englishfor businessstudies -...

A course for Business Studiesand Economics students

English forBusiness Studies

Teacher’s Book

SECOND EDIT ION

Ian MacKenzie

PUBLISHED BY THE PRESS SYNDICATE OF THE UNIVERSITY OF CAMBRIDGE

The Pitt Building, Trumpington Street, Cambridge, United Kingdom

CAMBRIDGE UNIVERSITY PRESS

The Edinburgh Building, Cambridge CB2 2RU, UK40West 20th Street, New York, NY 10011–4211, USA477Williamstown Road, Port Melbourne, VIC 3207, AustraliaRuiz de Alarcón 13, 28014 Madrid, SpainDock House, TheWaterfront, Cape Town 8001, South Africa

http://www.cambridge.org

© Cambridge University Press, 1997, 2002

It is normally necessary for written permission for copying to beobtained in advance from a publisher. The role play cards, testsand tapescripts in this book are designed to be copied anddistributed in class. The normal requirements are waived hereand it is not necessary to write to Cambridge University Pressfor permission for an individual teacher to make copies for usewithin his or her own classroom. Only those pages which carrythe wording ‘© Cambridge University Press’ may be copied.

First published 1997Second Edition 2002Reprinted 2003

Printed in the United Kingdom at the University Press, Cambridge

TypefaceMinion (Adobe Systems Incorporated) 10/13pt. SystemQuarkXPress® [OD&I]

A catalogue record for this book is available from the British Library

ISBN 0 521 75286 8 Teacher’s BookISBN 0 521 75285 X Student’s BookISBN 0 521 75287 6 Audio Cassette SetISBN 0 521 75288 4 Audio CD Set

Ian MacKenzie teaches at the Haute École de Gestion, Lausanne.

Contents

Thanks and acknowledgements _______________________________________________vi

Summary of unit contents ___________________________________________________vii

Introduction ______________________________________________________________ix

Introduction to the Second Edition ____________________________________________xi

1 The three sectors of the economy _________________________________________13

2 Management _________________________________________________________16

3 Company structure ____________________________________________________21

4 Work and motivation __________________________________________________25

5 Management and cultural diversity ________________________________________30

6 Recruitment _________________________________________________________33

7 Labour relations ______________________________________________________37

Test 1: Management _______________________________________________________40

8 Production __________________________________________________________42

9 Products ____________________________________________________________49

10 Marketing ___________________________________________________________53

11 Advertising __________________________________________________________56

12 Promotional tools _____________________________________________________60

Test 2: Production and marketing ____________________________________________65

13 Accounting and financial statements _______________________________________68

14 Banking _____________________________________________________________72

15 Stocks and shares ______________________________________________________76

16 Bonds_______________________________________________________________81

17 Futures and derivatives _________________________________________________86

18 Market structure and competition ________________________________________91

19 Takeovers, mergers and buyouts __________________________________________94

Test 3: Finance ___________________________________________________________99

20 Efficiency and employment _____________________________________________103

21 Business ethics _______________________________________________________108

22 The role of government ________________________________________________112

23 Central banking, money and taxation _____________________________________117

24 Exchange rates _______________________________________________________122

25 The business cycle ____________________________________________________126

26 Keynesianism and monetarism __________________________________________129

27 International trade____________________________________________________133

28 Economics and ecology ________________________________________________137

29 Information technology and electronic commerce ___________________________141

30 Entrepreneurs and venture capital _______________________________________145

Test 4: Economics ________________________________________________________150

Language reference – Answers _______________________________________________153

13The three sectors of the economy

Unit 1 The three sectors of theeconomy

1b Reading

Vocabulary notes You probably have to be Britishto understand ‘pebble-dashed semis’. A semi- is asemi-detached house, almost a symbol of suburbanmiddle-class life. Pebble-dashedmeans that the bricksare covered with lots of small stones stuck in a thinlayer of cement.It should be pointed out to German speakers that a

warehouse in English is not the same as a Warenhaus(department store) in German; and to Frenchspeakers that inhabit is the English equivalent ofhabiter, and not the negative inhabité.

A possible additional exercise related to this textwould be to describe other processes, along the linesof Lodge’s description of all the activities that precedeboiling water in a kettle. For example, what has beendone that enables you to pick up and use a pencil, orbrush your teeth, or look in a mirror, and so on.

1c Comprehension

SUGGESTED ANSWERS

1 Tiny fields (the primary sector), factories (thesecondary sector), and railways, motorways,shops, offices, and schools (the tertiary sector).

2 Primary sectordigging iron oremining coal

Secondary sectorassembling

ANSWER

The text suggests that most people take for grantedthe amazing complexity of the economicinfrastructure.

As mentioned in the Introduction, the units in theStudent’s Book are grouped according to subjectmatter: management, production, marketing, finance,and economics. This first introductory unit is moregeneral. It covers a lot of basic vocabulary concerningdeveloped economies, much of it in an extract from awell-known British novel. It also discusses theevolution of the economy of most of the olderindustrialized countries, with the decline ofmanufacturing industry and its replacement byservices. There is an extract from a magazineinterview with an economist and an interview with aBritish Member of Parliament on this issue. Task 1a,based on the photograph, provides a good warm-upactivity.

An important point: virtually all the activities in thisand the succeeding units can be done in pairs, andthen checked with the whole class. Here this appliesto describing the photo in 1a, classifying the activitiesin 1c, answering the questions in 2a and 2b, writingthe summary in 2c, and so on.

1 The economic infrastructure

1a VocabularyThe photo clearly shows a large factory (the Unileverfactory in Warrington, England) in the centre, withmore factories, industrial units, or warehouses in thetop right-hand corner. The large factory seems toinclude some office buildings. Also visible areagricultural land (in the background; the land in theforeground doesn’t appear to be cultivated), a river, arailway and several roads, and housing, perhaps with aschool in the centre of the housing estate top left.

