even a company's chairperson rely on the general management team to promote the company's interests at every turn. GMs give their subordinates a

reason to want to work for them. They instill a sense of pride in shareholders. General managers tell the press why people should care about their products, marketing strategy, and goals. Without their guidance a company could flounder. General managers bring a measure of order and purpose to their organizations. Small businesses and start-ups often have limited management teams. The founders, who take on the titles of CEO and president, typically lead such companies. As a company grows and departmentalizes, the general management function is divided into a family of positions. While the CEO and president remain committed to the overall mission of the organization, other positions have more specialized responsibilities. Some examples are the chief operations officer (COO), chief financial officer (CFO), chief technical officer (CTO), and general manager (GM). Underneath them are department heads who run specific areas of an organization, such as marketing or human resources. They in turn hire and oversee managers who handle the day-to-day supervision of lower-level employees. In this way, larger corporations have developed a well-defined chain of command. Lower-level employees answer to operational managers, who oversee their daily work. Many firms have several layers of frontline and middle managers. Such supervisors are responsible for managing the functions of an organization. They set project goals, make hiring decisions, settle staff disputes, and ensure that deadlines are met. Operational managers report to department heads who set policy and determine the goals of their divisions. Department heads answer to the executive officer who controls their area of specialty. For example, the heads of Web development and information technology answer to the CTO. Executive officers work together to set the goals and policies of a corporation. Their work is overseen by the general manager or president, who supervises the entire organization. Above them is the CEO, the highest-ranking manager. The CEO is held accountable for

all aspects of the business. However, the CEO still has to answer to the board of directors. In publicly held corporations, the board is ultimately responsible for the success of an organization. Members of the board have a fiduciary responsibility to look after the stockholders' (owners') interests first and foremost. If the company begins to falter, they have the right and the duty to correct the situation using any means possible, up to and including firing the CEO or any other top executive. In some cases, the board takes control of all managerial functions until a business has stabilized. Who Does Well GMs can be found in every industry and organization, from publicly held companies to non-profits and governmental agencies. Before entering management, GMs should have first proven themselves in their core industries. Usually they work for a while as operations managers, then slowly work their way up the corporate ladder. GMs can expect to be in the spotlight most of the time. Every decision they make and every policy they set is subject to scrutiny by those around them. There will be no place to hide. CEOs and presidents of large organizations are the stars of the corporate world. They are given as little privacy as their Hollywood movie-star counterparts. The trade press follows a GM's every move closely. Employees and shareholders want to know what makes GMs tick, what they do in their spare time, and how much money they made last year. As long as profits are up, they can do no wrong. But even a slight blip in the markets can change public perception. They are often the first to be let go. However, the public dismissal of a GM will be padded by a large settlement offer and the GM's equity in the companythe so-called "golden parachute." Marketing When you think about cola, what do you think? Coke? Pepsi? That's due to marketing. What comes to mind when you think of computers? Dell? Apple? IBM? That's no coincidence. Those companies have spent a lot of money so that you'll associate a generic product such as a computer with a brand name.

What You'll Do Broadly speaking, marketing is the intermediary function between product development and sales. In a nutshell, it's the marketer's job to ensure that consumers look beyond price and functionality when they're weighing consumption options. Marketers create, manage, and enhance brands. (A brand can be thought of as the way consumers perceive a particular company or its products and how a company reinforces or enhances those perceptions through its overall communicationsits logo, advertising, packaging, and so on.) Marketers want the consumer to ask: "Which brand helps me look and feel my best? Which brand can I trust?" Their goal is to make the brand they represent the obvious and uncontested answer to those questions in the consumer's mind. In marketing terms, this is called owning share of mind. Of course, a brand can't be all things to all people. A key part of a marketer's job is to understand the needs, preferences, and constraints that define the target group of consumers (who may be from the same geographic region, income level, age range, lifestyle, or interest group) or the market niche corresponding to the brand. How can a company aggressively expand its market share and keep customers satisfied? That question is central to everything a marketer does. Marketing is a function at every company in every industry. In the consumer products industry, marketing (called brand management) is the lead function. In other industries marketing may play a supporting role to another function. At a high-tech company, for instance, marketing may play a supporting role to research and development. And in advertising, market research, and public relations, a specialized marketing function is the industry. Who Does Well Marketing appeals to creative thinkers as well as numbers-minded statisticians. Engineers, for example, work with customers to help define new products (a marketing function); psychologists analyze consumer behaviour so that marketers can better target their promotions. A single purpose underlies the diversity of opportunity

and the variety of marketing roles: to create something customers will want and to communicate why they should want it. Project Management Everyone practices project management to some degree. A writer blocks out her novel, homeowners plan their housework, the host of a dinner party makes sure the meal is served on time. In business, project management is an art, a skill, and a demanding full-time job. Project managers are key employees in such industries as construction, engineering, architecture, manufacturing, and real estate development, but many opportunities for PMs exist outside these areas. In computer hardware and software for example, project managers are responsible for launching new products, developing new technologies, and managing alliance programs with strategic partners. Large corporations such as insurance companies and banks may also hire PMs to manage the implementation of new standards or practices in their many branch offices. Internet companies often look for project managers to oversee site launches or the development of new applications. Whether a project involves constructing a building, releasing a product, or launching a rocket, project managers make sure everything comes together in a timely, cost-effective mannerand take the heat if it doesn't. Their high-profile, high-risk work demands multitasking ability, analytical thinking, and excellent communication skills. What You'll Do Project managers live and breathe by their schedules. In most cases, a project is planned down to the daily or even hourly level, and a formal schedule is developed using the Critical Path Method (CPM), a precedence-based technique that determines the sequence in which things must happen. Milestones punctuate most project schedules, indicating the required completion of various steps. All project managers are familiar with at least one CPM scheduling software application, such as Microsoft Project, Primavera, Scitor

Project Scheduler, AEC FastTrack, CA-SuperProject, or Kidasa Milestones. Many scheduling applications are tailored to specific industries or project types, but all use CPM precedence methodology. Most scheduling programs also help allocate resources, another big part of a project manager's job. If you are running a software development project, for example, you have to know how many engineers will be available and how many hours they'll need to work. Likewise, if you're running a construction project involving cranes and excavators that must be leased on an hourly basis, you'll need to know when to have those machines on site to get the most work done for the least money. Balancing limited labor, materials, and other resources is a difficult task that earns a good project manager top dollar. Who Does Well Many project managers cite stress as the main downside to their jobs. PMs are responsible for their projects' successes or failures, which determine both their income and their status within a company and industry. In construction, if a project isn't brought in on time, the builder has to pay damages for each day's delay, and the project manager will lose a bonusand possibly even his or her job. For some, the black-and-white scenario is a refreshing challenge. Delivering a project "on time and under budget" can provide great emotional rewards. The job offers the opportunity to lead, and new projects keep the work fresh. If you have an analytical mind, good people skills, and the willingness to rise or fall on the demonstrated success of your work, project management may be for you.

Human Resources Industry

The role of human resources (HR) in business has increased in recent years and has evolved from an exclusively in-house function to become its own industry providing a complete range of HR services. Whether in-house or third party, HR is the field of personnel recruitment and administration of a companys relations with its employees. The range of roles and tasks in HR is broad and varied. The job requires flexibility, grace under fire, and the ability to quickly switch gears from administrator, to counselor and negotiator. HR

handles all aspects of the employer/employee relationship from staffing, training, compensation, benefits, and employee disputes. HR has come a long way since the 60s and 70s when it was labeled a touchy-feely job. At the time, clerical staff tended to be assigned human resources tasks; they became proficient in these tasks, and moved up through the ranks sans business strategy skills. Although HR is about working with employees, a successful HR managers mission is to balance the overall companys business requirements with individual employee needs. Its often the case that HR is charged with making the companys goal of profitability central to his or her business planning. In todays business environment, there is a growing need for HR professionals who have a strong grounding in business, accounting, statistics, and legal issues. Many in the field have masters degrees and certifications. Top HR officers in corporations are usually key members of the executive team, sitting right alongside his or her counterparts in research, finance, operations, sales, and marketing. Because all workplaces need at least some HR support, the need for HR staff exists in virtually all industries. HR employees can be hired directly into a company or organization, or they can work for a thirdparty outsourcing company. If you're an analytical whiz, a natural seller of ideas and concepts, or a good listener and shrewd judge of people, you may have a future in this field (which used to be called personnel, though this name has fallen out of favor). Ultimately, human resources requires that you find it more satisfying to work with people than with products; if you do, the HR industry offers an array of opportunities. Trends The Rise of the Third Party Companies are increasingly outsourcing their HR work to third-party companies. In 2001, 74 percent of all companies outsourced at least one HR function, according to a study by the Society for Human Resource Management (SHRM ) and the consulting firm William M. Mercer Inc. A new type of firm, called a professional employer

organization (PEO), has sprung up and is equipped to take on the entire scope of human resources activity. Most PEO clients are smallto medium-sized companies that sign up with a PEO in co-op fashion obtaining better deals on the purchase of benefits as a group rather than as a single small entity. By contracting with a PEO, small firms can afford to give employees a range of benefits comparable to those offered by larger companies. This helps level the playing field for small companies, who are competing with large firms in hiring top candidates. Larger companies are also outsourcing HR tasks, but they more typically go with specialty firms. The most commonly outsourced function is employee assistance, followed by pension and retirement plan management, training, outplacement services, and finally payroll. The Cultural Vanguard To a certain extent, HR takes on the responsibility of molding a companys culture by setting policies that dictate the company dress code, grievance resolution, the kinds of benefits it will offer, and even who the company will hire. In the early 1990s and prior to that, some of HRs functions were seen as extras or nice to haves. As such, HR folks were often among the first to go in a layoff. While HR employees, in general, are still viewed as less crucial to the bottom line than other revenue-generating positions, companies have begun to take some of these nice to have HR functions more seriously. They are beginning to understand that a strong, well-defined culture can be a competitive advantage to attracting the best candidates during boom times. And whether good times or bad, HR can serve as the company backbone by administering programs that bolster the companys culture and values. Finding and Keeping Human Capital Now more than ever, a companys culture, its ethical conduct, and set of values are seen to have a direct impact on how the company does financially. The demise of Enron and other companies due to unethical accounting practices have certainly brought this connection into the spotlight. Therefore, the stress on investing in top-quality human capital is even greater. Companies are trying to hire candidates who are a good match with the companys culture and goals of profitability. Some employers now believe that fostering employee

loyalty will result in a stronger brand identity that will in turn boost the companys public and financial standing. Growing Reliance on Technology HR departments are increasingly relying on software applications and Internet access for two main reasons: to streamline administrative tasks (reduce clerical tasks or paperwork) and gain access to more information key to recruiting and setting employee policy. Many companies now rely on public websites as an important recruiting tool for collecting resumes and disseminating information to potential hires about the companys management, history, and culture. Company networks and e-mail also make it simpler and faster for HR to communicate with and distribute information to employees. Automating systems that were once clunky and slow paper processes has freed up HR administrators to focus on tasks more directly tied to the companys business goals. Weathering the Storm Because of the recession, recruiters are in low demand. However, in high demand are outsourcing firms that place workers who have lost their jobs due to layoffs or closures. Two years ago, when companies were in what the staffing industry calls a war for talent, everybody was hiring recruiting firms. Now that the bubble has burst, outsourcing firms are the hotter commodity. Its always a buyers market, says one out-of-work recruiter. Before, the buyers were companies looking for workers. Now, its workers looking for jobs. Outsourcing has grown by 12 to 14 percent in 2001 and 2002 and not just because of the recession. Recalling the tight talent market of two years ago, many employers are using outsourcing as a way to stay in the good graces of some of their more qualified laid-off employees in case they cut back too deeply and have to rehire them as contractors. How It Breaks Down We divided the opportunities in HR into in-house staff and service organizations that include staffing firms, consultants, and HR information systems. Within each of these segments, you'll want to think about the specific functional areas you'd like to pursue. In-House HR Staff

HR employees deal with all of these issues: staffing (everything from sourcing to orientation to retention), employee relations, compensation and benefits, training, and information systems. In larger organizations, several HR people may work on each of these functions, further subdivided into specialty areasfor example, the comps and benefits staff may include specialists in fields such as payroll, health insurance, and 401(k) plans. In smaller organizations, the HR person may wear many hats, but almost every company in the country has somebody on board to handle HR issues. As a job seeker, one thing you'll want to evaluate is the relative importance of the HR department to the companies you're considering. If the HR office is still down in the basement, right next to the furnace, you may want to cross that company off your list. Staffing Firms These firms replace or supplement in-house HR functions. They include companies such as Manpower, Kelly, Interim, and smaller organizations that focus on temporary positions, adding a fee to the hourly rates of the candidates they place. It also includes the executive-recruitment firms (Heidrick & Struggles, Spencer Stuart, and others) that place higher-level candidates into full-time positions and charge clients a hefty percentage of the candidate's first-year salary. Jobs in these organizations usually require you to be a sharp judge of people and a good salesperson and negotiator. You also need the ability to think beyond the client's immediate needs. HR outsourcing providers may specialize in functional areas. For example, Manpower and Adecco provide temporary staffing; Korn-Ferry International and Heidrick & Struggles offer executive recruitment; ADP provides payroll processing; Right Associates offers outplacement consulting. Compensation and Benefits Consultants The work here entails everything from policy development to the selection of health care providers to communication about programs to the rank and file. Players in this field include HR consulting firms like Hewitt, Hay, and Towers Perrin, and specialists in managing benefit programs, such as Ceridian, and even some of the investment houses and insurance companies that offer benefits packages. This field requires an interest in research, analytical ability, good communication and negotiating skills, and patience.

