lingua tests

1

PRACTICE TESTS FOR THE LINGUA EXAMINATION

(Business English)

Author: Emilia Plăcintar

CONTENTS

To the Candidate 2

1. Professional Communication 3

2. Management 9

3. Business Meetings 15

4. Professional Presentations 20

5. Recruitment 24

6. Marketing 28

7. Advertising 32

8. Finance and Accounting 36

9. Banking 42

10. Insurance 50

11. International Trade 54

12. Information Technology in Business 59

13. Business Travel 64

14. Business Ethics 69

15. Intercultural Awareness 73

Writing Reference 78

Answer Key 100

2

TO THE CANDIDATE

The idea of this collection of tests originates in the questions asked by many final-year students about

the structure and content of the LINGUA graduation exam in English, which is a prerequisite for the

BA exam proper. The book is therefore grounded realistically in the requirements of this exam and is

targeted principally at students in Economics and Business Administration, International Relations

and European Studies, Management of European Institutions, and Public Administration of ‘Babeş-

Bolyai’ University.

The LINGUA exam for language proficiency is made up of the written and the oral

components. In the interview, you will have to speak about two topics, each of which is marked with

6 points. For the first speaking task, you have to make a personal comment on a business-related

situation or a more general issue. Examples of this question could be: What government service would

you like to see improved in Romania? or Supposing you wanted to set up your own business, what

aspects would you consider in your business plan? or Should the state subsidise higher education / the

arts? For this first topic, you are given some thinking time to prepare a very brief answer that should

address exactly the points in the question. The second subject is related to one of the themes included

herein. This time, you will have to respond spontaneously to the examiner’s specific questions. For

example, if you pick the subject Management, the examiner may ask you: What are the key tasks of

managers? or Mention some attributes of an effective manager.

The exam paper comprises four sections, and the different types of question that may be included

in each section are described below.

- Listening (6 points)

- Note making and blank filling: Complete the notes with an appropriate word or short phrase.

- Multiple-choice questions: Decide which of the choices (A, B, C or D) is the correct answer.

- True/False statements: Are these statements true or false, according to the recording?

There is a sample listening task in Test 15.

- Reading (6 points)

- Gapped text: Choose the best sentence from the list to complete each gap in the text.

- Multiple-choice questions: Answer the questions by choosing the appropriate answer (A, B, C

or D).

- True / False statements: Decide whether the following statements are true or false, according to

the text.

- Use of English (30 items – 6 points) – All these four task types are included.

- Open-vocabulary cloze: For each blank, think of the word that best fits in the context.

- Multiple-choice vocabulary cloze: Decide which of the options (A, B, C or D) best completes

each gap.

- Error correction: For each sentence, find the underlined part (A, B, C or D) that contains a

mistake.

- Word formation/derivation: Use the word given in CAPITALS at the end of each gapped line to

derive a word that fits in the space.

- Writing (6 points) tasks may include the production of formal letters for various purposes,

memos, reports or essays. The two main aspects taken into account in the assessment of your

answer are use of language (accuracy of language, range of vocabulary and structure), and task

achievement (inclusion of all the points given in the input, logical transition between ideas, and

appropriate register). Tests 1 and 2 contain a sample writing task each.

The 18 theme-based tests in this new edition are designed with a double purpose in mind, namely to

familiarise you with the exam format and to provide you with thematic content and vocabulary for the

interview. The extensive writing reference section attached to the collection is intended to help you

with the special characteristics of the various text types you are asked to produce.

Good luck!

3

TEST 1 – PROFESSIONAL COMMUNICATION

INTRODUCTION

To communicate is to convey a message (information, thoughts or feelings) so that it is satisfactorily received

and understood by the receiver.

Professional communication covers the use of written and spoken language in work-related contexts,

between professionals, as representatives of an institution, or between professionals and lay persons, both parties

being interested in fulfilling their practical tasks and goals. It follows that institutional communication is

primarily purpose oriented. That is why whatever communication task is undertaken, asking the following six

questions before we start will give our communication a better chance of success and make the task easier:

- Why? (purpose) – Why am I communicating? What am I hoping to achieve?

- Who? (audience) – Who exactly is my audience (personality, age, status)? What do they need to

know? How are they likely to react to my message?

- Where and When?

The answers to these questions will help us find answers to

- What? (content) – What exactly do I want to say? What do I need to say? What do they need to

know? What information can I omit? What information must I include in order be clear, concise,

correct, and complete?

- How? – What tone and style should I engage to sound courteous and constructive?

Business communication comprises four areas of competencies: (i) oral interpersonal skills, (ii) business

writing skills, (iii) basic English skills, and (iv) other business communication abilities. The skills involved in

effective business communication are specified in this table.

Oral interpersonal skills Writing skills - analyse the audience before, during, and after the

interaction

- listen effectively

- maintain eye contact

- use voice effectively and strategically for emphasis

- establish rapport with the audience

- use appropriate body actions in interpersonal

communication

- ask appropriate questions and give appropriate

responses

- use appropriate register – conversational or formal

- present information objectively

- organise presentations, conduct and participate in

meetings, interviews, and negotiations

- use audio-visual aids professionally

- write well – clearly, concisely, correctly, completely

- write naturally and on the reader’s level

- organise info into effective sentences and paragraphs

- provide effective transition between ideas

- use subordination and emphasis techniques

- write persuasively

- use psychological factors in writing – positive words,

“you” concept, service attitude, goodwill

- select an indirect or direct approach based on the

situation

- use jargon in appropriate situations

- write routine letters – order, acknowledgement,

inquiry, etc.

- write special types of letter – sales, applications,

complaints/grievances, business proposals, etc.

- word process/compose at the keyboard

Basic English skills Other business communication skills - spell and punctuate documents correctly

- use correct grammar

- use appropriate/correct business vocabulary

- apply ethics, and values in business situations to

determine sociable responsible actions

- understand personal values and show sensitivity to

the values of others

- assess own needs and behaviour

- use principles of time management to organise work

efficiently

- locate outside sources of information to improve

knowledge and skills

- collect, classify, and analyse information about

business situations

- use creative thinking in developing solutions; select

effective solutions

- exhibit leadership by influencing and persuading

4

- know the importance of feedback in the

communication cycle

- apply knowledge of intercultural differences to

communication situations

Oral versus written communication

The most evident differences between speech and writing derive from the fact that they use different channels of

communication. In general, by comparison with spoken style, written style is

- less colloquial, with less slang, fewer shortened forms, interjections, etc.;

- more correct, in terms of grammar and syntax;

- more concentrated, with fewer ‘fillers’ and roundabout ways of expressing things;

- more complete, with more complex sentences including subordinate clauses;

- less complex, with no non-verbal signals (tone of voice, gestures, facial expression) to help in the

interpretation of the message.

Writing also involves the following elements that are not relevant to spoken style: spelling, abbreviations,

punctuation, visual and tactile elements, such as neatness, signals for emphasis and reference, paper quality,

use of colour and design, etc., which are important in establishing a professional and congenial look.

Oral business communications include interviews, presentations, negotiations, and meetings, while

written communications comprise letters, proposals, reports, memos, faxes, emails, questionnaires, CVs, etc.

READING

Read this extract from “How to Steer Clear of Pitfalls in Cross-Cultural Negotiation” by Andrew

Rosembaum. Decide whether the following statements (1-6) are true (T) or false (F).

1) The negotiation discussion between Henry and Hiroshi came to a deadlock because the

negotiators had different expectations of the negotiation process.

2) A negotiation between an American and a Japanese manager may be a long process because

the Japanese manager is less resolute than his American counterpart.

3) It is crucial for the first stage of the negotiation that the partners engage the problem-solving

style with caution.

4) Experts say that some cultures some cultures follow a certain protocol in the initial stage of a

negotiation in order to develop some rapport with the partner.

5) Western negotiators engage a more indirect and expressive communicative style than Asians

negotiators.

6) The author contends that while our partner’s culture cannot possibly be avoided, we should

ultimately adapt to the specific communicative style of each negotiating partner.

Tips for Avoiding Misunderstandings when Negotiating Cross-Border Deals by Andrew Rosenbaum

Henry in Los Angeles and Hiroshi in Tokyo both like Armani suits, baseball, Mozart, and good

Bordeaux. But Henry recently spoke for days with Hiroshi, his potential business partner, and yet the

barriers between them were never broached—and the deal didn’t get inked.

The problem had to do with different conceptions of the negotiation process itself and

misinterpretations of the other’s behavior. For Henry, negotiation is about pushing through a deal,

period. When Henry didn’t think their discussion was moving forward as quickly as he thought it

should, his arguments became increasingly forceful. Because Hiroshi read this as disrespect, the

negotiation essentially ended days before their talks did.

Although globalized communications and marketing have made the world smaller in many ways,

deep differences between cultures remain. Despite similar tastes, Henry and Hiroshi each approach

negotiation in a way heavily conditioned by his national culture. Because they sat down at the table

without understanding the other’s assumptions about the negotiation process, all they ended up with

was an impasse.

5

Negotiation is always a delicate business, requiring determination and diplomacy in equal

measure. But finessing a cross-cultural negotiation is a particular challenge. Here are some tips that

can help you put together a deal with a foreign partner.

Understand expectations

Your negotiating partner’s expectations of the negotiation may well be very different from yours. Like

you, he will want to succeed, but success may not mean the same thing to him and his co-nationals as

it does to you.

Decision-making styles may be different, too. American managers usually make decisions by

themselves, while Japanese managers tend to make decisions by consensus, a practice that can add

time to the negotiation process. Americans place a high value on flexibility, whereas once a Japanese

manager has reached a decision, he believes it is shameful to change it, says Tokyo-based

management consultant Mitsugu Iwashita, director of the Intercultural and Business Communication

Center. Understanding these underlying attitudes helps you see what your potential partner’s priorities

are, and you can then adapt your strategy accordingly.

Establish common ground and choose your style

Find anything that will allow your foreign colleague to share something with you. This can help you

get past “people” problems—ego wars, saving face, and so on—which is a good tactic because these

problems can crop up where you may least expect them.

Now the real work can begin. You’ll need to choose which of the two classic negotiating styles

you’ll adopt: contentious or problem-solving. The contentious negotiator, a tough, demanding guy

who makes few compromises, can be a great success given the right conditions. He either wins or

loses, but never comes to a conditional agreement. The problem-solving negotiator takes a broader

view, attempting to get as much as he can without handing out a deal breaker. He establishes common

ground wherever he can find it and approaches negotiations on a step-by-step basis.

While one has to be careful about generalizing across cultures, experts agree that a problem-

solving approach to cross-cultural negotiations is prudent. (Indeed, many would say it’s the right

choice for almost any negotiation.) The problem-solving approach helps to avoid blunders, says

Elaine Winters, co-author of Cultural Issues in Business Communication. But there are limits to this

approach. In many cultures, negotiation is ritualized, especially in its early stages. It is obviously

important to learn these negotiating rituals for a given culture, even if your foreign partner turns out

not to require them. Germans, for example, often need to spend a large part of the initial negotiations

in number crunching. All the facts and figures must be agreed upon, and woe betide* the negotiator

who makes a mistake! This German trait is not really about number crunching, however; it is a

confidence-building ritual in which two potential partners run through a series of routine checks just

to display trustworthiness. So the problem-solving approach, which would try to find common ground

quickly, could prove threatening for the ritual negotiators.

“When confronted with cultural differences in negotiating styles, we need to be aware of the

potentially adverse effects of a flexible, mixed style,” says Willem Mastenbroek, director of the

Holland Consulting Group (Amsterdam) and professor of organizational culture and communication

at the Free University of Amsterdam. “If it is not understood, people may perceive it as smooth and

suave behavior and resent it. Because they are not able to counter it with equal flexibility, they may

feel clumsy and awkward, in some way even inferior. It may also become difficult for them to believe

in the sincerity of the other side. They may see it as an effort to lure them into a game defined by

established groups which will put them at a disadvantage.”

Manage the negotiation

Let’s assume that you have passed successfully through the initial stages of the negotiation and that

you have agreed upon common ground with your prospective partner. The game of tactics now

broadens. It is at this stage, in which the actual issues go back and forth between participants, that

your awareness of negotiating behavior typical to your potential partner’s culture can be put to use.

6

Italian negotiators, for example, will often try to push through this stage quite quickly, repeatedly

insisting on their terms to tire out their opponents. Knowing this, a foreign negotiator may find a good

tactic is to display no great hurry to deal—change the subject, digress, etc.

On the other hand, Chinese negotiators usually make one offer after another at this point to test

the limits of a possible deal. According to Winters, nonverbal communication in negotiations with a

Chinese businessman can be quite important. He may say little in response to your questions, and

expect you to garner what you need to know from his gestures and from the context of whatever he

does say. More demonstrative Western cultures can find this conduct very difficult to work with, but

the application here of patience and deductive reasoning can take you a long way.

Most Europeans won’t break off discussions unless they are deeply offended, but Asian

negotiators are often happy to drop the project if they are uncomfortable with some aspect of the

negotiations. If this happens, try to backtrack and fix the problem.

But in focusing on your potential partner’s culture, don’t lose sight of him as an individual. It’s

always best to learn as much as you can about his personality and communication style. “Personalize

negotiation methods and approaches,” Winters says. “Don’t ignore culture (impossible anyway!), try

to treat it as background; focus on the capabilities of the specific individuals at the table. This is

frequently successful because a new, mutually agreed-upon culture is being created just for this

effort.” (http://www.mce.be/knowledge/315/46)

*woe betide – (used in making threats) there will be trouble for

USE OF ENGLISH

Questions 1-10

For each blank (1-10), think of the word that best fits in the context. Use only one word in each space.

Confused messages cause operational chaos. If we don’t listen to our people and our customers, and

__1__ not sensitive to their feelings and expectations, there’s not __2__ hope for constructive

dialogue. In __3__ case, more than 60% of our time __4__ spent communicating. The need __5__

good communications is a classic motherhood statement!

Perhaps the first clue for improvement is to understand __6__ the sender-receiver relationship.

There’s an ancient riddle __7__ goes “Is there sound in the forest if a tree crashes down but no one is

present to hear __8__?” Certainly there are measurable sound waves but there is no meaningful sound

__9__ a listener. Take the case of a finance director casually referring to debt/equity ratios and

discounted cash flows when talking to junior managers. The words are clearly expressed but no

meaning is conveyed __10__ they are outside the vocabulary of the listeners.

Questions 11-20

For each blank (11-20), decide which of the options A, B, C or D is best. Only one answer is correct.

The essence of good communications is the __11__ of meaning. The language must be __12__ and

the receiver switched on. Positive listening is crucial. Too many managers are __13__ anxiously

waiting to make their own brilliant __14__ that they don’t hear what is said to them. The sender-

receiver __15__ is also influenced by __16__ of trust. If I have no trust in you as a person I may

__17__ what you communicate, no matter how well that is __18__ technically.

Confusion often __19__ because of dissonance between body language and words. A scowling

expression with friendly words __20__ the clarity of communication.

11 A change B shift C transaction D exchange

12 A conceivable B apprehensive C comprehensible D comprehensive

13 A so B much C too D such

14 A participation B control C contribution D part

15 A connection B correlation C association D relationship

16 A layers B levels C heights D planes

7

17 A refuse B reject C resist D refute

18 A done B made C told D said

19 A rises B raises C arises D arouses

20 A imparts B impairs C impacts D impeaches

Questions 21-25

In each of the following (groups of) sentences (21-25), find the underlined part – A, B, C or D – that

contains a mistake. There is always one incorrect segment in each paragraph.

21) It is essential (A) to get feedback to know if messages (B) are both received and understood. Most

actors prefer the immediate response from a live audience (C) to performing before a camera. We tend

to be preoccupied with sending messages (D) as clear and as well as we can.

22) Commendable though that (A) it is, the same creativity (B) should have been addressed to finding

out if (C) the desired change or response to the message (D) has taken place.

23) Systematic questions, (A) careful listening and observation have (B) its part. A genuine “open

door” policy (C) encourages feedback. Small group briefings (D) remove misunderstandings and

generate common purpose.

24) That is true (A) for our own staff and (B) equally true for our customers. (C) Overzealous sellings

may lead to the neglect of listening to (D) customer dissatisfactions and new needs.

25) The communication gap (A) is often only recognised when a customer is lost. In both cases, (B)

the most successful communication style is participative rather than commanding and directive. “We

have this quality problem with product A. What (C) we can do together to overcome it?” gives

everyone a chance (D) to openly communicate their views and experience. When an action plan

follows, everyone owns it.

Questions 26-30

Use the word given in CAPITALS at the end of each gapped line (26-30) to derive a word that fits in

the space.

The most important influence of communications within an

organisation is that of information technology. Computers,

telecommunications, graphics and more combine to produce

radically new communications __26__. CAPABLE

Speed, relevance, __27__ and exciting visual presentation ACCESS

are typical __28__. If there is a down side it is the reduction of COME

one-to-one human contact. __29__ success will go to companies COMPETE

who understand how to reshape their organisation to these new

communications and information developments and yet retain the

__30__ of human interchange, with all its rich and subtle STRONG

potential for understanding and motivation.

(http://www.mce.be/knowledge/315/46)

WRITING

Write a letter to be sent to a number of local employment agencies informing them about your company’s one-

day courses and self-help training packs on business communication skills. The list of business communication

competencies in the introduction above and the following extracts from recent newspaper articles will give you

some ideas. Make up any further appropriate details. (See suggested solution in the Answer Key section.)

- According to a survey published yesterday, recent school-leavers are worse at spelling than any age

group educated since the war.

8

- Many young people are ruling themselves out of the labour market through their poor spelling. The

unemployed are 50% more likely to make mistakes than those in work.

Under the slogan “Language is Power”, the Ministry of Education and Research has initiated and funded the

“Be a Better Communicator” campaign, which aims to emphasise the link between communication skills and

job prospects.

9

TEST 2 – MANAGEMENT

INTRODUCTION

Management refers to the process of leading and directing all or part of an organisation, often a business,

through the deployment and manipulation of resources (human, financial, material, intellectual or intangible).

One can also think of management functionally, as the action of measuring a quantity on a regular basis and of

adjusting some initial plan, and as the actions taken to reach one’s intended goal.

Peter Drucker, the éminence grise of management theory, speaks about five main tasks of a manager:

- to set objectives

- to organise the activities by delegating responsibilities among employees

- to motivate and communicate

- to measure the performance of employees

- to develop people

Modern management as a discipline began as a branch of economics in the 19th century. Classical

economists such as Adam Smith and John Stuart Mill provided a theoretical background to resource allocation,

production, and pricing issues. About the same time, innovators like Eli Whitney, James Watt, and Matthew

Boulton developed technical production elements such as standardisation, quality control procedures, cost

accounting, interchangeability of parts, and work planning.

By the middle of the 19th century, Robert Owen, Henry Poor, and M. Laughlin introduced the human

element with theories of worker training, motivation, organisational structure and span of control.

The first comprehensive theories of management appeared around 1920 when Henri Fayol and

Alexander Church described the various branches of management and their inter-relationships. In the early 20th

century, Ordwat Tead, Walter Scott and J. Mooney applied the principles of psychology to management, while

other writers, such as Elton Mayo, Mary Parker Follett, Chester Barnard, and Max Weber approached the

phenomenon of management from a sociological perspective.

In 1946, Peter Drucker wrote Concept of the Corporation, a book on applied management. He went

on to write 32 books, many in the same vein.

Some of the more recent developments include the theory of constraints, reengineering, and various

information-technology driven theories, such as software development.

The theory of constraints approach describes management decision-making as a continuous cycle of

the following three basic questions: What to change? To what to change? How to make the change happen?

Towards the end of the 20th century, management came to consist of a number of separate branches, including:

- Human resource management

- Operations or production management

- Strategic management (see below)

- Marketing management

- Financial management

- Information Technology management

In the 21st century, we find it increasingly difficult to subdivide management into categories in this way,

as more and more processes simultaneously involve several categories.

Strategic management is the process of specifying an organisation’s objectives, developing policies and

plans to achieve these objectives (i.e. strategy formulation), and allocating resources so as to implement the

plans (i.e. strategy implementation). It is the highest level of managerial activity, usually performed by the

company’s Chief Executive Officer (CEO) and executive team. It provides overall direction to the whole

enterprise.

Strategy formulation involves (i) doing a situation analysis, (ii) setting objectives, and (iii) suggesting a

strategic plan in line with the situation assessment.

Strategy implementation includes (i) allocating sufficient resources, (ii) establishing a chain of command, (iii)

assigning responsibility of specific tasks or processes to individuals or groups, (iv) managing the process of

monitoring results, and (v) making adjustments to the process as necessary.

An organisation’s strategy must be appropriate for its resources, circumstances, and objectives. The

process involves matching the companies’ strategic advantages to the business environment the organisation

faces. One objective of an overall corporate strategy is to put the organisation into a position to carry out its

mission effectively and efficiently. A good corporate strategy should integrate an organisation’s goals, policies,

and action sequences / tactics into a cohesive whole. (adapted from http://en.wikipedia.org/wiki/Management)

10

READING

Read the article about the importance of interpersonal skills in management. The topic sentence (i.e.

the sentence that introduces the main idea/thought) in each paragraph has been removed. Choose

from the list (A-N) the best sentence to fill each of the blanks (1-12). There is one extra sentence,

which does not belong in any gap. There is an example at the beginning (0 J).

A At its core, this dimension is about forging connections with groups of people through visual

and verbal imagery.

B Individuals who score high in this dimension need to see and interact with other people very

frequently to feel satisfied.

C While people who score high in influence can be found in any function and any industry,

we’ve discovered that individuals with deal-intensive roles in financial services and sales tend

to stand out in this dimension.

D It’s important to note that the four relational dimensions are not discrete types.

E Although relational creativity in business is most commonly used for persuading customers to

buy and investors to invest, it is different from the influence dimension.

F This is the dimension many people first think of when they think “people person.”

G We’ve analyzed psychological tests of more than 7,000 business professionals, and our

findings challenge the limited traditional notion of who “people” people are.

H Clearly, “people” people are not interchangeable.

I Consider Alicia DiGiavonni, the internal medicine unit manager at a Boston-area HMO.

J The truth, however, is much more nuanced than that.

K Most of us don’t have much occasion to interact with people who stand out in this dimension,

although chances are we have coworkers with this strength that we don't know about because

it has no outlet in their daily jobs.

L Professionals who earn a high score in this dimension enjoy developing and extending their

sphere of interpersonal influence.

M The skill of resolving conflict in a department or company (as a leader, a manager and a

visionary) is invaluable in maintaining work processes, meeting deadlines, staying profitable

and, ultimately, keeping morale in check.

N The difference between individuals who score high in team leadership and those who do so in

the influence dimension is their interest in managing people.

Leveraging Your Team’s Interpersonal Skills by Timothy Butler and James Waldroop

What does it really mean to be good with people? This Harvard Business Review excerpt examines

the “relational” aspect of business.

Most executives assume they know who their “people” people are. They’re the team players, the ones

who know what’s going on in their colleagues’ personal lives, the ones who can smooth over

interpersonal conflicts. They’re usually found in human resources or sales.

[___0 J___]

Interpersonal savvy is critical in almost every area of business, not just sales and HR. In fact, it

comprises aptitudes that are more varied than a lot of people might think. Recently, we’ve conducted

extensive research on the people side of doing business - what we call the relational factor. After more

than eighteen years of studying how the deeply embedded life interests of business professionals

develop into career roles, we know that individuals do their best work when it most closely matches

their underlying interests. Managers, therefore, can boost productivity by using their employees’

relational interests and skills to guide personnel choices, project assignments, and career development.

[___1___] Using factor analysis, a method of statistical analysis, we have identified four distinct

dimensions of relational work: influence, interpersonal facilitation, relational creativity, and team

11

leadership. In this article, we’ll explain each component and show how knowledge of all four can help

managers hire the right employees, make the best work assignments, reward performance, and

promote career development (others’ and their own).

The four dimensions To maximize the interpersonal capacity of your organization, you must understand all four areas of

relational work - because when you match employees’ interests and skills to their responsibilities,

everybody gains.

Influence [___2___] They take pleasure in persuasion, negotiation, and the power of holding valuable

information and ideas. This dimension of relational work is all about changing the point of view or the

behavior of others. An old expression, “He could talk a dog off a meat truck,” aptly describes high

scorers here. Whether to a customer or to a colleague - and whether they're talking about a product, a

service, or an idea - these people live to sell. Think of the manager in your firm who is always able to

get more resources for his projects than anyone else can. Or picture that former boss of yours who

could always get people fired up for the next challenge, regardless of how tired they were from the

last one.

[___3___] Jeffrey Manning (all names of people cited as examples in this article are

pseudonyms), for instance, the managing partner of a very successful venture capital firm,

was running his own fund at age thirty-one. Some would argue that his success was a

function of good timing - he entered the world of high-technology investing in the mid-1990s

- but those who have done business with him have a different explanation: Jeff is a natural at

deal-intensive finance. He's a born networker. Whether he's on the golf course or at the

annual dinner for a prominent charitable organization, his talent for meeting people and

inspiring their confidence is indisputable. Jeff is not a salesperson, nor is he a team-focused

manager. He's an alliance builder and negotiator. He can locate and gather key players to

participate in deals that optimize value for all parties involved.

Interpersonal facilitation [___4___] Individuals with high scores here are keenly attuned to the interpersonal aspects of a work

situation. They intuitively focus on others’ experiences and usually work quietly behind the scenes to

keep their colleagues committed and engaged so that projects don't get derailed. They naturally ask

themselves questions like “What group will work together best to get this job done?” and “Why is Joe

being overcritical in meetings and underperforming in general?” and “What sort of assignment does

Miriam need to grow and feel more competent?” These types of issues rarely show up in reports, but

as every seasoned manager knows, handling them effectively is essential to organizational success.

[___5___] She has an MBA and is a focused, task-oriented operating manager, but

her success comes from her effectiveness as the organization's unofficial psychologist. Alicia

has done more in the way of counseling, conflict resolution, coaching, and informal

personality assessment than many of the therapists who work in the mental health unit. Staff

members frequently confide in her when there is disabling friction within a work team, when

they need career advice, or when they’re struggling with personal issues. She is an expert at

recognizing hidden agendas at meetings and identifying the problems that workers are

reluctant to share with senior managers. She knows which combinations of people on a

project team would yield great synergy and which would be disastrous. On countless

occasions, Alicia has kept projects on track through skillful, behind-the-scenes interventions.

Relational Creativity [___6___] This is the relational work being done when an advertising account team conceives of a

campaign, when a marketing brand manager develops a strategy to reach a particular consumer

segment, when a speechwriter crafts the president’s next address, and when a senior manager

12

develops a motivational theme that will focus and inspire her employees.

[___7__] Professionals skilled in influence convince others on a person-to-person

basis, whereas people talented at relational creativity use images and words to arouse

emotions and create relationships with groups. This dimension is not a measure of creativity

in general—only in the interpersonal realm. Someone who’s creative in an analytical area of

business work (such as designing new investment instruments) can still have low interest in

relational creativity; similarly, an artist (such as a composer or a painter) can lack skill in this

domain. [___8___] For an example of someone with outstanding skills in relational creativity, look at

Diane Weiss, a senior editor for a major magazine. Whether the question is which illustration to use,

how best to express data graphically, what title to give an article, or what image to put on the cover,

Diane is the one to ask: She has an unerring sense of what will pull readers in. But she is not known

for her easy management style or her ability to "read" people. In fact, even her most ardent fans will

agree that she can be exceedingly difficult to work with. For understanding the masses, though, Diane

is as good as you can get. She is a bona fide people person - with the emphasis on the plural.

Team leadership [___9___] Conversely, the more time they spend in front of a computer screen, the worse they feel -

and perform. Professionals with a high level of interest in team leadership love managing high-energy

teams in busy service environments and enjoy working both with the team and with the customer.

Their ideal job might be overseeing a busy resort or a retail store.

[___10___] High scorers in team leadership always want to work through a group. They’re

the embodiment of the player-coach role. People who score high in influence are interested in the

outcome of an interaction – the closed deal - whereas those scoring high in team leadership focus

more on the interpersonal and managerial processes. Compare the managing director of mergers and

acquisitions at an investment bank (excelling in influence) with the sales manager at a large

automobile dealership (strong in team leadership). Not all team leaders - even effective ones - have

high scores in this dimension, however. It is quite possible for team leaders in areas such as

production, research and development, and information technology to show little interest in this

particular relational skill. But we consistently see high scores here for leaders of teams that have a

strong customer focus. […]

[___11___] A person can have great interest and skill in two or more of these areas or in none

of them. And scoring high in more dimensions isn’t necessarily better; some are irrelevant or even

detrimental to certain types of work. Above, we’ve offered examples of people who are stars in one

dimension, but some of them score high in other areas as well.

[___12___] Put Diane where you should have Alicia, and the results will be disastrous. That’s

why it’s so important to align your employees’ relational talents with their job responsibilities. Keep

the four dimensions in mind when you’re hiring new employees, assigning tasks, rewarding

employees for their contributions, and developing the people in your organization, including yourself. (from “Understanding ‘People’ People,” Harvard Business Review, June 2004

http://hbswk.hbs.edu/item.jhtml?id=4187&t=leadership&noseek=one)

USE OF ENGLISH

Questions 1-10 For each blank (1-10), think of the word that best fits in the context. Use only one word in each space.

Managing conflict is __1__ learning to ride a bicycle – it’s easy when you get __2__ help balancing,

and practice, practice, practice! The difficulty most of us run __3__ is that we expect __4__ to be

good conflict managers without having learned the skills, then we __5__ mad at ourselves for doing

the same thing over and over __6__, getting the same predictable results. We react habitually because

we don’t know any __7__ way. We didn’t take conflict management in school __8__ with science and

math. Our role models may not have __9__ great skills either, so we end up dealing with conflict the

way our parents __10__, or vowing to take the opposite approach.

http://hbswk.hbs.edu/item.jhtml?id=4187&t=leadership&noseek=one

13

Questions 11-20 For each blank (11-20), decide which of the options A, B, C or D is best. Only one answer is correct.

In other words, we muddle __11__, doing the best we can, getting the same __12__ results, not

understanding why we get caught and not having __13__ to do it differently. It’s important to

understand this so we don’t become frustrated with ourselves, and expect __14__ change.

Good conflict management is a learned __15__. In many instances it goes against our basic

__16__ of “flight or fight.” First we need to __17__ the pain conflict brings into our life and be

willing to let go of ineffective habits and knee-jerk reactions. Then we can concentrate on applying

new behaviors. Often when we decide to change ourselves, we want others to change as well, so it’s

important to __18__ a “live and let live” approach.

One of the best arenas for practicing conflict management is in our relationships with others,

particularly those we’re __19__ to, because that’s where we __20__ into the most difficulty.

Below are Seven Strategies for Success, which I find very useful.

11 A along B through C in D about

12 A sad B hopeless C grievous D woeful

13 A means B devices C tools D utensils

14 A direct B urgent C instant D current

15 A skill B craft C knowledge D experience

16 A behaviour B reaction C attitude D approach

17 A acknowledge B declare C approve D adopt

18 A improve B produce C develop D grow

19 A most intimate B nearest C fondest D closest

20 A get B are C come D go

Questions 21-25 In each of the following (groups of) sentences (21-25), find the underlined part – A, B, C or D – that


21) (A) Notice your body language and tone of voice. Are you projecting (B) what do you intend to?

Listen, and then listen again. Listen (C) with your eyes and ears. Listen to what the person (D) is not

saying.

22) Listen with your heart. (A) Let’s go of the inner judge - that part of you (B) that criticizes and

attacks. Banish your fault-finder by taking a deep breath and (C) substituting a positive thought

instead. This process is never ending, so you’ll have (D) plenty of opportunities to practice!

23) Deal (A) with the present situation only – (B) no passed examples to score points! Ask yourself:

“Do I want (C) to be right or happy?” Then decide. After all, you’re the one (D) who gets to live with

the consequences of your choice.

24) (A) Omit words like NEVER, SHOULD and ALWAYS (B) from your communication. These

words (C) tend to escalating conflicts. (D) Take full responsibility for the communication.

25) This means doing whatever (A) it is necessary to ensure that (B) you are creating an inclusive

dialogue (C) in which each person (D) feels seen, heard and understood.

Questions 26-30 Use the word given in CAPITALS at the end of each gapped line (26-30) to derive a word that fits in

the space.

14

You’ve __26__ no doubt, that these strategies are all for you, and not NOTE

the other person. That’s because you’re the one reading this article,

so if you want change, be the change you want to see happen! When

we use these tools, the Strategies for Success, we get to understand

and appreciate our human differences, which in turn __27__ VITAL

and __28__ our relationships. STRONG

As the __29__ goes, “what goes around comes around,” so give SAY

the very best of yourself and be prepared to receive the best from

others. __30__ practicing! JOY

(from Managing Conflict by Angela Jackson, http://www.mce.be/knowledge/316/46)

WRITING

Describe the characteristics of an exceptional manager by examining someone whom you have

observed or with whom you have worked. Illustrate how his or her management style has influenced

you. (See suggested solution in the Answer Key section.)