14 Unit 1

2 Manufacturing and services

2a Reading

2b Listening

TAPESCRIPT

Interviewer Denis MacShane, do you agree withthe people who say that manufacturingindustry will inevitably decline in what wecall the industrialized countries?

Denis MacShane I think manufacturing willchange, convert itself. There are many newproducts that have to be invented to servenew needs, and they can be made in theadvanced countries because in fact thetechnology of production means you needvery little labour input. I’m holding in myhand a simple pen that British Airways givesaway to its passengers. It is made inSwitzerland, a pen, a low-tech product, madein Switzerland, with the highest labour costsin the entire world, and British Airways, aBritish company, having to pay in low valuepounds, is buying from Switzerland amanufactured product. Now what’s going onhere? It seems to me that the Swiss – andthey also manage to do it with their watches,the famous Swatch – have stumbled on anew secret, which is how to make low-tech

ANSWER

Denis MacShane quite clearly disagrees withGalbraith.

ANSWERS

1 Because they think it will lead to unemployment.

2 Designing goods, persuading people to buy them; arts and entertainment.

3 No, because it is a natural, progressive andinevitable development.

1d DiscussionThis activity is designed to get learners thinking aboutthe issue of the future of manufacturing inindustrialized countries, and the growth of the servicesector, for the next part of this unit.

buildingcutting metallaying cablesmilling metalpressing metalsmelting ironwelding metal

Tertiary sectoradvertising productscalculating pricesdistributing added valuemaintenance*marketing productspackaging products*pumping oil*transportation

* Some of these answers are open to discussion.For example, if maintenance involves cleaningoffice floors, this is a tertiary service, but if itinvolves replacing broken windows oroverhauling machines, this is closer to buildingor construction, and should consequently beconsidered a secondary sector activity.Similarly, designing product packaging is atertiary sector service, but the physical activityof packaging products can be considered part ofthe production process, which is of course partof the secondary sector. If pumping oil isunderstood as extracting oil by pumping waterinto bore holes, this is a primary sector activity,but if it is understood as pumping oil to orfrom a refinery, it is a tertiary sector transportactivity.

3 Other primary sector activities include farming(agriculture), fishing and forestry.Other secondary sector activities includemanufacturing, transforming and processing.Other tertiary sector activities includefinancing, designing and retailing.

15The three sectors of the economy

Note After listening to some of the interviews in thisbook (though certainly not this one), you might betempted to ask ‘What is the most common word inspoken English?’, to which the answer would of coursebe ‘Er…’. The tapescripts do not include all the ers,hesitations, false starts and repetitions of the speakers.

2c Writing

A POSSIBLE SUMMARY

Galbraith says that manufacturing industry willinevitably decline in the advanced industrialcountries, and be replaced by design, advertising,entertainment, and so on. MacShane says thatmanufacturing will change, and make new productswith new technology.

New words in this unitAt the request of some users of the First Edition of thisbook, this Second Edition includes lists of new wordsat the end of each unit of the Teacher’s Book.The lists are not exhaustive, as it is assumed that

learners will already know many of the words in theunits. The lists include about 60 words andexpressions that are not included in the five-languageGlossary at the end of the Student’s Book as they arevery similar and instantly recognizable in French,German, Italian and Spanish.

agriculturebusinesscompanyconsumereconomiceconomyemploymentgoodsindustry

infrastructurelabourmanufacturingprimary sectorproductraw materialssecondary sectortertiary sectorunemployment

ANSWERS

1 Because there are many new products that haveto be invented to serve new needs.

2 Because these countries have productiontechnology that requires very little labour input.

3 Precisely because it requires very little labourinput.

4 The conventional theory is that the mostimportant cost in manufacturing is labour, andwages and salaries in Switzerland are the highestin the world. (As is the cost of living!)

5 Because the pound sterling has, over the years,lost a great deal of value against foreigncurrencies, especially the Swiss franc.

6 It has a successful manufacturing economy,including its computer and car (automobile)industries.

7 1 B 2 D 3 A 4 E 5 C

products, sell them profitably, but actuallymake them in a country where in theorythere should be no more manufacturing,and if you look at any of the successfuleconomies of the 1990s, they all have astrong manufacturing component.

Interviewer Which countries are you thinking of?

Denis MacShane I’m thinking of the dynamicAsian economies, all based onmanufacturing, I’m thinking indeed of theUnited States which now has created forexample a new computer, high-techcomputer industry, its car industry iscoming right back in America. America is agiant manufacturing economy, which is whyit is still the richest nation in the world, so Iam extremely dubious of the theorists whosay that manufacturing has no future in theadvanced industrialized countries.

English for Business Studies Second Edition© Cambridge University Press 2002

16 Unit 2

Unit 2 Management

An additional question Give some examples offamous managers.Whose career would you most liketo emulate?

1b ReadingPeter Drucker, the (Austrian-born) Americanmanagement professor and consultant, is the authorof many books about business. The text paraphrasesthe extended definition of management he gives inone of his management textbooks.

Vocabulary note Many learners are unfamiliar withthe plural of crisis, namely crises (in the penultimateparagraph). Also: thesis – theses, hypothesis –hypotheses, and their pronunciation.

Outstanding, in the last line, here meaningexceptionally good, also has another meaning, as in anoutstanding (or overdue) balance, etc.

ANSWERS

Drucker’s first point (setting objectives anddeveloping strategies) presumably requiresqualities J, H, E and A (not necessarily in thatorder). The second point (organizing) presumablyalso requires H, E and J. The third point(motivation and communication) embraces F, D, Iand probably C. The fourth point (measuringperformance) probably requires H and E. The fifthpoint (developing people) might require H, F, Dand J. But all this is clearly open to discussion.