HR Information Systems (HRIS) Players here include service bureaus, such as ADP and Paychex for payroll, and IT firms such as PeopleSoft and Resumix that offer software and systems for operating the company's payroll, employee information, human resources management, and recruitment systems. HRIS has much in common with IT jobs elsewhere in a company, requiring the ability to work with users in defining needs and with vendors in understanding the capabilities and weaknesses of their wares. Success in this division also requires technical knowledge about systems and software and an ability to plan and implement training. Job Prospects The Bureau of Labor Statistics expects 27,788 new human resources jobs to be created between 2000 and 2010, and has identified the computer and data processing services as the largest area of growth. While human resource jobs are expected to grow by only 12.7 percent (lower than the average for jobs overall), HR jobs in the computer industry are expected to grow by an impressive 66 percent. Look for changes in the HR profession to reflect overall lifestyle and population trends. For instance, as the population ages, residential care and home health care services are expected to grow. Those two industries are tied for second place in terms of expected HR employment growth. Also related to the aging population is the need for more human resources workers in hospitals and in health allied services. Another area of expected growth isnt an industry per se, but rather the area of specialized HR business services. The staffing industry is rated fourth by the BLS as an area of expected growth by the end of the decade. Both BLS statistics and studies by SHRM indicate that specialized third-party firms dealing in compensation, legal services, and benefits will also grow. Human Resources

Is the information technology department avoiding your phone calls? Do you have a cool idea to increase office productivity? You can't tell the difference between your IRA and 401(k) plan? It might be time to talk to someone in your human resources department. What You'll Do Chances are, the first thing that comes to mind when you think of an HR administrator is someone responsible for screening and interviewing potential employees. Well, this is one of those times when perception is reality. Ninety-nine percent of HR workers responding to a 2001 industry survey said they both conducted searches for new staff and ran interviews. Most of the surveys respondents were in-house HR staff, but when you add to this the more than 6,000 people working in personnel outsourcing companies, youve accounted for a healthy chunk of what the majority of HR experts do. In addition to recruiting, the range of HR duties and specializations continues to grow, but at the eye of the hurricane remains the key relationship between employer and employee. Common tasks include: recruiting and screening potential employees; providing and arranging training programs for them; managing and administering their benefits, determining their compensation, maintaining their records; dealing with labor unions that represent them; dealing with legal issues such as occupational safety, diversity, workers with disabilities, and sexual harassment. In some cases, HR duties may also include distributing employee mailings, administering workplace security programs, and even coordinating food services. HR personnel must be accessible to prospective and current employees as much as possible, which means they need to be available from 8:00 a.m. to 6:30 p.m. most daysand on weekends several times a year. Who Does Well Human resources acts as the administrator between an organizations management and its workers. This requires wearing many hats: Its an HR administrators job to make sure that employees are working in a safe environment; that disputes are settled; and that benefits are understood and functioning properly. At the same time, HR is charged

with recruiting new employees who will both fit in well and help the company achieve its goal of profitability. They also represent management when negotiating for benefits with companies administering these benefits and when implementing companywide policies that will ultimately bring down costs or boost profits. The needs of HR cover a wide range of tasks, and therefore, require someone who is not only good with people, but also organized, analytical, business-minded, and able to juggle many projects at once.

Internet & New Media Industry

Trying ardently to fulfill the promise of the Web, Internet companies start-ups as well as online extensions of clicks-and-mortar companieshave singled out some activity to reinvent by conducting it on the Internetdistributing textbooks, software, or greeting cards; disseminating medical information, fiction, or law school classes; planning parties; or swapping vacation homes. For all of these activities, and many more, the Internet makes it possible to distribute information of all kinds and conduct a transaction at the same time, anywhere in the world, immediately. In the process, companies are doing a stunningly wide variety of things onlineselling products, producing newspaper- and magazinestyle publications, providing services like travel agencies and stock brokerages, delivering search engines, recruiting employees, building brands, and developing online gaming networks, to name a few. Add to this all of the companies that underpin and service these endeavors the online ad agencies, Internet Service Providers (ISPs), and management consultanciesand you get a sense of just how broad this industry is. In the past couple of years, Internet companies have witnessed a precipitous decline in advertising revenue. As a result, many pure-play Internet companies have gone under, and some old-economy companies decided to scale back their Web operations, leaving tens of thousands of people out of work. What happened? It turns out that many of the biggest online advertising spenders happened to be the struggling Internet companies themselves. Quick money from cashrich dot coms willing to wantonly spend for market share and brand

awareness is gone. And old-economy companies facing cost-cutting pressures in a difficult economic environment became less likely to spend for online advertising. The result: a dried-up revenue stream, and hard times for Internet companies with an advertising revenue model. Even behemoths like Yahoo! and AOL Time Warner have been hit hard. In the new world order, Internet companies must demonstrate profitability or a clear plan for it, or risk near-term financial disaster. In other words, to make it on the Web these days, youd better have a strong e-commerce component, or at least a viable subscription model if youre primarily a content provider. In the case of public Internet companies, the majority have disappointed stakeholders with lower revenues and longer than projected paths to profitability. As far as the remaining private startup shops are concerned, most are very short on cash; the much-needed venture capital funding no longer flows freely. The result: Either companies fold or scale back considerably. For most pure-play Internet companies, an IPO is no longer a viable exit strategy. (As evidence, take September 2001, the first month since 1975 that not a single company went public.) Trends Layoffs and Closed Shops The harsh realities of the economic decline, budget cuts, hiring freezes, and, worst of all, layoffs, have hit the Internet industry hard. Such cost-cutting actions are nothing new to corporate veterans, but have become painful lessons to the new, younger generation of dotcom workers. Often in droves, and more often without warning, tech firms are asking employees to leave in order to trim their costs. Each month the unemployment rate seems to reach a new high. Marketing and content jobs have been slashed the most. Safest are techies and salespeople, though even they can face the ax. And if a company closes its doorsas many have in recent times (716 companies closed up shop between January 2000 and November 2001)everybody is out of a job, no matter what his or her job title. The Bright Spots

The Internet seems to work best, from a business perspective, for companies engaged in low-overhead e-commercefor instance, financial, software, and travel-services sites that dont deal in storing or shipping inventory have low costs once theyve established their technological infrastructure. For example, Expedia, a leading travel site, operates on a 70 percent profit margin. Amazon.com, on the other handwhich has to deal with procuring and shipping actual physical productsoperates at a 26 percent margin. Blog-a-Thon Back in the 1990s, Web pundits hyped the ability of the Internet to bring people together on a one-to-many basisto give Internet users a voice they didnt have previously, and thus make the world a smaller place. It might not be doing quite that, but the promise of one-to-many connections is being fulfilled these days by the weblog phenomenon. Weblogsblogs, for shortare a kind of online diary, in which the author, or blogger, writes regular postings about whatever interests him or her, often including hyperlinks to other Web pages containing information about the topic at hand. Now Web pundits are making the claim that blogs are going to change the face of journalism; again, well have to wait and see on that claim. But theres no doubt blogs are proliferatingand that even journalists and newspapers are getting in on the act. How It Breaks Down The industry is a baggy monster that resists classification. The following breakdown is not a definitive taxonomy but rather a chance for the uninitiated to make some sense of a rapidly changing landscape. Publishers Online publications make money by selling advertising or subscriptions or both. Most of the players are losing money, and widespread profitability seems unlikely in the near future. Many players in this field are online ventures of already-established media brands. Some examples include The Wall Street Journal Interactive Edition, a subscription-based version of the leading business newspaper; and ESPN.com, an extension of the sports cable channel.

There are also a number of important players whose primary presence is online. A few examples are CNet, which provides news and information on the online world, and CitySearch, which is actually a cluster of publications, each devoted to life (restaurants, movies, community-service opportunities, and so on) in a given city. And hundreds of daily newspapers put all or part of their content on websites that are still exploring the differences between reporting for print and for the Web. Vendors Vendors make money by selling goods or services. The best-known online seller of goods is Amazon.com. Mail-order companies with websitesLands' End, for examplefall into this category. Other sellers provide services: E*TRADE and Charles Schwab act as stockbrokers, Expedia acts as a travel agent, and FreeMarkets creates customized business-to-business online auctions for large buyers of industrial parts, raw materials, and commodities. Aggregators and Portals Some of the busiest sites on the Web fall into this category. Search engineswhich account for five of the ten busiest websitesare aggregators (so named because they offer a huge aggregation of links to other websites). Portals (also referred to as gateways or start pages) are sites that serve as home base for Web surfers. The home page of AOL, for example, is designed as an Internet portal. In a move that typifies the fluidity and opportunism of this industry, the leading search engines, such as Yahoo!, have positioned themselves as gateways, and vice versa. Other so-called freestanding search engines like the popular Google.com have opted for search performance over the glitz and glam of gateways. All of these sites make money from banner advertising (think billboards on your computer screen) or, increasingly, through alliances with companies that pay a lot of money to be the gateway or aggregator's "preferred provider" of travel services, greeting cards, and so on. Communities Online communities serve as centers for people who share special interests. GeoCities is one of the largest, hosting a number of

communities with interests as varied as fashion, golf, and government. Other examples of community sites include Motley Fool for small investors; BabyCenter, a site for parents; iVillage, a site for women; and PlanetOut, a site for gays and lesbians. All of these sites encourage users to sign up for free memberships by offering access to chat, newsletters, and bulletin boards; some offer members the opportunity to construct Web pages, which then reside in the community's site and serve as a draw for more members. Like many other Internet concerns, these sites used to make money from advertising and alliances, but are trying to pump up revenue streams like e-commerce and subscriptions. Consulting and Support This category encompasses all of the companies that have sprung up to support and provide services to the industry. The ISP (Internet Service Provider) world is still divided between large players like America Online and smaller local players, although many of the latter are being bought and consolidated into national companies. Most of the major phone companies are also competing as ISPs. Local and long distance carriers such as PacBell and AT&T provide the latest in DSL and high-speed cable Internet connections. This segment also includes a variety of now struggling consulting firms that help develop websites, providing services including management and strategic consulting specialized for Web companies, online advertising, e-commerce development, user-interface design, and, increasingly, all of the above. Companies in this category include DiamondCluster International, Razorfish, Organic, and Sapient. Job Prospects This industry is in the doldrums. All those jobs that were created by hot start-ups a few years back? Well, most of those start-ups have disappeared, and even those that havent have cut back on staff. The result: A tough road to hoe for job seekers. But while theres little demand for new hires in business development, marketing, research, and operations in todays tight job market, there is still a need for good programmers and engineers.


Journalism & Publishing Industry

Publishing is changing awfully fast for a well-established industry that began several thousand years ago, five hundred years ago, or in the 1880s, depending on whether you date it from the first use of papyrus and stone tablets, the standardization of movable type, or the invention of the Linotype machine. Today, the journalism and publishing industries continue to produce books, newspapers, and periodicals that entertain us, educate us, and bring us the news we need to be informed citizens. Mass-market book publishing resides in a decreasing number of large corporations, some of them parts of giant worldwide entertainment conglomerates, most of them based in New York City. Each of them publishes under many imprints, the publishing world's term for brands. Academic and scholarly publishing is performed by publishing houses connected to the great universities, and many smaller ones. There is also a huge market for technical books for virtually all occupations, from bricklayers to software engineers. Technical publishers, such as Addison-Wesley, also tend to cluster in New York City, though many are found elsewhere. Many mass-market magazines like Time, The New Yorker, Rolling Stone, and Vanity Fair are published in New York City. So are many of the special-interest magazines published by outfits like Hachette Filipacchi (Woman's Day, Elle, Car and Driver, and Metropolitan Home). However, while many of the thousands of trade magazines are also published in New York, a good number are published in the centers of their respective industries; Variety is published in Hollywood, and numerous computer magazines are published in and around Silicon Valley by companies like Miller Freeman. Daily newspaper circulation has been decreasing for about a decade, but the vestigial empires of William Randolph Hearst and Joseph Pulitzer are not giving in. Newspapers continue to be published in U.S. cities, though the number of cities served by two or more major papers can probably be counted on one hand. The major difference between newspapers and periodicals on one hand and books on the other is that the former is supported by

advertising. That means that their content and their production are both influenced by the interests of big advertisers, though editorial staffs wage a ceaseless war for independence from the dictates of advertising sales departments, with publishers playing arbiter. Book publishing is a little different. Sales does not mean bringing in advertisers; it means securing deals with distributors like Ingram, with huge chains like Barnes and Noble or Borders, and Web merchandisers like Amazon.com. Trends Pop Journalism As circulation numbers become increasingly important in today's tight market, even the most prestigious news publications are being accused of pandering to popular taste. Breaking from the legendary editorial tradition of choosing worthwhile topics in spite of general appeal, online journals and print publications alike are deferring to the numbers in setting layout, content, and tone standards. USA Today was a pioneer in the easy-to-swallow strategy: Peppered with brightly colored photos and accessible information in graph form and sold in coinboxes designed to look like television sets, the daily newspaper achieved immediate success (and disdain) as a prototype of the TV/newspaper/comic book hybrid. Weblogs and Journalism The promise of one-to-many connections is being fulfilled these days by the weblog phenomenon. Weblogsblogs, for shortare a kind of online diary, in which the author, or blogger, writes regular postings about whatever interests him or her, often including hyperlinks to other Web pages containing information about the topic at hand. Now Web pundits are making the claim that blogs are going to change the face of journalism; again, well have to wait and see on that claim. But theres no doubt blogs get the news in front of reader in a hurry, or that they are proliferatingand that even journalists and newspapers are getting in on the act. Consolidation At the same time as the Web is making it easier for unique journalistic voices to be heard, the companies at the top of the heap in the industry are getting ever-larger. In recent years, AOL swallowed Time Warner,

