Профессиональный английский язык для экономистов. Учебное пособие

Pre-text discussions

1.What are the roles and responsibilities of a Board of directors?

2.What is the highest ranking position in a corporation?

3.What are business functions of PR, IT and R&D departments?

Reading

Text III. The Board of Directors and departments in companies

The Board of Directors of a corporation is the group of individuals who are charged with running the corporation. The board of directors may be called a board of trustees (for a non-profit corporation), board of governors, or executive board.

Selecting the board of directors is the job of the President/CEO of the organization, as the corporation is being formed. Board members should be selected for their ability to help move the corporation forward and provide oversight and guidance, not for friendship or political purposes.

The duties of the board of directors and officers of the corporation are set by the corporate bylaws but are also set by law, specifically by the laws of the state where the business is incorporated.

The primary duty of the board members is to set the mission and vision of the company, and policy for corporate officers and employees to follow. Board members do not participate in day-to-day operations of the company.

The highest-ranking executives are:

1.The Chief Executive Officer (CEO) runs the company.

2.The level below CEO is Chief Operating Officer (COO). The COO is responsible for the daily operation of the company, and routinely reports to the highestranking executive, usually the chief executive officer (CEO).

11

3. The Chief Financial Officer (CFO) is in charge of all the financial side of the business.

The board should have a board chairperson, a vice chair, a secretary, and a treasurer. The duties of each officer should be set out in the bylaws. Board officers should not be executives of the business itself, again because of conflict of interest principles.

The list of departments below is typical for many businesses – each one corresponds to a business function. Companies also have other departments related to their own particular business activity.

●Production might also include Purchasing and Quality Assurance (QA).

●Operations department refers to all the internal processes of a company and might include logistics.

●Sales might also include Business Development.

●Customer Services might include Technical Support.

●Marketing might include Market Research.

●Communications department refers to all promotional activities including a strong focus on Public Relations (PR).

●Finance has many subdivisions, such as Financial Control, Treasury, Accounts and Payroll (managing salary payments).

●Human Resources (HR).

●Information Technology (IT).

●Research and Development (R&D).

●Legal or Law department.

12

Vocabulary test

1. It is necessary to … between various types of business organizations.

a) divide; b) decide; c) differentiate; d) deteriorate.

2.A senior manager has the greatest … of authority with regard to day-to-day activities.

a) amount; b) account; c) sum; d) summary.

3.In private limited companies people can buy shares in them only with the … of current owners.

7.A business legal and ownership structure …the responsibilities of employees in the company.

10. The destination enjoys the … of businesses operating successfully in the area. a) divisions; b) divinities; c) diversity; d) diversion.

13

Translating

Choose the best option of the word in the following sentences:

1.Отдел информационных технологий поддерживает (maintains/supports) компьютерные сети всей компании.

2.Обязанность менеджеров по закупкам (shopping/purchases) – выбрать подходящее (convenient/suitable) для производства сырье.

3.Если бизнес успешен, то количество клиентов растет, товарооборот

(rotation/turnover) увеличивается.

4.Основатель (founder/developer) компании Мистер Смит Старший (elder/senior) собирается уходить на пенсию.

5.Генеральный директор ‒ главный менеджер в совете директоров, он управляет (runs/governs) компанией.

6.Собственники какого вида бизнес компаний ответственны (responsible for/ liable for) за все долги?

7.Одна из самых важных юридических процедур (provisions/requirements) корпорации – это ежегодная (annual/every year) встреча акционеров.

14

8.Совет директоров действует от лица (face /behalf) всех акционеров компании.

9.Корпорации часто платят дважды – налоги и дивиденды акционерам, это называется двойным (double/twice) налогообложением.

10.Первоочередная (first/primary) обязанность председателя правления – организовать обсуждение наиболее важных вопросов (questions/issues) во время встречи директоров.

Additional reading

Text IV. Franchising

Franchising is a means of marketing and distributing goods. The franchiser, usually a large business, supplies the franchisee, usually and individual with products or services for sale to the public. The franchisee pays for the right to sell the product or service in a certain area, and also makes annual payments – known as royalties to the franchising company.

This type of business has always been popular in the USA. It developed particularly in the 1950s and 1960s when there was a boom in fast-food restaurants such as McDonald’s and Kentucky Fried Chicken. Now about one-third of all retail sales in the USA are through franchising outlets, and there are about half a million enterprises operating in this manner.

The system is spreading quickly throughout the world, because franchising has advantages for both sides.

The franchiser is able to expand his business without reducing his capital or borrowing money. He gets additional capital from an outside source – the franchisee.

The franchisee gains from the arrangement as well. Franchisees are usually interested in business, but do not have much experience or capital. For their

15

investment, franchisees buy the right to use the trade name of the franchiser, and they get advice about running the business. Also the franchising company will provide them with training, materials and equipment. Finally, the franchiser will promote the brand name of the business in many areas with national advertising.