2 A personal choice of qualities: D, F, H and J. Ialso quite like K. If you like the sound ofderisive laughter ringing round the classroom,tell any learners who choose L that they shouldconsider becoming a teacher!

3 There are clearly no definitive answers as towhich of these skills can be acquired.

Management is important. The success or failure ofbusiness organizations, government institutions and public sector services, voluntary and non-profitorganizations, sports teams, and so on, often dependson the quality of their management. This unitincludes a discussion of the qualities required bymanagers, a definition of management, considerationof the role of meetings in management, a critical view of the management of one large Americanmultinational company, and an interview with themanager of a British department store, who discusseshis job.

A possible warm-up activity, before the discussion onthe qualities required by managers and the definitionof management, would simply be to discuss thecartoon.What’s the joke? We can assume that Mr Farvis runs this company (his name is on thedoor).What can we say about his managerial skills,or his apparent lack of them?

Another possible warm-up activity (for classes thatcan be expected to know the answer) would be to asklearners to discuss in pairs for two minutes whatexactly managers do, hoping to elicit vague notions(though probably without the correct vocabulary)concerning organizing, setting objectives, allocatingtasks and resources, communicating, motivating, andso on.

1 Management – an art or ascience?

1a Discussion

ANSWERS

1 The answer is probably that management is amixture of innate qualities and learnable skillsand techniques.

17Management

much effort into management and worrying aboutthe possibility of making bad decisions, and notenough into producing good, competitively-pricedproducts.

2b Comprehension

2c Vocabulary

ANSWERS

1 apparently 2 software 3 effort4 hardware 5 trainees 6 expertise7 layers 8 verify 9 amended10 downfall

POSSIBLE ANSWERS

1 It seems as if the people who work for IBMare more interested in being regarded as amanager than as a computer designer ortechnician.

2 IBM’s corporate culture seems to place moreemphasis on management than on developingand selling the company’s products.

3 IBM’s managers don’t actually do the work ofdesigning and writing software themselves, butorganize and supervise the people who do it.

4 IBM products are rarely as good or as cheap assimilar products made by their competitors.

5 There is an extensive hierarchy and a system ofchecks and controls which ensures that baddecisions are generally avoided (but gooddecisions also take a very long time to make).

6 The slowness of IBM’s decision-making process(and the consequent lack of competitiveness oftheir products) will eventually destroy thecompany.

1c Vocabulary

1d Vocabulary

1e WritingThese memos circulated for years in e-mails of lists ofstupid sayings. You may well have received similar lists of stupid things said by lawyers, defendants,politicians, people making insurance claims, etc. Theyare apparently genuine (with the one about securitycards coming from Microsoft). Your students maymanage to do better (or worse). This is not aparticularly serious exercise.

2 Meetings

Drucker obviously believes that work is largelysomething that is done individually, and thatmeetings are not ‘work’, but merely preparation for it, or consolidation after it.

2a ReadingRobert Cringely’s history of the personal computerindustry is very informative, in places very critical,and also very funny. In this extract, he is extremelynegative about IBM, saying that they put much too

ANSWERS

Common collocations include: allocate resources(or people), communicate information ordecisions, develop strategies (or people orsubordinates), make decisions, measureperformance, motivate people, perform jobs, setobjectives, and supervise subordinates.

ANSWERS

1 resources 2 manageable 3 setting,communicate 4 supervise, performance5 achieved 6 board of directors7 innovations

18 Unit 2

Vocabulary note Steve Moody talks about the ‘day-to-day running of the store’, and ‘running stores’appears in the question. Some learners may beunfamiliar with this synonym for managing.

3b Listening

TAPESCRIPT

Interviewer How much freedom do those peoplehave within their jobs to make decisionsthemselves? How much delegation is there ofresponsibility down the chain?

Steve Moody We would, as a business, like toencourage as much accountability anddelegation as possible. Of course that doesdepend on the abilities of the individuals, theenvironment in which you’re working, andthe time of year.With 282 stores we have acorporate appearance in the UnitedKingdom’s high streets. It is quite importantthat when customers come into Marks &Spencer’s Cambridge they get the sameappearance and type of looking store and thesame level of service that they would expect ifthey went into Marks & Spencer’s Edinburghin Scotland, for example, and it’s veryimportant that we have a corporate statementthat customers understand. So, there areobviously parameters and disciplines that,

ANSWERS

Steve Moody says that he is responsible for thefollowing tasks:

2 displaying the merchandise

3 employing the sales staff

4 ensuring the safety of staff and customers

6 getting commitment from the staff

8 maintaining a pleasant working environment

9 motivating staff

10 organizing the day-to-day logistics

14 supervising the day-to-day running of the store

15 training staff

3 The retail sector

The unit finishes with the first of three extracts froman interview with the manager of a Marks & Spencerstore. (The others are in Units 4 and 10.) M&S, asmany people call them in Britain, sell clothes,household goods, and food.

3a Listening Throughout this course, even where the instructionsto the learners do not specify it, it will almost certainlybe necessary to play each part of each recording atleast twice.

TAPESCRIPT

Steve Moody So, as the store manager inCambridge, which is probably the fortiethlargest of the 280 stores we have got, I amresponsible for the day-to-day running ofthe store. All the product is delivered to mein predescribed quantities, and obviouslyI’m responsible for displaying thatmerchandise to its best advantages, obviouslyI’m responsible for employing the staff toactually sell that merchandise, andorganizing the day-to-day logistics of theoperation. Much more running stores isabout the day-to-day operation, andensuring that that’s safe, and obviouslybecause of the two hundred people that wewould normally have working here it’sensuring that they are well trained, that theyare well motivated, and that theenvironment they work in is a pleasant one,that they are treated with respect, and thatthey are committed to the company’sprinciples.


