Get Ready for the Postgraduate Entrance English Exam. Working with Texts. Часть 1. Учебное пособие

3.Translate the text in written form.

4.Retell the text using the following expressions and terms: entrepreneurship, to create job opportunities, venture capital, angel funding, business incubators, science parks, survival rates, innovative startup companies, entrepreneurs with feasible projects, provision of physical space, management coaching, technical support, business networking, intellectual property, sources of financing, high-tech industries, seed capital and venture capital funds, start-up capital, to convert a new idea into a successful innovation, long-run economic growth, to submit to authority, the calculating inventor, the over-optimistic promoter, the organization builder.

IV. Test II (2)

1. Read the text again and decide which statements are true.

1.Entrepreneurship is often an easy undertaking, as a majority of new businesses prosper.

2.Entrepreneurship is often regarded as a defining characteristic of European life.

3.The market entrepreneur operates without special favors from government.

4.Too often entrepreneurship is seen as the process of finding capable individuals and providing nourishment.

2. Match the words given in the left column with the words in the

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Unit 3

I. Information for study

Tertiary Sector of Industry

The service sector or the service industry, is one of the three main industrial categories of a developed economy, the others being the secondary industry (manufacturing and primary goods production such as agriculture), and primary industry (extraction such as mining and fishing).

The tertiary sector of industry involves the provision of services to other businesses as well as final consumers. Services may involve the transport, distribution and sale of goods from producer to a consumer as may happen in wholesaling and retailing, or may involve the provision of a service, such as in pest control or entertainment. The goods may be transformed in the process of providing the service, as happens in the restaurant industry. However the focus is on people interacting with people and serving the customer rather than transforming physical goods. For the last 20 years there has been a substantial shift from the other two industry sectors to the Tertiary Sector in industrialized countries.

The service sector consists of the "soft" parts of the economy such as insurance, tourism, banking, retail and education. Others include:

•Franchising

•Restaurants

•Retailing

•Entertainment, including the Record industry, Music industry, Radio, Television and Movies.

•News media

•Leisure industry

•Transport

•Health care

•Consulting, Investment and Legal advice and services.

Public utilities are often considered part of the tertiary sector as they provide services to people, while creating the utility's infrastructure is often considered part of the secondary sector, even though the same business may be involved in both aspects of the operation.

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Economies tend to follow a developmental progression that takes them from a heavy reliance on agriculture, toward the development of industry (e.g. automobiles, textiles, shipbuilding, steel, mining) and finally toward a more service based structure. Whereas the first economy to follow this path in the modern world was the United Kingdom, the speed at which other economies have later made the transition to service-based, sometimes called post-industrial, has accelerated over time.

The term service economy, in contrast, refers to a model wherein as much economic activity as possible is treated as a service. For example IBM treats its business as a service business. Although it still manufactures high-end computers, it sees the physical goods as a small part of the "business solutions" industry. They have found that the price elasticity of demand for "business solutions" is much less elastic than for hardware. There has been a corresponding shift to a subscription pricing model. Rather than receiving a single payment for a piece of manufactured equipment, many manufacturers are now receiving a steady stream of revenue for ongoing contracts.

Issues for service providers

Service providers face obstacles selling services that goods-sellers rarely face. Services are not tangible, making it difficult for potential customers to understand what they will receive and what value it will hold for them. Indeed some, such as consulting and investment services, offer no guarantees of the value for price paid.

Since the quality of most services depends largely on the quality of the individuals providing the services, it is true that "people costs" are a high component of service costs. Whereas a manufacturer may use technology, simplification, and other techniques to lower the cost of goods sold, the service provider often faces an unrelenting pattern of increasing costs.

Differentiation is often difficult. How does one choose one investment advisor over another, since they (and hotel providers, leisure companies, consultants, and others) often seem to provide identical services? Charging a premium for services is usually an option only for the most established firms, who charge extra based upon brand recognition.

