SUMAR

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

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11. 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
12. 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
13. Stock market
35. Stocks and shares
36. Bonds
37. Futures, options and swaps
 Glossary
 Cheia exerciţiilor

 Extra Readings - Industry Profile and Career Overview from

WetFeet.com

Bibliografie

 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; Mureşan, Laura; Barghiel, Virginia;
Hollinger, Alexander – Corespondenţă de afaceri în limbile
română şi engleză, Editura Teora, Bucureşti, 1995
 Geoghegan, C.G.; Geoghegan, J.Y. – Engleza pentru negocieri,
Editura Teora, Bucureşti, 2000

4
 Roland, Marie-Claude; Mast-Grand, Martha – CV în limba
engleză, un pas spre angajare, Editura Teora, Bucureşti, 2000
 Dayan, A.; Lindsay, W.H.; Janakiewicz, A.; Marcheteau, M. –
Engleza pentru marketing şi publicitate, Editura Teora, Bucureşti,
2000
 Bantaş, Andrei; Porţeanu, Rodica – Limba engleză pentru ştiinţă
şi tehnică, Editura Niculescu, Bucureşti, 1995
 Laun, Flavia E. – Birotics and Telecommunication Explanatory
Dictionary, Editura Dacia, Cluj-Napoca, 1996
 Mănăilă, D.; Popa, C.; Popa, D.; Popescu, I.M.; Vlad, V.I. – Mic
dicţionar poliglot de fizică, tehnică şi matematică, Editura Acora
Press, Bucureşti, 1995
 Le Divenach, Éloi – Engleza în presă, Editura Teora, Bucureşti,
1999
 Marcheteau, Michel – Berman, Jean-Pierre – Savio, Michel,
Engleza comercială în 40 de lecţii, Editura Niculescu, Bucureşti,
2001

5
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 CFT’s 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 well-
intended ‘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 Anglo-
Saxon 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

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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 comercială, economică
strategică
TQM = total quality management = managementul total al calităţii
JIT = just-in-time = livrare exact la momentul potrivit
CFT = customer first team =
MBO = management by objectives = managementul pe obiective
pay-for-performance = plată pentru munca depusă
human-resource management = managementul resurselor umane
at any one time = în fiecare moment
premises = premise, locaţii
grasp = a pricepe, a înţelege (în text)
accountability = răspundere
bias = tendinţă, 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

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Welcoming visitors
Welcome to …
My name’s …

Arriving
Hello. My name’s … from …
I’ve an appointment to see …
Sorry – I’m a little late / early.
My plane was delayed…

Introducing someone
This is … He/she’s my Personal Assistant.
Can I introduce you to … He/she’s our (Project Manager).
I’d like to introduce you to …

Meeting someone and small talk

Pleased to meet you.
It’s 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?
I’d like to book a room for tomorrow night.
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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

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 Body language
 Language.

Practice 1

Make a dialogue based on the following flow chart. If you need

help, look at the Language Checklist

Visitor Receptionist

Introduce yourself

Say you have an appointment

with Sandra Bates. Welcome visitor.
Explain that SB will be
along shortly.
Offer a drink / refreshments.
Decline – ask if you can
use a phone.
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 SB’s
office.

 About small talk

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If you ask a question you should comment on the answer or ask a
supplementary question.

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, I’m 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. I’m 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. Isn’t it cold today?
h. You found us without too much difficulty, then?
i. It’s good of you to spare the time.
j. It’s 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:

Let’s get down to business. Or let’s get started.
B. With someone you don’t know well:
Perhaps we could talk about the subject of our meeting.
Or
Perhaps we could talk about the reason I’m 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.

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2. Telephoning

 Reading

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 one’s 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
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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 name’s … calling from …

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Saying who you want
I’d like to speak to … please.
Could I have the … Department, please?
Is… there, please?

Saying someone is not available

I’m sorry he/she’s not available …
Sorry, he/she’s 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 I’ll 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 didn’t catch (your name / your number / your company name )
Sorry, could you repeat your (name, number, etc.).
Sorry, I didn’t hear that.
Sorry, I didn’t understand that.
Could you spell (that / your name), please.

Acknowledging repetition
Okay, I’ve 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:
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 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.
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Switchboard Conglomerate Group; can I help you?
You Could I ------ ------- Mr. Pardee, please?
Switchboard Putting you ------ .
Secretary Hello, Mr. Pardee’s ------ . -------- I help you?
You ------, can you hear me? It’s a ------ line. Could you ---
---- up, please?
Secretary IS THAT BETTER? Who’s --------, please?
You (your name) from (your company).
Secretary Oh, hello. How nice to hear from you again. We
haven’t seen you for ages. How are you?
You Fine thanks. Could you ------- me -------- to Mr.
Pardee, please?
Secretary -------- the line a moment. I’ll see if he’s in. I’m sorry,
I’m afraid he’s not in the ------- at the ------ . Could
you give me your ----------, and I’ll ask him to -------
you ---------- ?
You I’m ----- 347 8621. That’s 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 I’ll expect him to ------- me this afternoon, then.
Thanks.
Secretary You’re welcome. Goodbye.

On speak to back message bad put

number call ring
Secretary through office speak speaking
can hello
Rang hold moment through

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

16
 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).
I’ll look up the number in the telephone book. (US).
The number is ex-directory. (UK).
The number is unlisted. (US).
I’ll ring Directory Enquiries. (UK).
I’ll ring information. (US).
The receiver
Can I help you?
Putting you through.
I’m afraid he’s not available at the moment. (UK).
I’m afraid he’s tided up at the moment.
You’re welcome. Goodbye.
The line
He’s 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).
I’d like to make a reverse charge call. (UK).
I’d like to make a collect call. (US).
I’d 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
I’m 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?
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Can I give her a message?
Let me take down your number.

 Remember
If you do not understand, say… “Sorry, I didn’t 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)

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 ‘Intership, good morning.’
Greeting.
Introduce yourself.
Check name.
Confirm / correct.
Offer to help.

Ask for appointment

with Mr. Dionis.
Ask what it’s 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)
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Stating reason for a call
I’m ringing to …
I’d 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 o’clock suit you?
What about July 21st?
That would be fine.
No, sorry, I can’t make it then.
Sorry I’m too busy next week.

Changing arrangements
We’ve an appointment for next month, but …
I’m afraid I can’t 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)

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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 there’s nothing else to say

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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: I’m afraid that ….

I’m 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. I’m Mr.
Whitle’s secretary. I understand you have an appointment for 10 a.m.
on Tuesday 13th. I’m afraid that Mr. Whitley is rather tied up them.
Could I suggest Monday instead?

Yes, I’m 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, that’s fine.

Mr. Rossi? It’s Jenny Kinsella here. From B.I.G. I’m sorry but my
colleagues can’t all make it on Thursday afternoon. Could I suggest
we meet on Tuesday instead?

22
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 that’s all right with you?

Right. Sorry to be difficult. Thanks a lot, Mr. Rossi. Bye now.

Mr. Rossi? Good morning. I’m ringing for Mr. Lund of Lund and
Lund Associates. He’s very sorry, but he won’t be able to manage
Wednesday afternoon. Could I suggest Friday afternoon instead?

Well, I think that should be all right. I’ll 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. Jenny Kinsella + colleagues (B.I.G.
Distribution)

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

23
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.

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Language Checklist
Telephoning (3)

Stating reason for the call

I’m calling about …
Unfortunately, there’s a problem with …
I’m ringing to complain about …

Explaining the problem

There seems to be …
We haven’t received…
The … doesn’t work.
The quality of the work is below standard.
The specifications are not in accordance with our order.

Referring to previous problems

It’s not the first time we’ve 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…
We’ll have to reconsider our position.
We’ll have to renegotiate the contract.
We’ll 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 …?
What’s the …?
25
Apologizing
I’m sorry to hear that.
I’m sorry about the problem / delay / mistake…

Denying an accusation
No, I don’t think that can be right.
I’m sorry but I think you’re mistaken.
I’m afraid that’s not quite right.
I’m afraid that can’t be true.

Skills Checklist
Telephoning (3)

If you receive a complaint:

 Consider your company’s 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?
26
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
 Don’t 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. Don’t interpret the other person’s formality as stiffness or
unfriendliness. On the other hand, if business partners with an Anglo-
Saxon background get on to first name terms straightaway, don’t be
surprised.

27
 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 doesn’t 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 …
I’m going to talk about …
The subject of my talk is …
The theme of my presentation is …
I’d like to give you an overview of …

28
Structure
I’ve divided my talk into (three) parts.
My talk will be in (three) part.
I’m 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 there’ll be a twenty-
minute break in the middle. We’ll stop for lunch at 12 o’clock.

Policy on questions / discussion

Please interrupt if you have any question.
After my talk there’ll be time for a discussion and any questions.

Skills Checklist
Effective presentations – planning and preparation

Audience
 Expectations
 Technical knowledge
 Size
 Questions and / or discussion

Speaker’s competence
 Knowledge
 Presentation technique

Content
 What to include
 Length / depth (technical details)
 Number of key ideas

29
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

30
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 audience’s expectations in terms of technical detail,
expertise, etc.?
c. What is the audience’s 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?

31
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 Useful Not necessary

1 2 3 4 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
32
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 audience’s 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
33
Introducing a visual
I’d like to show you …
Have a look at this …
This (graph) shows / represents …
Here we can see …
Let’s look at this …
Here you see the trend in …

Comparisons
This compares x with y
Let’s compare the …
Here you see a comparison between …

Pie chart = diagramă circulară (rotundă, “plăcintă”)

Flow chart = schema procesului tehnologic / organigramă
Diagram = diagramă
Bar graph = diagramă 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 hârtie detaşabile
whiteboard = panou alb din material sintetic

Describing the speed of change

A dramatic dramatically
A marked markedly
A significant increase / fall To increase / fall significantly
A slight slightly

Describing trends

To go up To go down
34
To increase an increase To decrease a decrease
To rise a rise To fall a fall
To climb a climb To decline a decline
To improve an improvement To deteriorate a deterioration
To recover a recovery To get worse a downturn
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 low point
To reach a maximum To hit bottom a trough
To peak
To undulate an undulation
To fluctuate a fluctuation

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 / OHT’s / 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.

35
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 / OHT’s, 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

36
Read the following passage and identify at least six
recommendations about speaking technique which can help to
make the message in a presentation clear.

You’re 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 audience’s attention?
What is the secret for those who do? First, find out about the audience
and what they need to know. Plan what you’re going to say and say it
clearly and concisely.
A good speaker uses various signals to help hold the
audience’s 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. Let’s 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 That’s all I want to say about the development of the
product. Now let’s 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

37
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 I’ve already said, there is no
alternative but to increase production by 100 per cent or I’d 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 doesn’t 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:

38
Introduction Main body of information

First part Second part Third part

Practice 4

The information below is part of a Product Manager’s 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 Below-the-line advertising

television commercials
newspaper advertising
magazines
youth magazines in-store on-pack targeted
women’s magazines e.g. e.g. mailing
displays, coupons,
merchandising competitions,
free samples joint promotions

Begin as follow:
‘ Good morning, everyone. I’d 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. I’ll 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.
39
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.
That’s all for the introduction.