15

TEST 3 – BUSINESS MEETINGS

INTRODUCTION

Meetings are an essential tool of management and supervision. Although some people feel that meetings are a

waste of time, when they are at their best, they are a place where people can be creative together, and where

everyone’s perspective, knowledge and experience can be integrated.

Meetings can be an important part of a process of coming up with innovative solutions to problems and

new and better ways of doing things. To make every meting pay off it is essential that everyone play their role

conscientiously.

Thus, the responsibilities of the Chair are to

decide the item of business to be discussed;

define the limits of discussion;

keep people to the point and ensure that one person speaks at a time;

try to be as impartial as possible and at all costs avoid arguing with members;

make sure the rest of the group understand what is going on.

In a problem-solving context, the Chair should

identify the subject/problem, state it clearly and repeat it at intervals, if necessary;

exchange and develop ideas; get the evidence and interpret it before getting ideas for the solution to the

problem;

evaluate the alternative by identifying the range of choices available; predict the consequences of each

(time, cost, resources, political considerations);

select a course of action, preferably by consensus and make sure everyone knows what their

responsibilities are.

To stimulate discussion, the Chair should

phrase questions to avoid ‘yes’ or ‘no’ answers;

keep questions brief and straightforward;

use simple words;

use questions directly related to the topic;

use questions that cover a single point.

Participants in a meeting are expected to resist negative feelings about meetings and develop an

attitude of open-mindedness and consideration for others. They should ensure that they are properly prepared

and informed on the topic, as the quality of a meeting depends on the quality of information possessed by the

group members.

The characteristics of an effective meeting participant are:

a consideration of the other people involved;

a recognition that interaction must be a flexible two-way process;

an awareness of communication barriers and a desire to overcome them;

an ability to think logically and analytically;

an ability and desire to speak clearly, to the point and in a language adapted to others;

a sense of proper timing in terms of when and how to speak;

a desire to co-operate and conciliate in order to achieve group goals;

an understanding of the need for attentive listening.

The secretary or minutes writer has the duty to

obtain the materials from previous minutes or new sources;

draft the agenda to a logical order of priorities;

agree with the chairperson;

circulate notice of meeting and agenda;

write the minutes (an official written record of what is said at a meeting and what decisions are taken

there). (adapted from D. Nickson and S. Siddons Business Communications and N. Stanton Mastering Communication)

16

READING

Read the article about the use of video in meetings. Choose the best sentence from the list below (A-

H) to fill each gap (1-6). There is one sentence that you do not need. There is an example at the

beginning (0 - A).

A Say your company is having a big meeting focusing on soft quarterly results.

B A short video can be worth a thousand PowerPoint slides at your next meeting.

C But with video you can take everyone in the meeting to places they couldn’t otherwise go.

D The video can reinforce key points made over a multi-day meeting or leave one or two

resonant images in the minds of the audience. E It doesn’t matter whether you want to explain how to fill out a form, show how to operate a

machine, or detail the benefits of a product.

F Let the professionals do it; there are seasoned video production teams in most towns of any

size.

G A brief word or two from an expert, a customer, or someone at your company could present a

point of view or deliver a message that would be difficult to do otherwise.

H Visual aids such as Microsoft’s PowerPoint too often merely increase the audience’s fatigue.

Lights, Camera, Presentation! Liven Up Boring Meetings with Video by Robert M. Goodman

There’s something uniquely powerful about the moving image: the combination of sound and action

grips an audience like nothing else can. Today’s technology means that this power can reach beyond

TV and movie audiences right into the conference room.

Think of how a speaker tells a joke to warm up an audience. A video can do this even better.

[___0 A___] Show a video that highlights the company’s real or perceived foibles* to begin a

discussion about how to improve the company’s performance.

Visual metaphors are a great way to motivate or inspire. If teamwork is a theme of your meeting,

try playing a short video in which a team of mountain climbers conquers a mountain. Or show a video

that demonstrates how an Indy 500 pit crew contributes to the driver’s success.

Putting together a compelling video is easier than you might think. What’s more, it’s quite

affordable. Here’s how to make video work for you.

Set the stage

Open the meeting with a video program that sets the tone for the rest of the proceedings. This visual

and aural medium excels at evoking an emotional response from an audience. After watching the

program, everyone will be in the same frame of mind, and the business of the meeting can flow

forward from this shared moment.

Eliminate barriers

Most of us have seen the earth from the moon, penguins on an Antarctic beach, and the colossal

figures on Easter Island - on television. Gaining access to a high-tech clean room, seeing your

company’s secure servers, or having a bird’s-eye view of company headquarters is equally beyond the

reach of most people. [___1___]

If it would help everyone understand the situation, show them the inside of the factory or a

news report about unrest in a faraway country that will have an impact on your company's

performance.

Video also allows you to bring people into your meeting who would be unavailable because

of budgetary or time constraints. [___2___] This may be the best approach to enhance credibility,

deflect anger, or tout an accomplishment. Video provides the advantage of being able to select the

right person rather than just whoever happens to be available at the time to make the presentation.

17

Provide the best view

Video gives everyone at the meeting the best view of the subject at hand. [___3___] Everyone shares

the same view and has equal access to the information. A moving picture is worth more than a

thousand words.

A camera can peer into an electron microscope, hover over a vat of molten steel, or go under a

car’s engine to reveal carefully composed images that convey meaning quickly. It’s easy to focus the

audience’s attention by isolating a particular area on screen to help them see what you want them to

see.

Video can demonstrate behaviors you wish others to model. A carefully edited version of a sales

call can teach more in minutes than hours of mentoring may accomplish. The demonstration remains

consistent no matter how many times the video is played.

An added benefit of video is that copies of the program can be made available to the

audience so they can watch it again later for reinforcement.

Alternate channels

An unbroken procession of speakers can be tiring. [___4___]

Break up that succession of speakers with a short video that has movement, color, and music. It’s

an opportunity to change the mood, switch subjects, or inject some fun. In a minute or two, you can

have your audience laughing, speculating on the future, or visiting the plush resort your company has

selected as an incentive for its top performers.

Sum everything up

Too many meetings drag to a close; end your meeting with color and action. By closing the

meeting with a video, you can motivate the audience to sell more, seek success, or solve

challenges. [___5___]

A common way to build camaraderie over multi-day sales meetings is to tape the

attendees participating in the different events. Try this with your team.

At the close of your meeting, show the final program and distribute copies. Not only will the

video commemorate a shared experience; more importantly, it will further cement the participants’

sense of community and their commitment to meeting common goals.

What does it cost? Plan to spend anywhere from $1,000 to $2,000 per minute of finished

video depending on how many bells and whistles you want. [___6___] To find a good one,

inquire at local TV stations. Most contract with independent teams on a regular basis, and

will know who the reliable ones are.

(http://hbsworkingknowledge.hbs.edu/item.jhtml?id=3331&t=career_effectiveness&noseek=one)

*foible – weakness, failing, fault, imperfection

USE OF ENGLISH

Questions 1-10


If you think you and your colleagues __1__ attending more meetings than ever __2__, it’s probably

not your imagination. In the old command-and-control days, people __3__ not need to gather in

meeting rooms that __4__. But as the workplace __5__ become more collaborative and democratic,

experts say, organizations have needed __6__ meetings to share information, receive people’s input,

and make group decisions. __7__, mergers and alliances have increased the need __8__ more

interorganization meetings in __9__ to those taking place __10__ companies.

Questions 11-20


18

But while meetings at their best can make crucial contributions to your company’s success, __11__ in

mind that meetings at their worst represent not only a lost __12__ but also wasted money. Time is

__13__; when one factors in the hours employees fritter __14__ at meetings instead of using the time

to complete work at their desks and in the field, companies are wasting enormous amounts of money.

The Web site EffectiveMeetings.com, operated by the Calgary-based SMART Technologies,

offers a meetings cost calculator that can help you determine the cost of meetings based on a set of

__15__. For example, the typical weekly management team meeting can cost a work group $390 each

time it assembles - or more than $20,000 a year - assuming that the group consists of five members

averaging $70,000 a year in salary and that the meetings last about two hours. Add to that dollar

amount the __16__ taken by the accumulated stress and discontent of staffers who return from back-

to-back-to-back meetings to an avalanche of messages and a deferred to-do list that __17__ by the

day.

“I have clients telling me they are completely overwhelmed by this ‘meeting mania’ happening at

many companies,” says Peggy Klaus, a consultant in Berkeley, Calif. “In this new meeting culture,

managers sometimes feel they have to hear everyone’s __18__ before they make a decision. But it can

become such a time drain that it’s ridiculous.”

Below are some practical ideas for managers __19__ on having meetings that enhance, rather

than __20__, their organization’s success.

11 A have B hold C put D keep

12 A event B possibility C opportunity D time

13 A defined B finite C definite D definitive

14 A away B off C up D down

15 A varieties B variations C variables D classes

16 A toil B damage C loss D toll

17 A rises B grows C mounts D increases

18 A knowledge B experience C testimony D input

19 A intended B intense C intent D intensive

20 A hinder B delay C resist D hold

Questions 21-25



Don’t always have a meeting

21) (A) The solution to an unproductive meeting might be (B) as simple as not having it. As experts

explain, “meeting mania” is fueled (C) in large parts by the use of meetings to take care of business

better handled (D) by other means.

22) Before calling the troops together yet again, managers (A) should have asked themselves

whether the purpose of the meeting might be fulfilled (B) some other way. If the point is to

share information - which is all too frequently the case in organizations (C) plagued by bad

meetings - e-mail, memos, and informal conversations (D) will probably work better.

23) The best reason (A) to have a meeting is that you really need interaction between the people (B)

who are attending. You need people to share (C) opinions and knowledges, and build a common

integrated thought-line about the issue at hand. Then a meeting – (D) if done well - is perfect for that.

24) In a few cases, information sharing might also be a legitimate purpose (A) for scheduling a

meeting but only (B) if you need the immediate spontaneous give-and-take that’s possible when (C)

everyone are together in real time. Otherwise, e-mail or voicemail (D) will probably suffice.

19

25) Before calling a meeting, (A) you’ve really got to ask yourself, ‘What is the point?’ (B) What it is

that, when you’re done, you (C) want people to do or think or feel? Ask yourself: (D) ‘Do I really

have to have this meeting?’

Questions 26-30


the space.

Spend time to save time

Terrence, the communications director of a health services company,

grumbles about all the meetings he attends. Yet when the senior

management team made a decision on his turf, Terrence was furious

about not being invited to the meeting at which the matter was discussed.

His behavior is not as __26__ as it may appear. Terrence’s CONSIST

problem with meetings is that most he attends are inefficient,

unfocused time drains. Worse yet is that the meetings where

the company’s real business gets accomplished are not managed

with __27__ skill to ensure that the right players are there. SUFFICE

Terrence from the example above would not have missed the one

meeting he did care about—and where his presence would have

been most __28__—if his company better prepared for and BENEFIT

communicated about meetings. Even if the president’s executive

assistant had forgotten to invite Terrence, if she had __29__ ROUTINE

circulated the agenda in advance to all managers, Terrence would

have known what was coming. Then he could have lobbied to join

the meeting, or at least sent an e-mail to his boss with the vital

information.

Don’t “discuss”

“Discussion” is no longer good enough. Time-starved staffs need more

than directionless chatter or meant-to-impress progress reports.

__30__ meetings depend on clearly defined objectives toward which PRODUCE

people can work and against which they can measure progress.

“If I’m organizing a meeting, I want to get beyond ‘discuss,’” Streibel

says. “Maybe ‘discuss and decide.’ Or ‘discuss and build a plan,’ or

‘discuss and identify key barriers to success.’” (adapted from http://hbsworkingknowledge.hbs.edu/item.jhtml?id=3507&t=career_effectiveness)

20

TEST 4 – PROFESSIONAL PRESENTATIONS

INTRODUCTION

A presentation is a talk, usually to a group of people, in which information is given. Presentations may have

various purposes: to inform or describe, to instruct or explain, to persuade, convince or inspire, to entertain or

amuse. The purpose of a presentation will determine the speaker’s approach to it. For example, if your

objective is to influence the audience’s beliefs, attitudes or behaviour, you must appeal to logic or emotion by

engaging a formal, apparently objective style for credibility or an informal, personal style for congeniality,

respectively. Similarly, you must structure your talk by argument and back up your utterances with facts or

engage vocabulary designed for vividness, interest, and engagement of emotions, respectively.

To give an effective presentation, you need to go through the following processes:

setting your objectives

researching your audience

choosing the structure of your talk

preparing your script

preparing any visual aids

rehearsing the presentation

warming up your voice

delivering the presentation

dealing with the audience’s questions

following up the presentation

If you want your audience to go away with a clear understanding of what has been presented and a clear

direction to follow, you need to prioritise your information and structure your talk carefully. Thus, in the

opening stage,

announce the subject and your objectives;

tell the audience who you are (i.e. name, title, contact information);

describe the background to the presentation;

mention what your conclusions will be;

show that you understand the audience’s concerns;

mention the benefits for the audience;

set the scene for the talk;

grab their attention;

set their expectations (i.e. how long the presentation will last, when you will deal with their

questions);

encourage them to listen actively.

The middle part should back up all the claims you made at the start, clarify your message and develop

your arguments. You should try to link each of the points you are making so that your presentation moves

smoothly from one point to the next. Use visual aids to help the audience understand abstract concepts, to

reinforce important and exact information, to link several ideas or compare information.

In the concluding stage,

summarise the most important points of your talk;

remind the audience of the benefits that your solution, product, options, conclusions will bring

to them;

launch a call to action;

ask for questions and answer them where appropriately;

tell them how to contact you if they need to.

Good presenters prepare the end of their presentations on a “high”, by using an anecdote or asking for a

decision or presenting a final benefit. (adapted from D. Nickson, S. Siddons, Business Communications; N. Stanton, Mastering Communication

21

READING

Read the article about presentations. Choose the best sentence from the list below (A-H) to fill each

gap (1-6). There is one sentence that you do not need. There is an example at the beginning (0 - C).

A You should check that view well in advance of the presentation.

B If they plainly stated that they want to sell an idea or a product to the audience or that they were there

to convince them that this is their best choice?

C Everything you do during that presentation is some form of manipulation.

D The chances that they will act as you want them to will then increase dramatically.

E Not if you are open about it.

F A good way to do this is to bring in a few supporters.

G Maybe even further, in some cases you may not want your audience to realise that you are

manipulating them.

H But in the final analysis, it’s the information a show imparts that matters most to those putting their

money down to attend.

Presenting Is Manipulating! Are You Ready for It?

by Eric van de Graaff

Any presentation should be seen as what it really is, a fully orchestrated activity aimed at

manipulating the attitude and actions of the audience towards your own objective. [___0 C___]

The most successful presentations bring to the audience exactly what they are expecting from it.

First they focus the audience’s attention, then they address what they will find important and finally,

they clearly state what the presenter wants the audience to do once the presentation and interaction is

over. From my own experience as trainer and coach, my message to you is: tell your audience what

you expect as soon as possible. [___1___]

Presenting is manipulation

When you present a message to an audience, you want to manipulate. You want to create a visible

change in their behaviour. You want them to say yes to your proposal, buy your product or endorse it.

This is not only true for commercial presentations but in almost all other circumstances too.

[___2___] You may want them to feel that they have made up their own minds.

State the conclusion at the beginning!

I have met many presenters who want to keep their objectives hidden. Sometimes they are so well

hidden that the audience couldn’t comply with them even if they wanted to! These presenters don’t

jump for joy at the first signs of agreement. They refuse to show their cards, and they don't ask for the

business.

But what would happen if they were simply open about what they wanted? [___3___] Why not

explain your own expectations at the beginning of your presentation so that everyone knows where

you stand? If the expectations are bold, you may well already get some feedback on where the

audience stands in relation to your expectations by means of non-verbal behaviour, e.g., nodding or

shaking of heads. This tells you where you will meet opposition and where to look for support. You

should then find out more specifically what their opinions are, what they think about the subject at

hand and what it would take to convince them of your own viewpoint. Next, you should suggest that

you address their specific concerns and discuss the advantages of your product, so that they can judge

for themselves. Once you have the audience’s agreement on this course of action, the presentation is

simple. You have found some support and the discussion is open. You are able to concentrate on the

needs of your audience and less so on manipulating them. Again, chances are that your audience will

react as you want them to.

Create your own audience!

In some cases, you may be able to optimise the outcome of your presentation by balancing the

audience. [___4___] Suggest a few supportive questions to them so that they can start the interaction,

22

if needed. But select these people carefully, look for the people that you really want to influence, and

assess their opinion. Find out what it would take to convince them, and make sure you give them lots

of attention. The amount of attention alone will shape their willingness to listen to your message.

They may be your first point of support from the wider audience.

Use your supporters to convince those who are in doubt!

Many people ask me, “but what if someone airs a negative opinion about my product?” That’s where

you need to be prepared. Never react to the opinion yourself and certainly don’t ask the overt

opposition to address the issue. Ask an influential member of the group to give their view - preferably

a person with positive experience of your product and a positive attitude towards your presentation

objectives. This is the best way to manipulate the others. [___5___]

Is it misleading? [___6___] Stating that your presentation is your best chance to manipulate the

audience and that you intend to take advantage of that may seem like an odd thing to do. But think

about it…. is it really? (http://www.mce.be/knowledge/90/26)

USE OF ENGLISH

Questions 1-10


Do your knees feel like Gumby’s when you have to get up and speak in front of a group? Do you feel

like the next words __1__ of your mouth are going to be the dumbest words __2__ uttered by a

human?

If you said yes to either of the questions above, you have a full-blown __3__ of stage fright.

Everyone, even experienced speakers, __4__ some anxiety when speaking in front of a group of

people. This is perfectly normal. The __5__ way to deal with this anxiety is to first acknowledge that

this fear is perfectly normal and you are __6__ alone. To reduce your fear, you need to __7__ sure

you properly and thoroughly prepare __8__ before you speak. Proper preparation and rehearsal can

help to reduce this fear by about 75%. Proper breathing techniques can further reduce this fear by

__9__ 15%. Your mental state accounts __10__ the remaining 10%.

Questions 11-20


__11__ are just a few suggestions you should use to __12__ your speaking anxiety. The first and

__13__ important of all is preparation. I like to think of it as the 9 P’s: Prior Proper Preparation

Prevents Poor Performance of the Person Putting __14__ the Presentation. __15__ will relax you

more than to know your are __16__ prepared. Here are 10 steps you can __17__ to reduce your

speech anxiety.

Know the room - become familiar with the place in which you will speak. Arrive __18__ and walk

around the room including the speaking area. Stand at the lectern, speak __19__ the microphone.

Walk around where the audience will be __20__ and from there to the place where you will be

speaking.

11 A Down B Below C Next D Following

12 A overcome B overlook C override D oversee

13 A very B most C more D utmost

14 A up B out C on D in

15 A Nothing B Something C Anything D Everything

16 A fairly B accurately C reasonably D properly

17 A take B do C learn D go

18 A before B soon C quickly D early

19 A at B over C into D on

20 A sat B seated C settled D placed

23

Questions 21-25



21) Know the audience – (A) If possible, greet some of the audience (B) as they arrive and chat with

them. (C) It is easiest to speak to a group of friends (D) than to a group of strangers.

22) Know your material - If you are not familiar with your material or (A) are uncomfortable with it,

your nervousness (B) will increase. Practice your speech or presentation and (C) revise it until you

(D) will present it with ease.

23) Learn how to relax - You can ease tension (A) by doing exercises. (B) Sit comfortable with your

back straight. (C) Breathe in slowly, hold your breath for 4 to 5 seconds, and then slowly exhale. To

relax your facial muscles, (D) open your mouth and eyes widely, then close them tightly.

24) Visualize yourself speaking - Imagine yourself walking confidently to the lectern (A) as the

audience applauds. Imagine yourself speaking, (B) your voice loud, clear and assured. When you (C)

will visualize yourself as successful, you will be successful.

Realize people want you to succeed - All audiences want speakers to be interesting, stimulating,

informative and entertaining. They want you (D) to succeed – not fail.

25) Don’t apologize for being nervous - Most of the time your nervousness (A) does not show at all.

If you don’t say anything about it, (B) nobody will notice. If you mention your nervousness or

apologize for any problems you think you have with your speech, you’ll only be calling attention to it.

(C) Had you remained silent, your listeners (D) may not notice at all.

Questions 26-30


the space.

Concentrate on your message - not the audience. Your nervous

feelings will dissipate if you focus your __26__ away from your ATTEND

anxieties and concentrate on your message and your audience,

not yourself.

Turn nervousness into positive energy - the same nervous energy

that causes stage fright can be an asset to you. Harness it, and

transform it into __27__ and enthusiasm. VITAL

Gain experience - Experience builds __28__, which is the key CONFIDE

to __29__ speaking. Most beginning speakers find their anxieties EFFECT

decrease after each speech they give.

If the fear of public speaking causes you to prepare more, then the

fear of speaking serves as its own best antidote. Remember, “He who

fails to prepare is preparing for __30__ - so Prepare, Prepare, Prepare!” FAIL (adapted from http://www.mce.be/knowledge/89/26)

http://www.mce.be/knowledge/89/26

24

TEST 5 – RECRUITMENT

INTRODUCTION

Recruitment communications include writing job advertisements, CVs or résumés, letters of application, and

attending interviews, whether as interviewers or interviewees.

An employer may choose to advertise a job / position / vacancy / post through one of the following

job advertising media: (i) in-house magazines and notice boards; (ii) the situations vacant or appointments

page of professional trade or technical newspapers or magazines, and national or local newspapers, (iii) job

centres, or (iv) school and university careers office.

The job ad(vertisement) should be concise but comprehensive enough to give an accurate job

description (e.g. job title, area of business activity, size and type of organisation, main duties and

responsibilities, salary, benefits, opportunities for training, career development, etc.) and candidate

specification (e.g. qualifications and experience, other skills and special aptitudes, required and preferred /

desirable). A job ad may also include advice on how to apply, to whom and by what date.

A CV or résumé (AE) is a form of advertising designed to help you get an interview. So your objective

is to call the recruiter’s attention to your best features and to downplay your disadvantages, without distorting

the facts.

In the CV, a job candidate provides details about their education and training, qualifications, work

record / experience, as well as some information about additional interests and skills that are relevant to the

targeted job.

In the U.S., there are three types of résumé: chronological, functional and targeted. To capture the

employer’s attention immediately, a candidate should choose the best résumé format depending on their

background and goals.

The chronological format highlights the job titles, dates and places of employment in reverse order, by

presenting them as headings under which responsibilities and achievements are listed, giving more detailed

information about the most recent positions. This organisational plan is recommended to those applicants who

have an impressive employment history that shows growth, making the job objective a natural step in their

career path.

The functional résumé presents the candidate’s experience under areas of competence with the work

history listed very concisely in subordinate sections. This format gives applicants the freedom to prioritise their

accomplishments by impact rather than by chronology and is most useful for candidates who are changing

careers or are just entering the job market or have gaps in their work history.

The targeted résumé focuses on the abilities and achievements that are relevant to the specific job

target. Education and employers are mentioned in subordinate sections, as they are considered to have little

importance for that particular position. This organisational pattern is best suited for those who have a clear idea

of what they want to do and can do.

The European Union CV format requires information that will result in a more complex portrait of the

candidates in terms of their specialisation, capacity to adjust to multicultural environments, linguistic

competence, etc. It comprises the following sections: work experience, education and training, personal skills

and competencies (not necessarily covered by formal certificates and diplomas), mother tongue, other

languages, social skills and competencies, organisational skills and competencies, technical skills and

competencies, and artistic skills and competencies. This format requires not only a description of those

competencies but also an indication of how they were acquired.

The main purpose of the job application letter / cover letter is to advertise your strengths and assets

in a way that would interest employers in interviewing you (see Writing Reference for guidelines and samples).

As for the style of the application letter, use formal language, state facts confidently, not arrogantly, be honest,

but stress good points, show eagerness, not desperation, to get the job, and be courteous.

A job interview has two purposes: to establish basic trust with the interviewer and to give the

interviewer a few clear ideas about what you can do for the company. Achieving these goals takes some

planning and advance work. At the most fundamental level, you need to inform yourself about the organisation

(e.g. its history, geographical location, general methods of doing business, reputation, etc.) and anticipate

questions that might be asked (factual as well as ‘trap’ questions). Finally, be prepared to ask the interviewer

some specific questions, such as Are you preparing a new product launch? What would constitute success in

this job? Can you give me an example of a previous success? How was the employee rewarded? Can you give

me an example of a significant failure someone on the team has experienced? What happened? Was the

employee punished? What are the opportunities for career development in your company?

25

In an interview, the stakes are very high. Your answers should illustrate the good job you will be able

to do for the company if you are hired and, at the same time, have an emotional subtext that shows you to be a

loyal, trustworthy, and hard working employee. (adapted from http://esl.about.com/library/weekly/aa120797.htm)

READING

The concluding sentences in the paragraphs of the following article about Internet recruiting have

been removed. Choose the best sentence from the list below (A-I) to fill each gap (1-7). There is one

sentence that you do not need. There is an example at the beginning (0 - F).

A A strong employee communications program that emphasizes the economic and social

advantages to working at the company is essential.

B An internal on-line system may be the best way to satisfy employees’ desires for new

challenges.

C On-line job services give workers unprecedented access to free information, and that

information has shifted some of the power to employees in the employee-employer

relationship.

D Online recruiting will save you time and money, but Wharton School professor Peter Cappelli

warns that you must recruit strategically and not forget the human touch.

E The system automatically alerts managers’ superiors after openings are posted.

F If they are good at what they do, recruiters will find them.

G And once an employee starts looking, it’s often too late to patch things up.

H Once you’ve determined which employees have been contacted or are actively looking, you

can make efforts to retain them.

I With so many organizations recruiting on-line, employees can receive numerous job offers.

How the Web Changes Recruiting by Peter Capelli

Internet recruiting is, of course, a two-edged sword. If it’s much easier for you to hire experienced

workers, it is also much easier for competitors to hire away your own people. Employees can forget

the advice that they need to market themselves, to develop their own “brands” in order to advance

their careers. [___0 F___]

Many employers are out there ready to snap up your workers, and everything moves quickly in

the on-line world. As if that weren’t enough of a problem, the proliferation of on-line information

about pay and benefits is making retention even more difficult, since compensation is a key reason

that employees leave their jobs. Using resources like the salary surveys by Robert Half International

posted on Monster.com, people can quickly compare their own salaries against those offered

elsewhere. [___1___]

Company loyalty can also suffer because of the sheer number of choices available through the

Internet. Psychologist Charles O’Reilly at Stanford University and his colleagues have demonstrated

that having more job choices decreases employees’ commitment to their current jobs. [___2___]

But companies can reverse the destabilizing effects of on-line recruitment. First, managers must be

more careful than ever to avoid situations that might make employees think about leaving. With the

Internet only a click away, there’s no longer any time for an irate employee to cool off. A worker can

post a résumé on a job board in minutes and be contacted by potential employers within a day.

[___3___]

At the same time, companies should help employees make sense of on-line salary

information, especially its limitations. Such data typically ignore stock options, for instance, and can’t

help an employee measure which jobs have the best advancement prospects. Sometimes employees

are wooed away to new jobs because they don’t see how good their existing situations are. [___4___]

Should you prevent your employees from being contacted by on-line recruiters? Some

employers try. Cigna has changed the email addresses of its IT employees to make it harder for

recruiters to get to them. Other companies use software to make sure there are no links from employee

http://esl.about.com/library/weekly/aa120797.htm

26

home pages to a company intranet through a firewall. Still others set up software that alerts human

resources if employees receive email from on-line recruiters. Hewett Associates is one of many

employers that check to see whether employees have résumés posted on job boards. [___5___]

But a more promising approach, especially for large companies with many openings is to

preempt on-line hiring by building an internal on-line job network. Most companies, even if they

make quick offers to outside candidates, still find it difficult to move internal candidates around or

make timely counteroffers. As a result, many employees find it’s easier to land a job with a different

company than get a new job at the old one. To make matters worse, on-line recruiting, which makes it

cheap and easy to hire experienced employees, encourages outside hiring at the expense of internal

development and placement. [___6___]

Nortel Networks, for example, has contracted with Monster.com to create its own job board, Job

Shop. “I want to make it drop-dead easy to find your next opportunity internally,” says Brian Reilly,

director of internal mobility. The goal is to provide an internal version of what’s available in the

outside market, thereby redistributing talent within Nortel’s growing business and preventing

employees from leaving for competitors. Any employee can post a résumé on Job Shop without

alerting his superior, and any manager can post a job opening. [___7___] (http://hbsworkingknowledge.hbs.edu/item.jhtml?id=2330&t=innovation)

USE OF ENGLISH


Searching for a job is __1__ of the most important things that professionals __2__, and they are doing

it much __3__ frequently. The changing employer/employee contract, the lack of __4__ security, the

increasing pace of change in the workplace, advances in technology, globalization, and even the quest

__5__ a better work/life balance __6__ all creating significant movement in the marketplace for jobs.

Another prominent factor has __7__ the overall strength of the U.S. economy __8__ the recession in

the early 1990s. People are changing jobs because of the opportunities that __9__ been created and,

for some, because of the fear that they will miss __10__ on opportunities now available.


Although the job search is a crucially important __11__ for most professionals, it is also one of the

most __12__, misunderstood, and mishandled activities, even by otherwise intelligent, accomplished

people. The good news is that you can __13__ better at it.

Let me start with a simple but powerful, and I hope empowering, concept, namely that there is

only one answer to almost all job-search questions: “It depends.”

Searching for a job is an art, not a science; there are few absolutes. Everything depends on the

individual and the situation. This __14__ has been demonstrated repeatedly to me in working with

thousands of job __15__ at widely varying employment levels __16__ the past decade.

Although the job search is an art, there are __17__ search methodologies and __18__; most are

applications of common sense. They often reflect the Golden Rule - doing unto others as you would

have them do unto you. You also need to consider how any job-search action you take __19__ be

perceived at the receiving __20__.

11 A phenomenon B procedure C process D operation

12 A feared B afraid C frightened D fearful

13 A be B make C do D get

14 A point B issue C topic D problem

15 A pursuers B finders C seekers D lookers

16 A since B over C for D in

17 A efficient B efficacious C practical D effective

27

18 A plans B approaches C attitudes D programmes

19 A would B must C might D should

20 A end B part C terminus D point



21) A few years ago, a friend of mine found a book on this topic (A) that was published in 1937. The

book (B) did not mention faxing your resume, having it scanned in, or (C) surf the Internet for jobs,

but most of its advice (D) was still valid sixty years later.

22) People often have problems (A) applying search methods because of the emotional component

(B) is involved. It is hard to be “objective” when your life, career, and future (C) seem to be at stake.

Some job seekers overlook, or (D) don’t seem to fully appreciate, that the search process is both an

intellectual and an emotional one.

23) The job search is also (A) a marketing and sales process, and most job seekers are not experienced

with, or comfortable in, those disciplines. And even those (B) who are experienced in these areas -

people (C) who find it easy to market a specific product or service - often have difficulty (D) to apply

these disciplines to their own search.

24) (A) There are no magic bullets in the search process. Determination, effort, patience,

perseverance, timing, and luck all can play key roles in your eventual success. Many job seekers hope

to find one or two things they can do (B) to guarantee getting a job or their dream job. There are no

guarantees, (C) unless you will start or buy a business. You will have a job, but only (D) if your

business prospers.

25) (A) Anything you do in the job search, no matter how many sources recommend it, will make a

good impression (B) on some and not on others. It is highly unlikely that you can “do the right thing”

for everyone (C) you encountered in your search. Your goal is to impress those people you might

want to work for or with, who might lead you to a job or offer other help in your search. Be yourself

in the job search, but be sure (D) it is your best possible self.


the space.

Adapt all job-search advice to your own personality, style, and

approach. Ignore advice that does not work for you, but don’t

avoid the tougher tasks in job search, such as contacting strangers

or near strangers. The real __26__ of the “it depends” concept APPLY

comes in how you understand and apply the ideas and techniques

found in how-to-books, articles, Internet sites, and job-search

resources, as well as those suggested by friends, network contacts,

career __27__, and outplacement consultants. The bottom line in COUNSEL

the job search is that most people find jobs through friends, relatives,

colleagues, classmates, and other __28__ (by networking). ACQUAINT

It was true in the past, is true now, and will be for the __29__ SEE

future, despite the __30__ belief of some that searching for a job APPEAR

over the Internet is fundamentally changing the search process.