19Management

ANSWERS

1 A focus group.

2 Members of staff from all areas of the store (e.g. the food section, the menswear section,the stock and accounting office, the warehouse,and so on).

3 Staff can discuss problems in the store, andmake suggestions for improvements. After this,they will meet with members of management todiscuss those issues and try to providesolutions.

4 Individuals’ problems with their work or theirline manager, or even family problems.

5 Individuals are encouraged to discuss suchproblems with their supervisor or manager.

goods. They have meetings, they discussissues, they discuss problems that they feelare going on in the store. They also discusssuggestions of how they can improve that werun the store, and they discuss that amongstthemselves first. They will then have ameeting with members of management andobviously myself, and we will discuss thoseissues and work together to try and providesolutions. However, Marks & Spencer’sphilosophy, I suppose, is that meetingsshould not be a substitute for day-to-daycommunication and therefore if problemsdo arise in terms of the operation, or anindividual has got a problem in theirworking environment, or indeed theirimmediate line manager, or indeed if theyhave a problem outside, which might bedomestic, or with their family, we would liketo discuss that as it arises and would like toencourage a policy that they will come andtalk to their supervisor or their manager, tosee what we can do to solve the problem.


3c Listening

TAPESCRIPT

Interviewer Do you have meetings for membersof staff where they can express views aboutwhat’s going on in the store?

Steve Moody We have a series of meetings,management and supervisory every week,we have something which Marks & Spencer’scall a focus group, which is members of staffwho get together regularly from all areas ofthe store, so from the food section andperhaps the menswear section, from theoffice who do the stock and accounting, andindeed the warehouse where people receive

ANSWERS

1 Although Marks & Spencer ‘would like toencourage as much accountability and delegationas possible’, they have a corporate appearance forall their stores, in all of which customers shouldget the same level of service. This limits thefreedom of individual managers to change thestores: there are ‘parameters and disciplines thatnot only the staff but supervision andmanagement would follow’.

2 Instead, they concentrate on staff developmentand training.

you know, not only the staff but supervisionand management would follow.Within that,in terms of development and training,training is obviously an investment for allstaff. If staff are trained to do their job welland they understand it, they will feelconfident in what they’re doing, that in turnwill give a better service to the customers,obviously from Marks & Spencer’s point ofview it could well lead to increased sales.


20 Unit 2

New words in this unit

allocatebankerboard of directorschairmancompetitivecustomerdirectordistributorfunctionhardwareinnovationinvestorlogisticsmanageablemanagementmanagermeasuremeeting

merchandisemotivateobjectiveorganizationpayperformancepromotionresourcessoftwarestaffstrategysubordinatesupervisesuppliertacticsteamtop managertrainee

3d DiscussionSome learners may decide that they have the necessaryabilities to become a manager or even a top manager;others may envisage more specialized careers in aparticular function such as marketing, finance,computing, accounting, and so on, which will notinvolve managing and coordinating a large number ofpeople and operations.

21Company structure

Unit 3 Company structure

If you think that the learners may know the answers,the text can also be prepared orally by way ofquestions such as the following (each of whichpresupposes an answer to the previous one):

● How are most organizations structured?

● Yet most companies are too large to be organized asa single hierarchy. The hierarchy is usually dividedup. In what way?

● What are the obvious disadvantages of functionalstructure?

● (Discuss briefly in pairs) Give some examples ofstandard conflicts in companies betweendepartments with different objectives.

● Are there any other ways of organizing companiesthat might solve these problems?

Vocabulary notes In colloquial English we use theword boss rather than superior.We generally do notuse the word chief (except in job titles, e.g. ChiefFinancial Officer).Most companies have a human resources or

personnel department; some American companies usethe term staff department. Staff is a collective word forall the workers or employees of an organization. Staffin this sense is not the same as a ‘staff position’.

ANSWERS

The diagrams are:A functional structure

B matrix structure

C line structure

D staff position

One of the most important tasks for the managementof any organization employing more than a fewpeople is to determine its organizational structure,and to change this when and where necessary. Thisunit contains a text which outlines the most commonorganizational systems, an exercise which focuses onthe potential conflicts among the differentdepartments of a manufacturing organization, anexample of an organization chart, and an extract froma talk by Jared Diamond concerning the best way toorganize a business.

1 How are companiesorganized?

1a DiscussionThis discussion activity follows on naturally fromactivity 3d in the previous unit, about managingcompanies or having more limited responsibilities ina particular department.

1b Vocabulary

1c ReadingThe text summarizes the most common ways inwhich companies and other organizations arestructured, and mentions the people usually creditedwith inventing functional organization anddecentralization. It mentions the more recentdevelopment of matrix management, and a well-known objection to it.

ANSWERS

1 C 2 E 3 B 4 A 5 F6 G 7 D

22 Unit 3

Promotions. The Finance Department contains bothFinancial Management and Accounting. Sales consistsof two sections, the Northern and Southern Regions,whose heads report to the Sales Manager, who isaccountable to the Marketing Manager.

2 Competition andcommunication

2a Vocabulary

2b Listening

TAPESCRIPT

Jared Diamond I’ve received a lot ofcorrespondence from economists andbusiness people, who pointed out to mepossible parallels between the histories ofentire human societies and histories ofsmaller groups. This correspondence fromeconomists and business people has to dowith the following big question: what is thebest way to organize human groups andhuman organizations and businesses so as tomaximize productivity, creativity,innovation, and wealth? Should yourcollection of people be organized into asingle group, or broken off into a number ofgroups, or broken off into a lot of groups?Should you maintain open communicationbetween your groups, or erect walls betweenthem, with groups working more secretly? How can you account for the fact that

Microsoft has been so successful recently,and that IBM, which was formerlysuccessful, fell behind but then drasticallychanged its organization over the last fouryears and improved its success? How can weexplain the different successes of what we

ANSWERS

1 C 2 F 3 E 4 A 5 G 6 B 7D

1d Comprehension

1e Discussion

Note This exercise might be difficult for lessadvanced classes as it includes a number of words thatare not defined here or practised elsewhere in theunit.Words which recur and are defined in later units(e.g. capacity, sales force, commission, features,market share, credit facilities, inventory, retainedearnings) are not included in the vocabulary list at theend of the unit.