Beginning the main body

Now let’s 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

Let’s 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 there’s 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 …
I’ll describe the development of the idea.
First the background, then the present situation, and then the prospects
for the future.

40
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 Sections Subsections

A i a.
b.
ii.
B i. a.
b.
ii.
iii. a.
b.
c.
C i. 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

41
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 – I’ve 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, vice-
presidents, or potential trainees, the Training Manager has outlined
recommendations and explained what is available. He/she can end
with:
‘Right! I’ve 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?'

42
 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.
Don’t say anything you’ll 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 someone’s 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. That’s a pretty amazing

43
 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 don’t 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.
That’s all I want to say for now on …

Beginning the summary and/or conclusion

I’d like to end by emphasizing the main point(s).
I’d like to finish with …
 A summary of the main points.
 Some observations based on what I’ve 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 I’d like to invite your comments.
Now we have (half an hour) for questions and discussion.
Right. Now, any question or comments?
So, now I’d be very interested to hear your comments.

44
Handling Questions

Understood but difficult or impossible to answer

That’s a difficult question to answer in a few words.
 it could be …
 in my experience …
 I would say …
 I don’t think I’m the right person to answer that. Perhaps (Mr.
Holmes) can help …
 I don’t have much experience in that field …

Understood but irrelevant or impossible to answer in the time

available
I’m afraid that’s outside the scope of my talk / this session. If I were
you I’d discuss that with …
I’ll have to come to that later, perhaps during the break as we’re short
of time.

Not understood
Sorry, I’m not sure I’ve understood. Could you repeat?
Are you asking if …?
Do you mean …?
I didn’t 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.

45
 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, don’t answer if you
don’t want to.
 Refer questioner to another person if you can’t answer.
 Suggest you’ll 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.

46
 Don’t 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 haven’t all met before so I’d
better introduce myself. I’m Luis Lopez from the development
department of Citrus Incorporated… I should say before we start that I
hope you’ll excuse my English. I’m a little out of practice…
Anyway, I’m going to be talking this morning about a new product
which we are planning to launch in two months’ time; it’s called
KOOL-OUT, that’s K-O-O-L dash O-U-T, and it’s a lemon-flavoured
drink…
Well, I’ll start with the background to the product launch; and then
move on to a description of the product itself, I’m going to list some of
the main selling points that we should emphasize in the advertising
and sales campaign. I think if you don’t mind, we’ll 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
47
in a moment, you’ll 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 we’ll 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, let’s 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… it’s low calorie, too.
O.K., so just before closing, I’d like to summarize my main points
again… We have KOOL-OUT, a new design concept, aimed at a
relatively new age and income group; it’s 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
today’s market… well, that’s all I have today for the moment, thank
you for listening, now if there are any questions, I’ll 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, I’d like to run through the main points again…
c. I’ll begin by describing ---------, and then go on to ---------, and
I’ll end with -------- .
d. In conclusion…
e. I want to stress…
f. Good afternoon.
g. That brings me to the end of my presentation.
h. I’d like to talk about…
i. To return to the point I made earlier…
j. First, let me introduce myself; I’m ------- from ---------- .
k. Feel free to interrupt if you have any questions.
48
l. Thank you for your attention.
m. First of all … Next …
n. Please excuse my rather poor English!
o. I’d like now to turn to…
p. If you have any questions, I’ll be glad to answer them.
q. 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 haven’t mentioned the price yet!
b. Your product is more expensive than your competitor’s!
c. I’d like the exact specifications, please!
d. I still don’t 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. I’ll be coming to that in a moment.
3. You’re 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
49
 I wonder why it’s so expensive?

Now, you may well ask, what does the mean by ‘up-market’?
Anticipates
What’s ‘up-market’?

You will have noticed that I haven’t given any figures.

Anticipates
Where’s 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. Why is the delivery period so long?

b. What’s ‘top quality’ specification?
c. Do the accessories have to be so expensive?
d. Why doesn’t he mention the price?
e. Can he prove what he says with figures?

4. Meetings

7. Preparation for the meeting

Language Checklist
Chairing and leading discussion

Opening the meeting

Thank you for coming …
(It’s ten o’clock). Let’s start …
We’ve received apologies from …
Any comments on our previous meeting?

50
Introducing the agenda
You’ve all seen the agenda …
On the agenda, you’ll see there are three items.
There is one main item to discuss …

Stating objectives
We’re 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
I’d like to ask Mary to tell us about …
Can we hear from Mr. Passas on this?
I know that you’ve prepared a statement on your Department’s
views…

Controlling the meeting

Sorry Hans, can we let Magda finish?
Er, Henry, we can’t talk about that.

Summarising
So, what you’re saying is …
Can I summarise that? You mean …
So, the main point is …

Moving the discussion on

Can we go to think about …
Let’s move on to the next point.

Closing the meeting

I think we’ve covered everything.
So, we’ve decided …
I think we can close the meeting now.
That’s it. The next meeting will be …

51
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.

52
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
Chair’s opening address
Apologies for absence.

53
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 …
There’s no alternative to …
It’s obvious that …
Clearly / obviously …

Asking for opinion

I’d like to hear from …
Could we hear from … ?
What’s 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? That’s impossible. We / I think …

54
Handling interruptions
Yes, go ahead.
Sorry, please let me finish …
If I may finish this point …
Can I come to that later?
That’s 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
55
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.

56
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. Read the text again. Do you agree with:

a. The first sentence? Give reasons for your answer.
b. Hayne’s suggestions for the steps involved in decision making?
c. The view that communication must be a two-way process?
d. 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 cost-
effective 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 another’s needs and
perceptions. If these are not effectively communicated, if there is an

57
insufficient degree of understanding of one another’s 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
58
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 …
59
Checking that the clarification is sufficient
Is that okay? / is that clearer now?

Referring to other speakers

As Peter has already told us …
I’m sure Mr. Kowski knows about this …
Later we’ll 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 …
We’ve covered everything, so I’d like to go over the decisions we’ve
taken …
So, to conclude … we’ve agreed …
 Confirming action
We’ll contact …
John will …
We’ve got to …
We need to look at …
 Referring to next contact
We’ll meet again next month …
We look forward to hearing from you …
It’s 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!
60
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 Participant B

Ask if the meeting can

reach a decision on this.

Respond that we need more

information.
Ask for clarification.

61
 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 chair’s 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.

62
5. Negotiations

10. Know what you want

Language Checklist
Negotiations (1)
Making an opening statement

Welcoming
Welcome to …
I’m 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

I’d 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 don’t 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
I’d like to finish there and give you the opportunity to reply to this.
I’d like to hand over to my colleague …, who has something to say
about …
63
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

64
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.
 Win–lose negotiation

65
 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.
66
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 won’t like your speculation.
 Note the other side’s answers, but don’t 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

67
 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 (zonă 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 …
That’s not acceptable unless …

68
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 …
Let’s 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.
That’s probably all right.

Confirming
Can we run through what we’ve agreed?
I’d like to check what we’ve said / confirm
I think this is a good moment to repeat what we’ve agreed so far.

Summarising
I’d like to run through the main points that we’ve talked about.
So. I’ll 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 we’ll …
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.’
69
 Ask for concessions
 All concessions are conditional
 Conditions first ‘If … then …’
 ‘It’s a package’
 Give what’s cheap to you and valuable to them.

During the negotiation

Main speaker
 Create a joint, public and flexible agenda.
 Question needs and preferences.
 Don’t talk too much.
 Listen.
 Don’t 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, ‘That’s right …’)
- Emphasise (‘This point is very important’)
- Add forgotten points (‘And we must remember …’)
- But don’t make concessions for your main speaker.
- Listen.
- Don’t 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. free delivery / large order
70
c. free on-site training / small increase in price
d. 5 % discount / payment on delivery
e. extra £ 50, 000 compensation / agreement not to go to law
f. promise to improve safety for staff / agreement on new contracts
g. 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 Beck Instruments

Offer to buy the machine if BI
can give a good price.
Say that your prices are very
competitive.
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 can’t
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

Agreed drawn up confirm included
71
 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.

72
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 don’t 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.

73
 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 2 a)1 b)2 c)3 3 a)3 b)2 c)1

4 a)1 b)3 c)2 5 a)3 b)1 c)2 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
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e. have the negotiation in a different place
f. change the individuals involved
g. ask an independent person to come and help you reach agreement
h. 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 amâna, a suspenda) to think and reflect
 Fix an off-the-record meeting (întâlnire neoficială)
 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.

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Suggest leaving the point and returning to it later after discussing
other issues, i.e. training for technical staff.

Situation 2
There’s 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.

 Below are five strategies in dealing with conflict. Use them in

making statements.
a. Adjourn to think and reflect.
b. Summarise progress and areas of agreement.
c. Leave the problem, discuss something else, come back later to the
problem.
d. Emphasise the loss to both sides of not reaching agreement.
e. 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, we’ll agree a 10 % discount.
You don’t know how many units you will need in six and twelve
months. It might be more or less.

Situation 2
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The price we are offering excludes installation costs but does include
a twelve month’s 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. It’s not
much to ask for.
You cannot spend more than your budget.

Situation 4
Now, some excellent news: we’d 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.
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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
I’m afraid we can’t …
Before agreeing to that we would need …
Unfortunately …
I don’t think it would be sensible for us to …
I think if you consider our position, you’ll see that …

Ending negotiations
So, can we summarise the progress we’ve made?
Can we go through the points we’ve agreed?
Perhaps if I can check the main points …
So, the next step is …
What we need to do now is …
It’s been a very useful and productive meeting.
We look forward to a successful partnership.

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Breaking off negotiations
I think we’ve gone as far as we can.
I’m sorry, but I don’t think we’re going to agree a deal.
It’s a pity we couldn’t 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 side’s position
 Highlight advantages of agreement

Don’t … Do …
 Be sarcastic ask questions
 Attack listen
 Criticise summarise
 Threaten build on common ground
 Blame explain your feelings

Types of negotiators

Hard
Negotiates to win
Makes demands

Principled
Looks for common benefits
Makes offers

Soft
Looks for agreement
Accepts what’s on offer

Fighter Independent advantage Creative negotiator

Win-lose win-win looks for agreement

Rejecting

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 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

Conditions Examples
Unit price $8.50 per unit
Minimum quantity at least 10,000 units
Credit period 30 days after invoice
Delivery date 20 June 2003
Bulk discount -2 % if over 10,000 units
Penalty clause 5 % for each month of delay
Cancellation clause 50 % charge if cancelled less
than six weeks beforehand
Exclusivity sole rights over all East Coast
states
Royalty on sales under licence 3 % of turnover on licensed
goods
Commission 5 % on sales in the territory
Early settlement discount -2 % if paid within 20 days
Option period first option for 12 months
after contract

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Method of payment irrevocable letter of credit
Warranty period 18 months warranty from
completion

 DATAFILE: Negotiation

Below are the stages of negotiation and some expressions which you
may find useful at each stage:

Conversation (1)
I’m sure/confident we can reach agreement. (optimistic)
I’m sure there’s room for negotiation.
We have a lot to discuss.
Let’s 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 other’s 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)

I’m sorry, I can’t accept 2 %.
You’ll have to do better than that, I’m afraid.
I’m afraid it’s not enough.
Other firms offer more than 2 %.