Tribune acquired Time Mirror, Gannett acquired Central Newspapers, and McGraw-Hill acquired Tribune Education. Often this M&A activity is accompanied by a lowering of costs (read: layoffs)so be aware that in publishing, as in most any other industry these days, there are very few jobs whose future is 100 percent secure. How It Breaks Down Newspapers Newspapers remain the biggest segment of the publishing world, accounting for nearly 40 percent of the industry's revenue. The big players here are Gannett, Knight-Ridder, Times Mirror, Dow Jones, The New York Times, and The Washington Post. Most of these also own substantial interests in broadcasting, cable, and new media. Traditional newspapers, like all traditional publications, are entering a new era: Most conventional newspapers boast online content on their own websites or those of partners. Insiders even foresee personalized news services in which customers will subscribe to writings by particular journalists. Magazines This is a multibillion-dollar industry that expands each year, with top publishers such as AOL Time Warner (Time, People, Sports Illustrated, Fortune), McGraw-Hill (Business Week) and the Washington Post (Newsweek) leading in the Fortune rankings. TV Guide still outstrips them all in sales, and television news programs' increasing influence on the magazine format of glitzier features suggests the possibility of more links between the two media (to the chagrin of serious readers). Niche publications focusing on health, nutrition, travel, golf, and such are a growing presence, toothey've been thriving for the past 20 years and are slated for even more impressive growth. Books In the past, book publishers acted as gatekeepers, offering authors the only viable means of producing books and persuading stores to sell them. But the proliferation of the Web and the publishing alternatives it offers are challenging this staid Goliath. As technology forges ahead, this segment lags behindreluctance to embrace new media is

common among traditional publishersand cynics allege that the death of print is approaching. But having recovered from similar catastrophes, such as the introduction of radio, television, and CDROM, the book publishing industry is realistically predicted to weather the storm. In spite of the current identity crisis, this segment is a multibilliondollar business of pulp titles and blockbusters that accounts for about a fifth of the publishing industry pie. The big players are New York's clashing titansBertelsmann (Random House) versus Viacom (Simon & Schuster) versus AOL Time Warner (Warner Books)whose diversified interests put them on the path towards world domination. Online Information This is an ever-expanding universe. A quick browse on the Web will produce a spectrum of publications, including encyclopedias, daily journals, interactive newspapers, and even novels. The rapid dissemination rate and global capabilities of this far-reaching medium exceed traditional methods and offer information that can be easily updated. Revenue is generated by advertisements, subscriptions, and e-commerce partnerships, but long-term profitability is yet to be determined. The biggest players are well-established publications that support an online presence, such as the Wall Street Journal Interactive Edition, and focused content-based sites like CNet. Job Prospects Publishing has been marked recently by massive mergers, consolidations, decreased circulation, and lower advertising revenues. As a result, the job market is stagnant with employment expected to grow more slowly than other occupations through the year 2010 according to the Bureau of Labor Statistics. Publishing is still one of the bright and shining career options for humanities majors and people who love to read, think, and discuss their ideas, but it will continue to be one of the more difficult professions to break into. An internship or apprenticeship is often the best idea for recent gradsyou'll gain valuable experience and make industry connections. Seasoned reporters concede that whatever one's education, on-the-job experience is where most skills are cultivated.

Once you enter the field, there are myriad possibilities due to the diverse interests of corporate employers. The diversification of the media giants has had interesting repercussions on the job market. As recently as 15 years ago, if you began life as a print reporter, you did not generally end up in television or book publishing. If you covered hard news stories, you did not moonlight in PR and other promotional copy. The mix is much more fluid now. And although a few old-school journalists decry these developments, they make your job prospects more interesting than they once would have been. Broadcasting Peter Jennings. Barbara Walters. Rush Limbaugh. Oprah Winfrey. Howard Stern. What do they all have in common? Besides being extremely rich and famous, these on-air personalities all started their broadcasting careers as unknown announcers at local radio and television stations. While such dramatic rises to superstardom attract many young hopefuls to broadcasting, there are many more professionals working behind the scenes. For every well-known newscaster or talk-show host, there's a score of people hired to create a program and keep it running. In addition to on-air announcers, broadcasting stations hire writers, program directors, and producers who manage the overall creation and delivery of station content. What Broadcasting Is From world news to local weather and the Top 40 countdown, broadcasting generally encompasses any audio or visual programming that is disseminated to a large number of radio or television receivers. Although that definition could be expanded to include Web-based media outlets, this career profile focuses on opportunities in radio and television news production and station management. What You'll Do


Broadcasting is a lot like other entertainment sectors. At the end of the day, a station's success depends on its ability to entertain its audience, or satisfy its audience's hunger for information, or both. Announcers, producers, directors, and everyone else must work together to tailor a station's programming to attract the largest possible audience, which in turn attracts advertising revenue or, in the case of nonprofit stations, public funding and support. In smaller markets, stations may also be responsible for producing ads. Who Does Well If you want to work in broadcasting, it helps to have a background in journalism, communications, or production, depending on the position you're after. But talent and skill alone may not be enough to succeed in broadcastingit takes a certain amount of business smarts and determination to become the next Walter Cronkite or Ted Turner, not to mention serendipity and star quality. In truth, the glamour jobs in broadcasting are few and far between, and the competition for entry-level jobs is fierce. Many jobs in fact are unpaid internships, and even permanent positions don't often pay very well, and require grueling hours. If it's money you're after, you might have more luck teaching in a public school. Those with more realistic goals, however, can find creative and engaging careers in broadcasting. Not everyone in the business gets the chance to interview the president, but many more are satisfied by the opportunities to speak with local political figures, produce new programs and commercials, and get intimately involved in their communities. Editorial and Writing Anyone who's corrected the spelling on a memo or questioned the insight of a newspaper reporter has edited. If you've composed a letter or an e-mail, you've written. If you want to turn that editing and writing into a career, you'll need an ongoing engagement with languageand a keen desire to communicate ideas to people effectively and efficiently.

What You'll Do Editors and writers tell stories. Business writers tell stories about companies and their management teams, organizational structures, and economic successes and failures. Feature writers tell stories about celebrities, movies, and people doing different, sometimes unusual things. Copywriters use language to convey a story about the benefits of a brand or product. Writing almost always requires research or knowledge about a particular subject. While many writers start out as generalists, in the course of reporting or writing a story, they must become experts. An investigative story in a magazine into the causes of drug abuse, for instance, might include conversations with doctors, drug abusers, sociologists, legislators, drug-policy-reform groups and experts on organized crime, as well as research into public documents about government policy and the causes of drug abuse. The reporter then analyzes and synthesizes interviews and research, and organizes it into a storyhoping, perhaps, to win a Pulitzer Prize. Editors often start out as writers, and in many cases their role involves substantial writing. However, their role also bridges the space between writer and publication. They help writers craft stories, make sure writers adhere to style guidelines and rules of grammar, and ensure that every article is suitable for a particular publication. In their role, they straddle management and production, managing writers and budgets, setting deadlines, scheduling what will run and when, and enforcing general editorial standards of quality. Writing and editing careers vary widely. The subject, length, and style of what one writes or edits are variables that depend on where one works and what one has chosen to do. Varieties of Opportunity Editorial and writing careers span industries. Advertising agencies hire copywriters to create compelling copy that will sell readers on a brand. PR agencies use writers to create press releases, write annual reports, draft speeches, and create op-eds (opinion pieces that PR firms try to "place" in newspapers to reach target groups). Computer software and hardware companies use technical writing and editors to

develop documentation and technical information on software and hardware products. Who Does Well Editors and writers need to have a strong command of language. You'll need to understand its rulesand when to break them. Writers and editors should be curious and resourceful, able to find information, synthesize it, and explain it. While some writing is highly persuasive, writers and editors should be able to look at a subject objectively. You will be required to interpret the facts you find, and the best approach to those facts is with an open mind. An ability to organize language and think critically and a desire to communicate to others are critical skills. A good sense of how to tell a story is also important, as is a mastery of the form in which your work appears. Most jobs require both writing and editing skills, though people generally start off in a role more primarily writing-based or editingbased. As a truism goes, all good editors are writers, and all good writers are editors.

Entertainment & Sports Industry

In entertainment and sports, the profits come from discretionary spending, so these industries enjoy the most success in economically stable countries where leisure dollars flow freely. Industry companies supply their audiences with large-scale sporting events, music concerts, TV situation comedies, and silver-screen masterpieces. Simply put, they're in the business of fun. Even during economically depressed periods, this industry flourishes as an escape from hard timesfor all walks of life. And standing at the pinnacle of entertainment culture are the celebrities: the movie stars and quarterbacks and rock stars and talk-show hostesses who seem to realize our dreams and thereby give us hope. This is the only industry whose product is an illusionneither a good nor a service, and yet both at the same time.

The culture in this industry is one of anti-corporate, studied casualness. There are still uniformsan ever-changing array of baseball caps and jackets in the music business, for example. But they're invariably less starchy, more expressive of individualism, than anything worn to work in the fields of finance or law. The people? Well, there's no people like show people, and the sports world has even more pep. This is a high-energy crowd. It's also a big-ego crowd, and working with its members can be both stimulating and frustrating. Bottom line, though, is that even if your job does not bring you into contact with the creative members of the industry, the glamour rubs off, lending an aura of excitement to mundane tasks that would be boring in any other industry. Poring over Nielsen ratings all day doesn't sound so bad when you describe it to your dinner companions as analyzing the relative sex appeal of Jerry Springer, Oprah Winfrey, and Dan Rather. Trends Vertical Integration A few enormous conglomerates dominate the entire entertainment industry, each controlling television, film, publishing, new media, and music businesses under one umbrella. Often, they own professional sports franchises as part of the package. Congress has encouraged this integration by easing restrictions on how many television stations one company can own and by passing the 1996 Telecommunications Act, which lifted an important ban on telecom companies developing new media content. At the same time, technological developments are leading to a convergence of digital television, digital audio systems, and the Internet, so that all home entertainment may soon be distributed through a single so-called set-top box, as simply as MP3 music files are now distributed over the Internet. If you are interested in this industry, watch for unexpected potential employers such as Microsoft and Intel, companies that are expected to play major roles in the industry's development. The War for Control of Copyrighted Entertainment Products

The fight against Napster, an online music file-swapping application, was just the beginning of the entertainment industrys efforts to make sure it doesnt lose profits due to new technologies that allow consumers to access entertainment products without paying for them. In terms of online music file-sharing, the industry has now turned its sights on technologies such as those offered by KaZaa and Audiogalaxy, hoping to prevent them from allowing the sharing of copyrighted songs. In addition to citing the legal protections due to copyrighted materials and initiating legal battles with file-sharing providers, some big entertainment companies have resorted to taking over or partnering with these companies to ensure they make money from the sharing of copyrighted files: BMG, for instance, partnered with Napster, and Vivendi took over MP3. Others are banding together to provide their own online services: AOL, EMI, and Bertelsmann, for instance, formed MusicNet. And a good chunk of new music products these days come with copyright-protection software that limits users abilities to copy files. In the broader fight to make money off all use of copyrighted entertainment products, the industry is now trying to make the case that all PCs and other digital products that run entertainment software should come loaded with software keys that will unlock software protections embedded in the industrys digital products. File-sharing advocates point to the rise of the VCR market as evidence that the industry is misguided in its efforts; Despite the movie industrys howls of protest when VCRs came on the market some 20 years ago, VCR technology ended up vastly increasing consumption of the industrys productsand pumped up profits in the process. A New Television Landscape In the old days, the major networksABC, NBC, and CBSruled the television roost. Nowadays, cable channels (everything from HBO to MTV to Comedy Central) make for a much more fragmented landscape. Adding to the confusion has been the success of upstart networks like Fox, UPN, and the WB. To enhance their moneymaking ability, the major networks have adopted an if you cant beat em, join em strategy, making all kinds of production and distribution agreements with their cable competition.

How It Breaks Down Despite the blurring lines between sports, music, movies, cable, and publishingand the media behemoths that preside over them all these various forms of entertainment are distinct domains. And though at Time Warner you could conceivably enjoy a career that includes working for the Atlanta Braves, Home Box Office, Six Flags theme parks, and the Atlantic record label, most people choose one area and stick with it. These worlds are closely knit, and whom you know and whom you oweand who owes youcounts for a great deal, particularly when you're looking for work. Film In the days of celluloid movie factories, the major studios controlled the project from the earliest script draft to the opening night at Radio City. Most films were completed in under a month and cost as little as $200,000 to produce. Today there are six major entertainment companies: News Corp, AOL Time Warner, Vivendi, Sony, Viacom, and Walt Disney. Known as the Big Six, they all have their roots in the original Hollywood studios: MGM, Warner Brothers, Paramount, and others. But the modern studios control Hollywood in a different way now: They solicit projects, provide the financing, and make the deals with thousands of smaller production companies. The indies (independents) remain only marginally profitableand are often owned by one of the Big Six. (Miramax, for example, is a Disney subsidiary.) Music Like most movies, music is often created by committee and on the whim of the record label. But the artists retain some control. At least, some do; the Billboard charts always seem to have room for packaged products like Menudo, the Monkees, and N'Sync. The 1996 Telecommunications Act lifted restrictions on how many radio stations a company can own and the ensuing domination by conglomerates resulted in more standardized (and oft-criticized) playlists nationwide. Beyond the Top 40, music is also big business in conjunction with the advertising industry: Whoever owns the rights to songs used in big national ad campaigns stands a good chance of making even more

than the record company or the artist. Sony is currently the acknowledged leader in the business. Other top music companies are Time Warner (Atlantic), EMI (Virgin, Capitol), Vivendi (PolyGram, Universal), and Bertelsmann (Arista, RCA). Television The old news in television is the emergence of cable, the decline in network viewership, and the surprising success of Fox TV, the only new network to date that has threatened the supremacy of reigning giants CBS, NBC, and ABC. The more interesting and pertinent news for job seekers is the slow but inexorable digital convergence of computer technology, the Internet, and television, and also the 1996 Telecommunications Act, which allows phone companies and power utilities, among others, to create and distribute entertainment content. These developments opened the floodgates for telecommunications and technology companies to enter the competitionPacific Telesis (NYNEX and SBC), AT&T (TCI), Intel, and Compaq have become strong players. Also building on this technology, Microsoft and other companies are melding broadband cable and electronic media to enhance Internet capabilities. Sports When world-class athletes cry, "Show me the money," team owners, managers, agents, and sponsors dance to the tune. The popularity of professional sports teams is phenomenal, and sky-high revenues are pulled in through a variety of avenues including advertising, sponsorships, team name and logo licensing, ticket sales, and worldwide broadcasts. As far as professional organizations go, the National Football League (NFL) leads the pack in profits, with the National Basketball Association (NBA), Major League Baseball (MLB), and the National Hockey League (NHL) not far behind. Teams, once owned by individuals, are increasingly owned by companies: AOL Time Warner (publisher of Sports Illustrated) owns baseball's Atlanta Braves, basketball's Atlanta Hawks, and hockey's Atlanta Thrashers; the Tribune Company owns baseball's Chicago Cubs; Walt Disney owns hockey's Mighty Ducks of Anaheim and baseball's Anaheim Angels; and News Corp., Cablevision, Comcast, The Molson Companies, and Anheuser-Busch all have teams as well.