II. Vocabulary Items

agriculture n – сельское хозяйство competition n – конкуренция

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costs n – стоимость, издержки demand n – спрос

distribution n – распределение elasticity n – эластичность equipment n – оборудование extraction n – добывание, добыча

final consumer – конечный потребитель franchising n – франшизинг

hardware n – техническое обеспечение health care – здравоохранение high-end a – лидирующий

insurance n – страхование investment n – инвестирование labor n – труд, трудовые ресурсы legal a – законный

leisure n – досуг

manufacture n – производитель manufacturing n – производство operation n – функционирование price n – цена

primary goods – сырье, сырьевые материалы primary industry – сырьевая промышленность provider n – поставщик

public utilities – муниципальные предприятия recognition n – официальное признание retailing n – розничная торговля

secondary industry – обрабатывающая промышленность service n – услуга, обслуживание

shift n – сдвиг

subscription pricing model – пожертвование, взнос tertiary a – относящийся к сфере услуг wholesale a – оптовый, оптовая торговля

III. Exercises

1.Read the text.

2.Learn the vocabulary items by heart.

3.Translate the text in written form.

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4.Retell the text using the following expressions and terms: the secondary industry, the primary industry, the service industry, manufacturing, primary goods, production, extraction, to provision of services to business as well as final consumer, franchising, retailing, leisure industry, healthcare, consulting, legal advice and services, public utilities, the utility’s infrastructure, service based structure, subscription pricing model, to receive a steady stream of revenue for ongoing contracts.

IV. Test II (3)

1. Read the text again and decide which statements are true.

1.The tertiary sector of industry involves the provision of services to other businesses as well as final consumers.

2.Services are not definite, making it difficult for potential customers to understand what they will receive and what value it will hold for them.

3.Manufacturing does not tend to be more open to international trade and competition as services.

4."People costs" are a high component of service costs because the quality of most services depends largely on the quality of the individuals providing the services.

2. Match the words given in the left column with the words in the

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Unit 4

I. Information for study

Institutional Fund Management

Institutional fund management is fund management conducted by large financial firms such as banks, insurance companies and major investment organizations.

The businesses

The activity of institutional fund management has several facets e.g. employment of professional fund managers, research, dealing, settlement, marketing, internal audit, the preparation of reports for clients. The largest financial fund managers, or institutions, are complex financial firms with all the complexity that their size demands. Apart from the people who bring in the money (marketing) and the people who invest it (the fund managers), there are compliance staff (to ensure that no laws or financial market regulations are broken), internal auditors of various kinds (to examine internal systems and controls), financial controllers (to control the institutions own money and costs), computer experts, and the "back office" (the people who track and record transactions and fund valuations for sometimes literally hundreds or thousands of clients per institution).

Key problems of running such businesses

Key problems include:

•revenue is directly linked to market valuations, so in the event of a major fall in asset prices revenues decline precipitately relative to costs;

•it is difficult to sustain above-average fund performance and at times of poor performance clients may not prove patient;

•successful fund managers are expensive and may be headhunted by competitors;

•above-average fund performance requires the flair of good fund managers and yet clients usually want to hear that they are hiring a firm (with a single philosophy and internal disciplines) rather than the skills of one or two young men/women;

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• evidence suggests that size of investment firm correlates inversely with fund performance i.e. the smaller the firm the better the chance of good performance.

The most successful investment firms in the world have probably been those that have been separated physically and psychologically from banks and insurance companies. That is, the best performance and also the most dynamic business strategies (in this field) have generally come from independent investment management firms.

Representing the owners of shares

Institutions control huge shareholdings. In most cases they are acting as agents (intermediaries between owners of the shares and the companies owned) rather than principals (direct owners). The owners of shares theoretically have great power to alter the companies they own via the voting rights the shares carry and the consequent ability to pressure managements, and if necessary outvote them at annual and other meetings.

In practice the ultimate owners of shares often do not exercise the power they collectively hold, and the financial institutions (as agents) may or may not choose to do so. There is a general belief that shareholders could and should exercise more active influence over the companies they hold shares in (e.g. to hold managements to account and to ensure that Boards function effectively). This would mean that there would be another effective pressure group (additional to the regulators and the Board) overseeing management.

Some institutions have been more vocal and more active in pursuing such matters than others. Some institutions have believed that there were investment advantages to building up substantial minority shareholdings (e.g. 10% or more) and then bringing pressure on managements to change the way firms were run. Another widespread tactic is for institutions to effectively collude to force management change. Perhaps more widespread is the sustained pressure that large institutions can bring to bear by talk and persuasion as they liaise with managements over time.