Refusing to move (5)

I’m afraid I can’t agree to / that.
/ increase the rate.
/ lower the price.
/ shorten delivery.
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We’ve 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)

Let’s just go through the terms.
Let’s 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, let’s get started. You know, with this delivery
problem I’m sure there’s 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. It’s 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

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said that you couldn’t take it any later, but couldn’t 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. I’ve already offered you seven weeks. I’ll have to consult
with my colleagues and come back to you, but I can’t 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. Find out how many points are to be negotiated.

2. Start from an extreme position.
3. Assume the other person owes you a concession.
4. Never concede without exchange.
5. Never give what you can sell.
6. Exaggerate the value of your concessions, minimize the value of
his.
7. If he insists on ‘principle’, expect a concession in return.
8. Only threaten what you are prepared to carry out.
9. Don’t show disrespect to your opponent.
10. If you’re happy with the result, don’t shout ‘I’ve won!’

Read Dr Zap’s 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. B.
a. You see? I knew I’d win!
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1. If you increase the order, then we may be able to reduce the price.
b. I know what you want to discuss, so let’s start.
2. Very well, but if you can’t give discounts I’m sure you can
extend…
c. I can reduce the price. Does that help?
3. If you can’t accept this, I may have to reconsider my position.
d. Delivery? That’s no problem; no extra charge.
4. I think we can agree on these terms.
f. It’s against your policy to give discounts? OK.
5. I’m afraid that will not be possible.
g. What a ridiculous idea! Don’t be stupid!
6. May we go through the points to be discussed before we begin?
h. Another half per cent? Yes, that’s very generous offer you’re
making.
7. Half per cent is very small amount
i. This is my final offer. If you refuse, I’ll 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 Zap’s 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?
I’m sorry, could you go through that again?
I don’t think we’re talking about the same thing.
That’s right! We’re talking at cross-purposes.
Can we say it’s agreed, here and now?
I’ll have to come back to you on this.
Where does the January figure come from?
I’m just looking. Could you bear with me a moment?
So what is the basis of calculation?
I’m sorry, I don’t have the figures to hand.

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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 agreement

condition binding
Section party provide for arbitration
compromise comply with/abide by
Litigation out of court breach valid
court term void

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
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 --------- 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.

We’ve 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
infringer’s production.

Let you have yearly bottom limit illegal copying

Official manufacturer have the legal rights over copier’s
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

86
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 one’s job perfectly, as well as the work
of one’s subordinates
I being persuasive: able to convince people to do things
J having good ideas

 Reading
This text summarizes some of Peter Drucker’s 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
87
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 company’s 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 business’s 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 company’s 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 board of directors communicate innovations

manageable performance
Resources setting supervise

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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 don’t ……… 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 company’s ………. .
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 –

89
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 (şef de producţie) in a manufacturing plant, the technical
supervisor (şef de echipă) in a research department, and the clerical
supervisor (şef 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 organization’s 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,

90
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-preşedinte senior (mai important decât cel
Junior)
president = preşedinte
executive vice-president – vice-preşedinte 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
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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 organization’s 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 day’s 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 organization’s
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.

92
 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
organization’s 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, şir) 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
depărata, 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.
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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 organization’s interests and
activities. It involves the manager’s 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 manager’s 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 manager’s 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 A a system of authority with different levels,

one above the other
2 decentralization B a specific activity in a company, e.g.
production, marketing, finance
3 function C independent, able to take decisions without
consulting a higher authority

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4 hierarchy D people working under someone else in a
hierarchy
5 line authority E dividing an organization into decision-
making units that are not centrally controlled
6 report to F the power to give instructions to people at
the level below in the chain of command
7 subordinates 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

A.……………… B.………………….

C.………………. D………………..

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).

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 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,
întrepătrundere), 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
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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 well-
known 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 împărţi) 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:

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 Board of Directors
with a Chairman (GB)
or President (US)

Managing Director (GB)

or
Chief Executive Officer (US)

Production Marketing Finance Research & Personnel

Development
Market Sales Advertising
Research Promotions Financial Accounting
Management

Northern Southern
Region 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
organization’s stakeholders – that is, the groups with direct impact on
the organization’s 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.
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 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 influenţă) 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
organization’s 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 întârzia, a
rămâne în urmă) in competitiveness critical, and has also blurred (a
întuneca, a pune în ceaţă) the distinction between the private and
public sectors.
The environment determines the extent to which (gradul în 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 industrial-
organization 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.

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8. Production and products
 Vocabulary
a. Match up these words with the definitions which follow.

Capacity component inventory lead time plant

Location 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
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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.

Capacity component inventory lead time

Location outsourcing plants subcontractor

Manufacturing companies are faced with a ‘make-or-buy

decision’ for every item or (1) ………. they use (as well as for every
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process and service). Do they make it themselves or do they outsource
(a contracta lucrări în 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 vice-
president 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 producţie) are possible. Any quality
problems or product defects should be noticed more quickly,
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production (8)……… (timpul de conducere a producţiei) 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 creşte) by benefits such as customer advice,
delivery, credit facilities, a warranty or guarantee, maintenance, after-
sales 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 multi-
brand 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 schimbă mărcile pe care le
cumpără).

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 company’s
items, brands and products constitute its product mix. Since different
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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 up-
market 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 slăbi, a dilua) a
company’s 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 (nişă), 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
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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

2 to launch a product
3 market opportunities
4 market research
5 market segmentation
6 packaging
7 points of sale
8 product concept
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)

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9 product features I to introduce a new product onto the
market
10 sales representative 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
producer’s task is to find wants and fill them. In other words, you
don’t 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

106
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
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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 Focus Means Ends
point
Factory Products Selling & promoting Profits
through sales volume

a. The selling concept

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

b. The marketing concept

5 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
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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 agency’s 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-analogică) – 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 ţine seama, a neglija) the fact that increased
ad spending or counter-cyclical advertising (reclamă anticiclică) can
increase current sales. On the other hand, excessive advertising is
counter-productive (antiproductivă) 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.

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 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 company’s 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 customer’s attention
11 choosing to spend the same amount on advertising as one’s
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 don’t need.
4. Advertising often persuades people to buy things they don’t want.
5. Advertising lowers the public’s taste.
6. Advertising raises prices.
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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% 85% 90%

5 The four major promotional tools

Insert the following words in the text below.

Advertising aimed awareness channel loyalty

Maturity medium tactics target trial

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, attractively-
priced 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 product’s
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 company’s products that is
not paid for, in any (3)………. : read, viewed or heard by a company’s
customers or potential customers, aimed at assisting sales. Many
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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
company’s 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.
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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 pre-
launched 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 company’s 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-of-
mouth 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

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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 ‘We’re 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
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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 company’s 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 business’s 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.

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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 company’s 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 company’s 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 one’s suppliers
9 a merger with or the acquisition of one’s 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 (persoană
agresivă, acaparatoare) were able to borrow money, buy badly-

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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 făcute) 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 creanţe şi 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 neonorării plăţii) was lower
than might be expected. He created a huge and liquid market of up to
300 billion dollars for ‘junk bonds’ (obligaţiuni cu risc). (Millken was
later arrested and charged (a fi acuzat) with 98 different felonies
(crime, acte penale), including a lot of insider dealing (operaţiuni ale
unui iniţiat, a unei persoane angajate în respectiva firmă), 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)
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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
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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
Friedman’s article is the stakeholder (cei care deţin un interes) model,
outlined, for example, in John Kenneth Galbraith’s 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
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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
company’s 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
what’s it? It’s a store of value or a measure of wealth. Money is
anything that is generally accepted as payment for goods and

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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 zornăi
Rustle = a foşni
Clink = a zăngăni
Piggy-bank = puşculiţă
Cowrie = scoică, ghioc
Beads = mărgele, mătănii
Wampum = colier de scoici

From Chickens to Plastic

At the end of the day, of course, it doesn’t 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 – “I’ll 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 I’ve only got five
chickens, can I buy half a cow? Obviously, precious metals are a
practical alternative to payment in kind (în natură).

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 they’re easy to break and quickly dry up; in other words, they
don’t last.

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Portability – in some parts of Africa your wealth is measured in cattle.
This is fine if you’re trading locally, but if money isn’t 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
won’t 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 sovereign’s 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 monedă

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
(în dificultăţi 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
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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, paşi

Short of coinage = lipsă de monezi
Ban = a interzice, a scoate în afara legii
Frown upon = a nu fi de acord cu ceva
Redeem = a compensa, răscumpăra

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 – you’ll 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

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 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.
(în slang: lovele, biştari, parale, bani, câştig)
So what are you thinking about now? A penny for your thoughts! Oh,
I see, you like the look of that new jacket – it’ll cost you an arm and
a leg. I’m afraid, or, to put it another way, you’ll have to pay through
the nose for it.
You may like it so much you insist that money’s no object –
but don’t forget: money doesn’t grow on trees, so don’t 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 can’t 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, you’re
strapped for cash, broke, or even flat broke. Perhaps you don’t have
a dollar to your name, you don’t have a red cent and you haven’t got
a bean, in which case you’re as poor as a church mouse!
If, on the other hand, you’ve got plenty of money then you’re
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 you’re laughing all the way to the bank.
You’ve got money to burn; you’re 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 you’re mean or stingy (zgârcit). Perhaps they’ll call you a miser
behind your back; in the US you’d be called a tightwad (calic, avar).
You might reply that money doesn’t grow on trees – but then
others might say that you can’t 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.

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28. The profits of labor

Roman soldiers were given part of their pay in salt, as it was

so valuable – at least that’s 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 take-
home 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 you’re paid overtime. If your company has been doing well, you
may get a bonus.
If you’re 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 company’s
performance, you will be given a golden handshake when you leave.
Perhaps you’re 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 doesn’t 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!

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White-collars workers = funcţionari
On the dole = ajutor de şomaj, subvenţie de la stat
On welfare = ajutor social
Share options =
Fringe benefit / perks = beneficiu suplimentar
In lieu of money = în loc de bani
Incur = a face, a crea
Lump sum = sumă globală / unică, plată unică

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 you’ll
probably negotiate a loan with your bank; you can either borrow a
fixed amount or agree a credit limit.
If you’re buying a house, then you’ll 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 you’re 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
you’ve 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 sfoară

Bailiff = inspector
Dreaded = de temut

Forgery
With the invention of money came forgery. Modern
counterfeit notes can be extremely difficult to spot and new
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developments in the production of notes are soon copied by the
forgers. Here’s 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 shouldn’t 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 contrafăcute
Forgers = falsificatori
Crisp = fragil
Embedded = introdus

IDIOMS

Hard Times
If you’ve 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
you’ve got enough saved up, that you’ve been saving for a rainy day
or that you’re lucky enough to have a nest egg that you’ve finally
decided to use.