Job Prospects Keep in mind that this could be the most competitive industry out there. Getting a job in sports or entertainment is a difficult undertaking that requires persistence, intense networking, and good luck. Unless your dad knows Ted Turner, don't count on landing even an entrylevel slot easily. Every year, hundreds upon thousands of job seekers flood New York and Los Angeles hoping to become celebrities, and the majority of them wind up waiting tables to make ends meet And, if they decide to stay in show biz, they eventually end up taking jobs in production or administration. Take heart in the fact, though, that companies can't ignore talent. If you prove that you've got the skills to thrive in a challenging and nontraditional work environment, then you're in for a thrilling ride. Careers in this industry usually start at the entry level; agents, personal managers, and studio executives usually got their start as lowly assistants. Once launched on their careers, people in the entertainment industry tend to change jobs frequently, and contacts in the industry are crucial. For those of you with a business or technical background, work is more readily available. The big corporations that dominate the industry always need people in the standard management functions such as finance, HR, IT, marketing, and communications. Technicians are needed in traditional fields such as sound engineering and photography, and in the rapidly expanding fields of digital special effects: Dozens or perhaps hundreds of companies in Southern California and the San Francisco Bay Area employ software engineers and other specialists to create digital special effects, which are at the center of films like The Matrix, Monsters Inc., Lord of the Rings, and Spider-Man, and contribute unobtrusively to scores of other films, removing unwanted telephone cables from outdoor scenes and wrinkles from stars' faces. Leading companies in this field include Pixar, PDI, Sony Pictures Imageworks, and Industrial Light and Magic. The difficulty of getting a job in the movie biz is legendarymaking a feature-length film can take years and a cast of thousands, yet you

will be competing with hundreds for even the most menial short-term contracts and per diem arrangements. When you finally land a job, your initial contributions are generally limited to contracts, spreadsheets, gophering, and creating dazzling promotional copy. But over time you often actually come to know the stars and other industry bigwigs you serve, and these relationships evolve into the everimportant industry contacts that will make or break your career. To get a job in the music industry, you'll have to follow a path almost as long and complex as that from the first stirrings of a tune in a musician's head to the final song you hear every time you turn on the radio. The important support jobs in the music industry are cover-art production, promotional video production, publishing rights, marketing and sales, and publicityand then more publicity, and then different publicity for radio, clubs, and both the mall stores and antimall stores such as Tower Records and Virgin Records. If you're interested in marketing to an online audience or the challenge of developing better online audio, these are also job areas to explore. So are MP3 players and DVDs, which are growing apace and are gradually replacing CDs and videocassettes. As the sports industry expands to include lucrative ancillary employment in marketing, promotion, sports medicine, and agency representation, your options extend well beyond one team or sport. You can earn almost as much as a good left-handed pitcher if your legal skills include licensing and contract negotiation. Manufacturing and Production Without manufacturing and production, there'd be no products to market or sell. Accountants wouldn't have anything to account for. The retail trade would collapse. Programmers would be without computers to program on. In short, there'd by very little need for any other career. In this career profile, WetFeet focuses on outlining the technical jobs in manufacturing and production, with an emphasis on high-tech industries. See our career profile on operations management for

information about operational manufacturing and production.




What It Is Manufacturing and production are relatively interchangeable terms for making a product, including all of the processes involved in making it. All products are manufactured and produced. The clothes you wear, books you read, and computers you use were manufactured. So were the textiles for the clothes, the paper for the books, and the components of the computers. People who work in manufacturing and production don't just create products; they create them as quickly as possible, as inexpensively as possible, and in the necessary quantities. Those working in manufacturing and production know that time is money: The faster and better that they and the machines around them work, the better their companies perform. It doesn't matter if you're producing silicon chips or Pokemon toys. The manufacturing challenge is to develop better production processes, secure the right material and component supplies at the least cost, reduce production time, eliminate waste, and ensure quality in the final product. What You'll Do While the introduction of industrial automation technology has reduced the number of blue collar and semiskilled positions in manufacturing, the evolution of the manufacturing process itself has opened up a wide range of opportunities for technicians, mechanical and electrical engineers, industrial designers and managers. As production lines become less labor intensive, they depend more on computers, sensors, and robotics. Programmable logic controllers (PLCs) handle what human hands used to do in the past, and step-bystep production control is left to sequencing equipment that controls the production flow. But PLCs are just the beginning: Sophisticated robots and "intelligent" computer software programs can now run entire factories, and skilled programmers and software engineers are required to develop human252

machine interfaces (HMIs), which allow robots to communicate with their human masters. That may sound like science fiction, but some of the most advanced technology on earth is now used to produce vast quantities of consumer goods and industrial products for an exploding global economy. As companies move their production centers around the globe, experienced production professionals are needed to direct overseas plant construction and equipment installation and to train local technicians and engineers. As trade barriers and tariffs fall, the sourcing of necessary components and subassemblies has become an international enterprise. Production managers, process engineers, and others involved in manufacturing travel extensively to "qualify" foreign suppliers or introduce new systems and techniques to their international subsidiaries. Who Does Well Manufacturing and production professionals today are highly skilled, mission-critical employees in an area where time is money. To succeed, you'll need technical skills, attention to detail, and the creativity to improve processes. You'll also need to be able to endure stress, as management demands new ways to produce new and old goods faster and cheaper. Sales Sales is the culminating function of commercial enterprise. Either directly or indirectly, selling goods and services keeps the economy in motion, because every item that someone owns is an item someone has bought and, therefore, someone has sold. What You'll Do The goal of today's salesperson is the same across all industries: provide customers or clients with goods and services, thereby earning money for the company that produces those items. What varies are the seller's product, technique, income, and title. For example, people who sell for their livelihood may go by the name of account executive, broker, manufacturer's representative, or merchandiser (even the term "relationship manager" is used in certain West Coast sets).

The double-talking, door-to-door charlatan intimidating housewives into purchasing a new vacuum cleaner or a World War II chess set is becoming an anachronism. Today's salespeople may sell for a small insurance company, never leaving the home office in Duluthor they may spend half of their time abroad, selling software applications to firms on the other side of the world. Who Does Well A salesperson must become an expert in his or her fieldbe it telecommunications equipment, real estate, or pharmaceuticals supplying answers and information as much as goods or services. The contemporary salesperson is a listener more than a talker and tailors the sale to fit the customer's needs. Establishing and maintaining a wide-reaching customer base is the salesperson's primary responsibility. Though cold callingthe act of initiating contact with a potential customeris still a major technique in creating such a database, its becoming less crucial in many industries. Cold calling has been subsumed under the larger umbrella of prospecting, which incorporates attending trade shows and using data marketing (relying on market research to determine likely customers) in its mix of strategies. At many companies the sales department works closely with marketing to ensure that a product is getting into the right people's hands and that the right people know about the product. Maintaining the client base is the key to acquiring new customers because most industries depend on repeat business for survival. To ensure client satisfaction, duties traditionally associated with customer service have become significant elements of the sales function. Salespeople are often expected to handle paperwork, address client problems and grievances, and manage special circumstances (such as supervising unusual delivery conditions or alternative payment plans). Wages vary greatly in the world of sales. Base pay may be literally $0.00 per year for those confident enough to take a commission-only position. But salaries fall all along the income spectrum, and earnings at the high end can be in the six-figure range. Most sales positions

offer a small base salary and pay a commission on each deal. Management positions generally command a reasonable base salary and don't earn commissions because managers usually aren't directly responsible for sales. Though pressure in commission-only positions can be tremendous, the percentage that, say, a real-estate broker makes on a sale can be quite hefty. In such situations the salesperson can potentially earn an unlimited amount of moneyand often earns more than his or her supervisor. Research Are you a trivia junkie, a science buff, a bookworm, or an armchair philosopher? Do you get a rush out of conducting scientific experiments, debating opposing viewpoints, translating ancient texts, or deconstructing postmodern political thought? If so, you might find your professional calling in research. Careers in research are diverse. Research can play a significant role if your career is in science, education, pharmaceuticals and biotechnology, marketing, or investment banking. In this career profile, we explain what research entails, regardless of the field you're in, and suggest specific career options to those who want research to play a significant role in their careers. What You'll Do All researchers share one primary objective: to uncover the meaning, significance, causes, and effects of whatever subject they're investigating. The work they do can have academic, commercial, political, or scientific impact. In investigating a particular subject, researchers have several purposes. They may be trying to advance society's understanding and appreciation of a particular subject, or develop products or practical applications based on their findings, or advocate changes in policy. During the course of their work, researchers review previously published findings, formulate hypotheses, and gather original data to

support or rebut their hypotheses. In technical or scientific fields, researchers develop experiments and conduct trials to test their hypotheses and gather new data. The results of research vary depending on its subject and purpose. An academic's research may result in a paper that proposes a new way to understand U.S. foreign policy after the Cold War. A researcher at an investment bank tries to determine the proper valuation and prospects for a company. A market researcher might investigate the market potential and public reaction to a new food product, such as a hot dog made of fruit. Scientists at high-tech companies investigate scientific principles that can be applied to developing a new type of computer chip or wireless data transfer. Who Does Well To be successful in a research career, you need to have an inquisitive mind, a hunger for knowledge, and a passion for your subject. You also need to be resourceful in finding ways to gather information and, in some cases, funding for your project. It takes an analytical mind to interpret the data you find, and communication skills to present your findings to the public, a professional group, or your boss. You have to be determined and willing to accept failure because, more often than not, you'll wind up at several dead ends before hitting the jackpot. Quality Assurance and Quality Control It used to be that quality control was the Rodney Dangerfield of the manufacturing industrygetting no respect and very little attention from management. The overriding goal was to ship as much product as possible, and if a few lemons got throughwell, the profits from sales would more than cover the reclamations. That's no longer the case. Today's quality assurance (QA) and quality control (QC) specialists can hold their heads high. In fact, QA and QC professionals have the power to stop production, stop a shipment, delay a website launch, and even demand personnel changes if quality standards slip.

What You'll Do Quality assurance professionals work with business managers and clients to develop policies, procedures, and programs to ensure the quality of manufactured products. QC specialists are responsible for employees' day-to-day adherence to quality programs. In Web companies and software firms, quality assurance specialists diagnose problems, recommend solutions, and determine if program requirements have been met. In manufacturing companies, QC workers are usually engineers who work closely with manufacturing technicians and engineers on the factory floor to ensure products and processes conform to quality standards and procedures. QC engineers often act as in-house independent inspectors, and must approve production lots based on their assessment of the products' level of quality. Within information technology, QC technicians test software before it is released to market. Their challenge is to try to crash the software, review and criticize the user interface or operability, and generally be the developing engineer's worst nightmare. In today's fast-paced marketplace, any product that's glitchy will die a quick deathand a website with bugs or dead links can kill customer enthusiasm. Quality assurance professionals often seem to have a more glamorous life than their colleagues in quality control. QA specialists often accompany salespeople and business development managers to client sites to make presentations, and QA managers and directors often have a seat at even the most top-level staff meetings. While many people progress from QC to QA, the nature of QA work, particularly in manufacturing, usually requires an MBA or an advanced engineering degree. The ISO 9000 Program Very often, the sole reason for the existence of a QA/QC department is to develop, implement, and maintain an ISO 9000 certification program. In manufacturing businesses, the ISO 9000 program inculcates a "total quality philosophy" throughout an organization, from senior managers

down through the janitorial staff. The ISO program establishes quality management policies and procedures for all aspects of manufacturing, from supply management and vendor qualification and product inspection and testing, all the way through to packaging and shipping. The initials ISO stand for the International Organization for Standardization, which was established by U.N. charter in 1947 as a means of facilitating international cooperation and trade in the wake of World War II. Based in Geneva, Switzerland, the ISO is a nongovernmental organization (NGO) that has established worldwide standards for quality management through its certification programs. The ISO 9000 program is actually a series of specific standards, namely ISO 9001, ISO 9002, ISO 9003, and ISO 9004. These are all quality-standards programs that pertain to different types of manufacturing and/or product supply. Asset Management If money makes the world go round, the Earth would grind to a screeching halt without the asset management industry. Asset management is the business of making money with moneyor at least trying to. By money, were not talking about salaries and bonuses (which can indeed be significant), but the gains you endeavor to make for investors who have forked over their cash in hopes that you, through your market savvy and keen instincts, can turn their nest egg into a fancy omelet with toast and hash browns on the side. What You'll Do Asset managers manage moneyother people's money, and gobs of it. Generally, they convert that money into assetsstocks, bonds, derivatives, and other types of investmentsand try to make that money make more money as fast as possible. Mutual funds, for instance, hire asset managers; so do corporations with lots of money sitting around, banks, and high net-worth individuals. Asset managers have one simple goal: to invest other people's money wisely and profitably. Asset managers use a combination of investment theory, quantitative tools, market experience, research, and

plain dumb luck to pick investments for their portfolios, ranging from high-risk stocks to commercial real estate to cash accounts. As soon as they've picked their basket of investments, they've stuck their necks out on the block. And the ax will fall if the portfolio doesn't beat its benchmarka peer group (competitor funds with the same investment objective), or a market index (such as the S&P 500). Who Does Well As an asset manager, you can't just bet your hunches. The profession requires excellent quantitative and analytical skillsif you hated statistics, you may want to look elsewhere. But asset management isn't just a matter of adding up the numbers. It requires the organizational skillsand nerveto make split-second decisions with millions of dollars riding on the line. And though the profession has seen tremendous growth in the last decade, it's still tough to break into, especially for those who only have an undergraduate degree. Sometimes MBAs work as fund managers right out of school, though more often they start as analysts in order to prove they have the right combination of caution and chutzpah to make a great asset manager. Competition for jobs is fierce at all levels, but if you have strong quantitative and analytical skills, good nerves, and can consistently beat the market, then there's probably a place for you. Networking and a single-minded pursuit of your goal are big helps, too. Recommended Reading The Mutual Fund Business, by Robert C. Pozen and Sandra D. Crane, MIT Press (1998) is the first textbook devoted to the mutual fund industry. It includes articles by various industry experts as well as case studies and other exercises for the student. Coauthored by Fidelity CEO Robert C. Pozen, the book includes an introduction to funds, a history of funds and the laws that regulate them, a look into how fund managers make and execute investment decisions, an explanation of the marketing and back-office servicing of funds, and a series of specialized topics, including fund globalization, technology issues, and institutional investing. It makes an excellent introduction to the industry as a whole.