1f Describing company structureHere is a short description of the organization chartillustrated.

The Chief Executive Officer reports to the Presidentand the Board of Directors. The company is dividedinto five major departments: Production, Marketing,Finance, Research & Development, and HumanResources. The Marketing Department is subdividedinto Market Research, Sales, and Advertising &

ANSWERS

1, 4 and 11 would logically satisfy productionmanagers, although 11 should also satisfy otherdepartments.

2, 3, 6, 7 and 9 would logically be the demands ofmarketing managers.

5, 8, 10 and 12 would logically keep financemanagers happy.

ANSWER

The only adequate summary is the second. Thefirst stresses the disadvantages of hierarchies muchmore strongly than the text, and disregards thecriticisms of matrix management anddecentralization. The third is simply misleading:matrix management and teams are designed tofacilitate communication among functionaldepartments rather than among autonomousdivisions.

23Company structure

At the time of writing, the full transcript of ProfessorDiamond’s talk is available at:http://www.edge.org/3rd_culture/diamond_rich/rich/_p1.html

ANSWERS

1 1 A 2 B 3D 4D 5 B 6 C 7 A 8 C2 g b c h i e k f d j a

Isolated companies or groups are at adisadvantage, because most groups of people getmost of their ideas and innovations from theoutside. So in order to maximize productivity,creativity, innovation, and wealth, you shouldbreak up your business into a number of groupswhich compete but also communicate with eachother quite freely. You should also exchange ideasand information with other companies, andregularly engage staff who have worked for yourcompetitors.

So what this suggests is that we can extract from human history a couple ofprinciples. First, the principle that reallyisolated groups are at a disadvantage,because most groups get most of their ideasand innovations from the outside. Second, Ialso derive the principle of intermediatefragmentation: you don’t want excessiveunity and you don’t want excessivefragmentation; instead, you want yourhuman society or business to be broken upinto a number of groups which competewith each other but which also maintainrelatively free communication with eachother. And those I see as the overallprinciples of how to organize a business andget rich.


(This recording is not of Jared Diamond himself,but was read by an actor from a transcript ofProfessor Diamond’s lecture.)

call different industrial belts? When I was aboy growing up in Boston, Route 128, theindustrial belt around Boston, led theindustrial world in scientific creativity andimagination. But Route 128 has fallenbehind, and now Silicon Valley is the centreof innovation. And the relations ofbusinesses to each other in Silicon Valley andRoute 128 are very different, possiblyresulting in those different outcomes.I’ve spent a lot of time talking with people

from Silicon Valley and some from Route128, and they tell me that the corporateethos in these two industrial belts is quitedifferent. Silicon Valley consists of lots ofcompanies that are fiercely competitive witheach other, but nevertheless there’s a lot ofcollaboration, and despite the competitionthere is a free flow of ideas and a free flow ofpeople and a free flow of informationbetween these companies that compete witheach other. In contrast, I’m told that thebusinesses of Route 128 are much moresecretive, and insulated from each other.Or again, what about the contrast between

Microsoft and IBM? Microsoft has lots ofunits, with free communication betweenunits, and each of those units may have five toten people working in them, but the units arenot micro-managed, they are allowed a greatdeal of freedom in pursuing their own ideas.That unusual organization at Microsoft,broken up into a lot of semi-independentunits competing within the same company,contrasts with the organization at IBM,whichuntil four years ago had much more insulatedgroups. A month ago, I met someone who ison the board of directors of IBM, and thatperson told me, what you say about IBM wasquite true until four years ago: IBM did havethis secretive organization which resulted inIBM’s loss of competitive ability, but thenIBM acquired a new CEO who changedthings drastically, and IBM now has a moreMicrosoft-like organization, and you can seeit, I’m told, in the improvement in IBM’sinnovativeness.

24 Unit 3


autonomousbosschain of commandChief ExecutiveOfficer (CEO)

collaborationcompetitorcorporate ethosdecentralizationdepartmentdivisiondownsizingdownturnfinancefragmentationfunctionalorganization

hierarchyinput

insulatedisolatedlevelline authorityManaging DirectormarketingoutputpersonnelpositionPresidentproductionproductivityreorganizationreport toresponsibilitysalarysalessubsidiarywealth

3 Big and small companies

3a Discussion

3b WritingThis could be a homework activity. Learners shouldbe discouraged from merely completing theparagraph given as an example.

There are further exercises on conjunctions andconnectors in Units 19 and 27. The precise differencesamong words on the same line in the box (e.g. as,because and since) are difficult to demonstrate orexplain. The use of these words is one of the thingsyou could draw attention to in any supplementarytexts you use in class.

ANSWERS

Advantages of working in a small company: 2, 3, 4,7, 9, 11, 13Advantages of working in a big company: 1, 5, 6, 7,8 (?), 10, 12, 14

Some of these answers are open to discussion. Forexample, number 8: some people might argue thatyou have a better possibility of realizing yourpotential in a small company in which you arerequired to take on a number of different tasks.

25Work and motivation

Unit 4 Work and motivation

1c Reading

Abraham Maslow, mentioned here, is of course morefamous for his own theory of motivation, and hispyramid of needs, with which most business learnersare familiar. The Student’s Book, I am pleased to say, isone of the very few books about business that does notmention this theory!

1d SummarizingLearners can be asked to complete these sentenceseither orally (working in pairs), or in writing (aloneor working in pairs).