Frills = fasoane, lucruri care nu sunt necesare

Scrounge = a şaprli, a şterpeli
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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 individual’s or a company’s 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 company’s owners
2. Depreciation
B all the money received by a company during a given period
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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
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replacement cost of plant or (2) ……… . The value of a business’s
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 company’s financial situation on a
particular date, generally the last day of the financial year. It lists the
company’s assets, its (8) ………… , and shareholders’ (stockholders)
funds. A business’s 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 +
Owner’s (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 company’s reserves, including the year’s
retained profits. Shareholders’ equity or net assets are generally less
than a company’s 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
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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 şi a profitului
The balance sheet – bilanţul contabil
Net Assets – activul net
Share capital – capitalul acţinilor
Share premium (GB) or paid-in surplus (US) – primă suplimentară
din acţiuni
Company’s reserves – rezervele firmei
The year’s retained profits – profitul păstrat dintr-un an
Goodwill – clientela; fondurile comerciale; vad
Source and application of funds statement / the statement of
changes in financial position – situaţia surselor şi a aplicării
fondurilor / situaţia schimbărilor din situaţia financiară

 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 1993
₤ ₤
[1 …………………….] 21,471,680 15,341,689
(income from football and related
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activities: gate receipts, broadcasting,
ground advertisements, prize money)

Costs and [2 ………………………], (14,951,737) (12,804,538)

less other income (costs include
salaries, [3 …………………], auditors’
remuneration, and lease payments; other
income includes Interest Receivable)

Profit on Ordinary Activities before

Transfer Fees 6,519,943 2,537,151

Transfer fees payable (889,588) (54,259)

Profit on Ordinary Activities before

Taxation 5,630,355 2,482,892

Taxation (1,596,226) (750,000)

Profit after Taxation Retained for

The Financial Year 4,034,129 1,732,892

Arsenal Football Club PLC – Balance Sheet 31st May 1994

1994 1993
₤ ₤
Fixed Assets 28,478,922 18,982,931
(including [4 ……………….],
leasehold properties, plant and
equipment, and motor vehicles;
all recorded at [5 ……………]
minus depreciation)

Current Assets 9,607,592 7,991,088

Stocks; (including [6 ………….],
Instalments on executive boxes);
and [7 …………….]

Creditors (9,863,457) (8,755,491)

Amounts falling due within one
year (including [8 …………….]
and social security)

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Total Assets less Current Liabilities 28,223,057 18,218,528

Long Term Liabilities

Amounts falling due after more than
One year (including debenture
Subscriptions) (17,893,500) (11,923,100)

[9 ………………………..] 10,329,557 6,295,428

Capital and Reserves

[10 ………………………] 56,000 56,000
Share premium account 237,201 237,201
Building reserve 846,000 846,000
Profit and loss account 9,190,356 5,156,227
(year’s profit added to previous balance)

Shareholders’ Funds 10,329,557 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
după) 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

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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
world’s 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 (marjă) between a currency’s
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
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established parties between member currencies, and a margin of plus
or minus 2 ¼ %. 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
world’s 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 împotriva) 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.

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 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.

 Vocabulary

1. Match up the half-sentences below.

1. To ‘peg’ a currency against something means to

A. the amount of a country’s 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?

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Abolish adjust appreciate convert diverge
Establish fluctuate peg suspend 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

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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 one’s 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
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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 country’s 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 lender’s 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 world’s 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.
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Commercial / retail bank – bancă comerciale / bancă de depozit
Merchant bank / Investment bank – bancă comercială / de investiţii

 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 one’s 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 client’s 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 advice
Do bonds
Exchange business
Issue currencies
Make deposits
Offer funds
Pay interest
Raise loans
Receive profits
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Underwrite 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 you’ll have to fill in.
Mr. X – There may be a problem. You see, I’m 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, I’m going to stay and work here for a while, and I’d
like my salary to be paid into my account. But I don’t want to have to
give notice before I can withdraw money.
Bank Clerk – It’s obviously a current account you need.
Mr. X – How long will take to open an account?
Bank Clerk – Doesn’t 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 I’d 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.

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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 won’t 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).
I’m open over/down here.

Queue / stand in line = a sta la coadă

Teller / clerk = funcţionar la ghişeu

You can then tell him or her what you want:

I want/need/would like to cash a check.
I’d like to cash these travelers checks, please.
Can you change a ten-pound note, please?
I’d like ten dollars’ worth of quarters, please.
I need a roll of quarters.

If you have an account there:

I’d like to make a deposit.
I’d like to withdraw some money from my account.
I’d like to make a withdrawal.

If you want to withdraw some money from abroad:

I’d 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)?
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Your reply:
It doesn’t 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?
I’d like the name and address of your bank, your account number and
your sorting code, please.
Please fill in this form.
I’m afraid you’ll have to go to the enquiries desk (biroul de
informaţii).

Or, if you’re cashing a check:

Could you endorse this (sign it on the back), please.

Perhaps you’re 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?
I’d like to change/buy some foreign currency.
What’s 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.
I’m 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?
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Are there any additional expenses?
What commission do you charge?

Maybe you’re staying in an Anglophone country for more than a

year and you want to open a bank account there:
I’d like to open a deposit/checking/ savings account, please.
I’d like to apply for a loan.
I’d like to get a safety deposit box (safe de depuneri).
What’s the interest rate on this account?
Could you explain the service charges on this account?
Could I have a new checkbook, please?
I’d like to apply for a bank/cheque/credit/cash card, please.

Means of payment.

I’d just had a phone call from the bank. They couldn’t cash in D’s
cheque. They were told there were insufficient funds on his account.
I’m surprised. That would be the first time. Can you remind me of the
amount?
It’s 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?
I’m 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? I’m sure he’ll
settle immediately.
I’ll do that. Something else. I’ve had very bad information about B,
you know, the reseller (vânzător) who wanted immediate delivery.
I see who you mean. It’s his first order with us?
That’s it. He’s 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 comandă). Delivery is
out of the question until the sum has been paid into our account.
Well, I think that’s all. Oh yes! One more thing, the drafts to be
discounted…

Means of payment. Key sentences.

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His account is overdrawn (in the red).
Cecul său este descoperit.
The settlement is long overdue.
Plata ar fi trebuit să fie făcută demult.
What’s his current account number?
Care este numărul contului său curent?
Charge it to my account.
Scoateţi suma din contul meu.
Settle the amount by money order if you find it more convenient.
Plătiţi suma prin mandat poştal dacă consideraţi că este mai practic.
The cheque was made out to his order.
Cecul era făcut la ordinul său.
He intends to open a deposit account at one of our branches.
El are intenţia să deschidă un cont pentru depuneri la una din
sucursalele noastre.
I think I remember it was a bearer cheque.
Cred că îmi amintesc, era un cec la purtător.
Normally, that payment-in ought to have been recorded on my last
statement of account.
Normal, acea plată (vărsământ) ar trebuie să figureze pe ultimul meu
extras de cont.
For sight withdrawals, you simply have to go to counter no.3
Pentru retragerile la vedere, ajunge să mergeţi la ghişeul nr.3
She will pay us by instalments over six months.
Ea ne va plăti în rate eşalonate pe şase luni.
I have kept the stub (counterfoil) of the cheque which I issued on
March 6th.
Am păstrat 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 cărţii de credit trebuie să informeze imediat biroul nostru
cel mai apropiat în caz de pierdere sau de furt.
Thanks to your credit card, you may rent a car without leaving a
deposit.
Datorită cărţii dumneavoastră de credit veţi putea închiria o maşină
fără să lăsaţi o garanţie.
How is it that this cheque has not been endorsed?
Cum se face că acest cec nu a fost andosat?
I suppose you’d rather be paid in cash?
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Presupun că preferaţi să fiţi plătiţi cu bani gheaţă.
The draft will fall due at the end of the month.
Trata ajunge la scadenţă la sfârşitul lunii.
Why haven’t you presented this draft for acceptance yet?
De ce nu aţi prezentat încă această trată la acceptare?
How long will it take to have the sum transferred to my account?
Cât durează să viraţi suma în 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 semnăturii (din cauză că
semnătura nu era cea adevărată).
This is not the first time he has issued bad cheques (dud checks;
cheques that bounce).
Nu este prima dată când el emite cecuri fără 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 traveller’s
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
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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 îndrumat

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 plătitor şi se plăteşte beneficiarului sau la

ordinul său. O trată este trasă de creditor asupra debitorului şi se
plăteşte trăgătorului sau unei terţe părţi după acceptare de către tras.

Bank. Key sentences.

1. An interest is charged on all banks services.

Se percepe dobândă pentru toate serviciile bancare.
2. You had better ask for an overdraft before your account is
overdrawn (in red).
Ar fi bine să cereţi un descoperit înainte de a vi se epuiza contul.
3. I always deposit my valuables and my wife’s jewels in a bank safe
before leaving for a long holiday.
Depun întotdeauna obiectele mele de valoare şi bijuteriile soţiei
la o bancă înainte de a pleca într-o vacanţă de lungă durată.
4. Where can I cash this cheque (check – U.S.)?
Unde pot încasa acest cec?
5. Remember to record all withdrawals on counterfoils (U.S. – stubs)
in your cheque-book.

147
 Nu uitaţi să înregistraţi toate retragerile pe talonul carnetului
dumneavoastră de cecuri.
6. They offered me to refund a 2,000 personal loan over a 30-month
period.
Ei mi-au propus să rambursez un împrumut personal de 2.000 de
lire în treizeci de rate lunare.
7. When writing out or endorsing a cheque, one must be careful to
avoid any erasure.
Când se redactează sau se andosează un cec, trebuie să se evite
orice ştersătură.
8. She made out so many dud (bad) cheques that no bank will trust
her with a cheque-book.
Ea a întocmit atâtea cecuri fără acoperire, încât nici o bancă nu-I
va mai încredinţa un carnet de cecuri.
9. Don’t forget to have these bills discounted by the end of this
month.
Nu uitaţi să scontaţi aceste efecte la sfârşitul lunii.
10. Recently a trader sued his banker after he could no longer have his
bills discounted.
Recent, un comerciant a intentat un proces băncii sale după ce n-
a mai avut posibilitatea să-şi sconteze efectele de comerţ.
11. The clearing-house will centralize all the operations dealing with
the exchange of bills and cheques between banks.
Camera de decontări/oficiul de cliring va centraliza toate
operaţiunile care se referă la schimbul interbancar de efecte de
comerţ şi cecuri.
12. The U.S. investment banks have just raised their prime rate by ¼
point to 6,75%.
Băncile de investiţii americane tocmai au crescut rata de bază (a
dobânzii) la 6,75% mărind-o cu un sfert de punct.
13. The increase in the price of short-term money has been confirmed
whereas longer term rates remain stable.
S-a confirmat creşterea preţului pentru împrumuturile pe termen
scurt, în timp ce ratele (dobânzii) pe termen lung rămân stabile.
14. 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 bază reprezintă rata acordată de băncile americane
clienţilor care prezintă cel mai mic risc.
15. The spell of monetary stability has lasted since the begining of the
year.
148
 Această perioadă de stabilitate monetară durează de la începutul
anului.
16. The policy of expensive money is meant to fight inflation.
Politica dirijată împotriva creşterii preţurilor este destinată
combaterii inflaţiei.
17. …but it has immediate repercussions on corporate income
statements.
…dar acest lucru are repercursiuni imediate asupra conturilor de
venit şi pierderi ale întreprinderilor.
18. The Central Bank acts as banker to the government and to other
banks, and as the central note-issuing authority.
Banca centrală funcţionează în calitate de bancher pentru guvern
şi alte bănci şi ca autoritate centrală de emisiune monetară.