Mutual Funds & Brokerage Industry

When a large amount of money is needed for any enterprise, from building a factory to funding a corporation to drilling wells in a new oil field, that money is raised from investorsusually a large number of them. Commonly, the enterprise raises that money by either selling ownership shares in itself or simply borrowing it. When ownership is sold, the investor gets stock shares. When money is borrowed, the investor gets bonds. Stocks and bonds are both securities. Investors buy and sell individual securities through brokers, also called securities dealers. Additionally, mutual fund companiesand other so-called asset management firmsform funds, which consist of a variety of securities. The asset management company buys and sells the securities in a fund, seeking to maximize its value, and it sells shares in these funds to investors directly and through securities brokers. The mutual fund company charges a fee for picking the securities in a fund. In turn, the shareholder is shielded from the risk of investing in individual securities. But why lump together two previously distinct areas of the financial services industrysecurities brokerage and asset management? Principally because the way your parents invested is not how most people do it these days. More people invest in securities today than ever before, and they have more choices. Not only are there more investments to choose from, including stocks, bonds, real-estate trusts, limited partnerships, and an ever-growing diversity of mutual funds; there are also more ways to invest: full-service brokerages, discount brokerages, and electronic trading for most of us; exclusive opportunities such as hedge funds and venture capital funds for socalled high net-worth individuals, such as multimillionaires, and institutional investors, such as pension funds, insurance companies, and university endowments. There is an unimaginably large amount of money chasing investments these days, which is part of the reason that the stock market rose so

steeply during the 1990s. Brokerages and mutual funds are the two primary means by which all these investments are made. Trends The Financial Supermarket Brokerage firms (such as Merrill Lynch, Citigroup/Salomon Smith Barney, and discounters Charles Schwab and E-Trade) and mutual funds (like Fidelity, Vanguard, and Dreyfus) have invaded each other's turf in an ever-escalating financial-services war. Fidelity was the first fund to offer a large discount-brokerage operation. Virtually every national and regional brokerage firm now offers its own family of mutual funds, in addition to traditional offerings of funds run by other firms like Fidelity, Eaton Vance, Nuveen, Putnam, and MFS. But all that was merely prelude. In late 1999, Congress repealed the 1933 Glass-Steagall Act, opening the door for banks, securities brokers, and insurance companies to engage in each other's formerly exclusive businesses, without restrictions. More consolidation of financial companies and of services within individual companies has followed. The aisles of financial supermarkets of the future will be lined with not just mutual funds, but every other kind of brokered investmenteven credit transactions. In one account you might combine mutual funds; individual stocks, bonds, and options; credit products such as credit cards, credit lines, and home mortgages; and even a money market checking account. Fearful Investors The struggling economy, an increasing number of examples of corporate financial shenanigans, and a plummeting stock market have combined to give investors cold feetquite a change from the late 1990s, when everyone from the guy behind the counter at the corner deli to your neighborhood pedicurist was talking about corporate earnings and upcoming stock splits and looking forward to tearing open the envelope containing their next brokerage-account statement. Nowadays, individual investors are staying away from the market. Which means fewer trades and fewer commission dollars for brokers, and less money going into mutual funds, and thus lower commission revenues for them as well. Unless the market turns around, the

corporate-accounting scandals dry up and blow away, or the Bush administration starts doing a better job of reassuring investors about U.S. business prospects, it appears the new paradigm of softer investment-services earnings will be around for a while. Which is not good news for job seekers. How It Breaks Down Though we divide the industry up into brokerages and mutual funds, within the two segments there are significant differences among the players. You'll want to make sure you not only know which segment you're interested in, but also how the particular company with which you're interviewing is distinguished from the competition. Brokerage A broker acts as the intermediary between the buyer and seller in a securities transaction. The buyer and seller, not the brokerage firm, assume the risk. (If the firm acts as the principal or dealer, it deals from its own account and assumes some of the risk itself.) Brokers charge their clients a commission. A full-service firm such as Merrill Lynch charges commissions up to several hundreds of dollars for transactions but offers extras such as tailored research, strategy and planning, and asset-management accountschecking, credit (including lending on margin), and brokerage, all in one convenient package. A discount broker, such as TD Waterhouse, generally just executes trade orders and issues a confirmationfew or no frills. Frills or no frills, to be authorized to trade on the various exchanges you need to be a registered representative and licensed by the NASD (National Association of Securities Dealers). Mutual Funds Whereas brokers act on investors' orders, mutual-fund managers raise cash from shareholders and then invest it in stocks, bonds, moneymarket securities, currencies, options, gold, or whatever else seems likely to make money. Mutual funds often have a specific investment focusbe it income, long-term growth, small cap, large cap, or foreign companies. And managers are restricted in what kinds of investments they can make. Compared to individual portfolios, funds

hope to persuade investors they offer several advantages: professional money management; liquidity; and more diversification than most individuals can create or afford in a personal portfolio, particularly now that switching between funds is allowed. All investors share equally in the gains and losses of a fund, and probably the most important factor in choosing onewhether to work for or invest inis your tolerance for risk. Bull markets tend to make many funds look good, but a downward turn or a jump in interest rates can have a significant negative impact that may take longer to correct for a fund than in the nimble independent investor's portfolio. Job Prospects With the tremendous proliferation of 401(k), IRA, and other types of retirement plans during the 1990s, more people than ever before can now be classified as investors, either directly or indirectly. The choices for the small-time investor have never been greater, and they include stocks, bonds, mutual funds, real estate trusts, individually managed accounts, and various alternative investments. Theres also a range of venue options available should one have an itch to invest, including traditional full-service firms, discount brokerages, and do-ityourself online trading. This all boils down to a wide range of career options in a dynamic and growing industry. The Bureau of Labor Statistics predicts that this increase in investments by businesses and individuals will result in faster than average employment growth through 2010. The greatest challenge to establishing a career in retail brokerage is getting a job. The next big challenge is keeping it. Just because you graduated at the top of your class at Harvard Business School doesnt mean the brokerage houses are waiting for you with open arms. Due to huge industry turnover and a hyper-competitive market, hiring plans have changed dramatically in recent years. But those who have been able to tough it out for five years or more report that it can be quite rewarding both personally and financially. In addition to brain analysts and savvy fund managers, most mutual funds also need retail sales personnel, marketers, and a slew of operational folks. There was $5.5 trillion in mutual funds in 1999, and

while that number has diminished somewhat over the past few years as portfolio values have declined and investors have pulled out, theres still a pile of cash invested in funds. Whether you choose a brokerage firm or mutual fund, career growth and income can be excellent after your first three to five years. But those first few years of building a client base and learning the markets are difficult. There's little patience in this industry for either mediocre or incompetent performance resulting in slow or zero growth in client assets (and correspondingly in firm income from those assets). Also, hiring numbers are way down due to the current bear market, but expect the situation to change as the market regains ground. Corporate Finance If you work in private enterprise, your company measures its success at the end of the year by comparing how much money it made to how much it spent. If it has made more than it has spent, it was a good year. If it has made less than it has spent, it was a bad yearor the company is in an investment phase. (In other words, like Amazon.com, it spent more than it made because the company and its investors believed it would realize a profit in the near future.) People who work in corporate finance and accounting are responsible for managing the moneyforecasting where it will come from, knowing where it is, and helping managers decide how to spend it in ways that will ensure the greatest return. This career profile focuses on opportunities in corporate finance and accounting in private industry. To learn about other areas in financial services, read our industry profiles for investment banking, mutual funds and brokerage firms, commercial banking, insurance, and accounting. These profiles detail a variety of specialized financial functions beyond those in private enterprise. Every company has a corporate-finance function. The responsibilities that fall under finance and accounting range from basic activities such as bill paying to very sophisticated ones such as forecasting the value of a potential acquisition. The stakes can amount to hundreds of

millionssometimes billionsof dollars and thousands of jobs. Careful assessment of the financial implications of particular strategic decisions can be critical to a company's success or failure. Of course, a company's size, complexity, economic sector, and stage of development (start-up or established business) influence what tasks the corporate finance team undertakes every day. All companies need to balance their books. Some large technology companies, for example, hire financial experts to valuate potential acquisitions. Others (such as insurance companies) have hundreds of millions of dollars to invest and need financial wizards to manage it. What You'll Do Corporate finance includes two key functions: accounting and finance. Accounting concerns itself with day-to-day operations. Accountants balance the books, track expenses and revenue, execute payroll, and pay the bills. They also compile all the financial data needed to issue a company's financial statements in accordance with government regulations. Finance pros analyze revenue and expenses to ensure effective use of capital. They also advise businesses about project costs, make capital investments, and structure deals to help companies grow. In spite of their different roles, finance and accounting are joined at the hip: The higher levels of accounting (budgeting and analysis) blend in with financial functions (analysis and projections). Thus, finance and accounting are often treated as one, with different divisions undertaking particular tasks such as cash management or taxes.

Retail Industry
Consumer money drives the economy, and retail is where consumers spend that money. Boutiques and department stores, mail-order companies and discount outletsthese are the establishments where consumers spend their hard-earned dollars. When goods are put in the hands, or shopping bags, of consumers, retailers realize revenues

and so do the wholesalers, distributors, and manufacturers that make up the rest of the consumer-goods distribution chain. In addition, retail transactions serve as the means for collecting sales taxes, which support public services of all kinds. Retail goods are traditionally divided into durable goods, like furniture, cars, and large appliances, which are expected to last at least three years, and non-durable goods, which include food, clothing, and other categories far too numerous to mention but which eventually form the bulk of the stuff you see on makeshift tables at garage sales. Most of the retail industry's employees are salespeople and clerks, but the industry also has opportunities for people interested in determining what goods will be sold, getting these goods to the right place at the right time, and managing the operations, finances, and administration of retail companies. Retail executive-training programs are crammed with energetic 20-somethings, all hoping to perform those functions as sales and merchandise managers, buyers, and marketers at major retail organizations, such as Ann Taylor, Macys, J.C. Penney, The Limited, and Saks. Trends Mom and Pop Disappearand Traditional Stores Are in Trouble The retail landscape is changing as new store categories start to dominate the marketplace. Mass merchandisers (Wal-Mart, Target), discount clubs (Costco), so-called category killers (Home Depot, Barnes & Noble, Staples), and specialty retailers (J. Crew, Coach) have all developed successful retail models. At the same time, both smaller mom-and-pop stores and traditional department stores, like Sears, Macy's (owned by Federated Department Stores), and Mervyn's (owned by Dayton Hudson), have found the competition intense. Indeed, in 2001, while Wal-Mart and Target saw revenue growth (by 15 and 8 percent, respectively), Federated experienced a 15 percent decline in revenue. But even in the mass-merchandising segment, the competition is fierce, as is evidenced by Kmarts bankruptcy announcement in 2002. E-commerce

Though websites carry only a miniscule percentage of retail transactions, the number is growing. Many, though not all, major retail organizations have online stores. Companies like Amazon.com, which helped pioneer retail e-commerce, are being followed by bricks-andmortar and catalog retailers like J. Crew, which are expanding retail ecommerce into new markets. However, retail e-commerce raises serious questions. It has the potential to put so-called bricks-and-mortarthat is, physicalstores out of business on a large scale and to drastically reduce local government revenues, since many retail e-commerce transactions are not subject to sales tax. So far, there has not been a shakeout, but the e-tail phenomenon is just beginning its evolution, and its full impact is yet to be felt. Global Brands and Name Brands The big guys are all converging in the middle of the market. On the one hand, discount and mass retailers are finding it advantageous to introduce name-brand exclusive merchandise lines, which enhance their brands and bring in increased revenue; for example, consider the Michael Graves line at Target. On the other hand, more expensive department store chains are trying to lower costs and increase unit sales by developing store brands, which essentially offer consumers the same quality as brand names without the higher price tag (and with higher margins for the retailer). How It Breaks Down Retailing and wholesaling encompass a lot of consumer goods; we'll focus here on three areas: general merchandise, apparel, and furniture. These categories include computers, clothes, sports equipment, beauty products, jewelry, and home furnishings, but leave out food, autos, and building materials. Here's a look at the breakdown: Department Stores A few years ago, names like Sears, J.C. Penney's, Macy's, and Montgomery Ward's dominated malls and downtowns all over America. Over the last decade or so, however, department stores have suffered. In part this is a result of changing shopping patterns and increased competition from discount stores. It has also come from

financial burdens incurred by companies that acquired competitors and grew too fast. It's unlikely that these players will disappear from the market. However, expect more bumps as the strong get stronger and the weak get absorbed. Discount Stores These are giants such as Wal-Mart, the largest retailer in the world, and warehouses such as Costco. Originally set up to serve members only, the deep discounters now face competition from category killers, non-membership warehouses, and mass merchandisers like Ross. Even more alarming is the growing realization among their harried shoppers that traipsing through endless aisles of merchandise just to buy a roll of tape and some underwear isn't worth the savings. Category Killers These are the giant retailers that dominate one area of merchandise (Office Depot, Tower Records, and The Sports Authority). They are able to buy bathroom tiles, file cabinets, electronic goods, or pet food in such huge volume that they can then sell them at prices even fairly large competitors can't match. The outlook for this category is better than for many of the more general discounters, but the same employment caveats apply. For most job seekers, these companies offer earn-and-learn experiences with vendors and distributors before you move onward and upward. Specialty Stores These include Crate & Barrel, the Body Shop, and Victoria's Secret. These stores concentrate on one type of merchandise and offer it in some manner that makes it special. Some are very high-end (Louis Vuitton); others cater to the price-conscious masses (Old Navy). Many are so successful that department stores have started to emulate their buying, marketing, and merchandise display strategies. Industry experts predict growth in this segment, particularly for home furnishings and home improvement, and it seems to attract many of the best and brightest in retail. Promotion and responsibility come quickly to those willing to work hard, and in many of these stores the hand of bureaucracy is not heavy. E-tailers