The franchising system gives people the chance to set up business without taking great risks. If they choose their franchise wisely, they will have the opportunity to make a small fortunate.

Text V. Mergers and acquisitions

A merger is an agreement that unites two existing entities into one new company. Mergers and acquisitions are commonly done to expand a company’s reach, expand into new segments, or gain market share. All of these are done to satisfy shareholders wants and create value.

A merger is the voluntary fusion of two companies on broadly equal terms into one new legal entity. The firms that agree to merge are roughly equal in terms of size, customers, scale of operations, etc. For this reason, the term "merger of equals" is sometimes used. Mergers are most commonly done to gain market share, reduce costs of operations, expand to new territories, unite common products, grow revenues and increase profits, all of which should benefit the firms' shareholders. After a merger, shares of the new company are distributed to existing shareholders of both original businesses. There are five main types of company mergers.

Conglomerate: two or more companies are engaged in unrelated business activities. The firms may operate in different industries or different geographical regions. A pure conglomerate involves two firms that have nothing in common. A mixed conglomerate takes place between organizations that, while operating in unrelated business activities, are actually trying to gain product or market extensions through the merger. Companies with no overlapping factors will only merge if it makes

16

sense from a shareholder wealth perspective, that is, if the companies can create synergy. A conglomerate merger was formed when The Walt Disney Company merged with the American Broadcasting Company (ABC) in 1995.

Congeneric is also known as a Product Extension merger. It occurs when two or more companies operate in the same market or sector with overlapping factors, such as technology, marketing, production processes, research and development (R&D), join to form a new business entity. A product extension merger is achieved when a new product line from one company is added to an existing product line of the other company. When two companies become one under a product extension, they are able to gain access to a larger group of consumers and, thus, bigger market share. An example of a congeneric merger is Citigroup's 1998 union with Travelers Insurance, two companies with complementing products.

Market Extension occurs between companies that sell the same products but compete in different markets. Companies that engage in a market extension merger seek to gain access to a bigger market and, thus, a bigger client base.

Horizontal occurs between companies operating in the same industry. The merger is typically part of consolidation between two or more competitors offering the same products or services. Such mergers are common in industries with fewer firms, and the goal is to create a larger business with greater market share and economies of scale since competition among fewer companies tends to be higher.

Vertical: when two companies that produce parts or services for a specific finished product merge, the union is referred to as a vertical merger. Vertical merger occurs when two companies operating at different levels within the same industry's supply chain combine their operations. Such mergers are done to increase synergies achieved through the cost reduction which results from merging with one or more supply companies.

17

Defining the terms

Writing

1.It is a positive thing for people who are in senior management positions to have much higher salaries than other employees in the same company. To what extent do you agree or disagree?

2.Some people prefer to be freelancers. What are their reasons to be selfemployed? Would you choose such an employment?

3.Several businessmen think that the most effective way to get ahead is to expand business boundaries via mergers and acquisitions while others assure the company will face a number of difficulties which affect profit.

18

Unit 2. Globalization. Factors of globalization. Positive and negative impacts of globalization. Global trade

Learning objectives

1.Explain what globalization is.

2.Describe the processes driving globalization.

3.Identify positive and negative impacts of globalization.

4.Discuss different constraints limiting the pace of globalization.

5.Outline the benefits of going global for a business firm.

6.Discuss some of the challenges of managing in a global enterprise.

Terms to learn

Globalization, integration, interaction, IT, standard of living, innovation, human right violations, benefit, in check, outsourcing, consequence, access, accessibility, volatility, vulnerable, vulnerability, challenge, surplus, fluctuation, labor, incentive

Pre-texts discussions

1.How do you understand the term “globalization”?

2.Does globalization bring only positive changes?

3.Why are some countries against globalization?

4.Why do prices fluctuate?

5.How do western countries save money on labor?

6.Does the future of Russia depend on its involvement into globalization processes?

19

Reading

Text I. Globalization: positive and negative impacts

Globalization is simply the process through which integration and interaction of countries, companies, and people across the globe. The process is as a result of the investment, outsourced manufacturing and international trade. All these are supported by IT, with an aim of bringing economies of various countries together.

Technology is the main drive behind globalization, with enhanced technology leading to rapid increase in globalization over the last century. The accessibility of the internet which crosses national boundaries allows even the smallest of businesses to access immediate global commerce.

Positive impacts of globalization are:

As western society is becoming more knowledgeable in developing countries, there is greater opportunity for the people in those countries to economically succeed and increase their standard of living.

Increase in competition forces companies to lower their prices.

Increase in media coverage draws the attention of the world to human right violations. It leads to improvement in human rights.

Global competition encourages creativity and innovation and keeps prices for commodities/services in check.

Developing countries are able to reap the benefits of current technology.

Governments are able to better work together towards common goals.

There is a greater access to foreign culture in the form of movies, music, food, clothing, and more. In short, the world has more choices.

20