Banking. Key sentences.

1. I’d like to change French francs into pounds.

Aş vrea să schimb franci francezi în lire.
2. Your account is in the red (overdrawn).
Contul Dumneavoastră este epuizat.
3. Should I (must I) endorse the cheque?
Trebuie să andosez cecul?
4. He has opened a giro account.
El a deschis un cont-cec poştal.
5. My salary is paid into my account every month.
Salariul meu este vărsat în contul meu în fiecare lună.
6. The holders of such deposit accounts must give seven day’s notice
before withdrawal.
Deţinătorii de astfel de conturi de depuneri trebuie să înştiinţeze
(banca) cu şapte zile înainte pentru a-şi retrage banii.
7. Savings accounts earn an interest.
Conturile de economii aduc o dobândă.
8. The last withdrawal dates back to the 27th of last month.
Ultima retragere este din 27 luna trecută.
9. He wanted me to make out a blank cheque.
El voia să facă un cec în alb.
10. I’m not sure I kept the stub.
Nu sunt sigur că am păstrat talonul.
11. Why not endorse the cheque to his (her) name?
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 De ce să nu andosez cecul pe numele lui (ei)?
12. My bank will lend me part of the sum.
Banca mea o să-mi dea cu împrumut o parte din sumă.
13. He will find it hard to repay his loan.
Îi va fi greu să ramburseze împrumutul.
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 să împrumute atât.
16. This is the 5th bad cheque (dud cheque) we’ve had this month.
Este al cincilea cec fără acoperire care mi se dă luna aceasta.
17. Please go to counter 6.
Vă rog să mergeţi la ghişeul 6.
18. Please give me the rest in 5-pounds notes.
Daţi-mi restul în hârtii (bancnote) de 5 lire.
19. The statement has still not reached me.
Extrasul (de cont) nu a ajuns încă la mine. (nu mi-a parvenit
încă)
20. I have to (I must) replenish my account.
Trebuie să-mi reaprovizionez contul.
21. She hasn’t drawn on her account for 3 weeks.
Ea nu a mai scos din contul său de trei săptămâni.

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 already-
taxed costs from previous stages, is called a/an
150
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 people’s 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 vânzări
Capital gains tax – impozit pe plusul de capital
Capital transfer tax – impozit pe transferul de capital
Fiscal policy – politică fiscală
Tax avoidance – evitare fiscală
Tax evasion – evaziune fiscală
Tax – taxă, impozit
Taxation – impozit, impozitare
Tax shelter – protecţie fiscală
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

151
- 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 părerea) 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 Italy’s gross
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national product (GNP) figure, and then claimed that Italy had
overtaken Britain to become the world’s fifth largest economy.
To reduce income tax liability, some employers give highly-
paid 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 tax-
deductible.
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.
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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

154
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 don’t
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 company’s 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 year’s 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.

155
 Buying a share gives its holder part of the ownership of a
company. Shares generally entitle their owner to vote at a company’s
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 company’s 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.

156
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 investor’s 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
6. a stock – which usually has a high purchasing price and a low
current rate of return – that is expected to appreciate in capital
value
7. a wholesaler in stocks and shares who deals with brokers
8. financial organizations such as pension funds and insurance
companies which own most of the shares of all leading companies
(over 60%, and rising)
9. the use of information not known to the public to make a profit
out of buying or selling shares

157
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
firm’s 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 Moody’s 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 bond’s 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
158
spending exceeds receipts from income tax, VAT, and so on. Long-
term 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 – firmă de rating

Debt financing – finanţarea debitului
Equity financing – finanţarea acţiunilor
Investment grade – gradul riscului de investiţie
Debt-equity ratio – raţia debit-acţiuni
Public spending – chletuieli publice
Receipts – încasări, 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 A the amount of a loan

2 issuing bonds B borrowing money
3 principal C date at which the money will be
returned
4 maturity D fall in interest rates
5 pension funds E keep their bonds till maturity
6 buy-and-hold investors F default
7 non-payment G profits on the sale assets
8 price appreciation H providers of funds
9 price depreciation I retirement money
10 capital gains J rise in interest rates

 Vocabulary
159
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
security’s 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

160
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-the’counter’ 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.

161
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 season’s 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
162
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 option’s exercise price or strike price, no-
one 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 company’s floating rate loans. Whether they save or lose
money will depend on the movement of interest rates.

Call option – opţiune de achiziţie

Put option – opţiune de vânzare
Exercise price / strike price – preţ de exerciţiu
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
163
Find words in the text that are in an obvious sense the opposite of
the terms below.

Appreciate call discount drought floating

Hedging spot market strike price

 Glossary

Acceptance – acceptare (trată)