While most retailers have online storefronts, strictly online purveyors with no bricks-and-mortar counterparts are hoping to snare a percentage of the retail profit. And major players, such as Amazon.com, have generated enough business to cause top bricksand-mortar competitors to follow up with their own Internet sites. Traditional retailers like Wal-Mart and Starbucks, hugely successful in their own right, have also set up online stores so as not to miss out on the revenue opportunities that the Internet offers. Job Prospects Retailers are feeling the economic pinch of the recession as well as a changing retail landscape. Consolidation of corporations and automation of functions means many jobs become obsolete, resulting in layoffs. But this also means that there will be opportunities for businesspeople able to navigate through the mess of reconstruction as well as for people who can get products to consumers by means other than traditional retail stores. According to the Bureau of Labor Statistics, jobs in department, apparel, and accessory stores is expected to increase by only 4 percent over the 2000 to 2010 period, slower than the 15 percent increase projected for all industries combined. This is due mainly to the increasing popularity of "mega-retailers" and discount stores like WalMart and Costco that stress self-service and thus are less laborintensive. Employment in department stores, on the other hand, is expected to increase, but still more slowly than the average for all industries. The growth of wholesale trade jobs will be curbed by the increase of e-commerce sales, industry consolidation, and advances in technology that allow for more efficient means of tracking goods and inventory. Among other areas, the following should grow in demand in coming years: distribution specialists and merchandise planners; buyers with product development and private-label experience; anyone who understands data-interpretation technology and digital systems such as Quick Response, Electronic Data Interchange, and point-of-sale (POS) terminals; and all you managers with either e-commerce or overseas marketing expertise.

Insurance Industry
If you want to impress your friends and family with a job full of glamour, sizzle, and prestige, insurance is the wrong game for you. But while no industry offers genuine job security these days, insurance comes closer than most. About 1,800 U.S. insurance companies offer personal and commercial product lines including basic health/life and property/casualty protection as well as a long list of other coverages ranging from automobiles to mortgages to insurance for insurance companies (known as reinsurance). These products protect customers from losses resulting from illegal actions, medical needs, theft, earthquakes and hurricanes, and a variety of other causes. Insurance companies calculate the likely cost of a given loss, divide it by the number of people who want protection against it, add something for profit, and reach an amount that they charge each customer for a policy guaranteeing compensation should the loss occur. But that's only the beginning. Insurance companies also mount huge marketing campaigns to convince customers that they need protection in general and the company's products in particular. They also function as financiers, deriving a large part of their revenues from investments. Insurance companies must maintain enormous reserves of capital to back up potential claims obligations. They invest those reserves in stocks, bonds, and real estate, within the U.S. and overseas, providing an enormous amount of liquidity to financial markets and giving the industry an influence on the national economy far out of proportion to its size. That can be a risk, as when industrywide over-investment in Latin America during the 1970s led to huge losses for the entire industry and repercussions far beyond the insurance industry itself. Despite the fact that it is regularly accused of deceptive sales practices and even consumer fraud, Americas security blanket also protects the economy against losses of all kinds. U.S. companies are currently playing catch-up to worldwide players in the global marketplace and absorbing mammoth deregulation legislation.

Trends Terrorism and Insurance In the wake of September 11, 2001, insurance companies were faced with tremendous claims; estimates range from $30 to $70 billion. As a result, reinsurers stopped writing terrorism policies in the U.S. Primary insurers, as a result, started stripping terrorism coverage out of policy renewals, in states where that was legal, and stopped offering and/or renewing policies that included terrorism insurance in states where it was not. In response, the Bush administration stepped into the picture with the Terrorism Risk Insurance Act of 2002, which acts as a kind of safety net for writers of commercial insurance. The Act requires insurers to pay terrorism-related claims up to a ceiling; beyond that ceiling, the government will pay the bulk of claims, thus limiting the insurance industrys risk exposure. Deregulation Deregulation is redefining who can offer insurance. Repeal, in late 1999, of the 1933 Glass-Steagall Act (which formerly separated all arenas of financial services) promised a major facelift for the insurance industry. Insurers, banks, and securities brokers are now free to merge and cross-sell each others' products. This clears the way for financial service superstores that will offer insurance as well as investment and savings options. Commercial banks have been making modest inroads on traditional insurance markets for several years, but repeal of Glass-Steagall could lead to much greater and quicker changes in the role of traditional insurance agents. Shift in Demand The shape of the life insurance sector has morphed over the past generation. Nowadays, demand goes beyond straightforward life insurance. Rather, the market is looking to the insurance industry to provide investment products, such as annuities, which provide the consumer with regular payments for life or for a fixed period. What this means in macro terms is that the life insurance sector has had to shift its primary capability from analyzing and predicting mortality rates to a more investment-management capability. The recent collapse of the stock market has made annuities relatively even more attractive. And in a creative move insurers are building a market for

products that protect the investor against a variety of risks simultaneously while allowing them to draw down a death benefit while still alive. Technology The Internet promises to cut costs in a competitive market, provide a new way for consumers to compare quotes and choose policies, and make for a more convenient servicethe ideal customer-friendly combination. This transition is having an impact on the job market, with companies increasingly seeking tech-savvy candidates who can support the move to e-commerce. Consolidation Continuing the trend that essentially began 30 years ago, insurance companies are responding to global competition and the need for cost efficiency by forming strategic alliances, merging into conglomerates, and buying smaller companies. This trend is doing away with the independent agencies that used to define the industry. Consolidation also means that companies will offer a full range of insurance products instead of specializing in certain realms such as property or casualty. How It Breaks Down Life and Health Insurance The policies in this sector provide benefits packages that policyholders pay a premium to enjoy. Health insurance has gone through some major overhauls, including the replacement of fixed-fee Blue Cross/Blue Shield-inspired policies with managed care networks. The life insurance business is experiencing slow growth, and life insurance companies are likely to be merging with banks and securities firms. Hartford, Prudential, and Metropolitan Life are U.S. leaders in the life insurance game, while Aetna and CIGNA rule the HMO realm. Property and Casualty (P/C) Insurance The focus in this sector is on protection for owners of cars, homes, and businesses from loss, damage, and injury. Competition is fierce in this sector, and profits are falling. Only the strong will survive as

weaker companies continue to tank and even more secure ones sell off this line. Insurance Brokers Brokers act as go-betweens, uniting buyers and sellers of insurance and creating the contracts that bind them. Furthermore, they play the role of risk consultants for large clients, researching industry information to advise companies how to manage risk exposure. Major players include Aon and Marsh & McLennan Companies. Reinsurance In the most simple terms, reinsurance is the insurance of insurance companies. Insurance companies pay reinsurers to assume some or all of the risk the insurers have taken on in writing policies for their clients. Insurers use reinsurance to protect against the risk of unusual losses. Reinsurers write reinsurance because their business allows them to pool enormous numbers of individual insurance risks, making their risks even more predictable than the risks faced by primary insurers.

Job Prospects Due to the replacement of agents by Internet sales, job opportunities in this industry are increasing at a below-average pace. But the entrance of insurance companies into the grand arena of financial services marks a new era: Agents will be called upon to provide a full range of servicesincluding insurance, investment banking, and savingsin multidisciplinary teams, on a global scale. Companies are looking to hire college grads with proven ability in sales and information analysis. Growing occupations include systems analysts, adjusters, and examiners: These positions require fewer hands-on skills and more interaction with information, especially the ability to gather and manipulate information strategically. Furthermore, the insurance industry will become more hungry for techies as computers play an ever more integral part in business processes.

Want to work abroad? There are opportunities in insurance. Europe and Canada are still a focus for claims processing and investment and actuarial services, but Asian marketsparticularly Japan, Taiwan, and South Koreaare even more attractive places to land new business. If international financial markets are something you understand, and you speak a foreign language, you're someone insurance companies will want to talk to. Insurance What you don't know about insurance can hurt youat least, it can hurt your career. Insurance is full of jobs that pay well, usually without the long hours required in some other financial services sectors. Yet many job seekers who want to use their analytical skills or get into financial services never seriously consider these attractive career options. In general terms, insurance means protection. Insurance company clients pay fees (premiums) with the understanding that if specific misfortunes befall themif a fire burns down their house, for instance, or they have an accident and need hospitalizationthey can make a claim and the insurance company will pay them an amount agreed upon in the insurance policy. To learn more about the insurance industry, check out WetFeet.com's industry profile. What You'll Do Careers in insurance are varied. Actuaries, for instance, assess the relative likelihood of various types of accidents by performing a statistical analysis of anything they deem relevant to the subject. They use the resulting information to determine policy prices, as well as to whom they should sell which policy. Agents fill a sales function, and actually sell the policies. Underwriters determine how much overall risk a buyer will add to the company's business and figure out the premium at which to insure a buyer. Money managers invest the money the insurance company takes in through premiums. Claims adjusters decide what, if anything, the

company will pay on claims. Risk managers determine and help implement policies and processes to help clients avoid making claims. Insurance companies also hire folks for marketing, business development, IT and corporate finance positions. Insurance companies tend to be large in terms of both employees and assets, because they need to take in a lot of premiums from a variety of customers in order to diversify and lower their risk of being put out of business by a small number of large claims. Insurance companies also manage their risk by paying reinsuance companies to take on some of that risk. Reinsurers essentially insure insurance companies against unexpectedly large claims. By writing policies with a variety of insurance companies, reinsurers effectively take on many times the number of individual risks as primary insurance companies do. This lessens the likelihood that a small number of large claims will result in an unforeseen risk to their bottom line. Many jobs in insurance require certification or licensing. Since insurance regulations differ from state to state, certification and licensing requirements vary accordingly. Who Does Well If you like sales, have a strong quantitative bent, or like to investigate mysteries, this is a very good place to consider looking for a job. It's also a great field to consider if you're looking for top-notch benefits, reasonable hours, and a sense of belonging to a large organization. There's also a place in the industry for entrepreneurs who want to run an insurance agency or work in other sales positions.

Accounting Industry
Bean counters. Ebenezer Scrooge. Mention accounting, and until recently these would be the images people typically conjured. Who knew that the accounting industry could be the source of so much

intrigue, that the public would open the newspaper each morning to eagerly read about the inner workings of accounting firms? Of course, were referring to the scandals that have rocked the accounting world and contributed to the greatest undermining of trust in corporations and the markets in recent memory. Because of the misdeeds of Arthur Andersen accountants working on Enrons books, Andersen, once considered the gold standard of the accounting industry, is now for all practical purposes out of business. Before Andersens collapse, the top tier of the public accounting industry was known as the Big Five; now, its the Big Four (Deloitte Touche Tohmatsu, Ernst & Young, KPMG, and PricewaterhouseCoopers). But Andersen isnt the only firm implicated in accounting scandals. Ernst & Young, KPMG, and PricewaterhouseCoopers (PwC) have all faced scrutiny in recent times. In 2002, KPMG was censured by the SEC for auditing a money-market fund it was invested in; in 2001, PwC paid the SEC $5 million to settle allegations of auditindependence violations of its own, the largest fine ever for such violations; and Ernst & Young is being investigated by the SEC for alleged violations of audit independence for teaming up with an audit client to sell software. Clearly, theres a problem with how the accounting industry has operated of late. Critics of the industry think they know what that problem is. In the 1990s, they say, accounting firms became overly reliant on revenue generated by their consulting arms. Indeed, in 2000, KPMG, General Electrics auditor, was paid $23.9 million to audit GEs booksa fraction of the $79.7 million GE paid KPMG for IT and other consulting work in that same year. How, critics ask, can auditors maintain their objectivity if their firms are so beholden to clients for consulting revenue? Because IT consulting has recently become less lucrative (since companies cutting costs often cut back on tech consulting purchases), accounting firms have already been moving away from their reliance on consulting revenue; indeed, Ernst & Young, KPMG, and PwC have all sold off their IT consulting arms. But due to the crisis in accounting and the markets, the clamor to split accounting and consulting is louder than ever. A number of states are going so far as to consider legislation barring accounting firms from doing consulting work for audit clients.

As you step into the wonderful world of accounting, you have three obvious career options: 1) work for a Big Four public accounting firm; 2) work for a smaller national or regional public accounting firm; or 3) work in the accounting department of a private or government organization. If you go the public accounting route (options 1 and 2), you'll typically start by studying for and taking the CPA exam and then working for several years on a variety of tax or audit assignments. At that point, assuming you want to remain in accounting, you'll either leave to join a client or stay and try for the partner track. If you start in the private sector (option 3), you may or may not be able to get your CPA (some states require experience working for a public accounting firm to do this), but you will learn about one business in far greater depth than your public accounting pals will in their short-term auditing assignments.