Networking is not the only way to find a job, but statistically it is

by far the most effective technique. And the higher you go in

organizations, the more important it becomes. (http://hbsworkingknowledge.hbs.edu/item.jhtml?id=1462&t=career_effectiveness&noseek=one)

28

TEST 6 – MARKETING INTRODUCTION

Marketing is the craft of linking the producers (or potential producers) of a product or service with customers,

both existing and potential. Contrary to the popular conception, marketing is not just about promotion. It can be

divided into the following four sections, often called The Four Ps:

Product (management) – dealing with the specifications of the actual product or service and how it

relates to the end-user’s needs and wants

Pricing – setting a price for a product, including discounts

Promotion – promoting the product, brand, or company through advertising, publicity, word of

mouth, and personal selling

Place or distribution – getting the product to the customer (point of sale placement / retailing)

These four elements are often referred to as the marketing mix. A fifth P, which is sometimes added, is

packaging, i.e. all the materials used to protect and present a product before it is sold. A marketer* will use

these variables to craft a marketing plan. For a marketing plan to be successful, the mix of the four P’s must

reflect the wants and desires of the consumers in the target market. Marketers depend on marketing research

to determine what consumers want and what they are willing to pay for. They hope that this process will give

them a sustainable competitive advantage*. Marketing management is the practical application of this

process. (adapted from http://en.wikipedia.org/wiki/Marketing)

*marketer - (a) someone who works in the area of marketing; (b) an organisation that sells particular goods or services

*competitive advantage – an aspect of a product or service provided by a company to its customers that gives that company

an advantage over its competitors

READING

Read the following text about multichannel customer care. Choose the best sentence from the list

below (A-G) to fill each gap (1-5). There is one sentence that you do not need. There is an example at

the beginning (0 - D).

A The company has now expanded its channels to include specialty retail stores and an e-

commerce Web site.

B As J. Jill’s multichannel strategy continues to evolve, EDS will provide J. Jill with an

enterprise-wide view of its customers’ behavior across marketing channels.

C By aligning the right people, processes and technology, EDS can help you achieve maximum

efficiency, strengthen relationships and succeed in today’s digital economy.

D Buyers expect premium service regardless of whether they interact with sellers by phone, e-

mail or in person.

E “Customer relationship management is becoming an issue of channel management,”

continues Hayes.

F EDS was a key partner in helping us achieve this level of performance.”

G This requires a better understanding of our customers and their behaviors across all three

channels.”

EDS - Serving Multichannel Customers for the J. Jill Group

The emergence of the Internet as an additional sales and marketing channel has added another

layer of complexity to the challenge of managing customer relationships. [___0 D___]

Companies must be able to gather and analyze customer information from multiple

touchpoints.

http://en.wikipedia.org/wiki/Marketing

29

“This is the age of the multichannel customer”, says John Hayes, president, J. Jill Direct,

the catalog and Web division of The J. Jill Group (Nasdaq: JILL). The J. Jill Group is a

leading specialty retailer of high-quality women’s apparel, accessories and footwear that

markets its products through catalogs, stores and an e-commerce Web site. [___1___] “For

example, we knew we had multiple customer segments with varying profitability. This

provided us an opportunity to improve overall profitability by marketing through additional

channels. But to do it effectively – as well as to maximize profits for each of our customers –

we would need to manage both the marketing channels and sales channels.”

For many years, J. Jill marketed its products – which are designed to appeal to active, affluent

women age 35 and older – exclusively through direct mail catalogs. However, in 1999 the company

shifted from being a catalog-only company with multiple catalog titles to being a single-brand

specialty retailer with multiple distribution channels. [___2___] There are currently about 30 retail

stores nationwide, and the company has announced plans to open another 17 this year.

“We believe that the combination of ‘mail, mall and Web’ is the most powerful formula in

specialty retailing today,” Hayes says. “Our goal is to enhance J. Jill’s brand identity by developing

strong relationships with our customers that foster loyalty and increase repeat purchases. [___3___]

Rather than try to manage its customer interaction data in-house, J. Jill outsourced its CRM

needs to EDS, a recognized global leader in providing e-business and information technology services

to 9,000 business and government clients in 55 countries around the world. EDS quickly helped the

company identify unprofitable customer segments, eliminate duplicate mailings and optimize the

catalog contact strategy, and reduce the number of catalog titles mailed from four to two – while

improving profitability.

[___4___] EDS will use sophisticated techniques such as segment profiling; predictive modeling

using behavioral and demographic information; affinity modeling; and lifetime customer value

analysis. Executive-level reports will continue to be generated and improve in an effort to identify the

interaction of the channels employed by J. Jill.

“The results have been nothing short of extraordinary,” says Hayes. “We recorded revenues of

more than $246 million in 2000 – up from $136 million in 1997 – and experienced a 510% increase in

e-commerce sales over 1999. We greatly improved the quality and integrity of our database and the

customer information it contains, and maximized our contact strategy. [___5___] (from FORBES, July 23, 2001)

USE OF ENGLISH

Questions 1-10


For every prominent ‘Internet marketing’ success story (e.g. Amazon, Dell, e-Bay or Yahoo), __1__

are dozens or __2__ hundreds of organisations that __3__ failed in their efforts to build effective

marketing and sales capabilities on the Internet. There are many potentially valuable lessons in __4__

successes and failures, including the fundamental importance of recognising that the Internet brings

yet __5__ set of tools and a further degree of complexity __6__ the vast and sophisticated marketing

and sales toolbox that many companies __7__ employ.

‘Internet marketing’ successes, including __8__ just mentioned, have relied heavily on other, __9__

traditional marketing and sales channels: brand advertising in broadcast media, demand generation

and promotional communications in print media, direct mail and email channels, and sales and service

support __10__ field sales, telesales and business partners.

Questions 11-20


30

There is a __11__ business aphorism that marketing is the __12__ of the whole organisation. This

aphorism is equally __13__ for Internet marketing. Companies that have achieved the greatest

successes also have defined and __14__ Internet marketing strategies from a cross-functional

perspective and leveraged the __15__ of multiple marketing and sales channels. In these companies,

customer-facing marketing, sales and service activities have not __16__ been automated or moved to

the Internet. __17__, they firstly have been freshly re-designed to provide greater __18__, reliability,

responsiveness and service quality to customers, and, secondly, to provide improved transaction

economics to the company. Such a re-design, of course, suggests that the company has already gained

a __19__ understanding of customers’ buying behaviours and their channel __20__.

11 A worn-out B well-worn C outworn D well-kept

12 A responsibility B obligation C commitment D liability

13 A authentic B true C fair D actual

14 A deployed B undertaken C involved D spread

15 A force B intensity C strength D validity

16 A actually B practically C absolutely D simply

17 A Mostly B Instead C Alternatively D Rather

18 A significance B price C value D worth

19 A meticulous B clear C pure D thorough

20 A preferences B favourites C tendencies D inclinations

Questions 21-25



21) The Internet (A) has been an integrated element of the marketing mix, not an isolated or stand-

alone marketing activity. Moreover, the Internet (B) has been deployed as both an “enabling” channel

that provides support and leverage to (C) others selling channels as well as an “end-to-end” channel

(D) that transacts or closes deals.

22) (A) In both instances, (B) throughout the sales cycle, from learning, to shopping, to closing the

deal and gaining (C) post-sale support, customers benefit from (D) greater choice and conveniences.

23) And, companies gain (A) by shifting low-complexity marketing and sales tasks (B) to lower-cost

channels, (C) while freeing the capacity of high-cost marketing and channels (D) to targeting and

pursuing higher-value opportunities.

24) And, finally, the company’s (A) re-designed “Internet marketing” strategy (B) driving the design

and (C) deployment of Internet and CRM capabilities and the selection and implementation of (D)

underlying technologies. Not vice versa.

25) Years of management research and (A) practical experiences have demonstrated that changing

customers’ buying behaviours and motivating them (B) to accept and adopt innovations, like Internet

marketing, can be difficult and costly. The most successful ‘Internet marketing’ companies have

recognised that integrating new e-channel capabilities (C) with traditional marketing and sales

channels can accelerate the innovation process (D) for customers and themselves. (from Internet Marketing: Lessons for Success by Gordon Swartz http://www.insightexec.com/cgi-

bin/item.cgi?id=130983&d=pndpr&h=pnhpr&f=pnfpr)

Questions 26-30


the space.

Dr Gordon Swartz has more that 20 years of high-level __26__ and SELL

marketing consulting experience and has been vice president of

31

MarketBridge since 1998. Swartz’s areas of __27__ include rapid EXPERT

deployment of teleweb technologies, marketing and sales __28__ AUTOMATE

systems, design and management of complex channel systems, sales

and marketing performance __29__, database marketing and MEASURE

__30__ modeling. QUANTITY

32

TEST 7 – ADVERTISING

INTRODUCTION

Advertising is one component of the promotional mix, which also includes publicity / public relations,

personal selling and sales promotion.

Advertising is the most visible industry of our days. It comprises any paid form of impersonal

presentation of products, services or ideas through various media. Below are the main categories of advertising

media and the corresponding advertising products.

Print media:

direct mailing (advertising materials sent by post to people’s homes)

advertorial (advert + editorial – a positive article written about a company that buys advertising space

in a publication)

leaflet (a folded piece of paper advertising a product, service or company)

brochure (a small magazine containing information about a product or service)

Broadcast media

commercial (radio or TV advertisement)

informecial (a long commercial that gives a lot of information about a product)

jingle (a short tune that is easy to remember, often with words, used for radio or TV ads)

teaser (a very short TV ad that prepares the viewer for a longer ad that appears later)

Point of sale / point of purchase advertising

freebie (something given away free, like a pen, key ring, T-shirt, sticker, bag, etc. with the logo or

name of a company or product)

window display (arranging products in a shop window for public view)

aisle interrupter (a sign that juts into the aisle from the shelf)

glorifier (a small stage that elevates a product above other products)

Outdoor media

billboard (BE: hoarding) (a large board on which paper adverts are stuck, especially at the side of the

road)

neon board / sign (the name of a company or product in neon or other bright lights)

skywriting (the use of special smoke released from an aircraft to write words in the sky)

poster (a large printed ad that appears on a wall)

spectacular (a lighted board, where illuminated moving adverts are run in succession)

transport advertising (signs on taxis, trams, buses, trains, etc.)

The Internet’s World Wide Web

READING

Read the following text about the role of greed in advertising. Choose the best sentence from the list

below (A-H) to fill each gap (1-6). There is one sentence that you do not need. There is an example at

the beginning (0 - ).

A Although these products have a reduced emphasis on the individual amassing property, they

still show the possible effects on the individual who doesn’t take advantage of the offers.

B If an ad can make a product, or more usually a service, appear that it will help the individual

get a bigger piece of the pie, then it will attract attention and generate sales.

C A person dominated by greed will often ignore the harm their actions can cause others.

D They then sing the praises of the product or service that showed them how to get out of their

ruts and into their Rolls Royces.

E Advertisers often attempt to associate their product with desirable things, in order to make it

seem more desirable.

F However, personal enjoyment is a factor that often comes into play as people decide what

they want to do: how much effort do I want to expend to accomplish something?

33

G The “greed” of American farmers has allowed them to grow food for the world, since the

more they produce, the more money they make.

H It also reduces the dissonance some people may feel when the greedy impulse runs up against

the social disapproval of greed.

Greed

by Richard F. Taflinger

Greed, no matter what anybody says, is a part of the human psychological make-up. Everybody wants

more. Thus, as an advertising tool, greed (or acquisition of property, to make it sound better) works

well. [___0 B___] Bank, financial service and broker, franchiser, magazine subscription service, state

lottery, etc., ads, and memory improvement, grade improvement, and “make a fortune in real estate”

informecials all depend on convincing people that what they sell will make possible the purchaser

getting more.

How does advertising convince people that they can get more if the customer buys the product?

By making vague promises. Please note that the ads never state unequivocally that the purchase of the

product or service will result in an increase in material goods. What the ad promises is a chance, a

possibility.

The most common approach is the testimonial. In this type of ad, someone who has purchased

the product or service tells the audience how rich they have gotten. They will often explain how they

were in dead end or low paying jobs (the better to relate to the targeted audience of these products).

[___1___]

They also emphasize how easy it was to get so rich using the product. The acquisition of

property, unless you inherit it, is often extremely hard work. The examination of problems and

solutions, the discovery and evaluation of new and effective approaches and techniques, the

“wheeling and dealing” involved requires 26 hours a day and gallons of skull sweat (ask any

successful executive). [___2___] The easier something is to do, the more likely someone will be

willing to do it: watching TV is easier than reading a book, driving your own car is easier than taking

mass transit, going home and relaxing at the end of an 8- or 9-hour day is easier than working 16 to 20

hours a day. Thus, the ads emphasize the ease with which it is possible for someone to amass a

fortune using the product.

Other ads, such as those for business machines, computers, and phone systems, show how their

products provide greater speed, convenience, and/or savings than their competitors’ products.

[___3___] The so-called “slice of death” commercials use this approach: they show how a person may

possibly be demoted or even lose her job if she chooses the wrong product – that produced by a

competitor of the commercial’s sponsor.

Note that all these ads depend on the concept, not of taking resources from another individual,

but of providing a “competitive edge”: the products are available to all – you were simply smart

enough to take advantage of the offer. This approach can increase sales by making potential

purchasers wish to get their “edge” before someone else can beat them to it. [___4___] By making it

appear that the product purchaser wins, but no individual loses (wiping out your corporate

competition is socially acceptable), then there is no social stigma to acquiring a larger piece of the pie.

The thing to bear in mind is that “greed is good”. That is, it’s good for the individual, but perhaps

not for the society in which that individual lives. Unrestrained greed in an individual can lead to

callousness, arrogance, and even megalomania. [___5___] Sweatshops, unsafe working conditions

and destruction of livelihoods are all consequences of people whose personal greed overcame their

social consciences.

However, even a society that bans individual greed can suffer. It is greed that makes people want

to do things since they will be rewarded for their efforts. Remove that reward, and you remove the

incentive to work. The Soviet Union provided an example of this: the collective farms provided no

individual incentive to strive, and thus produced an insufficient supply of food. The individual-owned

and run truck farms, however, with the possibility of selling their produce and keeping the proceeds,

grew a far greater harvest per acre than the collective farms. [___6___]

34

Unrestrained greed is detrimental to society; unrestrained disapproval of greed is detrimental to

society. Advertising that takes advantage of this biologically favorable impulse in people attempts

to avoid both.

(from Taking Advantage http://www.wsu.edu:8080/~taflinge/advant.html)

USE OF ENGLISH

Questions 1-10


In __1__ attempts to find fresh advertising techniques, agencies and marketing companies __2__

harnessing new technology. For example, a recent controversy in London concerned proposals to

install talking ads in bus stops, __3__ a sensor would register the arrival of a passenger and the ad

__4__ begin to play. Some supermarkets now come equipped __5__ screens that run ads and sense

where you are in the supermarket, directing __6__ to special offers. __7__ seriously, perhaps, the

Internet offers a new field for advertisers, with virtual ads and home shopping. British Telecom __8__

just launched a trial of interactive TV in two English towns, and a major aspect of __9__ is the so-

called “Adland”, __10__ interactive advertising service.

Questions 11-20

For each blank (11-20), decide which of the options A, B, C or D is best. . Only one answer is correct.

As trade barriers come __11__ on the American continent and in the “old world”, where central and

eastern European countries are queuing up to join the European Union, there is a worldwide trend

towards the freeing of international trade and the strengthening of supranational companies.

Advertisers have to adapt to this, creating brands and campaigns that __12__ be successful the world

over with a minimum of adaptation from country to country. This is obviously true for brands like

Coca-Cola, and can be seen in ads like The United Colours of Benetton, which tries to make a __13__

out of multiethnicity and create a global __14__ for its products.

Yet globalization is not the only answer – an apparently __15__ trend is also __16__ ground.

One way for advertisers to get more for their money is to focus more __17__ on smaller, emerging

groups of consumers - defined by their ethnic origins, sexual preferences or purchasing habits.

Consumers’ buying patterns can be tracked by following purchases made by credit card, so helping

firms identify our individual product preferences; each of us can then receive direct mail advertising

for the kind of product we have already shown a preference __18__. This will lead more and more to

niche marketing – focusing on small groups or even individuals, and so to a __19__ away from big

campaigns and towards direct marketing backed up by __20__ databases.

(adapted from SPEAK UP, February 1996)

11 A down B off C up D apart

12 A will B may C can D must

13 A merit B virtue C virtuosity D profit

14 A agenda B strategy C program D platform

15 A controversial B contrasting C contradictory D adverse

16 A gaining B increasing C getting D earning

17 A peculiarly B specially C particularly D specifically

18 A for B to C of D in

19 A change B swing C movement D transition

20 A comprehensive B general C overall D comprehensible

http://www.wsu.edu:8080/~taflinge/advant.html

35

Questions 21-25



PARIS (Reuters), August 13, 2004

21) Actress Charlize Theron (A) has signed a contract with Christian Dior to be the face of (B) it’s

best-selling perfume J’adore, pitting her (C) against fellow Oscar winner Nicole Kidman, (D) who

will launch a similar campaign for Chanel.

22) Theron (A) is due to star in (B) print and television advertisements for J’adore (C) is starting in

this fall, a spokeswoman for Parfums Christian Dior (D) said Friday.

23) She (A) could not have provided details of the contract, but (B) trade publication Women’s Wear

Daily quoted Friday industry sources (C) as saying the South African actress (D) had signed a three-

year deal worth between $3 million and $5 million.

24) Theron (A) won this year’s Oscar for Best Actress (B) for her performance as serial killer Aileen

Wuornos in “Monster,” a role which required her to put on weight and (C) wearing heavy make-up

that rendered her (D) almost unrecognizable.

25) The former model is (A) the latest celebrity to sign (B) an advertising deal with a major fashion

label, a trend (C) whose industry watchers say reflects public fascination with (D) the lifestyles of the

rich and famous.

Questions 26-30


the space.

Hilary Swank, another Oscar __26__, headlines underwear ads WIN

for Calvin Klein, while Scarlett Johansson, Diane Kruger and

Chloe Sevigny star in Louis Vuitton’s fall campaign. Kidman

earlier this year signed a contract reported to be worth millions

to become the face of Chanel’s __27__ No. 5 perfume. LEGEND

The advertisements were shot by fellow Australian Baz Luhrmann,

who directed Kidman in the hit musical “Moulin Rouge.”

The Dior campaign starring Theron was a __28__ between COLLABORATE

photographer Nick Knight and rebel British designer John Galliano,

who has __29__ the image of the label with extravagant REVOLUTION

and __30__ catwalk. PROVOKE

36

TEST 8 – FINANCE AND ACCOUNTING

INTRODUCTION

Financial management is broadly about the administration of finances to secure a positive cash flow, whether

it is at the individual or the corporate levels.

Management of personal finances involves adapting expenses to the financial resources of an individual.

Individuals who own surplus money or have access to funding may choose to invest it to cover the impact of

taxation and/or inflation or to spend it on discretionary items. They need to make those financial decisions that

will benefit them in the long run and help them meet their financial goals.

At the corporate/organisational level, financial management refers to financial planning and financial

control. The former seeks to identify and assess the resources available and plan the size and timing of

expenditures. The latter involves supervising cash flow – that is, the inflow and outflow of funds – in relation to

the budget. The main task of corporate finance management is to attain the goals set by a company for a given

period of time. Efficient financial management ensures that investments generate returns so that a company’s

resources are increased.

Financial managers are expected to be able to (1) interpret financial reports (see below), (2) improve the

allocation of working capital within business operations, (3) review and fine tune financial budgeting, and

revenue and cost forecasting, (4) evaluate the funding options for business expansion, including both long and

short term financing, (5) review the financial health of the company or business, and (6) apply critical financial

decision making techniques to assess whether to proceed with an investment.

Financial accounting is concerned with keeping track of a company’s financial transactions, that is,

recording, summarising and presenting them in financial reports or financial statements. These statements are

considered external, as they are at the disposal of various stakeholders, such as owners, stockholders,

customers, suppliers, employees and so forth. As a rule, the financial documents of publicly traded companies

are widely circulated so that competitors, investment analysts and labour organizations can access the

information.

Below is the description of the financial documents generated by financial accounting.

(1) The income statement (BE: Profit and loss account) reports on a company’s profitability during a

specified period of time; it covers revenues, expenses, gains and losses.

(2) The balance sheet displays what a company owns and owes by reporting its assets*, liabilities* and

stockholders equity* at a specified date, commonly the last day of an accounting period.

(3) The statement of cash flows explains the change in a company’s cash during a time interval in terms of

operating activities, investing activities and financing activities.

(4) The statement of stockholders’/shareholders’/owners’ equity lists such items as net income, other

comprehensive income, dividends, stock repurchase and the exercise of stock options.

Given that external financial statements need to be credible, transparent and comparable, financial

accounting follows some rules, now officially called International Financial Reporting Standards (IFRS).

These international common standards are based on such fundamental accounting concepts as cost principle,

matching principle, full disclosure, going concern, conservatism, relevance and reliability.

*assets – what a company uses to operate its business; any possession that has value or the power to earn money, such as

cash, accounts receivable, inventory, prepaid insurance, buildings, land, and equipment

*liabilities (pl.) – obligations due at the date of the balance sheet; payable items like notes, accounts, wages, interest, etc.

*stockholders’ equity – the difference between the amount of assets and the amount of liabilities; the amount of money

invested into a business plus any retained earnings

READING

This article describes the financial crisis of 2008. Some sentences have been removed from the text.

Choose from the list (A-P) the best sentence to fill each blank (1-14). There is one extra sentence that

does not belong in any gap. There is an example at the beginning (0 H ).

A There were competing theories on how so many pillars of finance in the U.S. crumbled so

quickly.

B The two periods of hard times had little else in common, however; the Depression started in

the manufacturing sector, while the current crisis had its origins in the financial sector.

37

C Japan and China largely avoided that pitfall, but their export-oriented manufacturers suffered

as recessions in their major markets – the U.S. and Europe – cut deep into demand for their

products.

D Credit Suisse declined an offer of government aid and, going the way of Barclays, raised

funds instead from the government of Qatar and private investors.

E A week later the Swiss National Bank cut its benchmark rate to a range of 0–1%.

F It began with mortgage dealers who issued mortgages with terms unfavourable to borrowers,

who were often families that did not qualify for ordinary home loans.

G Even in China, car sales growth turned negative.

H Share prices plunged throughout the world – the Dow Jones Industrial Average in the U.S.

lost 33.8% of its value in 2008 – and by the end of the year, a deep recession had enveloped

most of the globe.

I It was doubtful that the worldwide economic picture would grow brighter anytime soon.

J What began as insurance, however, turned quickly into speculation as financial institutions

bought or sold credit default swaps on assets that they did not own.

K Barclays, telling the government “thanks but no thanks,” instead accepted $11.7 billion from

wealthy investors in Qatar and Abu Dhabi, U.A.E.

L Compounding the damage, exporters could not find loans in the West to finance their sales.

M Mortgage lenders did not merely hold the loans, content to receive a monthly check from the

mortgage holder.

N The most spectacular troubles broke out in the far corners of Europe.

O Another 7% of homeowners with a mortgage were at least one month past due on their

payments, up from 5.6% a year earlier.

P The G-20’s deliberations were necessarily tentative in light of the U.S. presidential transition

in progress.

The Financial Crisis of 2008: Year In Review 2008 by Joel Havemann

In 2008 the world economy faced its most dangerous crisis since the Great Depression of the 1930s.

The contagion, which began in 2007 when sky-high home prices in the United States finally turned

decisively downward, spread quickly, first to the entire U.S. financial sector and then to financial

markets overseas. The casualties in the United States included a) the entire investment banking

industry, b) the biggest insurance company, c) the two enterprises chartered by the government to

facilitate mortgage lending, d) the largest mortgage lender, e) the largest savings and loan, and f) two

of the largest commercial banks. The carnage was not limited to the financial sector, however, as

companies that normally rely on credit suffered heavily. The American auto industry, which pleaded

for a federal bailout, found itself at the edge of an abyss. Still more ominously, banks, trusting no one

to pay them back, simply stopped making the loans that most businesses need to regulate their cash

flows and without which they cannot do business. [___0 H___] In December the National Bureau of

Economic Research, the private group recognized as the official arbiter of such things, determined

that a recession had begun in the United States in December 2007, which made this already the third

longest recession in the U.S. since World War II.

Each in its own way, economies abroad marched to the American drummer. By the end of the

year, Germany, Japan, and China were locked in recession, as were many smaller countries. Many in

Europe paid the price for having dabbled in American real estate securities. [___1___] Less-

developed countries likewise lost markets abroad, and their foreign investment, on which they had

depended for growth capital, withered. With none of the biggest economies prospering, there was no

obvious engine to pull the world out of its recession, and both government and private economists

predicted a rough recovery.

Origins

How did a crisis in the American housing market threaten to drag down the entire global economy?

[___2___] Some of these so-called subprime mortgages carried low “teaser” interest rates in the early

38

years that ballooned to double-digit rates in later years. Some included prepayment penalties that

made it prohibitively expensive to refinance. These features were easy to miss for first-time home

buyers, many of them unsophisticated in such matters, who were beguiled by the prospect that, no

matter what their income or their ability to make a down payment, they could own a home.

[___3___] Frequently they sold these loans to a bank or to Fannie Mae or Freddie Mac, two

government-chartered institutions created to buy up mortgages and provide mortgage lenders with

more money to lend. Fannie Mae and Freddie Mac might then sell the mortgages to investment banks

that would bundle them with hundreds or thousands of others into a “mortgage-backed security” that

would provide an income stream comprising the sum of all of the monthly mortgage payments. Then

the security would be sliced into perhaps 1,000 smaller pieces that would be sold to investors, often

misidentified as low-risk investments.

The insurance industry got into the game by trading in “credit default swaps” – in effect,

insurance policies stipulating that, in return for a fee, the insurers would assume any losses caused by

mortgage-holder defaults. [___4___] As early as 2003, Warren Buffett, the renowned American

investor and CEO of Berkshire Hathaway, called them “financial weapons of mass destruction.”

About $900 billion in credit was insured by these derivatives in 2001, but the total soared to an

astounding $62 trillion by the beginning of 2008.

As long as housing prices kept rising, everyone profited. Mortgage holders with inadequate

sources of regular income could borrow against their rising home equity. The agencies that rank

securities according to their safety (which are paid by the issuers of those securities, not by the

buyers) generally rated mortgage-backed securities relatively safe – they were not. When the housing

bubble burst, more and more mortgage holders defaulted on their loans. At the end of September,

about 3% of home loans were in the foreclosure process, an increase of 76% in just a year. [___5___]

By 2008 the mild slump in housing prices that had begun in 2006 had become a free fall in some

places. What ensued was a crisis in confidence: a classic case of what happens in a market economy

when the players – from giant companies to individual investors – do not trust one another or the

institutions that they have built.

……………………………………………………………………………………………………….

International Repercussions Although the financial crisis wore a distinct “Made in the U.S.A.” label, it did not stop at the water’s

edge. The U.K. government provided $88 billion to buy banks completely or partially and promised to

guarantee $438 billion in bank loans. The government began buying up to $64 billion worth of shares

in the Royal Bank of Scotland and Lloyds TSB Group after brokering Lloyds’ purchase of the

troubled HBOS bank group. The U.K. government’s hefty stake in the country’s banking system

raised the spectre of an active role in the boardrooms. [___6___]

Variations played out all through Europe. The governments of the three Benelux countries –

Belgium, The Netherlands, and Luxembourg – initially bought a 49% share in Fortis NV within their

respective countries for $16.6 billion, though Belgium later sold most of its shares and The

Netherlands nationalized the bank’s Dutch holdings. Germany’s federal government rescued a series

of state-owned banks and approved a $10.9 billion recapitalization of Commerzbank. In the banking

centre of Switzerland, the government took a 9% ownership stake in UBS. [___7___]

[___8___] In Greece street riots in December reflected, among other things, anger with economic

stagnation. Iceland found itself essentially bankrupt, with Hungary and Latvia moving in the same

direction. Iceland’s three largest banks, privatized in the early 1990s, had grown too large for their

own good, with assets worth 10 times the entire country’s annual economic output. When the global

crisis reached Iceland in October, the three banks collapsed under their own weight. The national

government managed to take over their domestic branches, but it could not afford their foreign ones.

As in the U.S., the financial crisis spilled into Europe’s overall economy. Germany’s economic

output, the largest in Europe, contracted at annual rates of 0.4% in the second quarter and 0.5% in the

third quarter. Output in the 15 euro zone countries shrank by 0.2% in each of the second and third

quarters, marking the first recession since the euro’s debut in 1999.

In an atmosphere that bordered on panic, governments throughout Europe adopted policies aimed

at keeping the recession short and shallow. On monetary policy, the central banks of Europe

coordinated their interest-rate reductions. On December 4 the European Central Bank, the steward of

39

monetary policy for the euro zone, engineered simultaneous rate cuts with the Bank of England and

Sweden’s Riksbank. [___9___] On fiscal policy, European governments for the most part scrambled

to approve public-spending programs designed to pump money into the economy. The EU drew up a

list of $258 billion worth of public spending that it hoped would be adopted by its 27 member

countries. The French government said that it would spend $33 billion over the next two years. Most

other countries followed suit, though Germany hung back as Chancellor Angela Merkel argued for

fiscal restraint.

Asia’s major economies were swept up by the financial crisis, even though most of them suffered

only indirect blows. Japan’s and China’s export-oriented industries suffered from consumer

retrenchment in the U.S. and Europe. [___10___] Japan hit the skids in the second quarter of 2008

with a 3.7% contraction at an annual rate, followed by 0.5% in the third quarter. Its all-important

exports plunged 27% in November from 12 months earlier. The government announced a $250 billion

package of fiscal stimulus in December on top of $50 billion earlier in the year. Unlike so many

others, China’s economy continued to grow but not at the double-digit rates of recent years. Exports

were actually lower in November than in the same month a year earlier, quite a change from

October’s 19% increase. The government prepared a two-year $586 billion economic stimulus plan,

and the central bank repeatedly cut interest rates.

The U.S., Europe, and Asia had this in common – car makers were at the head of the line of

industries pleading for help. The U.S. Senate turned down $14 billion in emergency loans; the car

companies got into this mess, senators argued, and it was up to them to get out of it. President Bush,

rather than risk the demise of General Motors (GM) and Chrysler, tapped the $700 billion financial

sector bailout fund to provide $17 billion in loans – enough to keep the two companies afloat until

safely after the Obama administration took over in early 2009. In addition, the Treasury invested in a

$5 billion equity position with GMAC, GM’s financing company, and loaned it another $1 billion. In

Europe, Audi, BMW, Daimler, GM, Peugeot, and Renault announced production cuts, but European

government officials were reluctant to aid a particular industry for fear that others would soon be on

their doorstep. [___11___] As elsewhere, the industry held out its tin cup, but the government left it

empty.

The pressures of the financial crisis seemed to be forging more new alliances. Officials from

Washington to Beijing coordinated interest rate cuts and fiscal stimulus packages. Top officials from

China, Japan, and South Korea – longtime adversaries – met in China and promised a cooperative

response to the crisis. Top-level representatives of the Group of 20 (G-20) – a combination of the

world’s richest countries and some of its fastest-growing – met in Washington in November to lay the

groundwork for global collaboration. [___12___]

By year’s end, all of the world’s major economies were in recession or struggling to stay out of

one. In the final four months of 2008, the U.S. lost nearly two million jobs. The unemployment rate

shot up to 7.2% in December from its recent low of 4.4% in March 2007, and it was almost certain to

continue rising into 2009. Economic output shrank by 0.5% in the third quarter, and announced

layoffs and severe cutbacks in consumer spending suggested that the fourth quarter saw a sharper

contraction. [___13___] Forecast after forecast showed lethargic global economic growth for at least

2009. “Virtually no country, developing or industrial, has escaped the impact of the widening crisis,”

the World Bank reported in a typical year-end assessment. It forecast an increase in global economic

output of just 0.9% in 2009, the most tepid growth rate since records became available in 1970.

Measured by its impact on global economic output, the recession that had engulfed the world by

the end of 2008 figured to be sharper than any other since the Great Depression. [___14___] Perhaps

a more apt comparison could be found in the Panic of 1873. Then, as in 2008, a real estate boom (in

Paris, Berlin, and Vienna, rather than in the U.S.) went sour, loosing a cascade of misfortune. The

ensuing collapse lasted four years. (selected from Encyclopaedia Britannica Online http://www.britannica.com/EBchecked/topic/1484264/Financial-Crisis-of-2008)

USE OF ENGLISH

The four excerpts below are selected from the official communiqué issued at the close of the G20

Leaders’ Summit on Financial Markets and the World Economy held in London on 2 April 2009.

Questions 1-10

http://www.britannica.com/EBchecked/topic/1484264/Financial-Crisis-of-2008

40


We, the Leaders of the Group of Twenty, met in London on 2 April 2009.

We face the greatest challenge __1__ the world economy in modern times; a crisis which __2__

deepened since we __3__ met, which affects the lives of women, men, and children in every country,

and which all countries must join __4__ to resolve. A global crisis requires a global solution.