TYPICAL ANSWERS

1 According to Theory X, employers have tothreaten workers because the threat of losingtheir jobs often makes people work better.

2 According to Theory Y, employers should givetheir workers responsibilities because aresponsible job is necessary to people’spsychological well-being.

3 Maslow criticized Theory Y because there arepeople who are unable to take on responsibilityand self-discipline.

4 Maslow argued that even though they mightwant to be given responsibilities at work, peoplealso require the security that comes fromroutines and from being given instructions.

ANSWERS

1 X 2 Y 3 X 4 X 5 Y 6 X7 Y 8 Y

As well as setting and communicating objectives,developing strategies, and allocating resources,managers have to motivate the staff who report tothem. These will often include people withinteresting, responsible and fulfilling jobs, as well asothers with less interesting and highly repetitive tasks.This unit includes a discussion on whether it shouldbe assumed that people like work and responsibility,or whether they need to be forced to work; adiscussion about the kind of things that mightmotivate, or at least satisfy, employees; and aninterview with a department store manager, whodescribes how he attempts to motivate his employees.

A possible warm-up would be to ask the learners todiscuss briefly in pairs what is the worst possible long-term job they could imagine doing, one in which itwould be almost impossible to motivate them, andwhy. (Someone will probably say ‘Business Englishteacher’, but of course we approve of humour in theclassroom, don’t we?!)

1 Work and responsibility

1a Vocabulary

1b DiscussionAs always, to be discussed in pairs. There are no ‘right’answers, but these statements naturally fall into twogroups, reflecting two opposing views of humannature, as will be seen in the text that follows.

ANSWERS

1 A 2 B 3 B 4 C 5 C6 B 7 A 8 B 9 C 10 B

26 Unit 4

2 Motivating staff

2a Listening This is a second extract from the interview with themanager of the Marks & Spencer store who featuredin Unit 2.

TAPESCRIPT

Steve Moody In terms of keeping peoplemotivated, the first thing is obviouslyensuring that they are paid a decent salaryand that they work in a pleasantenvironment. Beyond that, that theyunderstand what is expected of them andthat when they do do their job and they docarry out tasks, that what they do is actuallyappreciated by their line manager andindeed the people that they work with. Theyare not asked to do the same thing over andover again, yeah, without being told whythey’re being asked to do it.

Interviewer How important is a variety of tasks inmotivating people? I mean, you wouldn’thave somebody just working on the till thewhole time, which I imagine is really hardwork.

Steve Moody I think again it depends on theindividual’s abilities and the individualneeds.We have people who work for us whoactually like being on the till, all the time,because what they actually love, more thanmost, is the interface with the customers.They also, of course, become highly skilled,highly specialized, and highly efficient on thetill, and if they like doing that and it actuallysuits us from an operational point of view,we would not discourage anybody fromdoing that. Equally, we’ve got members ofstaff who don’t particularly like going on thetill, but like filling up and doing stock ordersand doing specific jobs that other peopledon’t like doing, so it is tailoring individuals’needs and abilities to the operational needsof the store. Obviously you would not wantto reduce flexibility by only having a certain

1e DiscussionLearners’ answers will almost certainly differ here.This task relates to the text in 1g, which summarizesHerzberg’s well-known argument that many of theitems listed here (including good pay and goodworking conditions) merely satisfy but do notmotivate workers.

1f WritingThis is probably a task to be set for homework.

1g ReadingAccording to Herzberg, good conditions merely satisfyworkers, but do not motivate them; motivation canonly come from interesting work, responsibility, andso on.

1h Summarizing

TYPICAL ANSWERS

1 Herzberg suggested that good labour relationsand working conditions will only satisfy people – or more importantly, dissatisfy them ifthey do not exist – but not motivate them.

2 According to Herzberg, the kind of things thatmotivate people are challenging or interestingjobs, recognition, responsibility, the chance ofpromotion, and so on.

3 The problem with saying that only challenging,interesting and responsible jobs are motivatingis that there are and always will be people in jobsthat are not challenging, interesting andresponsible, and managers have to try tomotivate these people.

4 Ways of motivating people in unskilled jobsinclude giving them responsibilities as part of ateam, giving them more than one activity to doduring the day, and encouraging them to believein corporate values.

5 The problem with trying to motivate workers bythe belief that their company is the best is that itis unlikely to succeed if it is not true, and mostcompanies are evidently not the best.


2b Listening

TAPESCRIPT

Interviewer M&S has a very good reputation forjob security and looking after its staff, withthings like good perks, good canteen, thatsort of thing. Do those things actuallymotivate people, in their work, the fact thatthey’re secure and well looked after, do youthink?

Steve Moody I think it is, it is very important.When people have been working on the salesfloor, and they may have been in from eighto’clock in the morning or seven o’clock inthe morning, and they can come off the salesfloor and they can go to the staff restaurantand obviously they can have tea, coffee, or adrink provided free of charge, and can thenbuy at very reduced rates a full cookedbreakfast, if they want one, or a roll andcheese, in a pleasant environment, in ahygienic environment, food of the highestquality, there’s areas where they can rest andread papers, or play pool or something, yeah,that is very important because they need abreak from customers. At busy times, theyneed to get away from it, they need to be ableto relax. In terms of all the health screeningprogrammes we’ve got, that is veryimportant, when people know that they willbe having medicals, and the staff discount isanother thing – obviously there’s an amountof merchandise that they will buy which theywill be able to buy at discounted rates.Christmas bonus, which I suppose for Marks& Spencer’s, you know, we give all ourgeneral staff a 10% of their salary bonus atChristmas which is guaranteed, and themotivational effect of that, actually, at thebusiest time of the year when they’re underthe most pressure and working hard, isfantastic and, you know, to see their faces asyou hand them the envelope with 10% oftheir salary in it… I believe the environmentthat you work in, the quality of the people

Note Some learners may erroneously suppose that‘tailor’ has some relation to ‘Taylorism’, or the‘scientific management’ associated with FrederickTaylor, which involved the strict division of labour,and so on. In fact, Moody is saying the opposite, andconsidering the worker as well as the task.