All three options can eventually lead to lucrative and interesting responsibilities in senior management. And all three will also serve as excellent preparation for a variety of business careers should you want to leave the world of debits and credits behind. Trends Ethics In terms of how would-be accountants are being affected by the accounting scandals, the accounting industry is refocusing on ethics. A number of schools have beefed up ethics-related aspects of their accounting programs. The Big Four, the American Accounting Association, the American Institute of Certified Public Accountants (AICPA), and the Institute of Management Accountants have all announced plans to join with universities to develop changes in accounting curricula. And the AICPA is considering changing the CPA exam to better gauge test-takers ability to think independently as accountants. So if you interview for an accounting job, expect to be asked to shed light on your high ethical standards. (Of course, there

are those who are cynical about this new focus on ethics. One insider says that the accounting industry put a similar focus on ethics following the Savings & Loan crisis, only to have ethics become a secondary consideration during the 1990s.) Cutting-Edge Technology As recently as 1990, you'd go into an audit with nothing but a legal pad and a couple of sharp pencils, according to one senior accounting recruiter. Now, auditors arrive with far more serious electronic artillery in tow, in some cases boasting expertise in various specialized software applications that automate accounting tasks, from spreadsheets to ledger packages. To do well in this field, you'll still need to have your journal entries down pat, but increasingly you'll need to be able to use computers. Big Four firms are renowned for their technology. These firms have been among the most savvy and aggressive users of intranets, extranets, and e-commerce technologies. One insider says, I take a lot of it for granted, but we really have an unreal amount of information at our fingertips. The intranet, external Web, the research capabilitiesits almost information overload at times. Globalization Like so many other facets of economic life, accounting is increasingly immune to international borders. As corporations become multinational, so do their accounting firms. While each country still has its own canon of standard accounting practices, there is a gathering movement toward international accounting rules. Numerous issues have been raised by globalization, but few if any have been resolved. One thing is sure, however; international accounting bodies, such as the International Federation of Accountants (IFAC), the International Accounting Standards Committee (IASC), and perhaps the Institute of Social and Ethical Accountability (ISEA), will have more influence than in the past. How It Breaks Down The obvious breakdown in accounting is the one we made above: Big Four, smaller public-accounting firms, and private and government accounting. In public accounting, most people will go into either audit

or tax. In private accounting there's a wider range of jobs, including in-house accounting. The Big Four This group used to be the Big Five, but with the demise of Andersen in the wake of the Enron scandal, its now the Big Four. These are the major public accounting firms: Deloitte Touche Tohmatsu, Ernst & Young, KPMG, and PricewaterhouseCoopers. They are mammoth in size; each has annual revenues in the tens of billions of dollars, and the smallest among them in 2001, E&Y, had 88,000 employees. These are the most prestigious employers for accounting grads. Why? Big Four clients are Fortune 1000 companies, which means that employees are exposed to complex accounting issues. And a job with a Big Four firm is a great career move for someone entering the accounting profession. Either youll move up the ladder in your Big Four firm (to partner, hopefully), or, if you decide to go to work for another public accounting firm, an in-house accounting position in industry, or a government accounting positionor decide to hang out your own shingleyour Big Four experience will shine on your resume. Big Four firms central focus is audit services: The verification of the accuracy of clients books. They also include non-audit lines of business, including actuarial work (risk analysis and management), tax consulting, human resources management, and merger and acquisition advice. In the wake of the Andersen collapse, the other big public accounting firms are picking at the Andersen carcass. By mid-fall 2002, Ernst & Young had picked up more than 200 ex-Andersen clients, while the other Big Four firms had picked up in excess of 100 each. In some cases, the Big Four have acquired entire Andersen offices; in other cases, teams of accountants have gone from Andersen to the other firms, bringing clients with them. Regional Public Accounting Firms Although the Big Four get most of the publicity, there are many smaller, less well-known national players and regional public accounting firms that do a lot of accounting and hire lots of people. Representative national firms include Grant Thornton, RSM

McGladrey, BDO Seidman, and Moss Adams. Within different regions of the country, there are also strong regional players that usually affiliate themselves with some national network of other such players. Insiders tell us that the hours are often a little better than at the Big Four, the path to partner a little quicker, and the work itself more varied and interesting. If you go to a Big Four firm, your only responsibility for three months might be to audit the cash account at IBM. Ugh! According to one insider, at a regional firm you'll be a bigger fish in a smaller pond. In-House Accounting Whether publicly traded or not, every company has internal accountants to set budgets, manage assets, and keep accurate track of payroll, accounts payable and receivable, and other financial matters. For medium-sized and large firms, the internal staff works closely with the public auditors at the fiscal year-end and with senior management and IT staff year round. Controllers and CFOs at smaller firms often enjoy even more important and influential roles in running and developing the business. These jobs are just as demanding as those in public accounting. Most accountants in the private sector stay in one place, in one job, working with the same colleagues, for extended periods. However, should you choose to move around, accounting skills are very portable. Some businesses prefer to outsource their internal audit functions to a third party. For these companies, and for auditors who want to work in this capacity, accounting firms like Jefferson Wells International are the answer. Government Although its not the biggest blip on the radar screen for aspiring accountants, the government hires a lot of people with accounting skills. The biggest federal employers are traditionally the Department of Defense, the General Accounting Office, the Securities and Exchange Commission, and the Internal Revenue Service. In addition to monitoring individual and corporate tax returns, government

accountants at the state and federal levels formulate and administer budgets, track costs, and analyze publicly funded programs. Independent As an accountant, you can always hang out your own shingle, individually or in partnership with other accountants, especially once you have your CPA. There is plenty of business preparing tax returns and advising small businesses, provided you have the relevant expertise, such as a thorough knowledge of tax laws. You also will need to be able to market your services and manage your own businesstime-consuming activities that not everyone enjoys. Job Prospects According to the Bureau of Labor Statistics, accounting and accounting-related jobs will grow on average with employment overall between 2000 and 2010. CPAs will continue to enjoy a wide range of opportunities, especially as more and more states require a minimum 150 hours of coursework to take the exam making the certification harder to obtain. Proficiency in accounting and auditing software, excellent communication skills, and a strong sense of teamwork will give you an advantage over the competition. Accounting The accounting industry has been rocked by scandal in recent times, with one major firm, Arthur Andersen, being forced out of the picture. Before Andersens collapse, the top tier of the public accounting industry was known as the Big Five; now, its the Big Four (Deloitte Touche Tohmatsu, Ernst & Young, KPMG, and PricewaterhouseCoopers). Still, clients need Big Four accounting services, and as a result the accounting industry will continue to be a source of many jobs, especially for those interested in entry-level positions. What You'll Do Accounting concerns itself with the day-to-day operations of bookkeeping. Accountants balance the books, track expenses and revenue, execute payroll, and pay the bills. They also compile all of

the financial data needed to issue a company's financial statements in accordance with government regulations. Accountants are taking a step away from the ledger sheets and are becoming essential to every successful business team. They're the ones who understand the language of money and a company's complex financial situation. Consequently, accountants are increasingly being called on to offer advice and even make business decisions based on hard facts rather than on speculation or gut instinct. To be sure, an accountant's day-to-day work is still very different from that of a lion tamer, especially for those who are just entering the field. Most public accountants, for example, still need to know the specifics of tax law and must file audits that meet the generally accepted principles of accounting (GAAP). Here, there's little room for people who want to think outside of the box. The box has been well thought out, and it's the accountant's job to make sure a company's records fit inside it and are in lockstep with the law. Who Does Well Finance and accounting jobs require critical, detail-oriented thinking. If you have a knack for using numbers to understand patterns that influence business, you're going to be valuable to a company. If you can't crunch and analyze them, this isn't going to be the right job for you. You should also like, and be good at, solving problems and be able to think critically about the numbers you're working with. While accountants need to be good at math and have strong analytical thinking skills, attention to detail is usually considered more important. And as accountants are increasingly being promoted to the boardroom, they are finding it increasingly necessary to develop strong written and verbal communication skills. The American Institute of Certified Public Accountants strongly recommends that all accountants balance their technical business training with a classically liberal education. Furthermore, as business is increasingly being performed electronically, accountants need to pick up as much knowledge about computers and information systems as possible, not only to understand their utility but also to assess their value to a company.

Commercial Banking Industry

Asked why he robbed banks, Willie Sutton replied, "Because that's where the money is." That was in the '30s, but even today, despite changes, a lot of the money is still in commercial banks. Most of us maintain checking accounts at commercial banks and use their ATMs. The money we deposit in our neighborhood bank branch or credit union supports local economic activity through small business loans, mortgages, auto loans, and home repair loans. The bank also provides loans in the form of credit card charges, and it renders local services including safe deposit, notary, and merchant banking. The bank branch or credit union office remains the cornerstone of Main Street economic life. Trends Consolidation and New Jobs For decades, banks profited by simply holding customers' money and charging them check writing fees and interest on loans. Jobs were well defined and stable, and promotion paths were clear and secure. Not anymore. Consolidation, competition, and technological change are shaking the industry to its core, forcing layoffs but also creating opportunity. Since 1995, more than 200 large and small banks have merged. Several of these and a handful of recently consolidated giants Citigroup, Bank of America, Bank Onedominate the banking industry. The new behemoths are entering new markets, while at the same time closing branches and replacing service personnel with online and other technologies. However, hiring by a growing number of nonbanks compensates for this trend to a degree. These firms, which are pioneering new ways of delivering financial services, include MBNA and Capital One, which are credit card lenders; transaction processing and data services like First Data and Fiserv; and bill-payment-services marketers like MFSDC and Integrion. Deregulation

The Glass-Steagall bill, passed by Congress in 1933, served as the backbone of banking regulation. During the late '90s, however, banks and other financial institutions found ways around the restrictions placed on them by Glass-Steagall and related legislation. Finally, in late 1999, Glass-Steagall was repealed, eliminating the legal framework for Depression-era boundaries that had already been abandoned by large financial services firms, including banks. In theory, the repeal of Glass-Steagall opened the floodgates to consolidation, spawning superfirms that will offer banking, insurance, and securities. However, big firms are already doing this through affiliated companiesCitigroup, for example, offers insurance through its Travelers subsidiaryso the impact of the Glass-Steagall repeal remains to be seen. Problem Loans and Lower Profits The recent spate of corporate accounting misdeeds, and the resulting bankruptcy of some companies, means that some banks are stuck trying to recoup loans from corporations that are cash-starved. On the consumer side of the business, in January 2002, 4.9 percent of all home loans were past due, a full point higher than a year earlier. And the average household has $8,000 in credit card debt, up from $3,000 in 1990. Profits at deposit-taking banks declined 5 percent in 2001, and in the current economic environment, banks performance could get even worse. How It Breaks Down As a job seeker, the most important distinction to keep in mind is between regional banks and the big global ones. Here we've broken down the industry by type of banking, rather than size of player, since banks are increasingly adding new services to their array of traditional ones. Consumer or Retail Banking This is what most people think of when they think of banking: A small to midsized branch with tellers and platform officersthe men and women in suits sitting at the nice wooden desks with pen setsto handle customers' day-to-day needs. Although thousands of small community banks, credit unions, and savings institutions still exist,

employment opportunities are increasingly coming from a few megaplayers such as Citibank, Bank of America, and Bank One, most of which seem hell-bent on building nationaland even international banking operations. One complicating factor in this picture is that the banks mentioned above, in addition to extending their consumer-banking operations, have added to their portfolios by strengthening their investmentbanking and asset-management capabilities, among others. So, if you want to work at a Citibank branch, make sure that you're applying to the right part of the organization. Business or Corporate Banking Many of the players in this group are the same ones in the consumerbanking business; others you'll find on Wall Street, not Main Street. At the highest level, the larger players (Bankers Trust, Bank of New York, and J.P. Morgan Chase & Co. being three names to add to the list of megaplayers above) provide a wide range of advisory and transaction-management services to corporate clients. Depending on which institution and activity area you join, the work can resemble branch banking or investment banking. Securities and Investments Traditionally, this field has been the domain of a few Wall Street firms. However, as federal regulations have eased, many of the biggest commercial banks, including Bank of America, Citibank, J.P. Morgan Chase & Co., and others, have aggressively added investment-banking and asset-management activities to their portfolios. For people interested in corporate finance, securities underwriting, and asset management, many of these firms offer an attractive option. However, the hiring for these positions will frequently be done separately from that for corporate and consumer banking. Nontraditional Options Increasingly, a number of nonbank entities are offering opportunities to people interested in financial services. Players include credit card companies such as American Express, MasterCard, and Visa; credit card issuers like Capital One and First USA; and credit-reporting

agencies such as TRW. Although people at these firms are still in the money business, the specific jobs vary greatly, perhaps more widely than jobs at the traditional banks do. In particular, given the volume of transactions that many of these organizations handle, there are excellent opportunities for people with strong technical skills. Job Prospects Banks remain in the business of profiting from other people's money, but now they need to do it in as many markets at home and abroad as possible, as aggressively as possible. Competition has forced banks to move quickly and more creatively into mortgage lending, securities and derivatives trading, and transactions processing. Throughout banking there are positions for people who understand technology, the full gamut of financial services, and how to market to new customers. Banks also employ sales and marketing staffs, developers of new products, mortgage and securities experts, and credit analysts. At the same time, though, banks have taken a hit during the current down cycle of the economy, so the opportunities to get into banking are fewer and farther between than they have been in some time. Banking and bank-related work are a good fit if you know something about finance and you like software development; if you're interested in marketing and sales; if you're a business school grad and you want a solid career start; if you're not a B-school grad but you're looking for work experience the equivalent of an MBA; if you're fluent in Spanish, Japanese, or another language and you want to live overseas for a few years; or if you just want the know-how to eventually start your own business. One thing about banking skills: They are extremely useful and portable. So even if you join a bank that gets gobbled up by a competitor and you end up a merger casualty, you can usually transfer your expertise somewhere else with relative ease.