We start from the belief that prosperity is indivisible; that growth, to be sustained, __5__ to be

shared; and that __6__ global plan for recovery __7__ have at its heart the needs and jobs of hard-

working families, not just in developed countries but in emerging markets and the poorest countries of

the world too; and must reflect the interests, not just of today’s population, but of future generations

too. We believe that the __8__ sure foundation for sustainable globalisation and rising prosperity

__9__ all is an open world economy __10__ on market principles, effective regulation, and strong

global institutions.

Questions 11-20


Restoring growth and jobs

We are __11__ an unprecedented and concerted fiscal expansion, which will save or create millions

of jobs which would __12__ have been destroyed, and that will, by the end of next year, __13__ to $5

trillion, raise output by 4 per cent, and accelerate the transition to a green economy. We are

committed to __14__ the scale of sustained fiscal effort necessary to restore growth.

Our central banks have also taken exceptional action. Interest rates have been cut aggressively in

most countries, and our central banks have __15__ to maintain expansionary policies for as long as

needed and to use the full range of monetary policy instruments, including unconventional

instruments, __16__ with price stability.

Our actions to restore growth cannot be effective until we restore domestic lending and

international capital flows. We have __17__ significant and comprehensive support to our banking

systems to provide liquidity, recapitalise financial institutions, and address __18__ the problem of

__19__ assets. We are committed to take all necessary actions to restore the normal flow of credit

through the financial system and ensure the __20__ of systemically important institutions,

implementing our policies in line with the agreed G20 framework for restoring lending and repairing

the financial sector.

11 A venture B undertaking C guarantee D engage

12 A else B contrarily C otherwise D differently

13 A amount B total C make D average

14 A release B deliver C perform D fulfill

15 A vouched B bound C assured D pledged

16 A reasonable B relevant C consistent D uniform

17 A provided B fulfilled C accommodated D supplied

18 A conclusively B finally C decisively D precisely

19 A injured B marred C viciated D impaired

20 A soundness B wisdom C health D merit

Questions 21-25



21) (A) Taken together, these actions will constitute the largest fiscal and monetary stimulus and (B)

the more comprehensive support programme for the financial sector in modern times. Acting together

strengthens the impact and (C) the exceptional policy actions announced so far must be implemented

without delay. Today, (D)we have further agreed over $1 trillion of additional resources for the world

economy through our international financial institutions and trade finance.

41

22) Last month the IMF estimated that (A) world growth in real terms would resume and rise to over

2 percent by the end of 2010. We are confident that the actions we have agreed today, and (B) our

unshakeable commitment to work together to restore growth and jobs, while preserving long-term

fiscal sustainability, will accelerate the return to trend growth. We commit today (C) to taking

whatever action is necessary to secure that outcome, and (D) we call on the IMF to assess regularly

the actions taken and the global actions required.

23) (A) We are resolved to ensure long-term fiscal sustainability and price stability and (B) will put in

places credible exit strategies from the measures (C) that need to be taken now to support the financial

sector and restore global demands. We are convinced that by implementing our agreed policies we

will limit the longer-term costs to our economies, (D) thereby reducing the scale of the fiscal

consolidation necessary over the longer term.

24) We will conduct all our economic policies cooperatively and responsibly (A) with regards to the

impact on other countries and (B) will refrain from competitive devaluation of our currencies and

promote a stable and (C) well-functioning international monetary system. We will support, now and

in the future, the candid, even-handed, and independent IMF surveillance of our economies and

financial sectors, of the impact of our policies on others, and (D) of risks facing the global economy.

(25) Major failures in the financial sector and in financial regulation and supervision (A) were

fundamental causes of the crisis. Confidence will not be restored (B) until we will rebuild trust in our

financial system. We will take action to build (C) a stronger, more globally consistent, supervisory

and regulatory framework for the future financial sector, which will support (D) sustainable global

growth and serve the needs of business and citizens.

Questions 26-30


the blank space.

We each agree to ensure our domestic regulatory systems are strong.

But we also agree to establish the much greater __26__ and CONSIST

systematic cooperation between countries, and the framework

of __27__ agreed high standards, that a global financial NATION

system requires. __28__ regulation and supervision must STRENGTH

promote propriety, integrity and transparency; guard against risk

across the financial system; dampen rather than amplify the financial

and economic cycle; reduce reliance on __29__ risky sources APPROPRIATE

of financing; and __30__ excessive risk-taking. Regulators and COURAGE

supervisors must protect consumers and investors, support market

discipline, avoid adverse impacts on other countries, reduce the scope

for regulatory arbitrage, support competition and dynamism, and keep

pace with innovation in the marketplace. (http://www.wcoomd.org/files/1.%20Public%20files/PDFandDocuments/Highlights/G20_Final_London_Communique.pdf)

http://www.wcoomd.org/files/1.%20Public%20files/PDFandDocuments/Highlights/G20_Final_London_Communique.pdf

42

TEST 9 – BANKING INTRODUCTION

The banking industry comprises two types of financial institutions: monetary authorities (central banks or

reserve banks) and wholesale or retail providers of banking services.

Central banks (1) set the monetary policy within their respective countries or a group of member states

(see the European Central Bank), (2) supervise the banking system to ensure that banks and financial institutions

do not behave recklessly or fraudulently, (3) control on the government’s behalf the amount of money in the

country, (4) fix interest rates and influence interest rates other banks charge, (5) act as lenders of last resort to

commercial banks in the event of liquidity crises, (6) manage the national debt on the government’s behalf by

borrowing or repaying money and paying interest due, (7) hold the country’s reserves of gold and foreign

currency and (8) issue coins and bank notes.

Wholesale banks are engaged in high-value transactions, as they provide services to large or mid-sized

companies, real estate developers and investors and other financial institutions or institutional clients, such as

pension funds and government entities. Wholesale banking services include underwriting*, market-making*,

consultancy, investment management and assistance with mergers and acquisitions.

Retail banking products, typically offered by commercial banks, serve the ordinary banking needs of the

public. They include such transactions as savings and current/checking accounts, mortgages, personal loans and

overdrafts, lines of credit, debit cards, credit cards, storage of valuables, exchange facilities, payment of regular

bills according to customers’ instructions, investment advice, insurance products, etc.

Online/Internet banking allows customers to perform financial transactions on a secure website

administered by their bank. More and more bank customers are discovering that it is more expedient to do the

following online: (1) check account balances, (2) perform an account to account transfer, (3) track recent

account activity, (4) authorize electronic bill payments, (5) request copies of past statements*, (6) issue stop

payment requests, (7) apply for loans and (8) request and receive product and service information.

*underwriting – assuming the risk of buying a part or entire new issue of bonds or shares from its issuer for reselling it to the

public at a higher price

*market-making – buying or selling securities at publicly quoted prices

*statement – a periodic report prepared by a bank for each client; it lists deposits, withdrawals, cheques paid, interest earned

and service charges or penalties incurred on an acocunt; it shows the cumulative effect of these transactions on the account’s

balance up to the date the report was released.

READING

Below is an interview with Harvard Business School professor David A. Moss, author of A Concise

Guide to Macroeconomics: What Managers, Executives, and Students Need to Know, by Sean

Silverthorne, editor-in-chief of HBS Working Knowledge, about how important it is for executives and

corporate managers to understand macroeconomics.

The questions are jumbled while the answers are given in the original order. Match the questions (1-

11) to the appropriate answers (A-K).

A Macroeconomic View of the Current Economy

by Sean Silverthorne 25 January 2010

If they didn’t understand it already, executives and corporate managers have learned one huge lesson

over the past couple of years: macroeconomics matters.

Interest rates. Exchange rates. Trade deficits. The Gross Domestic Product. Inflation. All of these

can affect a company’s bottom line by influencing the cost and availability of money, goods, and

services. Macroeconomic forces can conspire to make business more difficult, but they can also

present opportunities to executives who know how to, for example, read a country's national income

accounts and balance of payments.

For explanations on how the economic system works and what history teaches us, business

readers might turn to A Concise Guide to Macroeconomics: What Managers, Executives, and Students

http://harvardbusinessonline.hbsp.harvard.edu/b02/en/common/item_detail.jhtml?id=1797&referral=2342



43

Need to Know, by Harvard Business School professor David A. Moss, who holds graduate degrees

from Yale in economics and history. The book, which grew out of background notes Moss wrote for

his MBA students, is a nontechnical, accessible explanation of broad concepts such as “output,”

“money,” and “expectations” – as well as more specific ones ranging from real exchange rates to total

factor productivity. Moss also includes numerous tools for interpreting big-picture economic

developments.

We asked Moss to talk about the book and some of the events now taking place on the

macroeconomic horizon.

1 What is the current account deficit, and why is it important?

2 The second pillar of macroeconomics is money.

3 What's a good way to think about foreign direct investment in the United States? Are we

selling too much of our core assets to foreign investors?

4 As a field of academic study, where do you think macroeconomists have made the most

progress?

5 What will executives and other business readers learn from the book?

6 In your own field of research, what are you working on these days?

7 You mentioned that you can't predict exchange rates. But are there rules of thumb managers

can practice when thinking about exchange rates and how to play them?

8 What’s the definition of macroeconomics?

9 Your book centers on the three pillars of macroeconomics: output, money, and expectations.

Can you talk generally why these are important to understand?

10 The Federal Reserve Board and its chairman, Ben Bernanke, have tremendous influence on

the business environment, particularly on interest rates. If you’re a manager and interest rates

affect your business, how do you think about this?

11 And what about expectations? Why are expectations the third pillar?

A: It involves thinking about the economy as a whole. Micro is about firms and individual actors and

how they behave; macro is about aggregate performance of the economy: overall GDP, trade surplus

or deficit, inflation.

In principle, we should be able to get rid of the (macro/micro) distinction because all micro

behavior – all the firms and individuals – add up to the aggregate economy. But it turns out that we’re

not there yet. There’s still a great deal we don’t fully understand. We see patterns at the macro level

that are sometimes hard to disaggregate and pinpoint exactly where they came from at the micro level.

So as a result, we separate macro and micro. Someday, if we ever figured everything out, these things

would come together. That's true in many areas of study.

B: One of the most important things is they’re going to be able to read the Financial Times, the Wall

Street Journal, and The Economist much more effectively than they could before. Those publications

integrate macroeconomics with what we know about business and markets, often in the very same

articles. Without some background in macroeconomics, much of that goes past the reader.

What exactly does it mean that the real interest rate has moved, or the real exchange rate has

moved this way or that? There are different types of productivity – labor productivity, capital

productivity, and total factor productivity. Which is the right one to look at in a particular context?

There’s a lot of information out there – particularly in the business press. If these aren’t familiar

terms, and if one doesn’t have a way of putting it all together, then you can’t process all of this

information as effectively as possible. I think another thing readers will learn is that they can look at

big developments at the macro level and start to think about what they mean – how these

developments might come back and affect their bottom line.

Let’s take exchange rates. Exchange rates fluctuate widely, and anybody who tells you they

know what the exchange rate is going to be tomorrow either has godlike powers or is putting you on.

But there are patterns over time. For example, countries that are running large and ongoing current

account deficits tend to see their currencies depreciate over time. This doesn’t mean that the currency

of a country running consistent current account deficits is going to depreciate tomorrow or next week

44

or even next month. But over time, you expect it to depreciate. So if you’re a business manager, you

probably want to be fairly well hedged against this possibility, either by making use of certain

financial instruments or by carefully spreading out your real investments across various countries.

C: I’ll mention several.

First, as I just suggested, it makes sense to look at a country’s current account deficit or surplus.

For countries that are running large current account surpluses, like China and Japan, you'd expect their

currency to appreciate over sustained periods of time. I can’t say for sure that Japan’s currency is

going to appreciate over time, but in all likelihood, it will. I would be very surprised if China’s

doesn’t appreciate over time.

Another thing you want to look at is inflation. If a country has a higher inflation rate than its

trading partners, you should expect that its currency is likely to depreciate over time as well.

Maybe I can put this in some perspective. Over the long term, a main driver of a country's

exchange rate is probably its current account deficit or surplus. In the medium term, you probably

want to look at inflation rates. But at the day-to-day level, changes in short-term interest rates seem to

be a key driver. For example, if the European Central Bank suddenly (and unexpectedly) raises its key

short-term interest rate tomorrow, you’re probably going to see the euro appreciate, almost

immediately. If the central bank of the United States – the Fed – unexpectedly lowers its interest rate,

the dollar may well depreciate a bit that same day. You tend to see these very quick fluctuations

associated with interest-rate changes. But over the longer term, the current account balance is

probably far more important.

D: The current account deficit just means that you (as a country) are consuming, or spending, more

than you actually produce. Think about a household. If you earn $100,000 a year and spend $106,000,

you're going to have to borrow $6,000 (or draw down your assets) to make up the difference. The

same is true for a country.

Between business spending, government spending, and consumer spending – consumer spending

being the biggest – the United States consistently spends more than 100 percent of its GDP (as high as

106 percent in 2005 and 2006). But of course we produce only 100 percent of GDP, so we need to

borrow the difference. How do we do that? Well, we ask the Japanese, the Chinese, and some others

for their goods, and they give them to us. And then they lend us the money to buy them. We are both

borrowing – literally borrowing in financial terms from, particularly, the Asians – and getting their

goods (imports). Someday, they’re going to want us to repay, which means they’re going to have a

claim on our output. And someday, we’re probably going to have to run a current account surplus,

where we’re producing more than we spend, and we’re shipping off the rest (the surplus) to our

current creditors.

E: When you think about these three things, output should be in big letters, and the other ones in

smaller letters. Output is really the center of macroeconomics, and the key measure is the GDP, that

is, total aggregate output, the market value of all final goods and services produced.

In a sense, all that you (as a country) have is the total output that you produce in a year – your

GDP. Sometimes people think if everyone owned lots of stocks and bonds, we could all retire happy,

regardless of the GDP. But if the nation’s total output in future years is not sufficiently large, then all

those stocks and bonds are going to end up being worth a lot less than expected. Total output is the

key to how much we can consume, not little pieces of paper called stocks and bonds.

As a result, economists worry a lot about how a country can increase its GDP growth rate, how

higher growth of output can be achieved over the long term, and how we can make sure that in the

short term total output isn't unduly volatile (with unsustainable booms and busts).

F: In some sense money is just another asset, but it turns out to be a rather special asset. One of the

reasons it is special is that there seems to be a relationship between people’s holdings of that

particular asset and their current consumption or spending. And that’s because money is an asset that

you can use to buy things, right now. It’s the ultimate form of liquidity. But another thing that’s

important about money is that its supply is largely controlled by the government. Depending on which

type of money supply you look at, the government has either a complete monopoly or a partial one.

45

By their control over the money supply, central bankers can essentially set interest rates, especially

short-term interest rates.

And that’s the basis of monetary policy. It’s because of that control over the money supply –

either increasing or decreasing the money supply – the government can set short-term interest rates.

And that short-term interest rate is what central bankers use to try to control inflation and moderate

the business cycle.

G: Expectations are extremely interesting because they represent a connection between the present

and the future. Current decisions are affected by what people expect the future to bring. For example,

business managers set the prices of their products – at least in part – based on expectations. More

broadly, if people expect the price of a good (say, wheat) is going to be higher in the future, then the

price is going to start rising today.

Although expectations of all sorts are important, one particular set of expectations – about the

state of the overall economy and one's own future income – is especially important from a

macroeconomic perspective. If people believe the economy is going to falter, even if their reasons are

wrong, in the short term the economy may well falter. If consumers believe that they’ll soon be in

economic trouble, they will reduce their consumption and start scaling back on purchases. And what

are businesses going to do? If they see people reducing their consumption (or even just planning to

reduce their consumption), business managers may decide to scale back on their own operations, so as

not to produce a lot of output that no one’s going to buy. Firms will start laying off workers. And

then, of course, the negative expectation becomes self-fulfilling. You can even get stuck there for a

long time – in a recession.

That’s why in some cases you need either a very aggressive monetary policy or large-scale

deficit spending, which is what we’ve seen this past year. Both aggressive monetary easing (lower

interest rates) and large-scale deficit spending send the signal that demand will increase, and thus both

aim to break the cycle of negative expectations about the economy.

H: Look, this is a political decision, and it’s above my pay grade. There may be some strategic assets

that we (as Americans) don’t want to sell to foreigners. Congress is going to have to decide which

ones those are. It may be that we don't want to sell certain elements of our media to foreigners, or

perhaps certain strategic assets that are important for building critical military equipment.

One can be too cautious about reliance on foreigners. In the early 19th century, the British

thought their grain supply was strategic, and they protected it aggressively. Eventually, however, with

the repeal of the Corn Laws, the British decided to move toward free trade in wheat. It was a

controversial move. Skeptics feared that other countries that supplied wheat to Britain could use it as a

weapon, by threatening to starve Britain. But it turned out that nothing of the sort ever happened, and

Britain was almost certainly better off after it repealed its Corn Laws.

The broader thing to think about with regard to foreign investors buying assets in the United

States is that if we as a country are going to spend more than we produce – if we’re going to run a

current account deficit – year after year, then there’s in fact no alternative to foreigners buying our

assets, either debt or equity. As I said, if you’re earning $100,000 and you’re spending $106,000,

you’re going to have to borrow or draw down your assets to make up the difference. So that’s what

we’re doing as a country. The problem is not fundamentally that foreigners are buying too many

American assets, but that Americans are spending too much.

The right way to fix this, of course, is by increasing the American savings rate. Up until the

economic crisis, household savings were essentially zero, business was saving in the vicinity of 15

percent (through retained earnings), and the government was dissaving (because of its budget deficit)

by a few percent of GDP each year. Once the crisis struck, household savings rose, and government

dissaving (deficits) rose by about the same amount.

Over the long term, we’ll need to find a way to save more across the board. We’ll need to

increase our national savings rate quite substantially. That’s ultimately the only way we’re going to

turn around our current account deficit and ultimately stimulate the kind of growth longer term that

we’d all like to see.

So what does that mean? We need to figure out how to encourage households to increase their

savings, especially once the recession is clearly behind us. I think that will have to be front and center.

46

Also, once the recession is over, we’ll definitely need to get our budget deficits under control – most

likely by controlling spending and raising taxes. We’ll certainly need to prepare for the retirement of

the baby boomers.

I: It’s worth putting yourself in the shoes of Ben Bernanke and trying to imagine how he thinks about

it. That’s going to be helpful in assessing what he might do.

As a central banker, Mr. Bernanke has to worry about a number of different things: inflation,

unemployment, GDP growth, exchange rates, the stability of the financial system, and so on.

In more normal economic times, he would likely focus mainly on maintaining a low and stable

rate of inflation – perhaps around 2 percent. He has written and spoken in the past about his belief in

inflation-targeting. The basic idea is that if the central bank manages to keep inflation within the

target range (again, around 2 percent), then everything else will tend to fall into place: low

unemployment, relatively stable GDP growth, and so on.

So, once the financial crisis and the recession are well behind us, probably the best way to

predict how Bernanke will set interest rates is by looking at where inflation is headed. If inflation is

rising above the 2 percent level, he’s likely to push the short-term interest rate upward, in order to

contain inflation. If inflation is falling below the 2 percent level, he’s likely to push the short-term

interest rate downward. That would be the best way to predict what he’s going to do in normal times.

Of course, these haven’t been exactly normal times. With the financial system in serious

jeopardy and unemployment surging, Mr. Bernanke put aside inflation-targeting and used just about

every weapon in his arsenal to save the economy from collapse. He lowered the federal funds rate to

just about zero – the lowest ever – and he developed and employed all sorts of unconventional tools to

help stabilize things, including asset purchase programs, large-scale financial guarantees, and direct

lending to nonbank financial institutions. My own view is that while he inevitably made all sorts of

mistakes (especially in the lead-up to the crisis), his extraordinary actions in the heat of the crisis may

well have saved us from a complete financial collapse and a far worse macroeconomic crisis.

Once the biggest dangers are behind us, Mr. Bernanke will have to figure out how to get things

back to normal. His aggressive stimulation of the economy could easily prove inflationary if he

doesn’t bring rates back up in time. But it will be a delicate balancing act if unemployment remains

unusually high.

Eventually, if all goes well, we'll get back to standard inflation-targeting, and monetary policy

will become far more predictable again. But for the time being at least, the Federal Reserve remains in

uncharted waters.

J: Theres a lot that macroeconomists don’t know. But I think in monetary policy they’ve made a good

deal of progress. Had we had the same level of knowledge today that we had in the early 1930s, we

might have faced a second Great Depression. Bernanke, of course, was a careful student of the Great

Depression; he understood it quite well, particularly from a monetary standpoint. The level of

monetary understanding is much better than it was in the past. And that reduces our odds of falling

into another Great Depression. Again, it doesn’t eliminate those odds, but it reduces them.

Macroeconomists deserve a lot of credit for that.

That said, excessively low interest rates during the boom years may well have helped to cause

the crisis. So monetary policy, while much better than in the past, is still nowhere near perfect. For

example, we still know very little about how to prevent a bubble from becoming a problem in the first

place.

K: Well, I'm working on a number of things. I’ve spent a great deal of time over the past year thinking

about financial regulation and what it should look like, and I’ve been talking with lawmakers in

Washington about this quite a bit.

I’ve also launched a new second-year course at Harvard Business School on financial history. I

started creating the course long before the financial crisis hit, but it’s definitely been fascinating to

teach about past financial booms and busts – about the history of financial innovation, financial

growth and excess, and financial regulation – at this particular moment.

47

Financial history has truly come alive over the past couple of years. My hope is that we can use

that history – the long history of financial markets and institutions – in figuring out how to prevent

another financial crisis going forward. That’s where much of my work has been focused these days. (http://hbswk.hbs.edu/item/6332.html)

USE OF ENGLISH

The four excerpts are from the review by Hans-Joachim Voth (Department of Economics,

Massachusetts Institute of Technology) of the volume The History of the Bundesbank: Lessons for the

European Central Bank (2000), edited by Jakob de Haan.

Questions 1-10


Few institutions vanish at the height of their powers and reputation. The Bundesbank, however, was

one that __1__. In the early 1990s, Financial Times journalist David Marsh argued that it __2__

“replaced the Wehrmacht as Germany’s best-known and __3__ feared institution.” The Bundesbank’s

demise as a policy-making institution marks a sharp discontinuity in the continent’s post-war

economic history. On January 1, 1999, with the introduction of the Euro, the baton for setting interest

__4__ in Europe passed to the European Central Bank (ECB). A number of volumes have

consequently tried to capitalize on a bit of early nostalgia – a massive edited volume, put __5__ by

the bank itself, on Fifty Years of the Deutsche Mark (Oxford University Press, 1999), most

prominently amongst __6__.

The volume edited by Jakob de Haan is the result of a workshop at the Germany Institute in

Amsterdam in April 1998. While this is a fine contribution to contemporary debate on monetary

policy, containing many valuable pieces of scholarship, one thing must be clarified at the outset – this

is not a history of the Bundesbank, let __7__ “the” history of the Bundesbank. The contributors

provide a number of comparisons between the ECB and the Bundesbank, and examine Bundesbank

policy in the recent past with a __8__ to deriving lessons for ECB policy. This is a thoroughly

worthwhile exercise, and it is a pity that the publisher or the editor __9__ decided to shun truth in

advertising by picking __10__ an embarrassingly grandiose title (perhaps to justify the obscenely high

price?). Readers interested in an historical account of the German central bank's policy should turn to

the Fifty Years of the Deutsche Mark mentioned above.

Questions 11-20


What, then, are the lessons that the ECB should learn from the Bundesbank? In terms of its

institutional setup, the similarities are __11__. As Sylvester Eijffinger shows in his detailed and

eloquent contribution, the Bundesbank and the ECB achieve almost identical scores for independence.

In terms of transparency and __12__, however, both do worse than the Fed, the Bank of England, and

the Banque de France. Neither publishes minutes of its meetings. Also, in terms of policy instruments,

the long shadow of the Bundesbank clearly influenced the ECB. Minimum reserve requirements

__13__ prominently in the bank’s arsenal of policy instruments, and money growth targeting (while

not as central as with the Bundesbank) plays an unusually large role. Eijffinger argues that, __14__

these numerous similarities, the ECB may have a hard time earning a reputation on par with the

Bundesbank. This is because legal independence is not enough to guarantee de facto autonomy in

setting interest rate policy – cultural and social factors play an important role as well. This concern is

echoed in Otmar Issing’s concluding comments, too. Acquiring a reputation requires __15__ a bit of

pain in hard times, or so Eijffinger argues. The true test will only come when politicians and central

bankers start to argue.

From the perspective of 2001, many of these __16__ seem prescient. Also, the simple day-to-day

management of central bank policy turned __17__ to be more of a challenge for the ECB than many

had expected. From the regular gaffes of its president Duisenberg to the general and __18__

skepticism about the common currency in foreign exchange markets, the ECB has had a hard time

filling the Bundesbank’s boots. Recent Italian attempts to tinker with the so-called “stability pact”

48

(that limits member states’ deficits) reinforces the importance of Eijffinger’s __19__ about the

importance that legal independence __20__ not be enough.

11 A manifest B memorable C striking D shocking

12 A accountability B obligation C reliability D liability

13 A emphasise B participate C boast D feature

14 A opposite B against C despite D unlike

15 A imposing B inflicting C applying D delivering

16 A clarifications B caveats C qualifications D notices

17 A out B up C in D on

18 A rising B deepening C mounting D ascending

19 A meaning B matter C orientation D point

20 A may B can C need D should

Questions 21-25



21) Given that inflation today throughout Europe (with the possible exceptions of Ireland, Spain, and

Portugal) (A) is still relatively low, why worry? Karl-Heinz Tödter and Gerhard Ziebarth, two

economists at the Bundesbank, argue that only dead inflation is good inflation. Even low inflation of

around two percent is, (B) in his view, clearly dominated by price-stability. According to their

calculations, these benefits (C) are exclusively driven by consumption timing effects. Gross benefits

might be (D) as large as two percent of GDP, and the net effect could still amount to 1.4 percent.

22) These results are for Germany, and (A) it is somewhat disappointing that in a volume that aims to

derive lessons for the ECB, no attempt is made to examine if the same results (B) hold for the Euro

area. Perhaps more worryingly, two standard objections to a policy of zero inflation – that this

increases wage rigidity, and increases the likelihood of monetary policy being “trapped” because

nominal interest rates cannot fall below zero – (C) is dismissed too lightly. In a simple technical

sense, the paper also (D) falls short of the standards now common in the debate about monetary policy

rules.

23) In many ways, Helge Berger’s and Friedrich Schneider’s article on Bundesbank behavior during

political conflicts is (A) the most impressive contribution in this volume. It is very much part of a

recent trend in the literature (B) to examine empirically how much of the Bundesbank’s tough-guy

rhetoric was justified, (C) given it’s actual behavior. Jordi Galí, Mark Gertler and Richard Clarida

showed that, despite “officially” targeting money growth, the Bundesbank since 1973 largely behaved

(D) as if it followed a modified Taylor-rule, targeting inflation and output.

24) Berger and Schneider examine if the Bundesbank really never blinked in the face of political

adversity, (A) as common wisdom has it. Given that its independence could be taken away by

parliament, this (B) would hardly be an optimal strategy. Berger and Schneider define policy conflicts

as those cases when money growth provided a stimulus to the economy that was the opposite of the

fiscal stimulus. By this definition, the federal government and the Bundesbank were pursuing

contradictory policies (C) about every other year of the post-war period. Berger and Schneider find

that, for a broad range of specifications and policy instruments, the Bundesbank proved more

“accommodating” when the government in Bonn (D) tried to steer the economy in a different

direction.

25) This is a very interesting finding that questions (A) one of the most persistent myth about the

Bundesbank. However, some of the details of the estimation only (B) lend qualified support to this

conclusion; other results are a little odd. Berger and Schneider’s estimates of the reaction function, for

example, imply that the Bundesbank (C) reacted only mildly and rarely significantly to increases in

inflation, while targeting output very strongly. This (D) is at variance with the findings by Clarida,

49

Galí and Gertler (European Economic Review 42, 1998), who demonstrated that the Bundesbank

targeted inflation to a greater extent than the output gap.

Questions 26-30


the blank space.

Readers will fully appreciate the contribution by Berger and Schneider

once they have read the literature overview by Philipp Maier and

Jakob de Haan. There is a __26__ literature on the extent VOLUME

to which the Bundesbank really was independent. Empirically sound

__27__ seems largely conspicuous by its absence, and much ANALYSE

remains to be done until we know as much about direct and indirect

political tinkering with __28__ policy in Europe as we do about MONEY

the Fed. This edited volume contains good research __29__. SUMMARISE

Graduate students and researchers will find much that is of use, and

some of the articles are important contributions in their own right.

At the same time, crucial policy questions such as the possible adoption

of inflation targeting by the ECB are never __30__ discussed, and it FULL

is difficult to claim that these seven essays represent an adequate

history of the Bundesbank. (http://eh.net/bookreviews/library/0395)

http://eh.net/bookreviews/library/0395

50

TEST 10 – INSURANCE

INTRODUCTION

Insurance is the business of providing protection against financial aspects of risk, such as those to property, life

and health. Very simply put, insurance is about managing risk. Insurance spreads risk – accident, theft, natural

disaster or illness – from one person or group to a financial entity in exchange for payment made at certain

intervals. Thus insurance companies sell insurance policies of all types in order to hedge the risk of possible

future losses or damage.

Various types of insurance include motor insurance, health insurance, life insurance, home insurance,

travel insurance, personal property insurance, key man insurance*, rental insurance, etc.

A motor insurance policy may include property, liability or third party and medical coverage. Property

coverage insures damage to or theft of a vehicle; liability covers bodily injury or property damage that may

occur as a result of the insured’s actions, and medical coverage pays any fees necessary for bodily injuries.

A policy holder who suffers a loss will need to fill in a claim form in order to give the insurance company

the details of the loss and how/when it happened. The aim of the insurance company is to indemnify the insured

person. According to the indemnnity principle, a compensation claimant should not profit from an insurance

policy but should only be compensated for the value lost, assuming that the damaged property is fully insured.

The people involved in the insurance business are:

(1) insurance brokers, who advise clients about different companies and their policies when you wish to take

out an insurance policy;

(2) underwriters, who assess the risk of enrolling an applicant for coverage or a policy and fixes rates and

conditions of insurance contracts;

(3) policy holders, the insured person who pays the premiums and has the right to claim under a policy;

(4) loss adjusters, who are qualified to settle claims, that is, to value losses incurred and agree to pay the

compensation;

(5) third party, to whom a legal liability for compensation is owed for loss or injury resulting from a negigent

act of someone who is insured;

(6) actuaries, who specialise in statistics and calculates insurance risks and compensation by applying the

mathematical laws of probability. (selected and adapted from http://www.investopedia.com/features/industryhandbook/insurance.asp)

*key man/person insurance – a type of corporate-owned insurance that insures an employer against the death or

incapacitation of a so-called key employee, usually an executive

READING

Read the information below about the current health care system in Romania. Choose the best

sentence from the box below (A-I) to fill each gap (1-7). There is one sentence that you do not need.

There is an example at the beginning (0-E).

A The most important features of the health insurance contract are as follows:

B Pharmacists must sell the cheapest available drug, if only the generic name is on the prescription, and

must mention potential substitutes.

C In accordance with the framework insurance contract, these treatments are fully covered for children

aged less than 16.

D Health status in Romania is poor compared with the other European countries: average life expectancy

is six years shorter than the EU average, and infant and maternal mortality are among the highest in the

European Region.

E Yet despite this positive development in terms of revenue, at least half the users of the health services

report making additional out-of-pocket payments.

F Contributions depend on income and are paid in even shares by the insured and the employer.

G If, on the other hand, the rationalization of the financing side corresponds to a continued deterioration,

and not to improvements, in the allocation of spending, the main benefits of the reform are in doubt.

H Co-payments are required for drugs and allowed for other services.

I As part of this trend, the Government introduced partial reimbursement of prescription drugs for

outpatient care in 1992.

http://www.investopedia.com/features/industryhandbook/insurance.asp

51

Health Care Services in Romania

Romania has seen a substantial change in the way its health-care sector is financed, namely, a shift

towards the funding of health-care by means of an insurance system. The introduction of health

insurance increased the amount of public funding available for that sector. [___0 E___] Moreover,

although the budget has benefited from a surplus of revenue from the health sector, the quality of

service is increasingly viewed as inadequate, and the system's performance is poor in terms of equal

access.

Public funding for health-care, a trend that compares favorably to other social services, should be

interpreted against a history of tight control on sector expenditure and inputs until 1998. At 3.8% of

GDP (1999), public expenditure on health in Romania remains among the lowest in the ECA region:

the only countries with a lower share are those where tax collection has virtually collapsed.