Acceptor – tras, acceptor
Allow credit – a acorda un credit
All-time high – un record de creştere a cursului
All-time low – un record de scădere a cursului
Amount – o sumă, un total
Amount to – a se ridica la, a ajunge la
Arrears – datorii, restanţe, arierate
Articles of Association – statutul societăţii
Assess, to estimate – a evalua, a estima
Assessment, an estimate – o evaluare, o estimare
Assets – activul
Auction – o vânzare prin licitaţie
Austerity – austeritate
Back – a susţine financiar
Bad cheque, dud check – cec fără acoperire
Bad debt – o creanţă neplătită
Balance of account –un sold de cont
Balance of Payments – balanţa de plăţi
Balance of Trade – balanţa comercială
Bank clerks – funcţionari bancari
Bank (A.E. discount) rate – rata scontului Băncii centrale
Bank account – cont bancar
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Bank tellers – casieri (la bancă)
Bank wickets – ghişee ale băncii
Banking regulation – reglementări bancare
Banknotes (A.E. bills) – bancnote
Bargain – a negocia
Barrier – o barieră
Barter / counter-trade – troc
Base rate / prime rate – taxă preferenţială / rata de bază
Be in the black – a fi creditor
Be in the red – a fi descoperit/ în deficit
Bear – un speculator de bursă (care mizează pe scăderea cursului)
Bear an interest – a produce o dobândă
Bearer – un purtător
Bearer cheque – cec la purtător
Benefit – un avantaj
Bill, a check (US) – o notă de plată
Bills – facturi, note de plată, efecte bancare
Bills of Exchange (B.E.), drafts – cambii, poliţe, trate
Bite – a avea efect
Blank cheque – cec în alb
Blue chips – acţiuni ale marilor companii
Board of directors – consiliul de administraţie
Bond – o obligaţiune
Bonus issue, shares / stock dividends – acţiuni gratuite, dividente
nominale
Boom – un avânt (perioadă de succes)
Boost – a relansa
Borrow – a lua cu împrumut
Borrower – cel care ia cu împrumut
Branch – sucursală
Brand – o marcă comercială
Break even – a echilibra conturile
Bring down – a micşora, a diminua
Brisk – activ, animat
Buck – bancnotă sau bancnote de un dolar (A.E. familiară)
Building society – o bancă populară de economii pentru cumpărare de
locuinţe
Bull – un speculator de bursă (care mizează pe creşterea cursului)
Bullion – lingou din metal preţios
Buoyant – susţinut, bine orientat
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Buy forward – a cumpăra la termen
Bylaw – prevedere regulamentară
Cap taxes – a fixa un plafon pentru impozite
Cash a cheque – a încasa un cec
Cash flow – flux de numerar
Cash point – un aparat distribuitor de bancnote
Cashier – casier în unităţi economice
Ceiling – plafon, nivel maxim
Central Bank – banca centrală
Change francs into pounds – a schimba francii în lire
Charge – taxă, preţ, cheltuieli
Cheque-book – carnet de cecuri
Cheque-book (A.E. checkbook) – carnet de cecuri
Chief executive officer / managing director – director general
Clearance sale – o vânzare la solduri
Clearing-house – cameră de compensare/decontare/oficiu cliring
Close – închidere
Close down – a avea un curs scăzut la închidere
Coin money – a bate monedă
Coins – monede, bani metalici
Collapse – a se prăbuşi
Collateral – garanţie, gaj / garant, girant, gir
Collect – a încasa, a percepe (impozite)
Commercial / retail bank – bancă comerciale / bancă de depozit
Commodity – o marfă (de larg consum)
Compete with sb. – a concura cu cineva, a face concurenţă cuiva
Competitive – competitiv
Composite rate – rată compusă
Contribution – cotizaţie, contribuţie
Convergence criteria – criterii de convergenţă
Cost accounting – contabilitate analitică / analiza costurilor
Cost effective- rentabil, care îşi merită preţul
Cost of living – costul vieţii
Council tax – impozite locale
Counter – ghişeu
Counterfeit – a contraface, a falsifica, a face bancnote false
Credit a sum to an account – a vira o sumă într-un cont
Credit an account – a credita un cont
Credit rating – evaluare a solvabilităţii clientelei
Credit squeeze – restrângere a creditului
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Credit standing – situaţie financiară, gradul de solvabilitate
Creditor – creditor
Crisis – o criză
Cross out – a bara
Crumble – a se prăbuşi
Curb – a frâna, a stăpâni
Currencies – devize
Current / checking account – cont curent
Current account deficit – un deficit al balanţei de plăţi curente
Current account; account current – cont curent
Custom-made – făcut pe/la comandă
Customs – vamă
Dabble on the Stock Exchange – a juca la Bursă
Deal – o tranzacţie
Dealer – un dealer
Debit a sum from an account – a debita o sumă dintr-un cont
Debit an account by a sum – a debita un cont dintr-o sumă
Debt – o datorie
Debtor – un debitor
Decline – a decădea, o scădere
Deeds – acte, contracte
Default – a nu onora
Default on a payment – a nu onora o plată
Defaulter – rău platnic
Defer – a amâna, a întârzia
Deficit – un deficit
Deflation – deflaţie
Delay – a amâna, a întârzia
Demand – cerere
Deposit – a depune
Deposit / time / notice account – cont de depunere
Deposit account – cont de depunere la scadenţă, de depozit
Deposit bank – bancă de depuneri
Depositor – depunător
Depreciation – amortizare, depreciere
Deregulation – dereglementare
Devaluate – a devaloriza
Devalue – a devaloriza
Dip – a scădea, a descreşte
Direct debit – debitare directă
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Directive – o directivă
Discontinue – a înceta (de a mai face ceva), a întrerupe
Discount – a sconta (o poliţă)
Discount a draft – a sconta o trată
Discount bank – bancă 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 trată) asupra cuiva
Drawee – tras
Drawer – trăgător
Drop, to fall, to come down – a scădea, a se micşora
Dull – inactiv
Duty –o taxă
Earn an interest – a produce o dobândă
Earnings – câştiguri, venituri (salariale)
Ease – a se relaxa
Encash – a încasa un cec (la bancă)
Endorse – a andosa
Endorse a cheque – a andosa un cec
Endorsement – andosare
Enquiry, inquiry – cerere de informaţii
Equities – acţiuni ordinare
Erasure – ştergere, ştersătură
Exceed – a depăşi
Exchange – schimb
Exchange broker – agent de schimb
Exchange bureau – birou de schimb
Exchange rate – rată de schimb
Executive – administrator
Expenses – cheltuieli, plăţi
Face value – valoarea nominală
Fall back – a se replia
Fall due – a sosi la scadenţă
Fall, drop in prices – o scădere a preţurilor
Federal Reserve Bank (the Fed) (A.E.) – banca federală de rezerve,
banca centrală a S.U.A.
Fee – un onorariu
Figure – o cifră
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File for bankruptcy, to file under chapter 11 (US) – a-şi depune
bilanţul, a cere falimentul
Fill in a form – a completa un formular
Finance, to fund – a finanţa, a acorda fonduri
Financial backing (support) – susţinere financiară, sprijin financiar
Firm – ferm
Flat rate – rată uniformă
Float (a currency) – a face/ a lăsa să oscileze o monedă străină
Float a company – a lansa o societate
Flourish – a prospera
Foot the bill – a achita nota de plată
Forecast, an outlook – o previziune
Foreign / overseas trade – comerţ exterior
Foreign resident – rezident străin
Forge – a falsifica, a contraface (bancnote, documente)
Forgery – contrafacere, falsificare, falsuri (bancnote, documente)
Free trade – liber schimb
Fringe benefit – beneficiu suplimentar (în afara salariului)
Futures market – piaţa tranzacţiilor la termen
Gain – a câştiga / un câştig, o plus-valoare
Gilt-edged securities – valori/titluri fără risc (obligaţiuni de stat)
Giro – cecuri poştale
Giro account – cont-cecuri poştal
Give notice – a da un preaviz
Globalise – a se extinde la scară mondială
Go belly up (US) – a da faliment
Go into administration – a fi supus unei proceduri de lichidare
juridicară
Go into liquidation – a intra în lichidare
Go on a welfare – a se înscrie la asistenţă socială
Go public – a intra la Bursă, a fi acceptat la Bursă
Go up, to rise – a creşte, a urca, a se mări
Goods, wares – produse, mărfuri
Grant – a acorda, a aloca / o alocaţie, un ajutor financiar
Grant a loan – a acorda un împrumut
Grant credit – a acorda un credit
Greenbacks – dolari (americanism familiar)
Gross Domestic Product – Produsul Intern Brut
Gross National Product – Produsul Naţional Brut
Hard cash – bani gheaţă
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Hedge – a se acoperi (risc)
Hike prices (US) – a mări, a creşte preţuri
Historical cost accounting – contabilitatea costurilor de achiziţie /
istorice
Holder – titular (carte de credit)
Holder of an account, account holder – deţinător al unui cont
Home savings plan – plan de economii pt. (construcţia de) locuinţe
Home trade – comerţ intern
Hot money – bani fierbinţi (capital atras din străinătate de dobânzi
ridicate sau de un climat politic sigur)
In cash – în numerar
In custody – în custodie
In real terms – în bani constanţi
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 şi pierderi
Income tax – impozit pe venit
Index – a indexa
Index-linked – indexat
Inflation – inflaţie
Inflationary – inflaţionist
Inheritance tax – drepturi de succesiune
Interest – dobândă
International Monetary Fund (I.M.F.) – Fondul Monetar
Internaţional (F.M.I.)
Investment (B.E. merchant) bank – bancă de investiţii
Investments – investiţii
Invoice – factură
Issue – a emite
Jack up – a mări preţuri
Jewels – bijuterii
Joint account – cont comun
Junk bonds – obligaţiuni fără valoare
Kickstart the economy – a impulsiona economia
Leave a deposit – a lăsa o garanţie
Legal tender – ofertă legală, curs legal
Lend – a da cu împrumut
Lending rate – rata de împrumut
Level off – a se relaxa
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Leverage – capacitate de influenţă / raportul dintre creanţe şi capital /
creşterea rentabilităţii capitalului unei societăţi ca urmare a
contractării de datorii
Leveraged buyout – răscumpărarea unei societăţi datorită creşterii
rentabilităţii capitalului ca urmare a contractării de datorii
Levy – a percepe, a impune (o taxă, un impozit) / o taxă
Liabilities – pasivul
Liquidation – lichidare
Listed company – societate pe acţiuni
Loan shark – un cămătar
Loans – împrumuturi
Look up, to pick up – a se redresa
Loss – o pierdere
Loss-making, unprofitable – nerentabil
Lump sum settlement – plată forfetară, plată globală
Make – o marcă (de fabrică), fabricaţie
Maturity (of a loan) – scadenţa unui împrumut
Mercantile Exchange – Bursa de mărfuri
Merchant bank – o bancă comercială
Merchant bank / Investment bank – bancă comercială / de investiţii
Mint – institut britanic de emisiune monetară/ Monetăria Statului
Monetary – monetar
Monetary supply – masă monetară
Money order – mandat poştal
Mortgage – ipotecă
Mutual Fund – societate de investiţii cu capital variabil
Note – bancnotă divizionară
Offset – a contrabalansa, a compensa
Open up – a avea un curs ridicat la deschidere
Opt-out clause – o clauză excepţională
Order – o comandă
Outlet – un debuşeu, un punct de desfacere
Outstanding – neachitat, întârziat (la plată)
Overdraft – descoperire în cont, sold debitor
Overdraw (an account) – a descoperi, a epuiza un cont
Overdue – expirat, întârziat, scadent
Overheads, fixed costs – cheltuieli fixe
Overheat – a supraîncălzi
Over-the-counter market – piaţă de titluri fără valoare
Pace – beneficiar
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Paper money – bani de hârtie, bancnote
Pawn – a gaja, a amaneta
Pawnbroker – cămătar
Pay (in) cash – a plăti în numerar, a plăti cu bani gheaţă
Pay as you earn (PAYE) – plata prin prelevare direct de la sursă
Pay back, to repay – a rambursa
Pay into an account – a vărsa într-un cont
Payee – beneficiar
Pay-in slip – foaie de depunere sau de vărsământ
Payment by installments – plată în rate
Payment in cash – plată în numerar
Payment-in – virament (într-un cont)
Pick up the tab – a achita nota de plată
Plough back profits – a reinvesti profiturile
Plummet – a merge foarte prost, a avea greutăţi mari
Policy – o politică, o strategie
Portfolio – un portofoliu (de valori)
Postpone –a întârzia, a amâna
Premise – locaţie
Price index – un indice de preţ
Prime rate (A.E.) – rată de bază
Private limited company – societate cu răspundere limitată
Privatise – a privatiza
Production, output – producţie
Profit margin – o marjă de profit
Promissory note – bilet de ordin, cambie, titlu de gaj, obligaţiune
Pundit – un expert
Purchase – o achiziţie, o cumpărare
Qualified majority – majoritatea calificată
Quid (B.E.) – bancnotă sau bancnote de o liră (familiar)
Quota – o cotă-parte
Quote – a cota
Quoted or listed company – societate cotată la bursă
Rally – a se reface, a se întări
Recover – a se restabili, a-şi reveni, a se reface
Recurring – care se repetă, periodic, recurent
Recurring expenses – cheltuieli recurente
Reduce, to cut back – a reduce
Refund – a rambursa
Registrar of companies – registrul de comerţ
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Regulation – regulament, reglementare
Remittance – vărsământ
Rents – chirii
Repay, to pay back – a rambursa
Residual value – valoare reziduală
Restrict – a impune o restricţie
Retail price index – indicele preţurilor cu amănuntul
Revalue – a reevalua
Revenue – venituri
Rights issue – emisiuni rezervate acţionarilor
Rise in prices – o creştere a preţurilor
Running costs – cheltuieli variabile
Safe – casă de bani
Savings – economii, bani economisiţi
Savings account – cont de economii
Savings Bank – casă de economii
Security – titlu de valoare
Sell at a premium – a vinde sub preţul pieţei
Sell short – a vinde la termen, a subevalua
Setback – o cădere, o involuţie, un regres
Settle – a echilibra un cont, a plăti
Settlement – plată
Share – a împărţi, a participa împreună
Share – o acţiune
Shoot up – a creşte vertiginos
Short term – pe termen scurt
Shortage – o penurie
Shortfall – o lipsă, o insuficienţă
Sight withdrawal – retragere la vedere
Single market – o piaţă unică
Slacken, to slow down – a încetini, a frâna
Slash – a reduce radical
Slide – a scădea
Slow payer – rău platnic
Slump – a scădea masiv
Small amount, small sum – sumă mică
Solvency – solvabilitate
Spending – cheltuieli
Spin-off – o schimbare radicală
Spot market – piaţa tranzacţiilor cu plata pe loc
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Spread / Margin – marjă, margine
Squeeze – a presa, a constrânge
Stagflation – stagflaţie, (stagnare economică + inflaţie)
Stagnate – a stagna
Stake – participare, interest
Standard of living – standardul de viaţă
Statement of account – extras de cont bancar
Steady – stabil
Stimulate – a sitmula
Stock Exchange – Bursa de Valori
Stock market – o piaţă bursieră
Stock, securities – valori, titluri
Stockbroker – un agent de schimb/bursă
Stub, counter-foil – cotor, talon, matcă (de chitanţă, cec etc.)
Subscribe – a subscrie
Subscription – abonament
Subside –a subvenţiona
Sue – a face un proces, a chema în instanţă
Sum – o sumă
Summit – o întâlnire de vârf
Supply / provide sb. With sth. – ofertă, a furniza ceva cuiva
Survey – un studiu, o anchetă
Swap – swap (operaţie de schimb între două devize prevăzută pentru
o anumită perioadă)
Target – o ţintă
Tariff – un tarif vamal
Tax – a impune taxe, a impozita
Tax allowance – scutire de taxe
Tax break – o reducere/ scădere 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 one’s belt – a strânge cureaua
Trade – a face comerţ
Trade bank – bancă comercială
Trade gap – un deficit comercial
Transfer – a transfera, a vira
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Traveller’s cheques (A.E. traveler’s checks) – cecuri de călătorie
Treasury – tezaurul public
Trend – o tendinţă
Trust – a avea încredere, a încredinţa
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 – taxă pe valoarea adăugată
Venture capital – capital de risc
Veto sth. – a-şi exprima dreptul de veto faţă 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 întocmi un cec
Yield – a aduce, a produce venit
Yield – randament
Yield an interest – a produce o dobândă

Cheia exerciţiilor

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 name’s 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. She’s just finishing a meeting.
Can I get you something to drink?
Visitor: No thanks, I’m 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…
175
Visitor: No, it’s 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 there’s anything else you need, please ask.
Anything…
Visitor: Yes, I was wondering how far is it to the station?
Receptionist: It’s about two miles – ten minutes by taxi. Shall I book
one?
Visitor: Er, yes, thank you. that would be good. Can we say four
o’clock?
Receptionist: Right, I’ll 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 name’s Lara Camden from Bulmer Cables
Ltd. Please could I speak to Mr. Conrad Bird?