Commercial Banking


Banks used to be the dorky cousins of the hot and flashy investment banks and brokerages. No longer. The legislation that kept banks and investment banks separateGlass Steagallwas struck down by Congress in 1999. So banks are now moving into highly visible spheres of activity, such as investment banking, mutual funds, and brokerage. What It Is Commercial banks hold customers money and supply loans, in exchange for check-writing fees and interest collected from loans. The work of commercial bankers is criticalretail consumers get their credit lines extended, their checking accounts upgraded, their mortgages, cars, and home improvement loans approved. Small businesses are also highly dependent on the goodwill of commercial bankers. Even as dot coms, angel investors, and VCs monopolize the news, most small businesses continue to fund their growth with commercial loans. Such loans allow them to secure new inventory, cover payroll, remodel their stores, buy registers, and manage their overseas accounts receivables. What They Do Commercial bankers perform core financial analysis to assess risk, creditworthiness, and the likelihood a business will succeed. They play a key part in deciding the best business initiatives, expanding existing businesses, developing new markets and clients, and creating new products for e-commerce, the Internet, international markets, and consumers. Commercial bankers have to combine business acumen with strong accounting and interpersonal skills. After all, commercial bankers are at the front lines of the banking business. Ideally, they know their clients' lives intimately and can recommend additional products and services. Commercial bankers are a key distribution point and referral source for the rest of a bank's financial services activities. Trends Many commercial banks are consolidating in order to branch out and provide other services such as mortgage, mutual funds, investment banking, and insurance. As other financial firms expand their services,

commercial banks are diversifying to keep up, and often a merger with a peer company is the best way to do this. Since 1995, more than 200 large and small banks have merged. Consolidation usually results in layoffs and fewer job opportunities, but jobs in banks that are more diversified offer more opportunities for career development. And a growing number of non-banks are pioneering new ways of delivering financial services, providing more jobs in the finance industry. Technology is changing the job requirements for bankers. There are fewer junior staffers, and the ability to manipulate data intelligently and discover trends is key to long-term success. Banks want to maintain their record levels of profitability by reducing defaults and increasing efficiency, resulting in an increasing reliance on technology and more finance jobs available to job seekers with technical backgrounds. Many banks have lost profits trying to recoup loans. The recent spate of corporate accounting misdeeds has resulted in seriously diminished funds for some corporations and bankruptcy for others, leaving banks holding an empty bag. On the consumer side of the business, in January 2002, 4.9 percent of all home loans were past due, a full point higher than the year earlier. Profits for deposit-taking banks declined 5 percent in 2001, and in the current economic environment, banks performance could get even worse. Who Does Well If you like intense project work, with a good deal of financial analysis and customer contactif you like helping new families and new businesses create brilliant futurescommercial banking might be for you. You'll just have to function in a larger organization, trying to build synergies with other product groups across different customer and product platforms.

Investment Banking Industry

Investment banks are experts at calculating what a business is worth, usually for one of two purposes: to price a securities offering or to set the value of a merger or acquisition. Securities include stocks and

bonds, and a stock offering may be an initial public offering (IPO) or any subsequent (or secondary) offering. In both cases, I-banks charge hefty fees for providing this valuation service, along with other kinds of financial and business advice. When banks underwrite stock or bond issues, they ensure that institutional investors, such as mutual funds or pension funds, commit to purchasing the issue of stocks or bonds before it actually hits the market. In this sense, I-banks are intermediaries between the issuers of securities and the investing public. I-banks make markets to facilitate securities trading by buying and selling securities out of their own account and profiting from the spread between the bid and the ask price. In addition, many I-banks offer retail brokerage (retail meaning the customers are individual investors rather than institutional investors) and asset management services. Not surprisingly, the center of this industry rests in the lofty aeries above Wall Street and Midtown in New York City. Other hot spots include London, San Francisco, and Silicon Valley. Firms also compete in Frankfurt, Tokyo, Hong Kong, and other foreign markets 24 hours a day.

Trends Cooldown As the global economic climate cools down, so has investment banking. In 2001 and 2002, I-banking heavyweights Credit Suisse First Boston, Merrill Lynch, JPMorgan Chase, and Goldman Sachs all laid off a significant chunk of their employees. But the bulge-bracket firms were not the only ones to feel the pinch of thinner profitsor to react by cutting costs via layoffs. In 2001 alone, approximately 30,000 Wall Street workers were laid off. Also, I-banking bonuses, which can comprise half or more of some employees total annual compensation, fell by some 30 percent in 2001. I-banks have also pulled back on college and MBA recruitingbut, because its cheaper to employ a recent grad than someone with more experience, there are still jobs to be had for the cream of the crop from the best schools. More than

ever, though, those who do I-banking internships will have the best shot at full-time openings. Deregulation and Financial-Services Consolidation Investment banking has witnessed a rash of cross-industry mergers and acquisitions in recent times, largely due to the late-1999 repeal of the Depression-era Glass-Steagall Act. The repeal, which marked the deregulation of the financial services industry, now allows commercial banks, investment banks, insurers, and securities brokerages to offer one another's services. As I-banks add retail brokerage and lending to their offerings and commercial banks try to build up their investment banking services, the industry is undergoing some serious global consolidation, allowing clients to invest, save, and protect their money all under one roof. Coupled with a slowing economy, these mergers have also triggered layoffs, as I-banks make an effort to cut spending and reduce overlap. Among the recent M&A activity: Donaldson, Lufkin & Jenrette was acquired by Credit Suisse First Boston; J.P. Morgan and Hambrecht & Quist were swallowed by Chase; Robertson Stephens was acquired (and then dumped) by FleetBoston; and Alex. Brown was acquired by Deutsche Bank. PR NightmareOr Something Worse? The swing in the markets from up, up, up to down, down, down focused a lot of scrutiny on firms on the Street. The biggest issue so far has been whether banks overrated the investment potential of client companies stocks intentionally, deceiving investors in the pursuit of favorable relationships and ongoing banking revenue opportunities with those companies. The outcome: a regulatory settlement released Dec. 20, 2002, directs the nations largest securities firms to pony up $450 million over five years to buy stock reports from independentresearch firms, ones not involved in I-banking. This means investors will be able to view at least one research report that was developed outside of the brokerage firm with which they have dealings. As well, I-banking firms have been mandated to put stock ratings from various sources on brokerage statements sent to investors after they buy a stock. Citigroup/Salomon Smith Barney, Credit Suisse First Boston, Goldman Sachs, and Morgan Stanley will also have to pay fines of $50 million on up. And a restitution fund will be put into place for investors burned in such dealings.

Of course, a lot of the details still need to be worked out, such as when this regulatory settlement is to take effect and what makes a research firm truly independent. These types of issues and other potential quagmires put into question how effective this settlement will be. According to the New York Attorney General Eliot Spitzer, all changes will take place before the end of 2003. How It Breaks Down The Bulge Bracket There's no clear and uniformly accepted definition of this group, but it basically includes the biggest of the full-service investment banks. This is the group that matters most in investment banking, and their names confer distinction, whether you're a start-up with an IPO to sell, a Fortune 500 company planning an acquisition, or a job seeker sending out rsums. Merrill Lynch, Morgan Stanley, Goldman Sachs, Citigroup/Salomon Smith Barney, Lehman Brothers, Credit Suisse First Boston, and JPMorgan Chase hold top spots in this bracket, at least for the moment. A whole host of others fall into the second tier of major players, including Bear Stearns and UBS Warburg, the investment-banking division of the giant Swiss bank, UBS. Boutiques and Regional Firms Obviously, the investment banking world extends beyond New York and the bulge bracket, but the list of small firms is getting smaller as the market consolidates. The strongest boutique firmsHambrecht & Quist, Montgomery Securities, and Alex. Brownhave all been acquired by commercial banks. But that's not to say independent firms are nearing extinction. The equity markets are strong, and that means big business for niche firms focusing on technology, biotechnology, and other high-growth industries. In New York, Allen & Co. and Lazard Frres still do big business in specialized fields. Volpe Brown Whelan and Thomas Weisel are Silicon Valley firms capitalizing on their technology connections and expertise. Job Prospects Investment banking is one of the best ways a young person can learn about finance and make a lot of money right out of school. Even if you ultimately decide to reclaim your personal life by pursuing other

options, the skills you learn on Wall Street will be valuable in most business careers. But before you can cash in on those potential returns, youll have to put up with some very substantial hardships, including high pressure, long days and nights of hard work, a few difficult personalities, and the expectationno, the requirementthat all personal plans are subject to the demands of work. In addition, youll find that life on the Street is very much at the mercy of the markets. Bull markets bring more work to do than is humanly possible, but youll be rewarded with a paycheck that can sometimes double year-to-year. Bear markets can leave you sitting at your desk with a pile of deals on hold, hoping that the rumored layoffs and smaller-than-usual bonuses dont come to pass. Despite this inherent uncertainty, the field remains a popular destination for undergraduates and MBAs. And, because of the current difficult economic environment, count on competition for open spots in investment banking to be especially stiff. Still, firms are always looking for new (read: cheaper) bodies; even though they certainly arent hiring to the extent they did a couple of years back, banks are still bringing on best-and-brightest hires for analyst and associate programs by way of summer internships for the most part. As one recruiter puts it, Well never not hire new talent, even during a merger, even during a downturn. Investment Banking Youve heard about the long hours, the big bonuses, and the megabillion-dollar deals. You can recite the names of the big firms by heart. You can even write a good enough cover letter or bid enough points to land a coveted first-round interview slot with one or more of these firms. But suddenly it dawns on you. What the heck is investment banking? You panic. What do investment bankers do? Whats the difference between sales and trading and corporate finance? More to the point, why do you want to be a banker? What I-Banking Is

The intensely competitive, action-oriented, profit-hungry world of investment banking can seem like a bigger-than-life place where deals are done and fortunes are made. In fact, its a great place to learn the ins and outs of corporate finance and pick up analytical skills that will remain useful throughout your business career. But investment banking has a very steep learning curve, and chances are youll start off in a job whose duties are more Working Girl than Wall Street. Wall Street is filled with high-energy, hardworking young hotshots. Some are investment bankers who spend hours hunched behind computers, poring over financial statements and churning out spreadsheets by the pound. Others are traders who keep one eye on their Bloomberg screen, a phone over each ear, and a buyer or seller on hold every minute the markets in session. Traders work hand in hand with the institutional sales group, whose members hop from airport to airport trying to sell big institutions a piece of the new stock offering they have coming down the pipeline. Then there are the analytically minded research analysts, who read, write, live, and breathe whichever industry they follow, 24/7. Investment banking isnt one specific service or function. It is an umbrella term for a range of activities: underwriting, selling, and trading securities (stocks and bonds); providing financial advisory services, such as mergers and acquisition advice; and managing assets. Investment banks offer these services to companies, governments, non-profit institutions, and individuals. An investment bank acts as an adviser to corporations. In that capacity it serves many functions. It's a middleman in the creation and issuance of financial products (stocks, bonds, and the like); a sales-anddistribution organization for the same financial products; a major investor, market maker and position taker in the financial markets; and a research organization. What You'll Do Traditionally, commercial banks and investment banks performed completely distinct functions. When Joe on Main Street needed a loan to buy a car, he visited a commercial bank. When Sprint needed to raise cash to fund an acquisition or build its fiber-optic network, it called on its investment bank. Paychecks and lifestyles reflected this

division too, with investment bankers reveling in their large bonuses and glamorous ways while commercial bankers worked nine-to-five and then went home to their families. Today, as the laws requiring the separation of investment and commercial banking are reformed, more and more firms are making sure they have a foot in both camps, thus blurring the lines and the cultures. The action and players are still centered in New York City and a few other money centers around the world, but the list of players is getting smaller as the industry consolidates. Today, leading banks include Merrill Lynch, Goldman Sachs, Morgan Stanley, Salomon Smith Barney, Credit Suisse First Boston, and JPMorgan Chase. These and other firms are regular visitors to campus career centers. Investment bankers issue financial products; sell and trade them (see WetFeet's profile on securities sales and trading), invest in them, research them, and advise others on financial transactions. A fullservice investment bank includes three major professional divisions: investment banking (which includes corporate finance, mergers and acquisitions, and public finance), sales and trading, and research. Nearly all banks have a staff of research analysts who study economic trends and news, individual company stocks, and industry developments in order to provide proprietary investment advice to institutional clients and in-house groups, such as the sales and trading divisions. The research division also plays an important role in the underwriting process, both in wooing the client with its knowledge of the clients industry and in providing a link to the institutions that own the clients stock once its publicly traded. The corporate finance group (frequently known as banking or CorpFin) serves the sellers of securities. These may be either Fortune 1000 companies looking to raise cash to fund growth or, frequently, private companies wanting to go public (that is, to sell stock on the public markets for the first time). Think of investment bankers as financial consultants to corporations. This is where CEOs and CFOs turn when theyre trying to figure out how to finance their operations, how to structure their balance sheets, or how best to move ahead with plans to sell or acquire a company.


The activities of the CorpFin department can range from providing pure financial advice to leading a company through its first equity issue (or IPO). As a result, industry or product knowledge is key, and many investment banks divide their corporate finance departments into industry subgroups, such as technology, financial institutions, health care, communications, entertainment, utilities, and insurance, or into product groups like high-yield, private equity, and investmentgrade debt. The job of salespeople is to ensure their bank's financial stability by getting investors to commit to buying (subscribing to) stock and bond issues before the new securities actually hit the market. The mergers and acquisitions department provides advice to companies that are buying other companies, or which are being acquired by others. Who Does Well You shouldnt go into banking just for the moneythe lifestyle is too demanding. To survive in investment banking, much less to do well, youll need to like the work itself. And, quite honestly, even if you love the work, an investment banking career can still be a tough road. If the market or your industry group is in a slump (or if your firm suddenly decides to get out of a certain segment of the business), theres always the chance that you may find a pink slip on your desk Monday morning. But, if you like fast-paced, deal-oriented work, are at ease with numbers and analysis, have a tolerance for risk, and dont mind putting your personal life on hold for the sake of your job, then investment banking may be a great career choice. But if this doesnt sound like you, a job in investment banking could turn out to be a bad dream come true.