Resolving the imbalance created by the improvement in the funding of health-care following

recent reforms, and the inefficient use of resources – as indicated by the persistent low marks for

services and the anecdotal evidence of large, private out-of-pocket payments – is becoming an

increasingly important part of reforming social service provision more generally. If the health sector

can be made to respond to health-care needs more effectively and equitably after the introduction of

an insurance system designed to enhance revenue performance, then lessons may emerge for other

parts of the social service delivery systems. [___1___]

The state budget was the only public source of health-care funding until 1991. The Ministry of

Health, as well as other ministries with their own health service provider networks (e.g., Defense,

Interior, and Transport) administered these funds. In the early 1990s the move towards diversifying

the sources of funding gained support within Romania as a way of spreading the burden of allocating

resources for the health sector. [___2___] The move was accompanied by the establishment of the

Special Health Fund, also administered by the Ministry of Health and Family and based mainly on a

two percent payroll tax, but also including revenues from small taxes on tobacco and alcohol sales,

and advertising. In 1993, responsibility for funding material expenditure other than for drugs, as well

as utilities and current maintenance, was transferred from the state to local budgets.

The adoption of the Law on Social Health Insurance in 1997 initiated the transformation of the

Romanian health-care system from a Semashko* state-financed model to an insurance-based system.

Since the law came into force in 1998, earmarked payroll contributions have become the main source

of health sector revenue. Key provisions of the law regulate health sector revenue generation and

redistribution, as well as the allocation of funds. The 1997 law made insurance membership

mandatory and linked it with employment. [___3___] Children and young people, disabled persons,

and war veterans as well as dependents without income have free access to health insurance. For

conscripted soldiers and people serving prison sentences, insurance contributions are paid from the

budgets of the Ministry of Defense and Ministry of Justice.

Health insurance covers ambulatory, inpatient, and dental care, including clinical preventive

services and drugs. A framework contract, agreed upon annually by the National Health Insurance

Fund (NHIF) and the College of Physicians and approved by the Cabinet, defines the benefits

package, conditions for service delivery, and payment mechanisms. [___4___] Family physicians play

a gatekeeper role.

The framework contract sets the terms for health-care services using a variety of parameters. This

contract is the basis of the contracts between the District Health Insurance Funds (DHIFs) and health-

care providers (hospital and their outpatient units, diagnosis and treatment centers, health centers,

basic clinics, and medical offices). [___5___]

Insurance benefits include medical services from the first day of sickness or the date of

accident until the patient is fully recovered.

Medical services include preventive health-care services, ambulatory health-care, hospital

care, dentistry services, medical emergency services, complementary medical rehabilitation

services, pre-, intra-and post-birth medical assistance, home-care nursing, drugs, health-care

materials, and orthopedic devices.

The insured are entitled to choose a family doctor for primary health-care services and, once

referred by the family doctor, can have the choice of a specialist ambulatory care provider.

52

Inpatient care includes full or partial hospitalization with medical examination and

investigations, diagnosis, medical and/or surgical treatment, nursing, drugs, and health-care

supplies, accommodation, and food.

Health insurance covers 40 to 60 percent of the cost of dental care, taking into account

previous use of prophylactic dental check-ups. [___6___]

The Ministry of Health and Family and the NHIF, using recommendations from the College

of Physicians and the College of Pharmacists, compile a list of prescription drugs on a yearly

basis with reference prices. [___7___]

The insured are entitled to prescription drugs; health-care materials needed to correct eyesight

and hearing, and prostheses of the limbs are also either partially reimbursed by the insurance

funds or free.

Coverage of medical rehabilitation, home-care and transportation related to medical treatment

and housekeeping support during illness or disability are also regulated by the framework

insurance contract.

Health insurance does not cover professional risks and diseases, certain high-tech health-care

services, various dentistry services, curative health-care assistance in the workplace, and luxury

accommodation services in hospital, all of which must be paid for directly by the patients or from

other sources (employer, professional risk insurance, and private insurance). Health expenditure from

public sources in Romania between 1990-1999 varied between 2.8 and 3.8 percent of GDP, equivalent

to $28-58 per capita. (abridged from http://www.factbook.net/countryreports/ro/Ro_HealthServices.htm)

*Semashko model/system – a centrally-organised health care system itroduced in CEE/CIS countries after the Second World

War and abolished in the early 1990s

USE OF ENGLISH

Questions 1-10


Motor insurance includes automobile, truck, motorcycle, aircraft, boat, or any __1__ form of

motorized transportation. It is perhaps the __2__ common type of insurance, and is required by law in

many countries.

Motor insurance covers the insured party __3__ financial loss that he __4__ incur to repair his vehicle

or a third party’s in the __5__ of an accident. In return for annual or semi-annual premiums, the

insurance company is __6__ to pay any losses as described in the policy. __7__ a policy may include

property, liability or third party, and medical coverage.

Property coverage insures damage to or theft of a vehicle; liability covers bodily injury or property

damage that may occur as a __8__ of the insured’s actions, and medical coverage pays any fees

necessary for bodily injuries, rehabilitation and in __9__ cases foregone wages and funeral costs.

In many countries, all of __10__ types of automobile insurance are required of vehicle owners. In

some countries, or states, only third party is required.

Questions 11-20


This form of insurance protects workers from injuries and illnesses which __11__ them from doing

their jobs. It __12__ pay for existing __13__ the policyholders may have such as __14__ bills,

mortgages, utilities, and __15__.

Workers’ compensation is __16__ in the US, and pays a worker his wages and medical expenses in

the event of an injury on the job.

Total permanent disability insurance __17__ the disabled employee with benefits for the rest of his

or her life, or according to the __18__ specified in the policy. Companies can purchase a similar type

of insurance, called disability overhead insurance. This pays for __19__ overhead costs of business

__20__ the owners are not able to work.

http://www.factbook.net/countryreports/ro/Ro_HealthServices.htm

53

11 A avert B forbid C prevent D preclude

12 A must B can C may D should

13 A promises B involvements C engagements D commitments

14 A superior B outstanding C important D noticeable

15 A further B more C such D alike

16 A mutual B ordinary C regular D common

17 A renders B allows C provides D stipulates

18 A periods B categories C terms D statements

19 A endless B ongoing C unfinished D current

20 A while B as C for D because

Questions 21-25



21) Most developed nations have government-funded health care, (A) which means that most or all

citizens have access to medical facilities and treatment, (B) as well as health insurance. For example,

the National Health Service (C) in United Kingdom pays for (D) citizens’ medical needs.

22) However, (A) in the US, there is no government-funded health policy – (B) whether for insurance

or treatment. As a result, US citizens and residents (C) must be insured or (D) risk to face

astronomical medical bills, garnishing of wages, and bankruptcy.

23) Often, medical insurance (both health and dental) is included in (A) employee benefit packages in

the US and other countries. Nevertheless, the issue of affordable health insurance and treatment in the

US is (B) one of the most controversial and heated topic, as many (C) cannot afford either. If you live

in a country without comprehensive national health care, then low cost health insurance (D) is a vital

requirement.

24) Issuance of insurance by an insurance company (A) is not free affair. Rather the policy holder of

insurance (B) is needed to pay a regular payment amount to the insurance company (C) till it’s

maturity. This amount is either repaid (D) in entirety or in part to the insurance holder in case of

occurrence of the hazard or casualty or loss.

25) But it has been observed that (A) many insurances are not claimed due to (B) non-occurrence of

the risk and thus (C) the premiums paid by the policy holders (D) becomes the profit of the insurance

company. (adapted from http://www.economywatch.com/insurance)

Questions 26-30


the blank space.

Credit insurance is taken by lenders who need __26__ against COVER

the people that have credit with them (borrow money). In the event

of their __27__ to pay it back (usually due to unemployment, ABLE

disability, or death), this insurance protects the lender.

There are many kinds of insurance, and each of the major categories has

dozens of __28__ and types. They differ depending on the markets, VARY

the understanding of risk and __29__ of historical data, government AVAIL

regulation and law, cultural __30__ and expectations, and more. PERCEIVE

http://health.insurancequotecompared.com/

http://www.healthinsurancefinders.com/

54

TEST 11 – INTERNATIONAL TRADE

INTRODUCTION

International trade is the exchange of goods and services between countries. Trading globally gives consumers

and countries the opportunity to be exposed to products not available in their own countries. It provides

countries with the opportunity for specialisation and therefore maximises their capacity to produce those

products with which they have a comparative advantage. International trade leads to greater competition on

the market and more competitive prices, that is, cheaper products.

International trade not only results in increased efficiency but also stimulates foreign direct investment

(FDI), by which foreign currency and know-how enter the country. As a result, employment levels are raised

and the gross domestic product (GDP)* grows. By investing abroad companies gain global market share,

enhance their potential for growth and ultimately gain higher revenues/profits.

International economic transactions are facilitated by international financial payments, with central banks

and private banks playing important roles. Imports and exports are accounted in a country’s balance of

payments, international trade being one of the indicators showing how well an economic system is working.

Foreign trade entrepreneurs should keep in mind that payments are often delayed and that before obtaining

profits they may incur additional costs to hire specialised staff, adjust the product or packaging, create new

promotional material, delegate personnel for travelling and secure licenses. Besides, operating overseas involves

additional knowledge and skills in comparison with operating a domestic business. In addition to the challenge

of discovering new markets or suppliers abroad, they are faced with such complex issues as financial and legal

documentation, shipping, government regulations, licensing and property rights.

Much of the modern history of international relations concerns efforts to promote free trade among

nations. Different regional trade blocs* or free trade zones have been formed in the period of economic

liberalisation in various parts of the world. These are designed to protect the interests of the member countries

by encouraging trade activities across nations through tax, tariffs and trade agreements. Trading blocs have

played a crucial role in the economic and political environment of the contemporary world.

*GDP measures the value of a country’s overall output of goods and services produced during a specified period, typically a

fiscal year; if income from abroad is added, it is called gross national product (GNP).

*Some examples of trade blocs are: NAFTA (North American Free Trade Agreement), EU (European Union), European

Economic Area (EEA), European Free Trade Association (EFTA), ASEAN (Association of Southeast Asian Nations),

MERCOSUR (Mercado Comun del Cono Sur), CEFTA (Central European Free Trade Agreement), SAARC (South Asian

Association for Regional Cooperation), CEMAC (Economic and Monetary Community of Central Africa), East African

Community (EAC) and CACM (Central American Common Market).

READING

This article is a critical commentary on the WTO’s perspective on the socio-economic impacts of free

trade. Some topic sentences have been removed from the text. Choose from the list (A-K) the best

sentence to fill each blank (1-9). There is one extra sentence that does not belong in any gap. There is

an example at the beginning (0 C).

A What Lamy did not mention is that this “productivity growth” has been measured as output

per person, not output per hour of work.

B Lamy admitted that free trade can be dislocating:

C He said that the multilateral system that came into being with the WTO “has brought

transparency and predictability to international trade.”

D Lamy apparently brushed off concerns about swelling global financial and trade imbalances

as well as the social hardships associated with immigration driven by economic desperation.

E What free trade has done, however, through the facilitated movement of capital is accelerate

the development of capitalist relations of production worldwide.

F Put simply, international trade has distributional consequences, producing relative winners

and losers in each society, affecting these groups' foreign policy preferences.

G Lamy attributed the loss of U.S. manufacturing jobs primarily to “productivity growth

brought about by advances in technology.

55

H “Yes, there are large imbalances in the U.S. economy.

I Lamy ascribed health care costs as a secondary cause of keeping wages flat.

J The WTO has faced scathing criticism for the free trade policies that have accelerated

globalization and the integration of a worldwide capitalist free market economy.

K Lamy continued, “I personally believe that issue of immigration is there to stay.

Free Trade and Distorted Development: A Critique of WTO Perspective

by Sharat G. Lin November 12, 2009

“Evidence is persuasive that trade openness delivers efficiencies and generates wealth. If trade

opening takes place under the right conditions, all countries can benefit from international exchange.”

This was the assessment of the Director General of the World Trade Organization (WTO), Pascal

Lamy, speaking at the Stanford Institute for Economic Policy Research (SIEPR) and the Stanford

Center for International Development (SCID) on 27 October 2008.

[___0 C___] “All of the models suggest that the gains to developing countries will be larger the

more they open their markets to trade.” Citing specific cases, he said, ‘since opening their economies,

Asian giants like China and India have together lifted more than 440 million people out of poverty, an

economic success which, I think, we all can agree is without any precedent.”

While trade has been an engine of aggregate economic growth in the BRICs (Brazil, Russia,

India, China) and similar emerging countries, Lamy did not consider the unmitigated displacement of

traditional sectors in these economies and the uneven development that has led to an alarming rise in

income inequality both socially and geographically within each country. With the 153 members of the

WTO at all levels of development, and 30 more queuing for membership, Lamy acknowledged that

the WTO framework is “no one size fits all paradigm.” He continued, “We acknowledge that the

poorest are simply not equipped to take on the obligations of the rich.”

Lamy argued that a 30-fold growth in international trade in real terms over the past 60 years was

made possible by progressive reductions in tariffs. “In 1947-48 before the GATT negotiations,

average tariffs in the industrial world were around 20 to 30 per cent and trade was constrained by a

myriad of quantitative restrictions. Eight successive rounds of negotiations succeeded in reducing

average MFN tariffs on the imports of manufacturers to the 4 per cent today in industrial countries.”

[___1___] But Lamy did make an important distinction: “trade opening is not synonymous with

deregulation.” The tariff reductions negotiated under the WTO framework involve complex rules and

formulas that are transparent to all parties. The problem is not one of deregulation or opacity, but that

the industrially developed countries have, until recently, dominated the negotiations because of the

differential rules and preferential subsidies that they have long had in place, and owing to their post-

colonial political weight. Fortunately, that is changing. Recent trade negotiating rounds have

conceded important preferences and exemptions for poor countries.

[___2___] The social alienation attributable to the production process is far more profound than

the social alienation owing to competitive trade between structurally unequal economies. Once again,

the legitimate concerns about economic justice must focus primarily on the relations of production,

and secondarily on the relations of exchange.

Job Losses

[___3___] “No doubt about it, trade opening has led to some job losses globally and in the U.S.” He

added, “Some of the wage stagnation that has beset American workers is due to competition from

lower-wage countries – exporters.” But he insisted, “The role of trade has been rather small compared

to other factors. Were trade the culprit for the declining manufacturing jobs, you would very likely

have seen domestic manufacturing output decline as foreign products displaced local products on the

marketplace. But this wasn’t the case. U.S. manufacturing output rose to an all-time record last year

[2007]. For the last two decades the Fed says real manufacturing output has risen more than 120 per

cent.”

In fact, the U.S. Federal Reserve Bank reported that the period 1991-2000 witnessed a sustained

cumulative manufacturing growth rate of over 50 per cent, led by the high-technology sector until free

trade facilitated off-shoring of software development, manufacturing, and back office services to low-

56

wage countries with qualified pools of talent. This was followed by a period of greatly reduced

manufacturing growth. The index of U.S. industrial production rose about 7 per cent from 2000 to

2007, followed by a substantial decline in 2008. When a mean annual population growth rate of 0.9

per cent is taken into account, U.S. per capita industrial production was stagnant over the period 2000-

2007, and experienced a net decline over the interval 2000-2008 during which free trade in North

America under NAFTA and globally was in full swing.

[___4___] According to Bob Lawrence at Harvard only about 10 per cent of job manufacturing

losses in this decade are due to international trade. Other studies put this number at somewhere

between 5 and 15 per cent. And in the U.S. until very recently productivity growth has been at an all-

time high. The U.S. Bureau of Labor Statistics reports that non-farm business sector productivity rose

at an annual rate of nearly 3 per cent for the decades 1950s and 1960s. Each year in the 1995-2000

average manufacturing productivity rose at 4 per cent. And though this rate has tapered off slightly

since 2000, it is still with a rate of 3.7 per cent. Where more goods and services are being produced

with fewer workers, job losses are inevitable.”

[___5___] With salaried employees being pushed to work longer hours in the economy in

general, and the high-tech sector in particular, output per person has risen much faster than output per

hour of work owing to advances in technology. Citing Lawrence again, Lamy acknowledged, “the

principal factor in keeping wages flat has been the sharp rise of the share going to the super-rich, the

top one per cent of taxpayers, and the share that has gone to profits which were at near record levels

until this year.”

[___6___] “Labour costs for U.S. corporations have actually risen 25 per cent since 2000, but

nearly the entire increase went to pay the higher bill for health insurance which is twice as expensive

today as it was at the beginning of this decade.” However, he added that “WTO does not involve itself

in the question of income inequality within a country's border, nor does it in the reduction of health

costs.”

“Policies aimed at trying to address job loss and stagnant wages through trade measures will not fix

the problem of manufacturing job erosion and it could, on the contrary, lead to a deterioration of this

most vibrant part of the U.S. economy today,” he said.

Free Trade, Global Imbalances, and Immigration

In response to a question on the potential differential impact of free trade on national economies

characterized by great differences in purchasing power parity, wage structures, and sectoral value

added, resulting in enormous trade imbalances and immigration flows, Lamy said, “The harsh reality

is that opening trade reshuffles economic and social fabrics, and that creates political hardship. In

whichever condition, the moment some of your constituencies are better off, others are worse off, you

have a political problem.”

[___7___] There is a huge trade deficit. This has to be seen sort of globally. Very talented

economists will tell you that the U.S. trade deficit is nothing [more] than the other [side of the] coin of

the U.S. rate of saving. It has to be financed, and it is external finance that sort of matches the lack of

domestic savings,” he commented.

“And if you take the example of the U.S., and you look at this huge trade deficit with China,

people see this as a U.S.-China issue. Whereas, they don’t realize that a large part of this huge trade

deficit (bilateral) is offset by a Chinese deficit with many Asian countries who produce goods which

then go to China which then go to the U.S. It’s the old example of the i-Pod which is shipped from

China to the U.S. for $100 and you have $5 of Chinese added value in that.”

[___8___] Trade, no trade, big trade, trade deficit, trade surplus – migrations in this planet occur

for reasons which are of a sort of such a compelling nature that I wouldn’t link them to trade. The

only prescription I would make is that if you believe that migrations are sort of a hardship for many,

making sure that goods and money flow freely is the right way to reduce the incentive to immigration.

If trade or finance were to flow less than they flow today, then the constraint on people to move

would probably be harder.”

[___9___] Yet it is the monumental debt and deficit burdens in the U.S. that are at the root of the

global financial crisis. Furthermore, his argument implies that the undocumented migration from

Mexico and Central America to the U.S. would occur regardless of free trade, which is not borne out

by its historical correlation with NAFTA. The argument that the free flow of goods and capital will

57

reduce the incentive to immigration applies only between two national economic structures that are

qualitatively similar and whose intensive parameters are quantitatively similar. Under these conditions

the free flow of goods and capital may tend to equalize conditions geographically between similar

socio-economic frameworks. But between structurally very different economies, the free flow of

goods and capital, but not people, introduces profound socio-economic distortions that impel

distressed populations to migrate.

Global policymakers need to understand not only the economics of aggregate growth, but the

socio-economic impact of globalized flows on the distribution of income and on the welfare of human

beings. (http://www.globalpolicy.org/social-and-economic-policy/international-trade-and-development-1-57/general-analysis-on-

international-trade-and-development/47302.html)

USE OF ENGLISH

Questions 1-10


__1__ the successor __2__ the General Agreement on Tariffs and Trade (GATT), the World Trade

Organization (WTO) __3__ established to supervise and liberalize world trade.

During negotiations ending in 1994, the original GATT and all changes to it introduced __4__ to the

Uruguay Round of trade negotiations __5__ renamed GATT 1947. This earlier set of agreements was

distinguished __6__ GATT 1994, __7__ comprises the modifications and clarifications negotiated

__8__ the Uruguay Round (referred to as “Understandings”) plus a dozen __9__ multilateral

agreements on merchandise trade. GATT 1994 became an integral __10__ of the agreement that

established the WTO.

Questions 11-20


Critics of the WTO, including many __11__ of economic globalization, have charged that the

organization __12__ national sovereignty by promoting the interests of large multinational

corporations and that the trade liberalization it encourages leads to environmental __13__ and

declining living standards for low-skilled workers in developing countries. Some WTO members,

especially developing countries, resisted __14__ to adopt rules that would __15__ for sanctions

against countries that failed to meet strict environmental and labour standards, __16__ that the

sanctions would __17__ to veiled protectionism. Despite these criticisms, however, WTO admission

remained attractive for non-members, as __18__ by the increase __19__ membership after 1995. Most

significantly, China entered the WTO in 2001, after years of accession negotiations, and many other

countries were slated to join through accession in __20__ years.

11 A challengers B competitors C opponents D rivals

12 A disobeys B undermines C impairs D threatens

13 A damages B loss C harm D damage

14 A attempts B efforts C trials D struggles

15 A grant B permit C allow D authorize

16 A differing B arguing C quarreling D debating

17 A amount B equal C mean D total

18 A presumed B certified C manifested D evidenced

19 A from B in C for D of

20 A coming B immediate C succeeding D next (adapted from http://www.britannica.com/EBchecked/topic/291349/international-trade)

Questions 21-25



http://www.britannica.com/EBchecked/topic/479643/protectionism

58

21) American policymakers should beware (A) claims of globalization’s axiomatic pacifying effects.

Trade creates vested interests in peace, but (B) these interests affects policy only to the extent they

wield political clout. In many of the states (C) whose behaviour we most wish to alter, such sectors –

internationalist, export-oriented, (D) reliant on global markets – lack a privileged place at the political

table.

22) Until and unless (A) these groups gain a greater voice within their own political system, attempts

to rely on the presumed constraining effects of global trade carry (B) substantial greater risk than

commonly thought. A few examples tell much. Quasi-democratic Russia is a state (C) whose principal

exposure to global markets lies in oil, a commodity whose considerable strategic coercive power (D)

the Putin regime freely invokes.

23) The oil sector (A) has effectively merged with the state, making (B) Russia’s deepening ties to the

global economy a would-be weapon (C) rather then an avenue of restraint. Russian economic

liberalization without political liberalization is unlikely to pay (D) the strong cooperative dividends

many expect.

24) (A) China (A) will prove perhaps the ultimate test of the Pax Mercatoria. (B) The increasing

international China’s presence in the oil and raw materials extraction sectors (C) would seem to bode

ill, given such sectors’ consistent history elsewhere (D) of urging state use of threats and force to

secure these interests.

25) Much will come down to the relative political influence of export-oriented sectors (A) heavily

reliable on foreign direct investment and easy access to the vast Western market versus (B) the

political power of their sectoral opposites: uncompetitive state-owned enterprises, energy and mineral

complexes with important holdings in the global periphery, and a Chinese military that increasingly

has become (C) a de facto multi-sectoral economic-industrial conglomerate. Actions to bolster the

former groups at the expense of the latter (D) would be effort well spent. (from Does Globalization bring war or Peace? by P. R. Goldstone, Sept. 24, 2007, http://www.globalpolicy.org/social-and-economic-

policy/international-trade-and-development-1-57/general-analysis-on-international-trade-and-development/47297.html)

Questions 26-30


the blank space.

Free trade zones in Romania are regulated by Law No. 84/1992.

Customs control is __26__ only at the borders of free trade zones, APPLY

which have to be __27__ delimited. Goods and other merchandise are STRICT

admitted into free trade zones without restrictions as to country of origin

or destination, provided that the import of such goods into Romania is

not prohibited. Free trade zones are established by Government __28__, DECIDE

at the proposal of interested __29__ and local public administrations. MINISTER

They are managed by a Board of Directors, under the supervision of

the Free Trade Zones Agency within the Ministry of Transport.

According to the __30__ of Law No. 84/1992, land and buildings can PROVIDE

be rented or concessioned to Romanian or foreign legal or natural persons

for a maximum of 50 years.

Foreign-owned firms have the same investment opportunities in free trade

zones as Romanian entities. Currently, there are six free trade zones in

Romania: Sulina, Constanţa-Sud, Brăila, Galaţi, Curtici-Arad, Giurgiu. (http://www.factbook.net/Freetradezone.htm)

59

TEST 12 – INFORMATION TECHNOLOGY IN BUSINESS INTRODUCTION

Information technology (IT) or information and communication technology (ICT) is the technology

required for information processing, in particular the use of electronic computers and computer software to

convert, store, protect, process, transmit, and retrieve information. The discipline of information technology

governance deals primarily with the connection between business focus and IT management of an organisation.

Business software is generally any software program that helps a business increase or measure

productivity. Examples of business software are: accounting software, customer relationship management,

human resources software, OFFICE applications suite, enterprise resource planning, and computer-mediated

communication.

Accounting software is used to record and process accounting transactions such as accounts

payable*, accounts receivable*, payroll*, and trial balance*. It functions as an accounting information

system. It may be developed in-house by the company or organisation using it, may be purchased from a third

party, or may be a combination of a third-party application software package with local modifications. Some

business accounting software is designed for specific business types to include features that are specific to that

industry.

OFFICE applications suite is used by typical clerical workers. Most office application suites include

at least a word processor and a spreadsheet* element. In addition to these, the suite may contain a

presentation program, a database management system and minor graphics and communications tools. Newer

variations on the office applications suite include an e-mail client, a personal information manager or a graphics

application suite.

Customer relationship management (CRM) enables an organisation to improve customer service and

customer relationships through the introduction of reliable processes and procedures for interacting with those

customers. CRM software is made up of three components:

operational – for the basic business processes (marketing, sales, service)

analytical – for the analysis of customer behaviour

cooperational – for contact with customers (phone, e-mail, fax, web)

The function of the Human Resource (HR) / Personnel department is to track innumerable data on each

employee, from personal histories, skills, capabilities, and experiences to payroll records. To reduce the manual

workload of these administrative activities, organisations utilise innovative Human Resource Management

Systems, which integrate financial and human resource modules into one universal database. They are

characteristically developed around four principal areas of HR functionalities: (i) payroll, (ii) time and labour

management, (iii) benefits administration, and (iv) HR management.

Enterprise resource planning (ERP) systems typically handle the manufacturing, logistics, distribution,

inventory, shipping, invoicing, and accounting for a company. Enterprise resource planning software can aid in

the control of such business activities as sales, delivery, billing, production, inventory management, and human

resource management. ERPs are often called back office systems indicating that customers and the general

public are not directly involved. This is contrasted with front office systems like customer relationship

management systems, which deal directly with the customer.

Computer-mediated communication (CMC) is any form of communication between two or more

individual people who interact and influence each other via separate computers. CMC most commonly refers to

e-mail, video, audio or text conferencing, bulletin boards, list-servers, instant messaging, and multi-player video

games. (adapted from http://en.wikipedia.org)

*accounts payable – creditors

*accounts receivable – debtors

*payroll – a list of employees with details about the amount of money that each is to be paid

*trial balance – a means of checking the correctness of a set of accounts by comparing the total of the debit balances with the

total of the credit balances

*spreadsheet – a computer software for calculating what effect a change in one variable will have on the others, given a set

of mathematical relationships between variable values

http://en.wikipedia.org/

60

READING

Read the following text about the impact of the Internet on companies. Choose the best sentence

from the list below (A-H) to fill each gap (1-6). There is one sentence that you do not need. There is

an example at the beginning (0 - E).

A All these clearly have great potential to change the way companies work, yet we may not see

those changes until well into the first decade of the twenty-first century - or even later.

B But such networks, and packaged software applications such as Enterprise resource planning

(ERP), tend to be cumbersome and expensive, forcing companies to accommodate them.

C Only then will they be able to apply it to take good decisions, a task that grow harder as the

flow of new information becomes ever more relentless.

D Some pure Internet plays will survive as viable businesses, but they will not be where the

impact of Internet technologies is greatest.

E Nowhere is this judgement truer than with new technologies.

F Information technology has undoubtedly been wonderfully successful in many ways.

G It will be most striking, at least in the medium term, in companies providing services:

financial, travel, medical, educational, consultancy.

H They will accentuate the need for talented and inventive people, who will have an even

sharper idea of their financial worth on the world market for human capital.

Making Your Company Ready for the Next Twenty-Five Years

by Frances Cairncross, Management Editor at The Economist

How will the Internet transform your company over the next twenty-five years? Subtly, but

profoundly, argues Frances Cairncross in this excerpt from The Company of the Future.

Most people overestimate the effects of change in the short term, underestimate them in the long

term and fail to spot where change will be greatest. [___0E___] The Internet stock-market bubble*,

like the bubble in railway stocks in the nineteenth century, reflected overestimates and misjudgments

of the potential impact of new communications. And as with railways, the bubble burst, leaving lots of

empty hands but an infrastructure that survived—and changed the world. There will be evolution,

rather than revolution and it will take many years to work through. Recall that even though the

telephone was first used commercially in the 1870s, telephone banking did not spring up until the

1980s. Consider that the Internet had been in commercial use for a mere seven years by the time

recession struck. Profound change rarely comes fast.

Over the next quarter century, though, the Internet will help to transform companies, although

the transformation may be too subtle for people to notice much while it happens. [___1___]

Many manufacturing businesses will grow more like service industries: They will cater to the

individual customer's tastes, for instance, and create a continuing relationship to ensure they

get repeat purchases. These changes will occur in established companies as they build the Internet into their existing

processes. Largely gone is the view of the late 1990s, which saw the Internet as a free-standing

technology and a basis for free-standing businesses; so has the thought that the Internet, in and of

itself, may be a technology that generates lavish profits. [___2___] The main revolution will involve

enabling established companies to do familiar tasks in new ways, and then to do new tasks in

increasingly familiar ways. These changes may or may not prove profitable—they will certainly raise

productivity and sharpen competition—but companies will have no more choice over whether to

deploy the Internet than they had over whether to deploy the telephone. Internet technologies will

offer managers much more scope to define their company in the most efficient way; they will not,

however, undertake that job on managers' behalf.

The biggest changes will inevitably be those that go with the grain of what is already happening.

Internet technologies will thus reinforce outsourcing, a trend that has been in progress for at least two

61

decades. They will further reduce inventory, a move that began long ago with just-in-time lean

production. They will bolster globalization, allowing companies to manage overseas operations and

connect with foreign suppliers in more intricate ways. They will highlight the emphasis on the

customer that so many companies strive to achieve. [___3___] They will enable the flat structures of

modern businesses to operate more effectively and make them even less hierarchical.

Indeed, one of the truly remarkable things about these technologies is the extent to which they

reinforce trends already under way. This reflects the fact that many of the things they do are not

entirely new: Proprietary electronic networks have long allowed large companies to do what smaller

firms can now emulate. [___4___] By comparison, the Internet is flexible, accessible, inexpensive,

and ubiquitous.

And there is more to come. Some Internet technologies that promise profound changes are

only in the early stages of application. They include peer-to-peer applications (variants of Napster);

applications that rate the relevance of information by the frequency with which others use it (as

Google, the search engine, does); or, indeed, XML and its variations, which allow seamless document

exchange. [___5___]

As this book has argued, the astonishing fall in the cost of communicating knowledge and

information has the power to transform knowledge management. So has the development of new tools

for collaboration, giving people new ways to share ideas and information. However, not only must

access to knowledge be as free and open as possible but senior managers must decide how to filter

and structure that knowledge. [___6___] If the center does not first impose structure, the true benefits

of an open culture will be lost. Here, as in many other applications of Internet technologies, the

center's power to set standards and structure grows more important, not less: the Internet may be a

tool of democracy, but in knowledge management, effective democracy requires self-restraint. (http://hbsworkingknowledge.hbs.edu/item.jhtml?id=2839&t=innovation)

USE OF ENGLISH


In the future, Internet technologies will give companies new control __1__ their relations with their

customers. The Internet will not __2__ widen reach, allowing companies to reach new markets; __3_

important, it will provide ways to deepen existing relationships. Here, as in many __4__ areas, the

development of a culture of trust will __5__ the most to deepen the relationship. In __6__, companies

will develop more sophisticated tools to identify their __7__ profitable customers, to retain them, and

to sell them extra products. They will find subtle ways to price discriminate, for example, __8__

developing two familiar concepts, loyalty schemes and clubs.

Given the importance of creativity and new ideas to corporate success, companies must work harder

than __9__ to recruit and retain the right staff and to create a corporate culture that encourages loyalty

and effective collaboration. With recruitment, as with customer management, identifying __10__

people likely to contribute most to corporate profitability and concentrate on retaining and developing

them will be critical.


One of the earliest and most visible __11__ of Internet technologies is on purchasing. Here, a __12__

new business model has __13__: the electronic exchange, which will __14__ several different forms,

but will be built around a single standard that will __15__ different industries and different companies

within an industry to __16__ freely with one another. In networks and in marketplaces, __17__

determined standards is one of the __18__ to realizing value. In purchasing within individual

companies, central __19__ will also be essential if companies are to benefit __20__ savings and new

suppliers.

11 A outcomes B results C effects D consequences

62

12 A genuinely B factually C naturally D legitimately

13 A aroused B risen C raised D arisen

14 A take B grow C receive D be

15 A consent B concede C allow D admit

16 A function B transact C operate D exercise

17 A practising B applying C employing D referring

18 A methods B ways C means D keys

19 A discipline B regulation C order D rule

20 A of B on C from D with



21) (A) More far-reaching will be the impact on the management of supplier networks. Here, (B) the

key will be the power of Internet technologies (C) to making information available simultaneously to

many different points (D) in a system.