176
Reception: I’m 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 he’s away. Would you like to leave
a message?
Lara Camden: Yes, perhaps you would ask Mr. Bird to call me? My
name’s Camden, Lara Camden, on 0181 299 462.
Reception: Right, that’s Lara Canden on 0181 299 462. Okay?
Lara Camden: Yes, er… Camden. C…A…M…D…E…N.
Reception: Oh yes, sorry! I’ve got that now.
Lara Camden: Thank you. I look forward to hearing from Mr. Bird.
Reception: It’s a pleasure. Thanks for calling. Bye for now.
 Practice 2 – a model example of the conversation
Intership: Intership, good morning.
Computech: Hello, my name’s Alex Hall from Computech Arcos in
Singapore.
Intership: Sorry, did you say Alex Hall from Computech Arcos?
Computech: Yes, that’s right.
Intership: Okay, how can I help you, Mr. Hall?
Computech: Well, I’d like an appointment with Mr. Dionis.
Intership: Can you tell me what’s about?
Computech: Certainly. I’d 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: I’m sorry, next week’s 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: That’s fine. Shall we say ten a.m.?
Intership: Yes, that’s 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: I’ll fax – and thank you but no, the hotel booking isn’t
necessary. I think that’s 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:

177
 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 Page 1 of 1
From: 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 name’s Luisa Dominguez. I’m 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 – it’s HF5618. It’s – it’s for twenty printers. The
problem is that only seventeen have arrived.
Tao Loon: Really? I’m surprised to hear that.
Luisa: Well, I’m afraid it’s 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.
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Luisa: Yes, I’m 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 – it’s very urgent.
Tao Loon: Right – let me see. We can promise you a despatch next
Monday.
Luisa: No, I’m sorry, that’s not good enough. We need despatch
now.
Tao Loon: I’m sorry – that’s not possible. But we’ll 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.
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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 speaker’s 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

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 Highlight information
 Cause audience to employ another sense to receive information
 Bring variety and therefore increase audience’s 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 you’re 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.
 Don’t 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. I’d 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. I’ll 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 women’s
market. Now, below-the-line advertising: there are three methods here
also: the first is in-store advertising, then there’s 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,

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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 I’d 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. I’m 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, you’re 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 don’t 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 haven’t all met before so I’d
better introduce myself. I’m Luis Lopez from the development

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department of Citrus Incorporated… I should say before we start that I
hope you’ll excuse my English. I’m a little out of practice…
Preparing the audience
Anyway, I’m going to be talking this morning about a new product
which we are planning to launch in two months’ time; it’s called
KOOL-OUT, that’s K-O-O-L dash O-U-T, and it’s a lemon-flavoured
drink…
Well, I’ll start with the background to the product launch; and then
move on to a description of the product itself, I’m going to list some
of the main selling points that we should emphasize in the advertising
and sales campaign. I think if you don’t mind, we’ll 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, you’ll 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 we’ll 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, let’s 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… it’s low calorie, too.

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Winding-up
O.K., so just before closing, I’d like to summarize my main points
again… We have KOOL-OUT, a new design concept, aimed at a
relatively new age and income group; it’s 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
today’s market… well, that’s all I have today for the moment, thank
you for listening, now if there are any questions, I’ll 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

 Practice 1
a. Welcome, everybody. Thank you for coming.
b. We are here today to talk about … (and to decide …; to look at)
c. We have an agenda with three points. (You’ve all seen the agenda.
I’d 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 don’t mind, can we let Mr. Kano finish? (Sorry, …, I can’t
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. I’d like to sum up the main points. (So let me summarize that.
You say that …)

184
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, I’ll 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. that’s everything. That’s it for today.
 Practice 2
1. A model of Agenda

Axis Finance Limited

Marketing Group: Year-end meeting

Time: Finish:
Place:
Participants:

Agenda
1. Apologizes for absence
2. Minutes of previous meeting
3. Chair’s opening address
4. Personnel changes
5. Review of marketing performance in the current year
6. New products
7. Marketing plans for next year
8. Any other business
9. Date of next meeting

2. The chair’s 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, we’ll look at the marketing
performances in the current year. Then we’ll discuss about new
products. And finally, we’ll examine the marketing plans for the next
year. So – any comments, any suggestions, or is everyone happy with
the agenda? Okay, then let’s start with item one on the agenda. I think

185
Mr. Smith has prepared a statement on the personnel changes so I’ll
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, it’s 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, I’d rather not go into that. We discussed that in previous
meetings. I’d prefer to talk about future prospects. The outlook is very
good just now…
B: What? I’d say things look quite bad.
A: I’m very surprised you say that. In fact, sales forecasts are much
better now. Anyway, let me tell you …
B: Sorry, I think I’d 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, don’t you think we should take a short break – have a
coffee?
A: Take a break? We’ve 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

186
 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 leader’s 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. That’s 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, let’s move to the next item on the agenda.
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  Practice 5 – a model example
So, we’ve 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, we’ve 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 14 th at 2 p.m. until then,
thanks everyone for coming. That’s it for today.
 Exercise 1 – Chairing a meeting
Chairman I’d 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 we’ve always… so that’s
how things are at the moment.
Chairman Thank you, Henry. Now, let’s look at possible courses of
action.
Bob Could I just say something ? The Italian market isn’t 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 Let’s 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
haven’t enough money to advertise on every television in Europe!
Chairman Let’s 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, I’ve often found that, when…
and you know, if I could pass on my experience to the younger people
here, I’d 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 I’d like to know if the
others agree. What do you think about this, Walter?
Walter I’m not too sure about this . My own feeling is that if…
Bob I don’t know why you don’t ask me. I’ve been to Italy so many
times recently.
Chairman Could you let Walter finish? I’d like to have his view on
this .

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Walter Well, I’d like to say that for the last two years we haven’t had
a stand at the Milan Trade Fair. I understand that the Fair has
produced lots of contracts in the past.
Chairman That’s an interesting point, Walter . Let’s summarize what
we’ve 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: I’m afraid I can’t comment at the moment.
You: A statement will be issued shortly.
You: I’m sorry, but I can’t comment at this stage.
You: Yes, I’m pleased to be in your country.
You: I can’t 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 … It’s 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 we’ll 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
you’ve met James already this morning, and a little while ago too?
f. Firstly, we see this meeting as an exploratory session, I think it’s
best for both of us that we look at some general questions.
g. We’d 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.
189
 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.
190
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, we’re happy to buy a machine if you can give us a
good price.
Beck: I’m sure we can. As you know our prices are very competitive.
Ojanpera: Even so, I’m 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: I’m sorry, we can’t 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,

191
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
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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
There’s 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 we’re 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
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There seem to be a number of problems, but I’d 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, we’ll agree a 10 % discount.
Unfortunately, I can’t say how many we’ll need in six months and
certainly not in twelve. I can’t 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 month’s guarantee.
I’m afraid that’s 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. It’s not
much to ask for.
It’s a pity but it’s still more than our budget. I can’t go that high.
Situation 4

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Now, some excellent news: we’d 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, I’m glad you’re 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. We’re a bit stuck I’m afraid
 Practice 8
Situation 1
It’s been a long meeting, but finally I’m very glad we’re able to reach
agreement. I think it would be good if we could go on to a restaurant
now, we’d be pleased if you can join us.
Situation 2
I’m 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 don’t join you on this
project, but no doubt there’ll be plenty of other things we’ll work on.
Situation 4
I’d like to repeat our order, but not on those terms. I’m sorry, we can’t
agree to this. I think we’ll go elsewhere, but thanks anyway.
Situation 5
I’m sorry, but it really is physically impossible. We cannot supply
goods in so short time. It’s just impossible. Sorry we can’t help you.
 Exercise 1 – Your turn to negotiate
Suggested replies: Let’s 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. I’m sorry, but I can’t
accept eight weeks. You’ll have to do better than that, I’m afraid. I’m
afraid I can’t 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. Let’s 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. I’ll have to come
back to you on this. C. Could you give me a moment to do some
195
 calculations? D. What is the basis of calculation for transport? E.
I’m just looking. Could you bear with me a moment? F. The
figure for installation costs? What is the basis for calculation? G.
I’m 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; copier’s.

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

196
 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.

197
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.

198
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 pre-
launched development stage) are introduction, growth, maturity and
decline.
5 Reasons to offer temporary price reductions include attracting price-
conscious 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
company’s sales force.
10. Apart from selling a company’s 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
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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

200
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

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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 3 bankrupt 4 assets
5 to liquidate 6 liabilities 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

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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

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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

204
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 efforts—everything from strategy to
concept to execution. Strategy involves helping the client make high-
level 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 client’s strategy and turns it
into specific ideas for advertisements—such 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 reality—the 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 on—so that they reach their intended audience. Sometimes the
agency works in conjunction with the client’s marketing department;
other times—when the client doesn’t have a marketing department—
the agency takes on that role.

But that’s 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
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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 control—the 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 planning—also known as strategic planning—was
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 it’s 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 won’t even pay
attention to ads. As a result, advertisers are now trying to get your
206
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 men’s 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 accounts—and 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
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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 D’Arcy 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 that’s still often the case, it’s 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 shops—some 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
208
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 corporate-
reputation 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 that’s not as exciting as that of
general agencies.

Job Prospects

209
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
business—and, 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 it’s
exceedingly difficult to start in this industry in anything but an entry-
level 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 don’t pay that well and they involve lots of
grunt work, but you’ll get a chance to show your stuff and get
promoted. If you’re a creative, you can’t get a job in advertising
without a book of your work. For entry-level copywriting or art-
direction 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.

210
 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 strategică / planning the future
work of a company
 Boutique – agency = agenţie tip boutique (de mici dimensiuni)
 Marketing collateral = auxiliare de marketing
 Dot coms = a company that primarily does business via the
Internet

Inroads = atac, năvală

Take on = a-şi asuma
Pop-up = care sare, se mişcă 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 = ştiri de actualitate
Report = a face un reportaj
To be run = a circula, a ţine, a apărea în ziar
Misadvanture = accident, moarte accidentală
To catch up with = a ajunge din urmă pe cineva
Clout = puterea sau autoritatea de a influenţa decizia altora
Media outlets = piaţă de desfacere media
Jaded = istovit, epuizat
Nifty = grozav, straşnic
Ads atop = reclame pe acoperişuri
Men’s room urinals = closet
On-demand printing = tipărituri la cerere

211
Customize = to lok special or unique
To a lesser extend = într-o mai mică măsură
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, înhăţat
To hung up your own shingle = to start your own business, especially
as a doctor or a lawyer
Cut back = a micşora, a reduce
Click-trough = care se accesează prin click-ul mouse-lui computerului
Rates = cotaţii
Plummet = to suddenly and quickly go down in value or amount
To be on the rebound = a-şi reveni
Come up with = a concepe, a veni cu ceva (o idee)
In-house = interior
Due to = datorită
To plunk down = a arunca
Bricks-and-mortar corporates = “clădiri”, companiile care îşi
desfăşoară activitatea în mod tradiţional
Add in = a adăuga
Currently = în prezent, acum
Exceedingly = grozav de, extrem de, foarte
Hires = slujbă, angajare
Grunt work = the hard, uninteresting part of a piece of work (donkey-
work)
Mock = model, simulare
Mock-up = model of a new product for testing or to show to possible
buyers
Internship = poziţie internă
Rewarding = plin de satisfacţii

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.