ANSWERS

1 Steve Moody says something similar to A, B and C. (A: he says a decent salary; B: he says apleasant environment; C: he says theyunderstand what is expected of them.) D and Eare not what he says: he says that people must beappreciated by their line superior and theircolleagues, and that people must not be askedto do the same thing again and again withoutknowing why they’re being asked to do it.

2 Because they like the human contact (what hecalls ‘the interface’) with customers.

3 They become highly skilled, specialized andefficient at this task.

4 Filling up the counters and doing stock orders.

5 Fitting, matching.

6 Because it gives them flexibility.

number of people who will only go on thetill, or only fill up the counters, you have tohave flexibility of people who like to doboth, and many staff like to do all sorts ofthings. They like to do everything theypossibly can, and the more varied thingsthey can get involved in, the more interestedthey get.


28 Unit 4

2d Case study: Motivation

POSSIBLE ANSWERS

Bus drivers probably want enough consecutivedays off to compensate for working irregularhours. They might appreciate facilities at the busdepot where they could socialize with colleaguesbefore or after work. Yet few bus companies arelikely to offer facilities as costly as a gymnasium ortennis courts. Drivers would almost certainlyappreciate a subsidized canteen. Early retirementmight be a good way of retaining staff for a largepart of their working life, and would almostcertainly be popular.Nurses certainly do not do their job for the

money. They are probably motivated by seeingtheir patients get better, and probably appreciateworking regularly with the same patients. Publichospitals are clearly not in a position toimplement a profit-sharing programme, and itdoesn’t even sound very appropriate for a privatehospital, any more than productivity bonuses.Most nurses would probably appreciate a shorterworking week. They would probably also respondfavourably to career training, and perhaps to anursery and sports facilities.Sales reps in general seem to be motivated by

high commissions, or a productivity bonus. Theyprobably already have a company car. If theyspend most of their time travelling, they areunlikely to be interested in a canteen, sportsfacilities, or a redecorated office. Few sales repsseem to stay long enough with the same companyto be affected by extra days’ holiday for longservice or early retirement. They would probablybe motivated by the knowledge that the productsthey sell are in fact beneficial.A manual printing worker who remained for a

large part of his or her career in the same companymight well appreciate every single motivationalstrategy suggested. In reality, they are unlikely tobe offered many of these, least of all a higher salaryor a company car.I have absolutely no idea how you would

motivate a shepherd!

2c Discussion

ANSWER

Steve Moody insists that the Christmas bonus,for example, actually motivates staff, whereasFrederick Herzberg argued that good salaries andworking conditions merely satisfy. But Moody’sstatement that there are people who like a routine,and others who prefer a variety of interestingtasks, coincides with Douglas McGregor’sargument.

ANSWERS

1 ● There is a restaurant where staff can get freedrinks and good, low-priced meals.

● There is a place where they can relax duringtheir breaks, read newspapers, play pool, andso on.

● They have regular medical screenings.

● There is a staff discount on M&Smerchandise.

● There is a Christmas bonus of 10% of theannual (not monthly) salary.

● Staff are treated with respect and dignity,and are listened to and consulted.

2 It motivates them to work hard during thebusiest period of the year (and a period inwhich they also have extra expenses).

that you work with, the way you are treated,with respect and dignity, and the fact thatyour views are listened to, even if they’re notalways carried out they are listened to, andyou feel you are consulted, that makespeople happy in their job, it makes themsatisfied in their job, it makes them get upand come to work in the morning.




administrationbenefitscash registeremployeeemployerincentivejob securitylabour relationslabour unionmotivationpensionperks

produceproductiverewardsick payskilledstoretaskthreattillunskilledwagesworking conditions

2e Vocabulary

Vocabulary note Many learners will probably beunfamiliar with the uncountable noun produce(stressed on the first syllable), which is only used foragricultural items (dairy produce, fruit, vegetables,flowers, and so on).

See also the role play ‘Extra Perks’ in BusinessRoles 2 by John Crowther-Alwyn (CambridgeUniversity Press).

ANSWERS

1 producer 2 products 3 productive4 production 5 unproductive6 productivity 7 pro′duce 8 ′produce

30 Unit 5

Unit 5 Management and culturaldiversity

syllabus (maths, accounting, management, marketing,finance, production, law, information systems, etc.) orthe people who teach these subjects? If it’s the former,what makes the difference between better and worsebusiness schools?Question 3 seems to be related to Adam Smith’s

account of the beneficial outcome of self-interest andthe notion of the ‘invisible hand’, with which thelearners may be familiar. Two well-known passages:

‘It is not from the benevolence of the butcher, thebrewer, or the baker, that we expect our dinner, butfrom their regard to their own interest.’

[The self-interested individual] ‘neither intends topromote the publick interest, nor knows how muchhe is promoting it … he intends only his own gain,and he is in this, as in many other cases, led by aninvisible hand to promote an end which was no partof his intention.’

Adam Smith,An Inquiry into the Nature and Causes ofthe Wealth of Nations [1776] (Oxford: ClarendonPress, 1976, pp. 26–7 and 456).

An additional question to the learners: why are theystudying business? For their own purposes (to get agood or better job) or to make the world a better placeby aiding other people?Question 4 raises the issue of collective

responsibility. Learners who have done militaryservice might have experience of situations ofcollective responsibility or punishment. Otherlearners may have experience of (or anecdotes about)playing team sports.