22) The transformation of the supply chain into an ecosystem will bring the biggest rewards when the

whole production process (A) can become more modular, so that different stages (B) that once took

place sequentially (C) could now occur simultaneously. That change will speed production, reduce

output, and increase the flexibility with which companies can respond (D) to changing customer

tastes.

23) In the past, the costs of transferring information (A) has been one of the main factors (B)

determining the structure of the company. Now, that is (C) far less true, and the consequence

is that companies can make decisions about (D) whether or not to outsource some process or

to decentralize some authority in terms of the business case alone.

24) (A) The pressure to outsource will grow, partly because (B) it will leave companies free

to concentrate on what they do best rather than on what they merely do well. They will grow,

too, because talent (C) is scarcely: some of the brightest and best may choose to be free

agents (D) rather than wage slaves.

25) However, when business (A) will be slack, employees may be less enthusiastic (B) about

going it alone; and outsourcing (C) will have drawbacks when companies are keen (D) to

keep direct control over their quality of service and the reputation of their brands.


the space.

The benefits of Internet technologies depend not on their wizardry

alone, which in coming years will seem __26__ ordinary and REMARK

natural, just as the phone does now. Companies will reap the full

benefits only if they have appropriate structures and cultures.

Creating those calls for __27__ leadership. Leaders must be able SKILL

to cope not only with change, __28__ and continuous, but also DISRUPT

with the pressures on decision makers to digest a __29__ torrent CEASE

of new data—a task that the next generation of managers will be

better able to do. Leaders must be good at communicating both

with the outside world and with their own people, and able to

63

__30__ the sense of managing in a fishbowl, visible to all. STAND

They must be as adept at making business decisions as at managing

public opinion and issues, such as the environment and corporate

social responsibility. Running a big company will remain one of

the world’s most complex and demanding tasks. (http://hbsworkingknowledge.hbs.edu/item.jhtml?id=2839&t=innovation)

*bubble – unreasonable and excited buying of shares in a company that is financially weak, with the effect of raising the

market price of the shares far higher than their true value

64

TEST 13 – BUSINESS TRAVEL

INTRODUCTION

With business communities expanding across the globe, business travellers find an array of useful new services

on the road. Hotels are better, remote communications are easier, better car rentals are available, and airlines and

airports have improved.

Here are some questions that one needs to consider when going on a business trip:

Do I need a visa for my destination?

Do I have my credit cards or the correct currency?

Have I booked my hotel?

How am I going to get to and from the airport?

What is my schedule?

What business documents do I need?

What do I need to do when I get to my destination?

READING

Read the article about female business travellers and decide whether the following statements (1-5)

are true (T) or false (F).

1) Women business travellers are a consumer segment whose needs and expectations are distinct

from men’s.

2) Travel industry services should make a distinction between business travellers and tourists as they exclude each other. 3) According to Travel and Leisures’s Begley, 50% of the business travellers who fly are men. 4) Compared to men, female hotel guests are more sensitive to the social and aesthetic environment in a hotel. 5) Female business travellers prefer more active and diversified ways of spending their free time than men.

The Hidden Market of Female Travellers by Martha Lagace

Women are a rising force among frequent business travellers. They also make a majority of decisions

for their families’ personal trips. So can the travel business get in gear?

Try this on for size: A female executive recently changing planes at one of the world’s busiest

passenger airports, Hartsfield-Jackson Atlanta, suddenly realized she’d forgotten to pack her extra

pair of shoes. With luck she found a shoe store at the airport, but its selection was limited to men’s

footwear. When she asked where she could buy women’s shoes, the clerk told her, “Sorry, not

anywhere here.”

It’s a real experience and a metaphor for a larger quest that women as a segment of the

travelling population frequently endure. Despite their numbers as a growing force in the marketplace,

women business travellers are still often shoehorned into a model designed for men. Hotel rooms for

business travellers offer downcast décor and so-so amenities; the hotel’s social area may consist of a

bar that is at best uninviting or at worst, vaguely creepy. In addition, women travellers often perceive

that airline employees treat them more grudgingly than the guys.

As a result, a valuable market is still waiting to be served; that goes double when one

considers women’s substantial role in organizing their families’ leisure vacations. So said five travel

professionals who spoke at a panel session of the Harvard Business School Dynamic Women in

Business Conference, held January 22. Laura Begley, style director for Travel & Leisure magazine,

moderated the session, whose theme was “Women Exploring the World.”

65

The two identifiable market segments – business and recreational travellers – are not even

mutually exclusive, panellists agreed. “There is a trend for incorporating family: taking a business trip

and adding a family component,” said Jenifer Ziegler, senior vice president of brand management for

Holiday Inn Express.

Any company that understands its female travellers’ experiences and wisdom is likely to

succeed, everyone agreed. Rewards for the travel and hospitality industry overall will come when

women occupy more senior management positions, added Kathy Stewart, a program director for

Butterfield & Robinson, a company based in Canada that runs high-end, active trips. “The more we

talk about women as travellers, the more it will be clear that these positions need women,” she said.

Females are estimated to comprise 50 percent of frequent fliers, according to Travel & Leisure’s

Begley. If a woman has a family, she may make 70 percent of all her family’s personal travel

decisions, Begley continued. Forty percent of business travellers today are women, while just thirty

years ago female executives comprised only one percent. A glance around any airport or train station

confirms that things have changed.

What do women want compared to men? On the one hand, both genders expect the same high

quality of service and efficiency. Peggy E. Stirling, vice president of the Safety, Security and

Environmental division of American Airlines, said female travellers – particularly women with

children – complain to American that flight attendants are not responsive enough to their needs

compared to men. “Flight attendants should be more responsive”, Stirling said. “We spend a lot of

time with our flight attendants educating them about this issue. “As professionals, we are obliged to

meet all expectations,” she continued. “By and large, the airline industry has come a long way.

American Airlines will be focusing on women and travel. Women who travel are clearly a rising

population and all the statistics show it.”

As travellers, women do seem to distinguish themselves from men in several important ways,

so it makes business sense to spend more to attract them, said the panellists.

Holiday Inn Express (and the segment in which it competes) estimates that male guests make

up 70 percent of all stays in its hotels, said Ziegler. But when her company conducts consumer

research on how to ‘enhance the guest experience’ in order to learn why customers would visit the

hotel more often and spend more money, it found that women often provide the best insights.

“The men indicate that they are already quite satisfied with what they’re getting from the

hotel,” said Ziegler. “But we know there’s so much more we could do, so that’s a little frustrating.

Women respondents see a lot more opportunity in improving the guest experience. Hotels have been

very much a male-designed experience, I would say. There are sports magazines in the lobby, et

cetera. When we wanted to update all of our bathrooms, the men said the bathrooms were just fine.

The women pointed out that we could do a much better job with the towels.” Holiday Inn Express

ended up overhauling 100,000 guest rooms, “and now all the bathrooms have larger, white (with the

sense of clean), fluffier, more absorbent towels. There are now better amenities with an upscale scent

and quality.” Men reported that they like these changes, too, and research indicates they would

consider prolonging their stay.

Ziegler’s parent company, InterContinental Hotels Group, recently launched a new brand that

is more female-focused called Hotel Indigo. The first Hotel Indigo is in Atlanta. “We didn’t want to

abandon men, but we wanted to give more attention to the things many women appreciate. So instead

of enlarging the space of a guestroom, we enlarged the space of the bath area. We decided to bring

some colour rather than stick with ‘hotel beige’ and to rotate some of the designs regularly. And we

have created a guest area where women can congregate and feel safe and comfortable. Instead of

going to the hotel bar, maybe they’d like a place where they can grab a salad and a glass of wine; a

place where they can do some business or read a book. Hotels can focus on some simple

improvements like that,” she said.

Panellists acknowledged that a sense of personal security can be more important to women

than men. In certain hotels, women business travellers may be offered the option of a room on a floor

just for female executives. Travel & Leisure advises women travelling alone to never accept a room

on the first floor of a hotel, nor one too close to (nor too far from) the elevator, added Begley.

Among the leisure-travel crowd, “we find that women solo travellers take comfort from going

in a group,” said Stewart. “Women want to go to exotic places, they want to have exotic experiences,

66

but they feel much more comfortable when there’s a guide or an experienced person there to make

them feel safe in a foreign country.”

With that caveat* in mind, women are even more adventurous than men in terms of the

destinations they want to go to and the experiences they want to have, but they like to know there is a

security backup, she continued. When her company designed women-only group trips, they were not

big sellers. Mixed groups are much more popular, she said. ‘Women want a fantastic experience and it

doesn’t matter who else is there. There might be women there, there might not. We say, ‘Bring your

partner, spouse, your children; or come by yourself, and you’ll all have a great time.”

There also seems to be a trend for learning while on vacations, Stewart said. Women express

an interest in gaining new skills, such as how to mountain bike, ski, or kayak; or learning languages.

Stewart’s impression is that women in particular love how foreign travel enriches and expands their

minds. Women also seem to enjoy getting closer to another culture by joining such activities as

helping to build a bridge in Costa Rica or visiting an orphanage in Sri Lanka. There’s been

“astronomic growth” in the area of such volunteer vacations, she said.

When the panellists were asked where they prefer to journey in their downtime, everyone

enthused about their favourite destinations, from South Africa to Thailand, Vietnam, France, and

Italy. “I definitely could go to Italy every year for the rest of my life,” said Stewart. “But where I

would like to go is somewhere I’ve never been before, and for me that would be South America.”

“When you’re a business traveller, really try to take advantage of personal time in a

foreign country,” Ziegler advised the audience. “It’s hard because you’re busy and have lots

of work to do. But it’s so worth it.” (http://hbsworkingknowledge.hbs.edu/item.jhtml?id=4611&t=marketing)

*caveat – a statement or warning intended to prevent misunderstanding

USE OF ENGLISH


As airports improve, so __1__ the services available to business travellers. In 2000 AT&T rolled out a

new generation of public phones __2__ combine voice calling with high-speed connectivity to the

Internet, Web surfing and e-mail. The device is a travelling executive’s dream. __3__ it includes a

full-size keyboard, a touch pad, speakers and a 12-inch video screen, travellers __4__ surf the Web or

connect to their e-mail __5__ as they do from their desktop computer. The usage charge is just 25

cents per minute, __6__ a four-minute minimum. The phone accepts calling cards, credit cards and

even one-, five-, ten- or twenty-dollar __7__.

“Travellers spend a lot of ‘dwell time’ at airports __8__ they want to or not,” says Jim Agliata,

marketing director of the AT&T Public Markets division. “We think there’s a need and a demand to

__9__ that time productive and a public phone that surfs the Web and does e-mail __10__ a terrific

productivity tool.”


The AT7T WorldConnect service __11__ corporate executives to keep their wireless phone number

while travelling to nearly 100 countries in Europe, Asia, Australia, Latin America and the Middle

East. With a SIM card and an international phone, a traveller’s U.S. number, voice mail and call

waiting also can travel.

AT&T Wireless is also in the vanguard of __12__ the Internet and wireless phones. The AT&T

Digital PocketNet service offers business travellers with Internet-ready phones access to a wide range

of Web information: real-time flight data, flight reservations, frequent-flyer account updates, taxi and

car-service reservations, __13__ and maps, and restaurant __14__ and reservations.

67

The trend toward wireless travel tools, first evident with cell phones, then refined by personal digital

assistants, is now __15__ back to portable computers, the mother of all high-tech business travel

products.

The new Compaq Evo family offers a wide range of computing products, but most __16__ is the

Compaq Evo Notebook 400c. It incorporates Multiport, a(n) __17__ modular wireless data solution

that __18__ travellers from the need for communication cables. The Multiport module itself is a

mobile __19__ it integrates the wireless technology and the antenna into a single assembly, which

then inserts and __20__ flush against the notebook’s display panel.

11 A empowers B sustains C enables D approves

12 A absorbing B joining C blending D merging

13 A directions B prescriptions C directives D orders

14 A inspections B reviews C re-examinations D criticisms

15 A reaching B spreading C extending D enlarging

16 A noticeable B distinct C distinguishable D notable

17 A optional B selective C voluntary D free

18 A releases B saves C discharges D frees

19 A marvel B wonder C miracle D curiosity

20 A matches B fits C goes D suits



21) This technology (A) not only offers (B) better performances and greater wireless coverage, it also

contributes to the sleek, stylish look of the Evo Notebook N400c. (C) The unit weighs just 3.5 pounds

and measures (D) less than an inch thick.

22) Within (A) that thin package, however, is (B) incredible mobile computing power: an Intel

Pentium III 700 MHz processor, a bright 12.1-inch color display, a 20-gigabyte hard drive, 128 MB of

memory and a unique, (C) full-sized keyboard. An optional mobile expansion (D) permits the addition

of a floppy drive and CD, CD-RW and DVD drive.

23) (A) For all the emphases on new and (B) better technology tools, however, productive business

travel (C) still rests on, well, (D) a place to rest.

24) There is an oversupply of (A) economy and limited-service hotels (B) in the most major cities

around the U.S. but full-service and luxury hoteliers (C) are finding that there is a continuing strong

demand for their product (D) from discerning business travelers.

25) (A) The rush to operate top-notch* properties (B) in key business destinations also (C) have led

several grande dame hotels to embark (D) on aggressive renovations and restorations.

* top-notch – of highest rank or quality; being one of the best possible


the space.

In the end, __26__ of improvements on the ground, REGARD

__27__ business travelers most need better airline CORPORATION

service. Major carriers are sparing no __28__ to coddle SPEND

executives willing to pay for premium-class service.

Many of the world’s leading __29__ have eliminated CARRY

68

international first class altogether and switched to a

“super” business class service. Along with its ally KLM

Royal Dutch, the U.S. airline Northwest has just completed

its World Business Class service. It includes seats with sixty

inches of legroom and a recline of 150 degrees. There have

also been a host of service __30__, including pre-departure GRADE

service and cocktail snacks, upgraded main meals and a new

digital audio system. (adapted from FORBES, 23 July, 2001)

69

TEST 14 – BUSINES ETHICS

INTRODUCTION

Generally speaking, ethics refer to moral rules or principles of behaviour governing a person or group.

Business ethics are the branch of ethics that examines the various moral or ethical issues that can arise in a

business setting and the special duties or obligations that apply to persons who are engaged in business

activities.

Today’s heightened interest in the proper role of businesses in society has been promoted by increased

sensitivity to ethical issues. Issues like environmental damage, improper treatment of workers, and faulty

production leading to customers’ inconvenience or danger, are highlighted in the media. Government

regulation regarding environmental and social issues has increased. Investors and investment fund managers

have begun to make investment decisions based on social sustainability as well as pure economics. Consumers

have become increasingly sensitive to the social performance of the companies from which they buy their goods

and services.

Some typical issues addressed in business ethics include:

“creative accounting”*

advertising deception

black market sales

bribery / kickbacks

business intelligence and industrial espionage

political contributions

hostile take-overs

fiduciary responsibility*

shareholder rights issues

insider trading*

price fixing and price discrimination

competitive misinformation

discrimination, affirmative action*

sexual harassment

violation of employees’ rights

illicit drug testing

environmental issues, animal rights, pollution

labour issues, such as union strikes and union busting

infringement / breach of patent or copyright

planned obsolescence*, product liability* and product defects (adapted from http://en.wikipedia.org/wiki/Business_ethics)

*creative accounting (also window-dressing) – the use of accounting policies and practices that make the figures appear

better than they might otherwise

*fiduciary – esp. of a loan, backed by good faith instead of being backed by the security of valuable assets

*insider trading – unfair secret buying and selling of shares by company directors and high officials based on their special

knowledge of the affairs of their companies, which other investors do not receive until later

*affirmative action (also positive discrimination) – the practice or principle of favouring people who are often treated

unfairly, esp. because of their sex or race

*planned obsolescence – making a product with a feature that will become unfashionable or unusable in a short time, so that

the person who bought the product will soon have to replace it

*product liability – the liability of manufacturers and traders to pay claims made against them for damages caused by faults

in their products

READING

Read the article about differences in ethnic values across borders and decide whether the following

statements (1-5) are true (T) or false (F).

70

1) Professor Paine’s interest in global cultural differences in business ethics originated in the

questions asked by her American business students.

2) The case studies included in professor Paine’s research project are representative of four

continental cultures.

3) Professor Paine selected both national companies and multinational corporations with a

complex mission that surpasses the mere achievement of profits.

4) The two case studies presented speak about religion as a primary cultural factor that shapes

and influences work-related behaviour.

5) Professor Paine’s course Globalization, Culture, and Management is intended to provide

future global managers with a set of prescriptions for how to handle differences in ethical

values across cultures.

Value Judgments: Business Ethics across Borders by Judith A. Ross

“As different cultural traditions meet in the marketplace and inside organizations, managers face

tough choices about the values that they and their organizations will live by,” Harvard Business

School (HBS) professor Lynn Sharp Paine told participants at a research conference in Hong Kong

last winter that was part of the inauguration of the HBS Asia-Pacific Research Office. “In order to be

effective, they must find ways to deal with differences in how people think about matters such as

authority, fairness, responsibility, and even the very purpose of business.”

In her previous work regarding organizational values and business ethics, Paine focused on U.S.

companies engaged in business principally at home. But faced with an increasing number of questions

from international students about whether U.S. standards and values applied in their home countries,

she began searching for answers in a much broader setting. “Students would ask me about the

possibility of establishing a global system of business ethics,” Paine says, “and whether cultural

clashes of one degree or another were inevitable. I needed a systematic way to study the values and

standards of high-aspiration companies around the globe in order to find out where and how much

they differ.”

With a research agenda organized around eight major world cultures — African, Confucian,

Hindu/Buddhist, Islamic, Japanese, Latin American, Slavic-Orthodox, and Western — Paine

embarked upon an ambitious course-development project in 1997. Writing cases on firms in China,

Japan, Thailand, Argentina, Nigeria, and Russia, she focused on businesses indigenous to each culture

as well as multinationals moving between cultures. In addition, she chose companies that aspire to

excellence along multiple dimensions — in terms of not only financial performance but also

management practices and reputation in the community.

The result of her efforts is the MBA elective course Globalization, Culture, and Management.

According to Paine, as students examine the values and beliefs embraced by companies striving for

excellence from different points of cultural reference, they learn to anticipate and deal with the kinds

of value conflicts they are likely to face as global managers. Paine points out that students taking her

course also develop a business philosophy and a set of values that will help them lead effectively

when crossing cultural borders.

Two of the seventeen case sequences she has developed for the course so far — “Siam Cement

Group: Corporate Philosophy” and “The Haier Group” — take place in Thailand and China,

respectively. Named Asia's most ethical company by Asian executives polled several years ago in

Asian Business magazine’s annual most admired companies survey, Siam Cement Group (SCG) was

one of the first firms in Thailand to develop its own written code of ethics. SCG’s philosophy is

rooted in the Buddhist concept of fairness and also stresses product quality, the value of the

individual, and concern for social responsibility.

As Siam Cement expanded beyond Thailand, however, managers felt pressured to compromise

the corporate code of ethics. The company’s standards regarding improper payments, for example,

made it difficult to compete in places where such transactions are a way of life. The case illustrates a

classic dilemma: should organizations conform to the environment they’re in, or should they export

71

their ethical standards to other lands? In Paine’s view, framing the issue as “my way or your way”

tends to heighten the dilemma and limit the possibilities for an effective resolution. Instead, she urges

managers to look beyond differences in practice to underlying principles. In many instances, this

approach can help managers find a strategy that honors the company’s values and also works in a

particular environment. “One firm that had built its reputation by being environmentally responsible

ran into trouble when it expanded its business into India,” she explains, “because people there were

not willing to pay for the world-class technology necessary to maintain the stringent emission

standards of the company’s U.S. plants. After much debate around the choice of technology,” she

continues, “the company re-examined its concerns about the environment and realized they originated

in a broader commitment to social responsibility. Managers then began working with the local

community to find meaningful ways – such as support for schools, health centers, sewage disposal,

and forest preservation – to be socially responsible within that setting.”

A series of cases on the Haier Group describes a Chinese refrigerator and white goods maker

aspiring to become a global brand. Among other challenges facing the CEO of this collective

enterprise was the need to focus the attention of the work force on performance issues. “His task was

to create a value system that favors personal accountability, emphasizes product quality, and centers

on serving the market and the customer rather than being responsive to the central planner,” Paine

notes.

In addition, the chief executive found himself torn between, on the one hand, a deep-seated

cultural code of ethics emphasizing loyalty to family and friends and, on the other, a desire to do what

was needed to build a world-class company. “Going back to the time of Confucius,” says Paine, “the

primacy of personal relationships and interpersonal reciprocity has been paramount in China. This

poses a problem for those who want to use strictly market criteria when choosing suppliers and

employees and entering into contracts.”

While there are no easy answers to these predicaments*, Paine views the challenges she is

uncovering as a beginning for coping with cross-cultural conflict. “Astute managers learn about

cultures in order to build bridges and bring about changes that will make their organization more

effective and responsible,” she concludes. “In any successful change process, an understanding of the

starting point is as important as a vision of the ultimate objective.” (http://hbsworkingknowledge.hbs.edu/item.jhtml?id=86&t=corporate_governance)

*predicament – difficult or unpleasant situation in which one does not know what to do, or must make a difficult choice

USE OF ENGLISH

Questions 1-10


Codes of conduct or guidelines for multinational corporations __1__ not have any fixed definition.

However, it is important to __2__ a distinction between corporate codes of conduct and codes of

conduct for multinational corporations. Corporate codes of conduct are individual company policy

statements __3__ define a company’s own ethical standards, __4__ codes of conduct for

multinationals are externally generated and to __5__ degree imposed on multinationals. These codes

are not of the companies’ own making, __6__ are they agreements between companies and the

entities which create the codes. In some cases, __7__, multinationals are involved in the drafting

process. The fact that __8__ codes are externally established standards while __9__ corporate codes

of conduct are of a voluntary and internal nature has important implications __10__ considering their

implementation in corporate practice.

Questions 11-20

For each blank (11-20), decide which of the options A, B, C or D is best. . Only one answer is correct.

Codes of conduct for multinational corporations must also be __11__ from framework agreements,

which are __12__ between trade union organizations and individual companies __13__ the

companies’ international activities. There are two types of framework agreements. First, __14__ are

72

written understandings between multinational corporations and international trade union

organizations, which __15__ cover any subject. Examples of such agreements include those __16__

information and consultation arrangements, as __17__ by the European Works Council Directive.

Second, there are framework agreements between trade unions and companies concerning the labour

__18__ of the company or of its suppliers and subcontractors in other countries. Such __19__ may

also be included in collective agreements that are recognized __20__ national law.

11 A parted B contrasted C separated D distinguished

12 A determined B resulted C concluded D finished

13 A regarding B relating C connecting D viewing

14 A these B there C they D some

15 A may B must C should D would

16 A fixing B settling C regulating D establishing

17 A advanced B mandated C proposed D forwarded

18 A practices B actions C habits D methods

19 A orders B obligations C provisions D arrangements

20 A within B in C under D by

Questions 21-24


contains a mistake. There is always one incorrect segment in each paragraph

21) (A) In relation to multinationals, codes of conduct for multinationals are recommendations. Even if the

codes have been agreed by (B) a number of sovereign state, or such other entities as (C) have been granted

international personality by sovereign states, they do not have a status of international law, (D) which would set

a binding effect on multinationals operating in those states which have adopted or joined the code.

22) Hence, codes of conduct for multinationals (A) impose no legal, but only moral, (B) obligations on

companies, and they (C) are not capable of enforcement by the application of external sanctions. For

multinationals, the commitment to the codes (D) are voluntary.

23) Anyone (A) may introduce codes of conduct for multinational corporations. (B) Besides governments and

intergovernmental organizations, codes (C) have introduced by trade union organizations, employers’

organizations, various environmental, consumer, investor, religious, ethical and other organizations, and by

various groups (D) protesting certain international phenomena. Some of the codes have been adopted

multilaterally, some unilaterally.

24) Codes of conduct for multinationals may address any issue (A) relevant to their activities. Codes (B) have in

fact been addressed a wide variety of issues, including: relations between multinationals in world markets (e.g.

with regard to advertizing, marketing, sponsorship, and competition in general); (C) labour matters (e.g. terms

and conditions of work and equality); environmental standards (e.g. emissions, waste or safety in production and

transportation); and (D) health and safety issues related to individual products (e.g. toys, baby milk substitutes,

and other products).

Questions 25-30


the space.

Codes of conduct for multinationals can take __25__ forms. VARY

Their __26__ depends on three main factors – the CREDIBLE

__27__ that have adopted them or companies that have GOVERN

subscribed to them (e.g. in number, size or internationality);

the nature of the __28__ provisions of the code; SUBSTANCE

and any related monitoring __29__, such as MECHANISE

investigation methods, reporting of investigation results,

and __30__ of reports. DISSEMINATE (adapted from International Labour Office, Bureau for Workers’ Activities, Geneva, http://www.ilo.org/actrav)

73

TEST 15 – INTERCULTURAL AWARENESS

INTRODUCTION

There are two main perspectives on the concept of culture: high culture and anthropological culture.

The first use of culture focuses on cultural elitism, civilisation, or the refinement of the mind, i.e. being

acquainted with the best intellectual and artistic accomplishments of humankind. This is culture in the narrow

sense, which Hofstede in Cultures and Organisations (1994) calls ‘culture one’.

Anthropological culture is seen as a collective phenomenon that comprises any aspect of the ideas,

communications, or behaviours of a group of people, and is used to organise their internal sense of cohesion and

membership. Hofstede terms this broader concept of culture, which is more tied up with ordinary ways of being,

‘culture two’, or ‘software of the mind’.

Hofstede explains that, because almost everyone belongs to a number of different groups at the same time,

people unavoidably carry several layers of ‘mental programming’ within themselves, corresponding to various

levels of culture. Some examples are:

- a national level according to one’s country

- a regional and/or ethnic and/or religious and/or linguistic affiliation level

- a gender level

- a generation level

- a social class level, associated with educational opportunities and with a person’s profession

- an organisational or corporate level for those who are employed

In intercultural (professional) communication situations, behaviour is appropriate when it meets

contextual and relational standards or expectations, and effective when it is functional in achieving desirable

ends or in satisfying participants’ needs.

Cultural competence is about more than understanding the intricacies of bowing in Japan or the

inappropriateness of accepting food with the left hand in Saudi Arabia. Cultural competence is the ability to

recognise the primary cultural orientations of ourselves and others and to be conscious of the potential impact of

these differences on working relationships. It involves going beyond the explicit components of a culture, and

working with the implicit value orientations that shape and motivate behaviour.

A key question is value orientation towards what? Anthropologists, psychologists, communication experts

and business consultants have chosen the following 10 variables that are of practical value to international

professional communicators in distinguishing between cultures and guiding key decisions: environment, time,

action, communication, space, power, individualism, competitiveness, structure, and thinking. For example,

there are seven possible ways to describe cultures in relation to their orientation to time: single focus,

multifocus, fixed, fluid, past, present, and future. Every culture contains each of these orientations; the key

difference among cultures being in emphasis.

Fons Trompenaars in Riding the Waves of Culture – Understanding Cultural Diversity in Business (1993)

explores four types of corporate culture: the Eiffel Tower, the Family, the guided missile, and the incubator.

The dimensions he uses to distinguish them are equality – hierarchy and orientation to the person –

orientation to the task. The metaphorical labels illustrate the relationship of employees to their notion of the

organisation. Below are the descriptions of these types of corporate culture in terms of the following

characteristics: (i) ways of thinking and learning; (ii) criticism and conflict; (iii) attitude to authority; (iv) ways

of changing; (v) relationships between employees; (vi) ways of motivating and rewarding; (vii) attitudes to

people.

The Family is at the same time personal, with close face-to-face relationships, but also hierarchical, in

the sense that the ‘father’ of a family has experience and authority greatly exceeding those of his ‘children’,

especially where these are young. The result is a power-oriented culture with the leader regarded as a caring

father, who knows better than his subordinates what should be done and what is good for them. Rather than

being threatening, this type of power is essentially intimate and (hopefully) benign. The work of the corporation

is usually carried forward in an atmosphere that in many respects mimics the home. Power and differential

status are seen as natural, a characteristic of the leaders themselves, and not related to the tasks they succeed or

fail in doing, any more than a parent ceases to be a parent by neglecting certain duties.

The Eiffel Tower stands for a bureaucratic division of labour with various roles and functions

prescribed in advance. These allocations are co-ordinated at the top by a hierarchy. If each role is acted out as

envisaged by the system, then tasks will be completed as planned. One supervisor can oversee the completion of

several tasks; one manager can oversee the job of several supervisors; and so on up the hierarchy. Each role at

each level of the hierarchy is described and rated for its difficulty, complexity and responsibility, and has a

salary attached to it. In considering applicants for the role, the personnel department will treat everyone equally

74

and neutrally, will match the person’s skills and aptitudes with the job requirements and will award the job to

the best fit between role and person. The same procedure is followed in evaluations and promotions.

The guided missile differs from both the family and the Eiffel Tower cultures by being egalitarian, but

differs also from the family and resembles the Eiffel Tower in being impersonal and task-oriented. While the

rationale of the Eiffel Tower culture is means, this culture has a rationale of ends. Its ultimate criterion of

human value is how you perform and to what extent you contribute to the jointly desired outcome. In effect,

each member shares in problem solving. The relative contribution of any one person may not be as clear as in

the Eiffel Tower culture, where each role is described and outputs can be quantified.

The incubator is based on the existential idea that organisations are secondary to the fulfilment of

individuals. If organisations are to be tolerated at all, they should be there to serve as incubators for self-

expression and self-fulfilment. This corporate type is both personal and egalitarian with minimal structure

and minimal hierarchy. The roles of other people in the incubator are crucial. They are there to confirm,

criticise, develop, find resources for and help to complete the innovative product or service. The companies are

usually entrepreneurial or founded by a creative team that quit a larger employer just before the pay-off.

Being individualist, employees are not constrained by loyalties and may deliberately ‘free ride’ until their eggs

are close to hatching. In this way, larger organisations find themselves successively undermined. (from Hofstede, G. Cultures and Organisations; Trompenaars, F. Riding the Waves of Culture)

READING

Read the article about global leadership competences and answer the questions (1-4) by choosing the

appropriate answer (A, B, or C).

Developing Global Leaders with Coaching across Cultures

by Philippe Rosinski, MCE Faculty Member

In their special issue ‘Leadership in a Changed World’ (August 2003), the Harvard Business Review

editors (Stephen Green, Fred Hassan, Jeffrey Immelt, Michael Marks and Daniel Meiland) observe

that, “for all the talk about global organisations and executives, there’s no definite answer to the

question of what, exactly, we mean by global.” There is some consensus, however. First, the five top

executives interviewed all agree that “the shift from a local to a global marketplace is irreversible and

gaining momentum”. Second, they all insist on what Fred Hassan (Chairman and CEO, Schering-

Plough) calls a ‘global attitude’: “an attitude which involves a real passion and curiosity about the

world, a willingness to accept good ideas no matter where they come from, and collaboration around

geographies”.

Beyond cultural sensitivity, which is characterised by openness, understanding and respect,

some of these top executives emphasise the value in cultural differences. Stephen Green (Group CEO,

HSBC) declares: “If, for example, my French colleagues lost their French-ness or my Brazilian

colleagues lost their Brazilian-ness, life would be a lot duller, and HSBC would be a lot less

profitable. We prize our diversity. That’s all part of the richness and fun of working together, and it’s

what makes us so creative and responsive to our clients’ needs”.

Unfortunately, as Daniel Meiland (Executive Chairman, Egon Zehnder International)

explains: “Many companies haven’t been all that successful at developing global executives… The

intentions are good, but the fact is, practice hasn’t caught up with intent”.

This is where global leadership development comes in. Strangely, many companies still

assume that global leadership competences will somehow either come naturally or through superficial

training. On the contrary, excellent international companies (including Unilever, Chubb Insurance,

Baxter Healthcare and IBM, which I had the chance to serve over the past several years) have found

that developing global leaders requires a rigorous and systematic approach.

They discovered that the unique combination of coaching and intercultural skills (which is the

essence of my book Coaching Across Cultures (2003) is key for effective global leadership, which

operates in a complex and multidimensional environment. It is in essence a more creative form of

coaching. Whereas traditional coaching tends to operate within the confines of your own cultural

norms, values and beliefs, coaching across cultures seeks to challenge these cultural assumptions and

discover solutions that lie ‘outside-the-box’.

75

Coaching is an effective leadership practice that develops people while getting results.

Coaching is about facilitating the unleashing of people’s potential to achieve important, meaningful

objectives. Coaching across cultures makes it possible to deploy even more potential by tapping into

different possible worldviews: alternative ways of thinking, communicating, organising, dealing with

power and responsibility, defining identity and purpose, and viewing time.

Beyond tolerating or adapting to differences, the goal is to pro-actively learn from other

cultures and make the most of various perspectives, that is, leverage the richness that lies in cultural

diversity.