212
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 design—and 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 client—a

manufacturer of consumer products such as Nike, or a service-
oriented 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 reality—the

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, account-
driven 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.

213
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 medium—radio,

television, print, or Web—when, 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 ads—for
example, showing well-dressed people driving up to a discount store
to highlight a change in product selection.

Creative departments also create storyboards—cartoon-style

summaries of what an ad will contain.

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
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Suntan lotion = loţiune pentru bronzat
Extol = a preţui foarte mult
Juggle = a jongla
Devise = a inventa a plănui / 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 public—a 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
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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 papers—a
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
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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 asemănător 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 stârni interesul cuiva în 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 = încărcat, plin de
Practitioners = someone who regularly does a particular activity
Endeavor = a încerca din greu
Assertive(ness) = behaving in a confident way so that people notice
you
Authoritative(ly) = în mod autoritar, plin de încredere şi care impune
respect
Outgoing = liking to met and talk to new people

Account Management
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Account management combines sales with customer service. Account
management professionals work with clients to ensure they’re getting
the most out of the products and services their employers sell—and 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 company’s products. And many service-
oriented 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 up—such as
when deadlines aren’t met or, in the advertising industry, when a
client hates what the agency’s creatives have put together—they 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.

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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

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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 industries—at
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.

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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 day-
to-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.
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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.
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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 company—the 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
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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 communications—its 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.

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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 manner—and 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.
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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 bonus—and 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 company’s 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.

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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 manager’s
mission is to balance the overall company’s business requirements
with individual employee needs. It’s often the case that HR is charged
with making the company’s goal of profitability central to his or her
business planning.

In today’s 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 master’s 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 third-
party 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 small-
to medium-sized companies that sign up with a PEO in co-op fashion
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—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
company’s 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 HR’s 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 company’s
culture and values.

Finding and Keeping “Human Capital”

Now more than ever, a company’s culture, it’s 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 company’s 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 company’s public and financial standing.

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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 company’s 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 company’s 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. “It’s always a buyer’s
market,” says one out-of-work recruiter. “Before, the buyers were
companies looking for workers. Now, it’s 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
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larger organizations, several HR people may work on each of these
functions, further subdivided into specialty areas—for 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)

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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 isn’t 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
231
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 survey’s
respondents were in-house HR staff, but when you add to this the
more than 6,000 people working in personnel outsourcing companies,
you’ve 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 days—and on weekends
several times a year.

Who Does Well

Human resources acts as the administrator between an organization’s
management and its workers. This requires wearing many hats: It’s an
HR administrator’s 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
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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
companies—have singled out some activity to reinvent by conducting
it on the Internet—distributing 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 online—selling products, producing newspaper- and magazine-
style 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 consultancies—and 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 cash-
rich 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
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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, you’d better have a
strong e-commerce component, or at least a viable subscription model
if you’re 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 start-
up 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 dot-
com 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 doors—as 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-commerce—for instance,
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financial, software, and travel-services sites that don’t deal in storing
or shipping inventory have low costs once they’ve established their
technological infrastructure. For example, Expedia, a leading travel
site, operates on a 70 percent profit margin. Amazon.com, on the other
hand—which has to deal with procuring and shipping actual physical
products—operates 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 basis—to give Internet users a
voice they didn’t 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.
Weblogs—“blogs,” for short—are 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,
we’ll have to wait and see on that claim. But there’s no doubt blogs
are proliferating—and 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
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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
websites—Lands' End, for example—fall 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
engines—which account for five of the ten busiest websites—are
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
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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 haven’t have cut back on staff. The
result: A tough road to hoe for job seekers. But while there’s little
demand for new hires in business development, marketing, research,
and operations in today’s tight job market, there is still a need for
good programmers and engineers.

Journalism & Publishing Industry

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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
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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. Weblogs—“blogs,” for short—are 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, we’ll have to wait and see on
that claim. But there’s no doubt blogs get the news in front of reader
in a hurry, or that they are proliferating—and 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
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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, too—they'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 behind—reluctance to embrace new media is
common among traditional publishers—and cynics allege that the
death of print is approaching. But having recovered from similar
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catastrophes, such as the introduction of radio, television, and CD-
ROM, the book publishing industry is realistically predicted to
weather the storm.

In spite of the current identity crisis, this segment is a multibillion-

dollar 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 titans—Bertelsmann (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 grads—you'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.
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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.

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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 broadcasting—it 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
language—and 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
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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 story—hoping, 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

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Editors and writers need to have a strong command of language.
You'll need to understand its rules—and 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 editing-
based. 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 times—for 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 illusion—neither 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 uniforms—an 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
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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 industry’s efforts to make
sure it doesn’t lose profits due to new technologies that allow
consumers to access entertainment products without paying for them.

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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 industry’s 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 industry’s
howls of protest when VCRs came on the market some 20 years ago,
VCR technology ended up vastly increasing consumption of the
industry’s products—and pumped up profits in the process.

A New Television Landscape

In the old days, the major networks—ABC, NBC, and CBS—ruled
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 can’t 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
publishing—and the media behemoths that preside over them all—
these various forms of entertainment are distinct domains. And though
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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 owe—and who owes you—counts 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 profitable—and 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).

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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 competition—Pacific 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
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that requires persistence, intense networking, and good luck. Unless
your dad knows Ted Turner, don't count on landing even an entry-
level 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 legendary—making

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
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bigwigs you serve, and these relationships evolve into the ever-
important 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 publicity—and then more publicity, and then
different publicity for radio, clubs, and both the mall stores and anti-
mall 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 responsibilities outside of
manufacturing and production.

What It Is

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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-by-
step 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 human-
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

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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
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becoming an anachronism. Today's salespeople may sell for a small
insurance company, never leaving the home office in Duluth—or 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 field—be 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 calling—the act of
initiating contact with a potential customer—is still a major technique
in creating such a database, it’s 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

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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 money—and 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,

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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 industry—getting 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 through—well, 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.

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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 death—and 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
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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 money—or at least
trying to. By “money,” we’re 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 money—other people's money, and gobs of
it. Generally, they convert that money into assets—stocks, bonds,
derivatives, and other types of investments—and 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

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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 benchmark—a 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 skills—if 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 skills—and nerve—to 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.
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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 investors—usually 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 companies—and other so-called asset

management firms—form 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 industry—securities 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 so-
called 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

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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 investment—even 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 feet—quite 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
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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 accounts—checking, 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 confirmation—few 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, money-
market securities, currencies, options, gold, or whatever else seems
likely to make money. Mutual funds often have a specific investment
focus—be 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
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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 one—whether to work
for or invest in—is 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. There’s also a
range of venue options available should one have an itch to invest,
including traditional full-service firms, discount brokerages, and do-it-
yourself 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 doesn’t
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
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while that number has diminished somewhat over the past few years
as portfolio values have declined and investors have pulled out,
there’s 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 year—or 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 money—forecasting 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
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millions—sometimes billions—of 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 outlets—these 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—
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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 Disappear—and 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 Kmart’s bankruptcy
announcement in 2002.

E-commerce

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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-and-
mortar and catalog retailers like J. Crew, which are expanding retail e-
commerce into new markets.

However, retail e-commerce raises serious questions. It has the

potential to put so-called bricks-and-mortar—that is, physical—stores
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
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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

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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 bricks-
and-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 Wal-
Mart and Costco that stress self-service and thus are less labor-
intensive. 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.

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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, America’s 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.
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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 industry’s 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
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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 service—the 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
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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
services—including insurance, investment banking, and savings—in
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.

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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 markets—particularly Japan, Taiwan, and
South Korea—are 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 you—at 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 them—if a fire burns down their house, for
instance, or they have an accident and need hospitalization—they 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
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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

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intrigue, that the public would open the newspaper each morning to
eagerly read about the inner workings of accounting firms?

Of course, we’re 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 Enron’s books,
Andersen, once considered the gold standard of the accounting
industry, is now for all practical purposes out of business. Before
Andersen’s collapse, the top tier of the public accounting industry was
known as the Big Five; now, it’s the Big Four (Deloitte Touche
Tohmatsu, Ernst & Young, KPMG, and PricewaterhouseCoopers).

But Andersen isn’t 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 audit-
independence 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, there’s 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
Electric’s auditor, was paid $23.9 million to audit GE’s books—a
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.
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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
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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 capabilities—it’s 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

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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, it’s 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 you’ll 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 position—or decide to hang out
your own shingle—your 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
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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 it’s 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

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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
business—time-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 Andersen’s collapse, the top tier of the public accounting
industry was known as the Big Five; now, it’s 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

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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.
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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 One—dominate 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
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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 companies—Citigroup, for example, offers insurance
through its Travelers subsidiary—so 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 officers—the men and
women in suits sitting at the nice wooden desks with pen sets—to
handle customers' day-to-day needs. Although thousands of small
community banks, credit unions, and savings institutions still exist,
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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 national—and 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 investment-
banking 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 consumer-
banking 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
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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

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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 separate—Glass Steagall—was 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 critical—retail 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,
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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 contact—if you like helping new families and new
businesses create brilliant futures—commercial 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
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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 profits—or 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 recruiting—but, because it’s 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

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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 Nightmare—Or 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 nation’s largest securities firms to pony up
$450 million over five years to buy stock reports from independent-
research 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.

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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 résumés. 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 firms—Hambrecht &
Quist, Montgomery Securities, and Alex. Brown—have 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 Frčres 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
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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, you’ll 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 expectation—no, the requirement—that all personal plans are
subject to the demands of work.

In addition, you’ll 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 you’ll 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 don’t 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 aren’t 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, “We’ll never not hire new talent,
even during a merger, even during a downturn.”

Investment Banking

You’ve 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?
What’s 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

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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, it’s 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 you’ll 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 market’s 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 isn’t 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-and-
distribution 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
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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 full-
service 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 client’s industry and in providing a link to the institutions that own
the client’s stock once it’s 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 they’re 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.

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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 investment-
grade 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 shouldn’t go into banking just for the money—the lifestyle is too
demanding. To survive in investment banking, much less to do well,
you’ll 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),
there’s 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 don’t 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 doesn’t
sound like you, a job in investment banking could turn out to be a bad
dream come true.

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