The national context in which shareholder representation considerations are set is variable and important. The USA is a litigious society and shareholders use the law as a lever to pressure managements. In Japan it is traditional for shareholders to be low in the “pecking order” and for managements and work forces to some extent to operate as mini-clubs

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able to ignore the rights of the ultimate owners. In Japan we may say that there is more of a stakeholder mentality where it is felt appropriate to seek consensus amongst all interested parties against the background of strong unions and labor legislation.

Fund managers and portfolio structures

At the heart of institutional fund management however are the fund managers whose job is to invest and divest client monies. Typically, if we take the example of a segregated account run for a single client then the fund structure has to be determined and implemented.

Briefly, for any given type of client there should be an agreed concept of the type of structure that the client thinks will make sense (given the institutions advice) and the fund might be invested in several asset classes including bonds and equities.

Asset allocation

A great deal of research and experience shows that the asset allocation is the prime determinant of long term returns. A great deal of thought needs to go into the asset allocation, and changes to the allocation over time. The skill of the successful fund manager consists in constructing the asset allocation, and separately the individual holdings, so as to outperform the peer group of competing fund management organizations, and the bond and stock indices (appropriate to the client's objectives and preferred style).

Long-term returns

A good deal of importance tends to attach to the evidence about long term returns to different assets, and to holding period returns. For example, over very long holding periods (say over 10 years) in most countries and in most time periods equities have generated higher returns than bonds, and bonds have generated higher returns than cash. According to financial theory, this is because equities are higher risk (more volatile) than bonds which are themselves more risky than cash.

Diversification

Against the background of the asset allocation, fund managers consider the degree of diversification that makes sense for a given client (given its risk preferences) and construct a list of planned holdings accordingly. The list will indicate what percentage of the fund should be invested in each particular stock or bond. The theory of portfolio diversification was originated by Markowitz.

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II. Vocabulary Items

allocation n – размещение annual a – годовой

assets n – активы, имущество, капитал

audit n – проверка, ревизия (баланса, отчетности) average a – средний

back office – вспомогательный офис, операционный отдел board n – правление

bond n – облигация

cash n – наличные деньги, имущество в денежной форме competitor n – конкурент

correlate n – коррелировать dealing n – контакт

diversification n – разнообразие, диверсификация

equity n – обыкновенная акция, акция без фиксированного дивиденда

facet n – аспект fund n – фонд

fund management – управление фондом growth n – рост, развитие

hire v – нанимать

holding n – владение акциями, пакет акций

institutional a – институционный, относящийся к учреждению insurance company – страховая компания

intermediary n – посредник internal a – внутренний

internal auditor – внутренний аудитор

labor legislation – трудовое законодательство litigious a – сутяжнический

pecking order – иерархия performance n – работа

portfolio n – портфель ценных бумаг research n – исследование

return n – доход revenue n – доход

salary n – оклад, заработная плата служащего segregated account – отдельный счет

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settlement n – урегулирование share n – акция, пай shareholder n – акционер

stakeholder n – организатор совместного дела, совладелец stock n – акция, фонды

ultimate n – основной valuation n – оценка

III. Exercises

1.Read the text.

2.Learn the vocabulary items by heart.

3.Translate the text in written form.

4.Retell the text using the following expressions and terms: complex financial firms, internal auditors, financial controllers, back office, market valuations, above-average fund performance, to control huge shareholding, to alter the company via the voting rights the shares carry, ultimate owners, shareholder representation considerations, effective pressure group, substantial minority shareholdings, litigious society, pecking order, a stakeholder mentality, labor legislation, segregated account, prime determinant of long term returns, asset allocation, individual holdings, the peer group of competing fund management organizations, holding periods, degree of diversification.

IV. Test II (4)

1. Read the text again and decide which statements are true.

1.The most successful investment firms in the world have probably been those that have been amalgamated physically and psychologically with banks and insurance companies.

2.In practice the ultimate owners of shares often exercise the power they collectively hold and the financial institutions (as agents) may or may not choose to do so.

3.Institutional fund management is fund management conducted by large financial firms such as banks, insurance companies and major investment organizations.

4.Against the background of the asset allocation, fund managers consider the degree of diversification that makes sense for a given client (given

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