For example, Chubb Asia Pacific’s executives learned to blend Western directness and Asian

indirectness, retaining the best about each communication pattern: clear and firm on the content,

sensitive on the process. This attitude has played a significant role in fostering harmony and unity at

the top, which in turn has allowed these senior executives to mobilise the entire workforce and

achieve record growth in Asia Pacific.

Similarly, leaders at Baxter Renal in the United Kingdom became skilled at reconciling

profit-driven and people-driven values. Used to impersonal marketing plans, business professionals

learned to better hold patients’ needs to heart. They developed the values of caring and empathy. They

found a new pride and inspiration knowing that their work would make a real difference for patients.

The leadership team set out to make renal patients’ lives as easy as possible. Baxter offered to take

care of various tasks that patients would normally have to worry about, such as the disposal of dialysis

bags, water purification, or the update of prescriptions. From a business standpoint, this approach

further reinforced Baxter’s market position and success.

Developing global leadership typically involves a combination of consulting, training and

coaching. The approach should consider the company’s context and build on its current leadership

development initiatives. It should promote alignment and consistency with other levers of progress

such as the company’s vision, strategy, culture, performance appraisal and reward system. Ideally, the

levers should reinforce each other rather than send confusing signals (for example, employees are our

main asset – but the company does not seem to care about its employees, or corporate social

responsibility – without a genuine intention to make the world a better place).

In any event, I suggest incorporating the following (non-exhaustive list of) leadership

competences into your company’s leadership model:

Empowering leadership

Intercultural coaching: being able to adopt a coaching style enhanced with a global and intercultural

perspective

Intercultural excellence: having a capacity to work effectively across cultures through an appreciation

of cultural differences augmented by an ability to leverage these differences

Integrity: being true to oneself and genuinely committed to serve others

Visionary leadership

Dialectic/synthetic leadership: uniting and interconnecting (‘and’) rather than dividing and excluding

Creative leadership: being curious and able to see reality from multiple perspectives, particularly for

addressing leadership challenges

Farsighted leadership: framing organisational goals in the broader context of improving the world

Effective communication

Intercultural communication: being able to rely on various forms of communication: explicit and

implicit, direct and indirect, affective and neutral, formal and informal. (http://www.mce.be/knowledge/400/27)

1) A global attitude is about

A adapting to differences.

B enriching one’s potential for performing successfully.

C tolerating differences.

2) Development of global leadership competencies is facilitated by

A an awareness of your own cultural values.

B an innate sensitivity for cultural differences.

C working in an international context.

76

3) Chubb Asia Pacific and Baxter Renal are two positive examples of how to

A reconcile different approaches in an intercultural working context with a view to

increasing profits.

B identify negative business practices.

C accept cultural differences.

4) The competencies included in the global leadership model speak about attaining

A harmony of opposites / unity in diversity.

B a consideration of a situation from multiple angles for the creation of pro-active

solutions.

C a positive attitude towards cultural diversity in a company.

USE OF ENGLISH

Questions 1-10


When an American executive goes abroad, it’s very easy __1__ cultural assumptions to slip into

his/her suitcase. “When negotiations are prolonged, or frustrating, __2__ cultural assumptions tend to

jump out of the suitcase, onto the negotiating table,” Bengtsson points __3__. The point to remember

at times __4__ this is that you are in someone else’s culture and, for the time __5__, you need to play

by __6__ rules.

Because of tighter budgets, companies are sending __7__ executives abroad these days, so the

executive who is sent to a foreign country has mission-critical work to __8__. Thus it’s essential that

the executive adapt to a different culture’s rules: for communication, interaction, and negotiation. If

he __9__ not, if he acts the proverbial “Ugly American,” his chances for success __10__ small. (from Harvard Management Communication Letter, December 2002)

Questions 11-20


At the individual level, leaders discover new cultural __11__ for dealing with challenging situations

and for making the most of a diverse __12__.

At the team level, they learn how leveraging diversity can lead, somewhat paradoxically, to increased

team unity and __13__.

At the organisational level, leaders find out how to integrate __14__ cultures during mergers,

acquisitions and alliances. They also __15__ their ability to define the new company’s culture and to

make it become real. In today’s global, multicultural, dynamic and competitive world, organisations

have to achieve greater results with scarcer __16__. Furthermore, they need the creativity and

farsightedness to __17__ the new ideas and aspirations that are also __18__ in our turbulent and

changing __19__. Effective global leadership is necessary to address both the threats and the

opportunities, thereby enabling sustainable business success. Therefore, global leadership

development is becoming vital to attract, develop and __20__ the human talent necessary to achieve

this success. (http://www.mce.be/knowledge/400/27)

11 A selections B versions C choices D preferences

12 A staff B workforce C employment D personnel

13 A performance B operation C production D accomplishment

14 A unlike B disparate C unequal D separate

15 A heighten B emphasise C intensify D sharpen

16 A reserves B assets C resources D supplies

17 A capture B captivate C seize D catch

18 A inherent B internal C characteristic D existent

19 A condition B medium C situation D environment

77

20 A reserve B retain C hold D continue

Questions 21-25



21) To develop (A) cross-cultural communicative competences, the following (B) global leadership

tools (C) have been proven to be (D) particularly useful: the Cultural Orientations Framework, the

Global Coaching Process, and the Global Scorecard.

22) The Cultural Orientations Framework (COF) (A) allows leaders (B) deciphering individual and

collective cultural orientations. An orientation is (C) an inclination to think, feel or act in a way (D)

that is determined - or at least influenced - by culture.

23) When (A) several cultures are involved, the COF gives leaders a systematic approach for

clarifying the nature of cultural differences (B) as well as similarities. (C) The emphases is to use (D)

dialectics rather than binary thinking for bridging cultural gaps: synthesising differences, achieving

unity in diversity.

24) The Global Coaching Process is (A) a three-steps process to facilitate a high-performance and

high-fulfilment journey with individuals and teams. Finally, the Global Scorecard is (B) a tool for

setting objectives that promote business success (C) while encouraging leaders to take care of

themselves, nurture relationships and (D) serve society at large.

25) (A) Coaching across cultures apply at various levels: (B) for leading diverse individuals (C)

creatively, cross-cultural teams and (D) across organisations.

Questions 26-30


the space.

Cultural differences do exist, but I think it is important to

recognise that all cultural differences are __26__ stereotypes. ESSENCE

For every person who conforms to the stereotype there are

Many others who are the exact __27__. Yes, there may well OPPOSE

be __28__ or preferences but should we allow them to shape TEND

our whole approach to a people? Indeed, __29__ may CONCEIVE

at times do more harm than good. Whilst it is critical to be

aware of such preferences and to respect them, I sometimes

fear that we focus too much on the differences - and not on

what we have in common. Maybe an __30__ approach is ALTERNATE

to comment more on what we have in common rather than

what we see as different. In all my years working in this area

I have often been asked to speak about cultural differences

but never about commonalities. Perhaps it is time to start? (Mark Thomas, MCE Faculty Member – Cultural differences – So do they matter?)

78

WRITING REFERENCE

A THE BASIC BUSINESS LETTER

A letter is an extremely versatile medium and format, which can be adapted to almost any purpose.

Here are some of the purposes to which we might put a letter:

- requesting or providing information

- ordering goods or services or acknowledging the order

- confirming information or arrangements

- notifying of some changes

- complaining about a product or service or adjusting a complaint

- introducing or explaining the contents of a package (a ‘cover’/’covering’ letter)

- applying for a specific vacancy

- conveying the benefits of a product or service

- persuading the recipient to do something

- giving instructions, etc.

Whatever the specific purpose of a business letter, there is always the general purpose of creating

a positive image. The written word being highly exposed, inaccuracy, error and lack of planning,

information, expertise, logic, and professionalism are visible in black and white and cannot be

immediately adjusted or amended as they might be in spoken communication.

Standard elements

Letterhead: the basic information (i.e. organisation’s name and status, address, telephone, fax and

telex numbers) that the recipient will need in order to reply*

References (Our ref. or Ref. / Your ref.): – the originator’s initials in cap(ital)s and the typist’s

initials in lower case

Date: 27th March, 2005 (the fullest form); 27 March 2005 (increasingly used); March 27(,) 2005

(American date format)

The recipient / Inside address: an organisation (Vitrina Advertising Ltd.); a department (Accounts

Department, Vitrina Advertising); a designated individual (Accounts Manager, Accounts

Department, Vitrina Advertising); a named individual (Mr/Mrs/Miss/Ms/Dr. X, Accounts

Manager, Vitrina Advertising) + the address

Salutation / Opening greeting: conventionally paired with an appropriate complimentary close,

as shown in the following table

GREETING CLOSE CONTEXT

Dear Sir/Madam/Sirs/Sir or Madam

To Whom It May Concern

(Name not used)

Yours faithfully

Formal situations

Recipient not personally known

Recipient senior in years, position

Dear Dr / Mr / Mrs / Miss Ford

Dear Sir Keith / Lady Diana

Dear Lord Elton

(Name used)

Dear colleague / student / customer

Yours sincerely

Friendly (or would-be friendly, e.g.

for selling or conciliatory letters)

Established relationships

Implied relationships

79

Dear Daniel / Alicia

Yours

Yours sincerely

Yours truly

Kind regards

Best wishes

Affectionately

Close, informal relationships

More various, because more

personal

Subject heading: an indication of the main subject of the letter

Main body: divided logically into paragraphs, separated by double spacing for clarity

Complimentary close: dealt with under Salutation, above

Writer’s signature, name and designation: the signature being often illegible, the addresser’s name is

printed below the signature together with his / her department and position in the company

Enclosure (Enc. / enc. or Encs. / encs. for more than one item): to indicate that other documents

accompany the letter, such as a cheque, a price list, a leaflet, a CV / résumé, etc.

*In a personal letter, you would put your address, phone number (if appropriate), and date at the top

right-hand side, but you would not put your name above the address, as this goes at the bottom of the

letter, under the signature.

Alternative layouts

Besides the designer letterhead and good quality print, the overall impact of a business letter depends

on the layout of text on the page. Below are the three most commonly used layout styles.

- Fully blocked / Block format: all the elements start at the left-hand margin.

- Semi-blocked / Modified block format: the body of the letter is left justified as in the

block format, but the date is against the right-hand margin and the subject heading are

centralised.

- Semi-indented format: is similar to semi-blocked, except that the first line of each

paragraph is indented instead of left justified.

FULLY BLOCKED style SEMI-BLOCKED style SEMI-INDENTED style

Date ____________

Ref: ____________

Recipient ________

________________

________________

Dear ___________

SUBJECT

Body ___________________

__________________________

__

_______________

__________________________

__

__________________________

__

__________________________

Ref: Date

______

Recipient_______

_______________

_______________

_______________

Dear ___________

SUBJECT

Body ___________________

__________________________

__

_______________

__________________________

__

__________________________

__

Ref: Date

______

Recipient_______

_______________

_______________

_______________

Dear ___________

SUBJECT

Body_________________

__________________________

___________

______________________

______________________

________

__________________________

__

80

__

___________

Yours _________

Name _________

__________________________

__

___________

Yours _________

Name _________

___________

Yours _________

Name _________

Punctuation

Using full punctuation for all elements outside the main body of the letter is called closed

punctuation*. The alternative, open punctuation, involves omitting all punctuation from the

elements outside the main body of the letter: no comma in the date, nor after each line of the name /

address block, nor after the salutation or complimentary close; full stops are also omitted from

abbreviations and initials. Obviously, open punctuation is quicker to type and plainer on the page.

*In the American business letter format, the standard is to use a colon (:) after the salutation (never a

comma) and a comma after the closing.

Structure

A letter should have a beginning, a middle and an end. In this section, we will look at particular

types of letter, but, for the time being, here are some general ideas.

In the opening paragraph, grab the attention of the reader by stating the main purpose or

business of the letter right away. Use a couple of sentences to explain the purpose, by acknowledging

correspondence received (date and nature), or by providing important details of the circumstances

leading to the letter (names, dates). Here are some suggested openings:

(1) Thank you for the letter of March 15th in which you requested information about conference

bookings.

(2) I would like to confirm that I have booked six places at the Marketing Conference on

Friday, 9th

April at the Transylvania Business School, in the name of GLOBUS Invest

PLC.

(3) As requested / agreed in our telephone conversation / meeting of 25 March, I am sending

you a cost estimate for the printing of 4,000 direct mail leaflets.

(4) On Tuesday, 6 August, I went on a One-Day Wildlife Safari organised by your agency.

Unfortunately, …

(5) I am writing in response to your letter of March 24, 2005 in which you discuss problems you

have had with an electronic spreadsheet purchased from our company.

In the middle paragraph(s), state the supporting details to justify your purpose. These may take the

form of background information, statistics or first-hand accounts. A few short paragraphs within the

body of the letter should be enough to support your reasoning. Consider the following possibilities for

structuring your message: (i) chronological order; (ii) order of cause and effect; (iii) topical order; (iv)

order of importance.

In the closing paragraph, briefly restate your purpose and make clear exactly what response is

required. Here are some examples of conventional closing forms:

(6) I would be grateful if you would confirm these points in writing.

81

(7) I look forward to meeting you to discuss the matter in more detail.

(8) We look forward to doing business with you.

(9) Thank you again for your order. I trust our order will be to your satisfaction.

(10) I will be contacting you in the next few days to arrange a meeting.

(11) If you require any further information, please call me.

Style in business correspondence

Keep the following advice in mind when you write and especially when you revise your business

letters.

Avoid round-about beginnings. Remember that when business people open a letter, their first concern

is to know what the letter is about, what its purpose is, and why they must spend their time reading it.

Keep the paragraphs of most business letters short. To enable the recipient to read your letters more

rapidly and to comprehend and remember the important facts or ideas, create relatively short

paragraphs of between three and eight lines long. In business letters, paragraphs that are made up of

only a single sentence are common and perfectly acceptable.

Compartmentalise the contents of your letter by placing each different segment of the discussion -

each different topic of the letter - in its own paragraph. Provide topic indicators at the beginning of

paragraphs. Study each paragraph of your letters for its purpose, content, or function. When you

locate a paragraph that treats more than one point, consider splitting it into two paragraphs. If you

discover two short separate paragraphs that deal with the same topic, consider joining them into one.

Place important information strategically in business letters. Information in the first and last lines of

paragraphs tends to be read and remembered better. Place less positive or detrimental information in

less highly visible points in your business letters.

Find positive ways to express bad news in your business letters. To convey bad news constructively,

cordially and tactfully avoid such words as cannot, forbid, fail, impossible, refuse, prohibit, restrict,

and deny as much as possible. Doing so reduces the chances that business relations with the recipient

of the bad news will end.

Focus on the recipient’s needs, purposes, or interests instead of your own. Even if you must talk a

great deal about yourself in a business letter, do so in a way that relates your concerns to those of the

recipient. This recipient-oriented style is called the “you attitude”.

Avoid pompous, inflated, legal-sounding language. When you write a business letter, picture yourself

as a plain-talking, common sense, down-to-earth person, but avoid slang.

Give your business letter an “action ending” whenever appropriate, which will make clear what the

writer expects the recipient to do and when. Instead of or in addition to Hope to hear from you soon or

Let me know if I can be of any further assistance, specify the action the recipient should take and the

schedule for that action as in the following examples (see also sentences 6-11, above):

(12) As soon as you approve this plan, I will begin contacting sales representatives at once to

arrange for purchase and delivery of the microcomputers. May I expect to hear from you within the

week?

(13) I am free after 2:00 p.m. on most days. Can we set up an appointment to discuss my

background and this position further? I look forward to hearing from you.

Common types of letter

Job application letter

This table provides some basic guidelines for approaching the task of writing a job application letter.

Purpose Audience

To identify relevant vacancy and express

Will need vacancy identified

82

interest

To highlight suitability for position

To present a positive image of self

Will need impression of suitability

Will want to see neatness, sense and enthusiasm

Will want to see next step (interview) convenient

and worthwhile

STRUCTURE AND STYLE

Opening paragraph Main body Closing paragraph

Context: source of knowledge

about vacancy; statement of

desire to apply

Reason for application: post’s

attraction

Qualifications, interests and / or

experience relating to post and

demonstrating skill, ability and

achievement

Current circumstances:

employed, student; availability

for interview or work

Enclosure of CV

Closing remarks: anticipation

of reply

Make an efficient statement of

context and of your intention

Link your own career

aspirations with the potential

employer’s interests

Stated self-evaluation

confidently, not arrogantly

Be honest, but stress good

points Make interview

availability convenient

Show willingness to furnish

information, and eagerness, not

desperation, to get the job

Be courteous

Sample application letter

Dear Personnel Assistant

Position of database programmer

I am writing about your newspaper ad in the August 1 Austin-American Statesman concerning your

need for an experienced programmer in the database environment. I believe that I have the

qualifications and experience that you are looking for.

As for my experience with database programming, I have worked for the past year as a programmer /

analyst in the Query database environment for Advanced Software Creations. In that capacity, I have

converted a large database that was originally written in a customized C language database into the

Query database environment. I am currently working on a contract with Texas Parks and Wildlife to

make major modifications to its existing Query database application. On both of these assignments, I

have also served as customer contact person.

Related to this database-programming experience is the work I have been doing to write and market

an automated documentation utility for Query database applications. This product was written using a

combination of C, Pascal, and Query programming languages. I was responsible for the authorship of

the Pascal and Query programs. The Pascal programs are completely responsible for the user interface

and system integration management.

83

Enclosed you will find a resume, which will give you additional information on my background and

qualifications. I would welcome a chance to talk further with you about the position you are seeking

to fill. I can be reached by phone between 9:00 a.m. and 6:00 p.m. at (513) 545-1098.

I am looking forward to your response.

Yours sincerely,

Virginia Lopez

Enc.: résumé (http://www.io.com/~hcexres/cgi-bin/color0.cgi?frameset=on&noter=../tcm1603/acchtml/applic3a.html)

Complaint / Grievance

Many people find it difficult to write complaints because they have to control their negative feelings.

In this case, it is important to distinguish between being assertive, that is, asking for your rights, and

being aggressive, that is, being pushy and angry. So you should decide, honestly and realistically, how

you want the reader to rectify your problem, and then calmly, ‘go for it’.

Purpose Audience

To identify problem

To express the inconvenience caused by

problem to you

To notify recipient of your wishes

To convince the recipient that your demand is

honest and realistic

Will want details for investigation.

Will weigh cost of fulfilling your demand with

cost of leaving you disappointed.

Will be resistant to implied failure and loss.

May or may not be concerned to secure your

goodwill and benefit.

STRUCTURE AND STYLE


Context: what you are

complaining about;

background events (product /

service, date and place of

purchase, salesperson, invoice

number).

Exact nature of complaint:

details of fault, damage,

omission, incompetence

Adverse results: inconvenience,

delay, injury, etc.

Request and justification

How and when you expect the

mistake to be redressed: money

back, replacement, apology,

payment of damages, by a

certain date

Provide concise, accurate

details

Give clear details of faults

Try to sound dispassionate

Be polite, but firm.

Be assertive not aggressive

Adopt a conciliatory tone

Sample complaint

Dear Director

Waveport 5000: purchase and return charges

I am writing you concerning the purchase and subsequent return of a Waveport 5000 I made on 10

August 2004 in the amount of $225.

84

On 10 August 2004, I purchased a Waveport 5000 from your company in the amount of $225. This

price included a two-day delivery and a 60-day money-back trial offer. The $225 was immediately

charged to my Ritz card. However, this product did not perform satisfactorily, and, on 15 August, I

decided to return the Waveport 5000 to your company. When I spoke to one of your company’s

representatives by phone, I was informed that the shipping and handling charges, as well as the price

of the Waveport 5000, would be credited to my account. I shipped the item by UPX and was notified

19 August of its receipt. Today, October 7, I received a statement for my Ritz card. And as of today,

no credit has been applied to my account for either the Waveport 5000 or the shipping and handling

charges.

If the Waveport 5000 was charged to my account immediately when I ordered it, I fail to understand

why the same promptness was not used in crediting my account immediately upon receipt of the

returned item. There is no real excuse for this delay other than someone not wanting to take the

necessary time in crediting my account. These finance charges*, as well as this letter, could have been

avoided if your employees had been as prompt in crediting my account as they were in charging to it.

It is not my responsibility to pay for your company’s lack of promptness and I rightfully deserve a

refund to any and all finance charges that may be applied during this time period.

Your company’s quick detection products have greatly helped me in the past, and I would like nothing

more than to have my account credited with the respective amount by October 15 so that I may be a

customer of yours in the future.

Sincerely yours,

John A. Smithson

Encs.: Copies of sales receipt and credit card statement (http://www.io.com/~hcexres/cgi-bin/color0.cgi?frameset=on&noter=../tcm1603/acchtml/complaintx1a.html)

*Note that the writer does not include any specific amounts as to shipping and finance charges; details like these should be

included.

Adjustment letter

An adjustment letter is one that answers a complaint letter. It is also called a compensation letter.

Such a letter must be seen to address directly the circumstances and stated wishes of the complainant.

Consider the guidelines in the following table.

Purpose Audience

To show you have considered the complaint

seriously

To attenuate the complainant’s anger,

disappointment

To offer a solution that will be acceptable to

both parties

To keep a positive relationship

Will want to have been taken seriously.

Will be resistant to denial of responsibility.

May be cynical about ‘sincere’ apologies.

Will have to be persuaded to accept the redress

you offer.

STRUCTURE AND STYLE


Context: acknowledgement of

previous correspondence and

Explanation: results of an

investigation

Assurance that the matter will

be resolved: restatement of

85

understanding of the

complaint; expression of regret

for the problem

Indication of arrangements

being made to put things right

apology;

assurance of non-recurrence;

hope that good relations will

continue

Briefly reconfirm the details

Apologise gratefully but simply

Don’t make excuses or try to

blame other people

Show that you were concerned

to find out why the matter

occurred

Don’t sound reluctant: show

that you are making amends

gladly, and swiftly

Be conciliatory, as you do not

want to lose customers

Smooth things over, but don’t

exaggerate

Sample adjustment letter

Dear Mrs. Hughes

March 24 letter about damaged freight

I have just received your March 24 letter about the damaged shipment you received through Green

Tree Freight and regret the inconvenience that it has caused you.

From your account of the problem, I am quite sure that your request for the $240 adjustment on the

damage to the 2 crates of Valjean Cristal stemware will be granted. A certain amount of breakage of

this sort does unavoidably occur in cross-country shipping; I am sorry that it was your company that

had to be the one to suffer the delay.

I must remind you to keep the damaged crates in the same condition in which you received them until

one of our representatives can inspect them. That inspection should take place within 2 weeks.

If all is in order, as it sounds to be in your letter, you can expect the full reimbursement within 2

weeks after our representative’s inspection. I hope this unfortunate accident will not keep you from

having merchandise shipped by Green Tree Freight in the future.

Sincerely,

David F. Morgan

Customer Relations

(http://www.io.com/~hcexres/cgi-

bin/color0.cgi?frameset=on&noter=../tcm1603/acchtml/adjex1a.html)

B MEMOS

The memorandum (plural = memoranda) or ‘memo’, for short, is a very flexible medium of

communication used within an organisation at all levels and for many different purposes. It can be

sent upwards, downwards or sideways in an organisation, from one individual to another, from one

department to another, or from one individual to a department or larger body of staff.

Memos perform internally the same function as a letter does in external communication. They

solve problems either by informing the reader about new information, like policy changes, price

increases, etc., or by persuading the reader to take an action, such as attend a meeting, use less paper,

86

use office phones for personal calls more economically or change a current production procedure.

Regardless of the specific goal, memos are most effective when they connect the purpose of the writer

with the interests and needs of the reader.

Format and structure

Standard memos are divided into segments to organise the information and to help achieve the

writer’s purpose. The heading segment follows this general format:

TO: reader(s)’ names and job title(s)

FROM: name and job title

DATE: complete and current date

SUBJECT: what the memo is about (highlighted in some way)

In the opening segment, mention the reason for writing and the context and problem of the

message, including the most important information.

In the discussion segment, which contains the substance of the message, include all the details

that support your ideas. Since a memo is less formal than a letter, put important points or details into

lists rather than paragraphs, whenever possible, but be careful to make lists parallel in grammatical

form (see tables in this section).

In the closing segment state clearly what action you want the recipient to take*.

*Because memos are in-house correspondence, no inside address, salutation or complimentary close

are required as in letters.

Two sample memos

RETAIL DEVISION

MEMORANDUM

TO: Val Ford, Dorset Branch Manager REF: JH/fm

FROM: J. Halliwell, Personnel Manager (Central Branch) DATE: 28 March 2005

TO: J. Clerk, Personnel Assistant (Regional Branch)

SUBJECT: L CITRON – JOB APPLICATION

This is to confirm our conversation on the phone this morning regarding Mr CITRON’s application

for the post of Marketing Assistant.

In his preliminary interview, I found Mr Citron an agreeable and articulate candidate. I enclose my

notes and his CV, which is outstanding and includes two years’ marketing experience.

I do recommend that you see him at the branch for a further and more technical interview. Please let

me know if his CV interests you, and if so, when it would be convenient for you to meet Mr Citron

and show him around the branch.

JH

Encs.

(adapted from Business Communication, BPP Publishing Limited, London, 1997)

87

MEMORANDUM

To: Administrative Staff

From: C Phillips, Office Manager

Date: 28 March 2005

Subject: STAFF MEETING, April 2005

The Managing Director intends to hold an informal meeting with administrative staff at some point

during April, to discuss any matters that may be of concern.

Tentative dates for the meeting are Wednesday 13th or Thursday 21

st. In either case, the meeting will

be held in Room 104 at 6.00 p.m. Refreshments will be provided by the canteen afterwards, should

staff wish to stay.

Please let me know as soon as possible (no later than Wednesday 7th):

1 Which date you would find most convenient;

2 Whether you are likely to stay for refreshments;

3 Any topics which you would like to see on the agenda for the meeting.

JH

(adapted from Business Communication, BPP Publishing Limited, London, 1997)

C REPORTS

A report is a medium for putting across a body of ideas to an audience. Reports are diverse in focus

and aim and differ in structure. They may be proposals, progress reports, trip reports, accident reports,

disciplinary reports, budgetary control reports, completion reports, sales reports, market research

reports, investigation reports, feasibility studies or evaluation reports.

Purpose

Reports are meant to be useful in several ways: to assist management, to be used as a permanent

source of reference, to provide information to interested parties or to make your own views known.

There are different types of information that might be included in a report: factual (these are the

facts), dialectical (this is what is happening, has happened or will happen), or instructive (this is

what should be done).

Planning

In planning a report, you need to consider the following questions:

- Who is the user?

- What kind of report will be most useful to the user?

- What exactly does the reader need to know and for what purpose?

- How much information is required, how quickly and at what cost?

- Do you need to give judgements, recommendations, or just information?

Style

This table specifies the main stylistic requirements in the writing of reports.

REQUIREMENTS GUIDELINES

88

Objectivity and impersonality

Avoid subjective value judgements and emotions,

which can undermine the credibility of the report

and its recommendations

Avoid emotional and loaded language

Avoid colloquialisms and abbreviated forms

Use impersonal constructions

Ease of understanding

Avoid technical language for non-technical users

Use clear, concise sentences

Organise the material logically especially if it is

leading to a conclusion or recommendation

Signal relevant themes by appropriate headings,

or highlight for easy scanning

Precision

Avoid using vague language

Specify recommendations firmly

Structure

Here are the basic types of business report:

Large-scale formal reports may run to hundreds of pages and will include a cover, title page, preface,

table of contents, list of exhibits, summary, report body, footnotes, appendix, bibliography, and index.

The short formal report is used in contexts such as middle management reporting to senior

management. It should be laid out into the traditional report divisions: objective, method, discussion,

and conclusion, each referenced and headed appropriately, as shown below.

TITLE

TERMS of REFERENCE / INTRODUCTION (What have I been asked to do?)

PROCEDURE / METHOD (How do I go about it?)

FINDINGS (What have I discovered?)

(1) Section heading

(i) subheading

(a) subpoint

CONCLUSIONS (What do the findings lead to?)

RECOMMENDATIONS (What particular recommendations do I wish to make?)

The structure of the short informal report is less developed, as it is used for less complex and lower-

level information. There will be three main sections: (i) Context, (ii) Analysis of the situation, and (iii)

Recommended action / solution. Sometimes reports function as letters or memos, in which cases we

speak about letter reports and memorandum reports, respectively.

Sample of short formal report

REPORT ON FLOPPY DISK STORAGE METHODS

I INTRODUCTION

This report details the findings of an investigation into the methods of computer disk storage

currently employed at the Head Office of the bank. Mr M Samuelson, Personnel Department

Manager, requested the report with recommendations for the improvement of current

89

procedure. It was compiled by G Thomson, Supervisor, and submitted to Mr Samuelson on 4

April 2005.

II METHOD

To evaluate the current procedures and to identify specific shortcomings, the following

investigative procedures were engaged:

1 interview of all staff using floppy disks

2 inspection of storage and indexing system

3 computer accessory firm consulted by telephone and catalogues obtained (see Appendix1)

III FINDINGS

1 Current system

(a) Floppy disks are ‘backed up’ or duplicated irregularly and infrequently.

(b) Back-up disks are stored in plastic containers in the same room as the disks currently

in use.

(c) Disks are frequently left on desk tops during the day and even overnight.

2 Safety and security risks

(a) There is no systematic provision for making copies, in the event of damage or loss of

disks in use.

(b) There is no provision for separate storage of copies, in the event of fire in the

personnel office, and no adequate security against fire or damage in the containers

used.

(c) There is apparently no awareness of the confidential nature of information on disks,

nor of the ease with which disks may be damaged by handling, dust, etc.

IV CONCLUSIONS

The principal conclusion drawn from the results of the investigation is that there is serious

cause for concern because of the insufficient awareness of safety and security among non-

specialist staff and insufficient formal provision for safety and security procedure.

V RECOMMENDATIONS

In order to rectify the unsatisfactory situation summarised above, the author of the report

recommends that consideration should be given as a matter of urgency to the following

measures:

1 Immediate backing up of all existing disks

2 Drafting of procedures for backing up disks at the end of each day

3 Acquisition of a fire-proof safe to be placed in separate office

4 Communication to all staff of the serious risk or loss, theft and damage arising from careless

handling of computer disks (adapted from Business Communication, BPP Publishing Limited, London, 1997)

90

Sample of short informal report – memorandum format

MEMORANDUM

To: M Robinson, Office Manager Date: 5 March 2005

From: E Johnson, Supervisor Ref: MK/pf/913

Subject: ABUSE OF OFFICE TELEPHONES

As you requested, I have looked into the possible causes of the rise in costs of maintaining current

telephone equipment and procedures over the last quarter. I have identified two main causes.

(a) There are more telephones in the office than are necessary for efficient communication.

(b) Staff have become used to making personal calls on office phones, many of which are made

at expensive charge rates and unnecessary length.

I suggest below some courses of action to prevent further increases.

(i) Remove unnecessary equipment. Several extensions are unallocated and little used for

business purposes, and therefore could be disconnected immediately.

(ii) Send circulars to all staff and department heads. This might discourage personal and lengthy

calls and encourage staff to be more aware of economy.

(iii) Monitor the length and cost of calls. A variety of devices are available at a reasonable cost,

capable of logging long-distance calls and displaying the value of units used on calls.

(iv) Provide alternative telephone facilities to staff. The installation of pay phones at accessible

locations within the building would allow staff to make personal calls, thereby maintaining

good working relations in the office.

If you wish to discuss these suggestions, I would be more than happy to give you further details, at

your convenience. (adapted from Business Communication, BPP Publishing Limited, London, 1997)

Information can also be conveyed in report-style letters. The letter report is generally directed to

people or groups outside the company when more information is given than a normal letter would

include. The body of the letter report may utilise headings to call the attention to the most important

aspects of the report. Subheadings also serve to emphasise and make reference easier (see writing task

in Practice Test 5 – Professional Communication – and the suggested solution in the Answer Key).

D ESSAY WRITING

Writing is as much a discipline as it is an art, and to ensure that your essays flow well and make sense,

you need to construct solid outlines before you write. Unless you conscientiously impose structure

around your ideas, your essay will be rambling and ineffective. An outline should make sense on its

own; the ideas should follow logically in the order that you list them. As you add content around these

main points, these words should support and reinforce the logic of the outline. Finally, the outline

should conclude with an insightful thought or image. Make sure that the rest of your outline reinforces

this conclusion.

The introduction is the first sentence of your essay and it plays the dual role of setting the theme

of your essay and engaging the reader. Once you have drawn the reader in through the first one to

91

three sentences, the last sentence in your introductory paragraph should explain clearly and briefly

what the point of the whole essay is.

The body paragraphs should consist of events, experiences, and activities you have already

organized in chronological order or in order of importance. Make clear why one point follows

another: each point in your outline should connect with the next; each main category should be linked

to your introduction or thesis; and each sub-category should be linked to the main category. As you

make your outline, you should be able to see where there are holes in your essay.