In Trompenaars’ data, as reported in Riding the Wavesof Culture, answers to the first question (Is a companya system or a social group?) varied widely withincontinents, allowing few conclusions to be drawn.Nearly all countries answered question 2 (Is an

organization structure about authority or functions?)by choosing function rather than authority, withscores of between 80 and 100%. Denmark, SouthAfrica and Malaysia, countries with somewhat

Despite the growth of global brands, and some degreeof convergence of consumer tastes and habits, thereremain enormous cultural differences amongdifferent countries and continents. This clearlypresents a dilemma to multinational corporations:should they attempt to export their managementmethods to all their subsidiaries, or should they adapttheir methods to the local culture in each country orcontinent? This unit contains a text that gives specificexamples of problems faced by multinationalcompanies in different parts of the world, and anumber of discussion activities about culturalattitudes. Discussion activity 1a serves as a ready-made warm-up to the unit.

1 Cultural attitudes

1a DiscussionIt is generally agreed that it is more efficient formultinational companies to adapt their methods tothe local cultures in which their subsidiaries aresituated.

1b DiscussionThe issues raised here are discussed in the reading textwhich follows. The learners’ answers will revealwhether they believe companies should be task- orperson-centred, whether they are primarilyindividualist or collectivist, and whether they are whatTrompenaars calls universalist or particularist. Theycan be invited to suggest in which parts of the worldthe opposing opinions are to be found – and they maywell be wrong.Question 1 perhaps boils down to whether people

or the functions they occupy are the most important.Are people all replaceable, or does the quality or thesuccess of a business depend on its staff? For example,what is more important in a business school: the

31Management and cultural diversity

2d Vocabulary

3 You and your culture

3a Discussion: You and yourinfluences

As with various other exercises in the Student’s Book(e.g. Unit 2 1a, Unit 4 1e, Unit 15 2f, Unit 22 1a), youmay feel that too much information is given here inquestion 1. If you would prefer your learners tosuggest these possible influences themselves, ratherthan merely select from a list, do a version of thisexercise with the students’ books closed. There areclearly no ‘right answers’ here.

ANSWERS

1 rationality 2 intuition 3 status4 seniority 5 (to be) offended 6 rewards7 bonus 8 humiliation 9 to resign10 ethically

2 Japanese companies have a policy of promotionby seniority, so a 50-year-old manager shouldautomatically be granted much more status andrespect than a 30-year-old one.

3 The Italian salesman did not want to earn more(i.e. show himself to be a better salesman) thanhis colleagues, or earn as much as his boss. TheSingaporean and Indonesian managers did notapprove of a system that might cause salesmento encourage customers to buy products theydidn’t need.

4 Universalists believe that rules are extremelyimportant, and distrust particularists becausethey break rules to help their friends, whileparticularists believe that personal relationshipsshould take precedence, and distrustuniversalists because they won’t even help afriend.

different cultures, all scored 100%.Venezuela on 44%was the only country below 50%.For question 3 (individual freedom versus taking

care of other people), most countries were spreadbetween 50 and 70% for individual freedom. Thelowest percentages came from Nepal, Kuwait, Egypt,East Germany and France – again, a varied bunch.The USA and Canada had the top scores forindividual freedom – 79%. At last a stereotype appears to be fulfilled!For question 4 (individual versus group

responsibility) most scores for individualresponsibility were between 30 and 50%. Indonesiawas the most collectivist, with only 13% choosingindividual responsibility, and Russia the mostindividualist, at 68%.For question 5 (the car and the pedestrian), most

northern European countries, along with Canada andAustralia, scored over 90% for thinking that a friendshould not expect you to lie. The lowest score here was26% for South Korea. Russia was on 42%, and Japanon 67%.

2 Managing multinationals

2b Reading

2c Comprehension

POSSIBLE ANSWERS

1 ‘Glocalization’means operating all over theworld while taking account of local culturalhabits, beliefs and principles in each country ormarket.

ANSWERS

According to the text, the illustrated managerswould be: a) American; b) Italian; c) Latin, orspecifically French; d) and e) Asian or SouthernEuropean or Latin American.

32 Unit 5

3f Discussion: Going abroadLearners who have travelled might have things to sayhere. I thought my own nervousness about buyingtickets on public transport was a personal pathology,until I went to conferences and saw famous professorswalking three miles to the venue because they weretoo frightened to get on buses and trams! ‘Do youhave to leave a tip in this country?’ is also a standardtopic of conversation at conferences.

3g WritingEven learners who have not been abroad should beable to think of information and advice that would beuseful to a foreigner spending several weeks in theircountry. In fact, perhaps the memo needn’t be ‘brief ’at all!


bonuscollectivistglobalglobalizationindividualistlocalization

multinationalnegotiatepay-for-performancesales representativesenioritystatus

See also the role plays ‘Flexible working time’ inBusiness Roles and ‘No Smoking’ in Business Roles 2by John Crowther-Alwyn, and the simulation‘The barbecue’ in Decisionmaker by David Evans(Cambridge University Press).

3b Discussion: Attitudes to workAgain, there are of course no ‘right answers’.

3c SurveyDoing this as an out-of-class survey would make achange from classroom discussion activities.Whatpercentage of positive or negative answers to anyquestion would be statistically significant and revealcultural attitudes is hard to say. The figure of 60% inthe Student’s Book was not arrived at scientifically.

3d Discussion: Corporate cultureThis discussion, and the next one, would probablywork better with mixed classes containing learners ofdifferent languages, nationalities and cultures. If youhave a homogeneous class, you could try to get themto suggest which countries or cultures might havemotivated some of these questions (e.g. Japaneseculture has very strict conventions about making eyecontact).

3e Discussion: Body languageAgain, you could try to elicit from the learners whichcultures find some of these forms of behaviourunacceptable. For example, blowing one’s nose inpublic is considered impolite in many east Asiancountries. However this book is not going to provide acompendium of hints for foreign business travellers!

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