The conclusion is your last chance to persuade the reader or impress upon them your

qualifications. Expand upon the broader implications of your discussion. This could include the

following strategies:

- Consider linking your conclusion to your introduction to establish a sense of balance by

reiterating introductory phrases.

- Redefine a term used previously in your body paragraphs.

- End with a famous quote that is relevant to your argument. Do not TRY to do this, as this

approach is overdone. This should come naturally.

- Frame your discussion within a larger context or show that your topic has widespread appeal.

- Tie the conclusion back to your introduction.

Sample essay outline

I Introduction

__________________________________________________

__________________________________________________

__________________________________________________

II Body

A. Paragraph 1:

1. Supporting Point #1

___________________________________________________

___________________________________________________

2. Evidence for Supporting Point #1: analysis of example to show how it supports the topic sentence

and thesis

___________________________________________________

___________________________________________________

B. Paragraph 2:

1. Supporting Point #2

__________________________________________________

__________________________________________________

2. Evidence for Supporting Point #2

__________________________________________________

__________________________________________________

__________________________________________________

C. Paragraph 3:

1. Supporting Point#3

__________________________________________________

__________________________________________________

92

2. Evidence for Supporting Point #3

__________________________________________________

__________________________________________________

__________________________________________________

III Conclusion

__________________________________________________

__________________________________________________

__________________________________________________

Style and Tone

A large majority of the corrections made by examiners fall into the following five categories: sentence

variety, word choice, verb tense, transitions and essay clichés.

Sentence Variety

Many students think that the longer the sentence they write, the better the sentence. This is far from

the truth. You do not need long, complicated sentences to show that you are a good writer. The best

essays contain a variety of sentence lengths, mixed within any given paragraph.

Once you have completed your essay, try labeling each sentence “short” (under 10 words),

“medium” (under 20 words), or “long” (20 or more words). A nice paragraph might read something

like M S M L M S. A dry essay would be S S S M L L L.

Word Choice

Don’t Thesaurusize. The second trap into which many students fall is thinking that big words make

good essays. Advanced vocabulary is fine if it comes naturally to you, and when used correctly in an

appropriate context.

Show, don’t tell. Students wrongfully assume that the reader will not “get it” if they do not beat to

death their main arguments. Thus, the essay succumbs to the usual clichés: “the value of hard work

and perseverance” or “learning to make a difference” or “not taking loved ones for granted” or

“dreams coming true” or “learning from mistakes.” Such statements are acceptable if used minimally,

as in topic sentences, but the best essays do not use them at all. Instead, allow the details of your story

to make the statement for you.

Don’t Get Too Conversational. Slang terms, clichés, contractions, and an excessively casual tone

should be eliminated from all but the most informal essays. Only non-traditional essays, such as ones

in the form of narrative or dialogue, should rely on conversational elements. Write informally only

when you are consciously trying to achieve an effect that conveys your meaning.

Don’t repeatedly start sentences with ‘I’. The trick is to change around the words without changing

the meaning.

Don’t repeat the same subject nouns. For example, when writing an essay about leadership, do not

repeatedly use the word “leadership”. Look for alternative phrases for your subject nouns. In the case

of leadership, you could use phrases such as “setting an example,” or “coordinating a group effort.”

Verb Tense

As you write your essay, remember to focus on verbs and keep adjectives to a minimum. Pumping

your sentences full of adjectives and adverbs is not the same thing as adding detail or color.

Adjectives and adverbs add lazy description, but verbs add action.

One of the greatest weaknesses of essays can be the frequent use of the passive tense. Overuse of

the passive voice throughout an essay can make your prose seem flat and uninteresting. Sentences in

active voice are also more concise than those in passive voice.

93

Essay Clichés

According to the Merriam-Webster Collegiate Dictionary, a cliché is “a trite phrase or expression,” “a

hackneyed theme, characterization, or situation,” or “something that has become overly familiar or

commonplace.” The last thing you want in your essay is any of the above. Clichés make your writing

appear lazy, your ideas ordinary, and your experiences typical. Arm yourself with the list below and

eradicate these and other clichés from your writing.

- I always learn from my mistakes.

- I know my dreams will come true.

- I can make a difference.

- _________ is my passion.

- I no longer take my loved ones for granted.

- These lessons are useful both on and off the field (or other sporting arena).

- I realized the value of hard work and perseverance.

- _________ was the greatest lesson of all.

- I know what it is to triumph over adversity.

- _________ opened my eyes to a whole new world.

Transitions

A good essay must use transitions within paragraphs and especially between paragraphs to preserve

the logical flow of the essay. An essay without good transitions is like a series of isolated islands; the

reader will struggle to get from one point to the next. Use transitions as bridges between your ideas.

As you move from one paragraph to the next, you should not have to explain your story in addition to

telling it. If the transitions between paragraphs require explanation, your essay is either too large in

scope or the flow is not logical.

If you are confident in your structure, but find yourself stuck on what might make a good

transition, try repeating key words from the previous paragraph and progressing the idea. If that

doesn’t work, try this list of common transitions as your last resort:

- to add facts or information: as well, and, additionally, furthermore, also, too, in addition,

another, besides, moreover

- to indicate the order of a sequence of events: first of all, meanwhile, followed by, then,

next, before, after, last, finally, one month later, one year later, etc.

- to list things in order of importance: first, second etc., next, last, finally, more importantly,

more significantly, above all, primarily

- to connect one idea to a fact or illustration: for example, for instance, to illustrate, this can

be seen

- to indicate an effect or result: as a result, thus, consequently, eventually, therefore,

- to indicate that one idea is the opposite of another: nonetheless, however, yet, but, though,

on the other hand, although, even though, in contrast, unlike, differing from, on the contrary,

instead, whereas, nevertheless, despite, regardless of

- to compare one thing to another: In a different sense, similarly, likewise, similar to, like, just

as, conversely

Types of essay

The following main essay structures are presented next: (i) example / argumentative, (ii) compare and

contrast, (iii) narrative and chronological, (iv) descriptive and (v) cause and effect.

Argumentative / Example Structure

The Example Structure follows the rules of a traditional academic essay: begin with a main argument

or thesis statement, follow this with three pieces of evidence that support the argument, and wrap up

94

by stating what the essay has shown. This is a good structure to use when making a single, strong

point. Its power lies in its simplicity. Because it allows you to present several points neatly in support

of a single claim, it is especially useful for making a persuasive argument.

Sample argumentative essay

Current Affairs: Middle East Debate

A Greek philosopher once said, “In argument, truth is born.” Even though sometimes feelings and

emotions come into play that confuse the issue at hand, usually an argument results in a new insight

on the subject. Even if a person holds strong views that are unshaken by anything his adversary may

say, he may nevertheless gain from the debate. It forces him to organize and analyze his views,

leaving him with a clearer understanding of the subject than before. Further, his opponent’s arguments

help him better appreciate his views and their differences. Finally, the argument forces both to look

inwards, at their character and value system.

For these reasons, I enjoy debating issues that are important to me and about which I hold strong

views. One such issue receiving great national attention is the Middle East peace process. While the

peace process has always been important to the American community as a whole, and more

specifically to the Jewish American community, the assassination of Israel Prime Minister Yitzhak

Rabin has focused the spotlight upon it, as well as intensified the debate around it. Since I attend a

private Jewish school, I often discuss this topic with my peers, often finding myself in the minority.

Most of them support the peace process, while I adhere to the views of the Likud (opposition) party,

which opposes the peace process.

Complicating the issue are several emotional stigmas that are often attached to it, transforming the

discussion from an objective one to one driven by passion. The foremost of these stigmas is the

accusation, which is often hurled at the opponents of the peace process, of promoting war and

violence. Often made by people who know little about the issue, this view fails to realize that

opposition to the peace process does not imply opposition to peace. Rather, it implies disapproval of

certain tactics and specifics of the peace process as it was carried out by Rabin.

Another commonly advanced accusation against American Jews who disagree with the peace process

centers around the question of whether they have the right to influence Israeli policy. “You don’t have

to send your children to the Army,” it is said, “your children don’t die in wars. What right have you to

oppose peace?” The fallacy of this argument is that it doesn’t differentiate between belief and action.

While it is true, for precisely the reasons above, that American Jews have no right to try to influence

Israeli policy, that does not preclude them from having ideas of what that policy should be.

Finally, the assassination of Yitzhak Rabin has introduced yet another dimension into this debate. In

its aftermath, opposing the peace process sometimes is identified with condoning the assassination

itself. Such an identification of the man and his beliefs involves grave dangers, such as rashly

implementing his ideas in a flurry of compassion and commiseration.

What all of these stigmas have in common is that they forsake logical and objective debate, opting

rather for emotions, generalizations and accusations. And the dangers of that happening are the main

lesson I learned from my debates. While those debates have shed new light on the issue and have

forced me to reconsider what I think is moral and just, most importantly they have demonstrated the

necessity of objectiveness and removal of emotions from the discussion, especially when, as in the

case of the peace process, thousands of lives are at stake. When passions and hatred take over, we

must stop and think of what it all is really about.

95

Compare and Contrast

You can structure a cause-and-effect essay point for point, by comparing one aspect of the object or

situation at a time. Or you can choose to employ the block method by thoroughly covering all the

points of the first object or situation in the first half of the essay and then comparing it with all the

points of the other in the last half.

Sample compare and contrast essay

Harvard, Favorite Characters

Of all the characters that I’ve “met” through books and movies, two stand out as people that I most

want to emulate. They are Attacus Finch from To Kill A Mockingbird and Dr. Archibald “Moonlight”

Graham from Field of Dreams. They appeal to me because they embody what I strive to be. They are

influential people in small towns who have a direct positive effect on those around them. I, too, plan

to live in a small town after graduating from college, and that positive effect is something I must give

in order to be satisfied with my life.

Both Mr. Finch and Dr. Graham are strong supporting characters in wonderful stories. They

symbolize good, honesty, and wisdom. When the story of my town is written I want to symbolize

those things. The base has been formed for me to live a productive, helpful life. As an Eagle Scout I

represent those things that Mr. Finch and Dr. Graham represent. In the child/adolescent world I am

Mr. Finch and Dr. Graham, but soon I’ll be entering the adult world, a world in which I’m not yet

prepared to lead.

I’m quite sure that as teenagers Attacus Finch and Moonlight Graham often wondered what they

could do to help others. They probably emulated someone who they had seen live a successful life.

They saw someone like my grandfather, 40-year president of our hometown bank, enjoy a lifetime of

leading, sharing, and giving. I have seen him spend his Christmas Eves taking gifts of food and joy to

indigent families. Often when his bank could not justify a loan to someone in need, my grandfather

made the loan from his own pocket. He is a real-life Moonlight Graham, a man who has shown me

that characters like Dr. Graham and Mr. Finch do much more than elicit tears and smiles from readers

and movie watchers. Through him and others in my family I feel I have acquired the values and the

burning desire to benefit others that will form the foundation for a great life. I also feel that that

foundation is not enough.

I do not yet have the sophistication, knowledge, and wisdom necessary to succeed as I want to in the

adult world. I feel that Harvard, above all others, can guide me toward the life of greatness that will

make me the Attacus Finch of my town.

Narrative / Chronological structure

While the narrative is one of the most effective forms of writing for an essay, it can also be difficult.

Use the following tips as your write your narrative:

- Make the reader aware of chronology and keep the story generally moving forward.

- Don’t feel obligated to tell more of the story than you need to convey your point. Extra

details distract from the main drive of the story.

- Try not to use reflective conclusions or introductions describing what you learned; start and

end with the action and have everything take place within the context of the story.

- Describe events, people, and places in very specific, colorful terms.

96

Sample narrative essay

Harvard, Hobbies and Interests: Violin

Struck with sudden panic, I hastily flipped through the many papers in my travel folder until I spotted

the ticket. I nervously thrust it toward the beaming stewardess, but took the time to return her wide

smile. Before stepping into the caterpillar tunnel I looked back at my parents, seeking reassurance, but

I sensed from their plastered-on grins and overly enthusiastic waves that they were more terrified than

I. I gave them a departing wave, grabbed my violin case, and commenced my first solitary journey.

Seated in the plane I began to study the pieces I would soon be performing, trying to dispel the

flutterings in my stomach. I listened to some professional recordings on my Walkman, mimicking the

fingerings with my left hand while watching the sheet music.

“Where ya goin’?” smiling businessman-seatmate interrupted.

“To the National High School Orchestra,” I answered politely, wanting to go back to the music. “It’s

composed of students chosen from each state’s All-State ensemble.” After three days of rehearsal, the

orchestra would be giving a concert at a convention center in Cincinnati. I focused back on the music,

thinking only of the seating audition I would have to face in a few hours.

When I arrived at the hotel in Cincinnati, instruments and suitcases cluttered every hallway, other kids

milled around aimlessly, and the line to pick up room keys was infinitely long. In line I met my social

security blanket, a friendly Japanese exchange student, [name], who announced proudly and

frequently, “I fro Tayx-aas!” Both glad to have met someone, we adopted each other as friends of

circumstance, and touched on a few of the many differences between Japanese and American culture

(including plumbing apparatuses!)

Soon all of the performers received an audition schedule, and we went rushing to our rooms to

practice. I had an hour until my audition, and repeated the hardest passages ad nauseam. When my

time finally came, I flew up to the ninth floor and into the dreaded audition room. Three judges sat

before a table. They chatted with me, futilely attempting to calm me. All too soon they resumed

serious expressions, and told me which sections to perform. They were not the most difficult ones, but

inevitably my hands shook and sweated and my mind wandered. . . .

I felt giddy leaving the audition room. The immense anxiety over the audition was relieved, yet the

adrenaline still rushed through me. I wanted to yell and laugh and jump around and be completely

silly, for my long-awaited evaluation was over. After dinner the seating list would be posted and I

would know just where I fit in with the other musicians, all of whom intimidated me by their mere

presence at the convention.

Solitary, having been unable to find [name] or any of my three roommates, I entered the dining room.

I glanced feverishly around the giant room which swarmed with strangers.

I gathered up all of my courage and pride for the first time ever, and approached a group I had no

preconceived notions about. I sat quietly at first, gathering as much information as I could about the

new people. Were they friend material? After careful observation of their socialization, I hypothesized

that these complete strangers were very bright and easy to talk to, and shared my buoyant (but

sometimes timid), sense of humor. I began to feel at home as we joked about S.A.T.’s, drivers’

licenses, and other teenage concerns. I realized then how easy it is to get along with people I meet by

coincidence. I became eager to test my newfound revelation.

The flutterings returned to my stomach when I approached the seating lists which everyone strained to

see. “I knew it; I got last chair,” I heard someone announce. My flutterings intensified. I located the

97

violin list and scanned for my name from the bottom up. My tender ego wouldn’t let me start at the

top and get increasingly disappointed as I read farther and farther down. “There I am, seventh seat.

Pretty good out of twenty,” I thought.

Every day at the convention seemed long, only because we did so many wonderful things. We

rehearsed for at least seven hours each day, made numerous outings, and spent time meeting new

friends.

On the second day, during a luncheon boat ride on the Ohio River, [name] and I sat together, both

dreaming of Japan. Looking over at her as we talked, I remembered that in two days I would be torn

from the young, promising friendships I had been building. When some friends-including a few I had

met at the dinner table on the first night-approached us, bearing a deck of cards, I became absorbed in

a jovial game and quickly forgot my sorrow.

Rehearsals were magical right from the start, because everyone rapidly grew accustomed to the

strangely professional sound of the group and began to play without reserve, with full dynamics. I

continually gazed, wide-eyed, around the large, bright room, watching others, admiring their skill. We

were surrounded by pure talent, and the sky was our limit. We blossomed under the conductor’s

suggestions, using our pre-developed technique to its fullest.

Each time the orchestra played, my emotion soared, wafted by the beauty and artfulness of the music,

bringing goose-bumps to my skin and a joyful feeling to my soul. I felt the power of the group-the

talent and strength of each individual-meld into a chorus of heavenly sound. I was just where I wanted

to be. I had everything I’d ever need. I was no longer doubting myself among strangers; I was making

music with friends.

Descriptive Structure

This is similar to the chronological structure except that instead of walking step by step through

increments of time, it follows step by step through a description of a place, person, or thing. The first

paragraph gives an introduction describing the general feel of the place, person, or thing. The body

paragraphs offer in-depth descriptions of two or three particular aspects of the place, person, or thing.

In the last paragraph, the writer steps out of the descriptive mode and offers a brief conclusion of what

the place, person, or thing says about him or her.

Sample descriptive essay

Harvard, Personal Identity: Bedroom Tour

If someone were to look through your bedroom, what do you hope your possessions would convey

about you?

A typical teen’s room? In some respects, yes, but in many ways, my room has become an extension of

my personality, interests and values. Upon entering, one would probably notice the lack of any music

group, scantily clad female model, or indeed, any adornment at all on my walls. I prefer the unsoiled

look of clean walls, which provide a sense of calm. However, my room is far from military precision

and order; my bed lies unmade and yesterday’s wardrobe gathers dust on the floor. The visitor may

consider my room tidy, but not inflexible.

While touring my room, one would surely stop to look through the room’s workspace, my desk and

computer. The desktop is fairly organized, consisting of a pencil holder, desk calendar, and assorted

textbooks. The calendar is full of important dates-tests, deadlines, and of course, the rare days off

from school. Academics are one of my highest priorities, but would be useless without occasional

98

relaxation. Above my desk hangs a bulletin board. Similar to the calendar, it holds important pieces of

information, as well as a few personal items. A postcard, a present from my grandfather, would likely

catch one’s eye. The postcard is from my homeland, and includes a famous quote by Mahatma

Gandhi. It reminds me of the country I was born in, and the ties I have to my original culture. Directly

below the postcard hang a few baby pictures of myself, mementos of a simpler time. Alongside my

desk is a computer, without which I could not survive. The slightly outdated, yet fully competent

Apple Macintosh aids with school, and, nearly any other activity I participate in. The Mac also has a

modem, connecting me to the global community linked through the Internet. I am very interested in

the Internet, and have found it a very useful source of information for everything ranging from

tomorrow’s weather to buying a new car. Upon leaving my workspace, I hope my possessions would

convey that I am serious about my work, but I approach it with practicality and a grain of salt.

On the other side of my room lies my relaxation area, commonly referred to as a bed. Strewn about

the bed are two magazines that represent my interests, MacWorld and Time. I read these magazines

daily, to keep up with current events as well as advancements in the information age. Atop my bureau

lays the latest work by Stephen King. The content may not be as deep and insightful as Jane Austen’s

or Keats, but his stories serve their purpose in providing light entertainment. The bed is unmade, a

fact for which I feel no remorse. Although my mother disapproves, I consider an unmade bed a

symbol of rest and quietude. My bed may be considered utilitarian, for its uses are not limited to

sleeping upon. Some of my best moments of focus and concentration have occurred while lying on the

bed and staring at the ceiling, producing thoughts ranging from T.V. shows to pondering college life.

Few teen rooms can be considered complete without a loud stereo and an assorted collection of tapes

and C.D.’s. My room is no different-my music collection occupies two shelves. Past the techno-rubble

of the Eighties lie my current favorites, alternative rock. If a visitor were to turn on the stereo, he

would find a couple presets devoted to “homework” music, classical and light jazz. I find that these

sounds provide a sense of tranquility while trying to do homework, write reports, or complete college

essays. My bed and surrounding areas represent my non-academic, more human interests. They

personify the activities and hobbies which I truly enjoy, and provide a breather from some of the more

rigorous aspects of life.

After exiting my room, I would hope my visitor learned a few important things about me. I consider

my academics seriously, and devote much of my time (and room) to them. However, they do not

necessarily dominate my existence; loud music and Stephen King novels also play a role.

Cause-and-effect structure

For this type of essay, you can either divide the essay into a “cause section” and an “effect section” or

you can mesh the two together by taking each small description one by one and explaining the effect

it has had.

Sample cause-and-effect essay

Columbia, Musician (cello)

For some reason, my parents felt the necessity to inundate me at a young age with extracurricular

activities. After school, I was always being driven from tennis to violin to swimming to cello to

baseball to piano to karate to near craziness! I could have been called the world’s busiest kid at the

time. From two of the activities, I have reaped the most benefits. Although my cello has been used

less frequently than my tennis racquet, the musical instrument creates the most meaningful ideas in

my life.

99

However, my appreciation for playing the cello did not come immediately. From the time I was nine

years old until I left for prep school, I detested Sunday. The first day of the week was torturous “cello

day”: I practiced all morning, had a lesson during the afternoon, and came home in the evening

exhausted. But today, I thank austere old Professor [teacher’s name] for forcing me to learn the art in

music.

With the hectic schedule I have year round, being overwhelmed is not a difficult task. Therefore, I

consider playing the cello one of the most rewarding aspects of my life. Very few people have the

luxury of being able to absolutely enjoying themselves in the middle of a workday. I can bomb a

physics test, and then five minutes later be in heaven. Totally relaxed, I sway back and forth to the

rhythm created by my bow and my fingers; both of my arms work in harmony. Eyes closed, I reach

the final note and my left hand creates a slow, soothing vibrato-mediocre cello playing at its

perfection.

The cello reigns as the supreme instrument in my mind. Whether blusteringly chaotic or lovingly

sweet, good cello playing, with its deep, rich tones and fantastically broad range is the epitome of

expression. I also have ample opportunity for the other half of art-interpretation. I feel a delight

beyond description when listening to Pablo Casals or Yo-Yo Ma. I am able to just sit there and think

about my life, and their masterful music can make me feel ebullience or rage. Most importantly,

whether I listen to music or play it, I can reflect upon and enjoy life as one special being.

I wish the venerable Professor [teacher’s name] could be alive today to hear me play the cello. “With

feeling,” he would always say. Whenever I played a note out of tune, Mr. [teacher’s name] would yell

at me until I cried. But now, with my newfound love for the cello, even if he screamed in my ear, I

would continue to relish my playing and let him go until he became hoarse.

(adapted from http://www.justcolleges.com/essays/index.phtml?no=essayedge/html)

BIBLIOGRAPHY

Business Communication. 1997. London: BPP Publishing Limited.

Paxson, W.C. 1981. The Business Writing Handbook. New York: Bantam Books.

Webster’s New Encyclopedia of Dictionaries.1990. New York: Ottenheimer Publishers, Inc.

http://media.fastclick.net

http://owl.english.purdue.edu

http://www.ecf.utoronto.ca

http://www.justcolleges.com

http://www.kings.edu

http://www.kings.edu/

100

ANSWER KEY

Test 1 – PROFESSIONAL COMMUNICATION

READING – Tips for Avoiding Misunderstandings when Negotiating Cross-Border Deals

1) T; 2) F; 3) T; 4) T; 5) F; 6) T

USE OF ENGLISH

1) are; 2) much; 3) any; 4) is; 5) for; 6) better; 7) which; 8) it; 9) without; 10) because;

11) D; 12) C; 13) A; 14) C; 15) D; 16) B; 17) B; 18) A; 19) C; 20) B;

21) D; 22) B; 23) B; 24) C; 25) C;

26) capabilities; 27) accessibility; 28) outcomes; 29) Competitive; 30) strengths

WRITING (Suggested solution)

Dear Mr Pretorius,

Business Communication Courses

You may have read recent press reports highlighting the link between basic communication skills and

the success or failure of job applications.

For example, surveys suggest that an unemployed person is 50 per cent more likely to be a poor

speller than someone who has managed to get a job.

This has clear direct implications for both your categories of clients – job candidates and prospective

employers – and we would like to share with you a solution backed by the government’s “Be a Better

Communicator” campaign.

Communication aspects

Our one-day business communication courses cover the following basic communication competencies

that people need to develop in order to improve their job prospects:

Spelling

Punctuation and grammar

Letter writing

Memos

Filling in forms

Verbal communication

The course is accompanied by a self-help training pack, which includes a booklet, a set of exercises

and a cassette tape to consolidate the material covered on the course.

I enclose a leaflet with further details about the course and the training pack. We offer a 30 per cent

discount to anybody who enrols in one of our courses as a result of a recommendation from you.

If you need more leaflets to give to your clients, please contact Ms Janet Johnson on 0264 608957.

Yours sincerely

Karl Markus

Marketing Manager

Encs.: Leaflet and training pack

101

Test 2 – MANAGEMENT

READING – Leveraging Your Team’s Interpersonal Skills

1) G; 2) L; 3) C; 4) F; 5) I; 6) A; 7) E; 8) K; 9) B; 10) N; 11) D; 12) H; M – extra sentence

USE OF ENGLISH

1) like; 2) some; 3) into; 4) ourselves; 5) get; 6) again; 7) other; 8) along; 9) had; 10) did;

11) B; 12) D; 13) C; 14) C; 15) A; 16) B; 17) A; 18) C; 19) D; 20) A;

21) B; 22) A; 23) B; 24) C; 25) A;

26) noticed/noted; 27) revitalizes; 28) strengthens; 29) saying; 30) Enjoy

Test 3 – BUSINESS MEETINGS

READING – Lights, Camera, Presentation! Liven Up Boring Meetings with Video

1) C; 2) G; 3) E; 4) H; 5) D; 6) F; B – extra sentence

USE OF ENGLISH

1) are; 2) before; 3) did; 4) often; 5) has; 6) more; 7) Moreover; 8) for; 9) addition; 10) within;

11) D; 12) C; 13) B; 14) A; 15) C; 16) D; 17) B; 18) D; 19) C; 20) A;

21) C; 22) A; 23) C; 24) C; 25) B;

26) inconsistent; 27) sufficient; 28) beneficial; 29) routinely; 30) Productive

Test 4 – PROFESSIONAL PRESENTATIONS

READING – Presenting Is Manipulating! Are You Ready for It?

1) D; 2) G; 3) B; 4) F; 5) A; 6) E; H – extra sentence

USE OF ENGLISH

1) out; 2) ever; 3) case; 4) has; 5) best; 6) not; 7) make; 8) yourself; 9) another; 10) for;

11) B; 12) A; 13) B; 14) C; 15) A; 16) D; 17) A; 18) D; 19) C; 20) B;

21) C; 22) D; 23) D; 24) C; 25) D;

26) attention; 27) vitality; 28) confidence; 29) effective; 30) failure

Test 5 – RECRUITMENT

READING – How the Web Changes Recruiting

1) C; 2) I; 3) G; 4) A; 5) H; 6) B; 7) E; D – extra sentence

USE OF ENGLISH

1) one; 2) do; 3) more; 4) job; 5) for; 6) are; 7) been; 8) since; 9) have; 10) out;

11) C; 12) A; 13) D; 14) A; 15) C; 16) B; 17) D; 18) B; 19) C; 20) A;

21) C; 22) B; 23) D; 24) C; 25) C;

26) applicability; 27) counsel(l)ors; 28) acquaintances; 29) foreseeable; 30) apparent

Test 6 – MARKETING

READING – EDS – Serving Multichannel Customers for the J. Jill Group

1) E; 2) A; 3) G; 4( B; 5) F; C – extra sentence

USE OF ENGLISH

102

1) there; 2) even; 3) have; 4) these; 5) another; 6) to; 7) already; 8) those; 9) more; 10) from

11) B; 12) A; 13) B; 14) A; 15) C; 16) D; 17) B; 18) C; 19) D; 20) A;

21) C; 22) D; 23) D; 24) B; 25) A;

26) sales; 27) expertise; 28) automation; 29) measurement; 30) quantitative

Test 7 – ADVERTISING

READING – Greed

1) D; 2) F; 3) A; 4) H; 5) C; 6) G; E – extra sentence

USE OF ENGLISH

1) their; 2) are; 3) where; 4) would; 5) with; 6) you; 7) More; 8) has; 9) this; 10) an;

11) A; 12) C; 13) B; 14) D; 15) C; 16) A; 17) D; 18) A; 19) B; 20) A;

21) B; 22) C; 23) A; 24) C; 25) C;

26) winner; 27) legendary; 28) collaboration; 29) revolutionized; 30) provocative

Test 8 – FINANCE AND ACCOUNTING

READING – The Financial Crisis of 2008: Year In Review 2008

1C; 2F; 3M; 4J; 5O; 6K; 7D; 8N; 9E; 10L; 11G; 12P; 13I; 14B; A – extra sentence

USE OF ENGLISH

1) to; 2) has; 3) last; 4) together; 5) has; 6) our; 7) must; 8) only; 9) for; 10) based;

11) B; 12) C ; 13) A ; 14) B; 15) D ; 16) C ; 17) A ; 18) C ; 19) D ; 20) A ;

21) B; 22) C; 23) B; 24) A; 25) B;

26) consistency; 27) internationally; 28) Strengthened; 29) inappropriately; 30) discourage

Test 9 – BANKING

READING – A Macroeconomic View of the Current Economy

8A; 5B; 7C; 1D; 9E; 2F; 11G; 3H; 10I; 4J; 6K

USE OF ENGLISH

1) did; 2) had; 3) most; 4) rates; 5) out; 6) them; 7) alone; 8) view; 9) has; 10) such;

11) C; 12) A; 13) D; 14) C; 15) B; 16) B; 17) A; 18) C; 19) D; 20) A;

21) B; 22) C; 23) C; 24) B; 25) A;

26) voluminous; 27) analysis; 28) monetary; 29) summaries; 30) fully

Test 10 – INSURANCE

READING – Health Care Services in Romania

1G; 2I; 3F; 4H; 5A; 6C; 7B; D – extra sentence

USE OF ENGLISH

1) other; 2) most; 3) against; 4) may; 5) event; 6) bound; 7) Such; 8) result; 9) some; 10) these

11) C; 12) B; 13) D; 14) B; 15) B; 16) D; 17) C; 18) C; 19) B; 20 A;

21) C; 22) D; 23) B; 24) C; 25) D;

26) coverage; 27) inability; 28) variations; 29) availability; 30 perceptions

Test 11 – INTERNATIONAL TRADE

103

READING – Free Trade and Distorted Development: A Critique of WTO Perspective

1J; 2E; 3B; 4G; 5A; 6I; 7H; 8K; 9D; F – extra sentence

USE OF ENGLISH

1) As; 2) to; 3) was; 4) prior; 5) were; 6) from; 7) which; 8) during; 9) other; 10) part;

11) C; 12) B; 13) D; 14) A; 15) C; 16) B; 17) A; 18) D; 19) B; 20 C;

21) B; 22) B; 23) C; 24) B; 25) A;

26) applicable; 27) strictly ; 28) decision; 29) ministries; 30) provisions

Test 12 – INFORMATION TECHNOLOGY IN BUSINESS

READING – Making Your Company Ready for the Next Twenty-Five Years

1) G; 2D; 3H; 4B; 5A; 6C; F – extra sentence

USE OF ENGLISH

1) do; 2) make; 3) that; 4) while; 5) some; 6) nor/neither; 7) however; 8) these; 9) other; 10) when;

11) D; 12) C; 13) A; 14) B; 15) A; 16) D; 17) B; 18) A; 19) C; 20) C

21) C; 22) C; 23) A; 24) C; 25) A

26) remarkably; 27) skil(l)ful; 28) disruptive; 29) ceaseless; 30) withstand

Test 13 – BUSINESS TRAVEL

READING – Making Your Company Ready for the Next Twenty-Five Years

1) T; 2) F; 3) F; 4) T; 5) T

USE OF ENGLISH

1) do; 2) that/which; 3) Since/As/Because; 4) can; 5) much; 6) with; 7) notes; 8) whether; 9) make;

10) is;

11) C; 12) D; 13) A; 14) B; 15) C; 16) D; 17) A; 18) D; 19) A; 20) B;

21) B; 22) C; 23) A; 24) B; 25) C;

26) regardless; 27) corporate; 28) expense; 29) carriers; 30) upgrades

Test 14 – BUSINESS ETHICS

READING – Value Judgments: Business Ethics across Borders

1) F; 2) F; 3) T; 4) T; 5) F

USE OF ENGLISH

1) do; 2) make; 3) that; 4) while; 5) some; 6) nor/neither; 7) however; 8) these; 9) other; 10) when;

11) D; 12) C; 13) A; 14) B; 15) A; 16) D; 17) B; 18) A; 19) C; 20) C

21) B; 22) D; 23) C; 24) B;

25) various; 26) credibility; 27) governments; 28) substantive; 29) mechanisms; 30) dissemination

Test 15 – INTERCULTURAL AWARENESS

READING – Developing Global Leaders with Coaching across Cultures

1) B; 2) C; 3) A; 4) B

USE OF ENGLISH

1) for; 2) these; 3) out; 4) like; 5) being; 6) their; 7) fewer; 8) do; 9) does; 10) are;

11) C; 12) B; 13) A; 14) B; 15) D; 16) C; 17) C; 18) A; 19) D; 20) B;

21) C; 22) B; 23) C; 24) A; 25) A;

26) essentially; 27) opposite; 28) tendencies; 29) preconceptions; 30) alternative

lingua tests

Documents

business administration

business meetings

business travel

business ethics

business plan

statements true

appropriate answer

answer key