UNIVERSITY OF ECONOMICS HO CHI MINH CITY
SCHOOL OF FOREIGN LANGUAGES FOR ECONOMICS
READING
(Module 4)
Focus
on
Learning
1
UNIT 7: MANAGEMENT STYLES
READING 1: MANAGEMENT STYLES
Activity 1: Discuss these questions.
1. What do you like or dislike about the management style in your organisation?
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2. What would your ideal workplace be like?
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Activity 2: Useful vocabulary
Word/Phrase
Part of
Definition and Example
speech
dispel
dictator
brusque
intimidate
regiment
resort
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authoritarian
Activity 3: Work in pairs.
Student A: Read the article about Anna Wintour, Chief Executive of Vogue, the fashion
magazine.
Student B: Read the article about Jim Buckmaster, CEO of Craigslist, the Internet company.
Student A
Anna Wintour
60 Minutes’ Morley Safer interviews Vogue’s Editor in her first lengthy U.S. T.V. profile.
She is said to be the most powerful woman in fashion and she does nothing to dispel that
belief. Her name is Anna Wintour, a name that strikes terror in some and loathing in others. It
should also be said she commands a loyal band of friends and admirers.
‘The blurb on your unauthorized biography reads ‘She’s ambitious, driven, needy, a
perfectionist’. Accurate?’ 60 Minutes correspondent Morley Safer asked Wintour.
‘Well, I am very driven by what I do. I am certainly very competitive. I like people who
represent the best of what they do, and if that turns you into a perfectionist, then maybe I am,’
Wintour replied.
Wintour is involved in every detail of the magazine: the clothes, editing the pictures and
articles. She is decisive, impatient and bears a look that says ‘I’m the boss, and you’re
boring.’
‘An editor in the final analysis is a kind of dictator – a magazine is not a democracy?’ Safer
asked.
‘It’s a group of people coming together and presenting ideas from which I pick what I think
is the best mix for each particular issue, but in the end, the final decision has to be mine.’
Wintour explained. ‘We’re here to work. There’s on-duty time and off-duty time, and we’re
drawn together by our passion for the magazine. If one comes across sometimes as being cold
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or brusque, it’s simply because I’m striving for the best.’
‘It’s not like a tea party here. We work very hard,’ Vogue’s Editor-at-large Andre Leon Talley
told Safer. Asked what kind of boss she is, Talley told Safer, ‘Let’s say that Anna can be
intimidating. I think that’s her armor, to intimidate. To give the people the sense that she is in
charge. She is not a person who’s going to show you her emotions ever. She’s like a doctor,
when she’s looking at your work, it’s like a medical analysis.’
Vogue Creative Director Grace Coddington says, ‘I think she enjoys not being completely
approachable, you know. Just her office is very intimidating, right? You have to walk about a
mile into the office before you get to her desk, and I’m sure it’s intentional.’
Student B
Jim Buckmaster
What is the office atmosphere like?
‘We don’t really have the arcade games, fussball, ping-pong tables or that sort of thing, but I
guess it’s a cosy kind of non-corporate atmosphere, it just feels like you’re sitting in a house,
and there’s no dress code. I spent a lot of years working in organisations that were regimented
and we were told what to do in many different ways, and I developed a very anti-authoritarian
mindset by the time I was put in a position of authority. The last thing I wanted to do was
reproduce all of those things that I had disliked so much. Such that our employees aren’t
really told what to do, or when to do it, or when to come into work or what they can wear, and
we don’t set deadlines at all – unless they are set for us by some external force like a
regulatory agency. I don’t think that artificial deadlines are a good idea. They just create stress
where it is not needed.’
So there is no management?
‘We do have a hierarchy, we do have managerial positions, but I personally don’t like trying
to impose my will on someone else or trying to hold it out that I’m in a position of authority. I
hold that in reserve as an absolute last resort, and certainly years go by when I don’t have to
exert that kind of authority.’
How do you motivate people?
‘One of the wonderful things about working at Craigslist is that the company philosophy and
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approach is such that people generally feel very good about working there. Because we have a
non-traditional philosophy – it is very pubic-good centric – people feel good about coming to
work ... We’re very careful in hiring people who are talented and self-motivated. Then once
we have people who fit that description, I’ve always found that it is just a matter of letting
them do their work.’
And you really don’t hold meetings?
‘Of all the meetings that I’ve gone to in the past, virtually all of then, I’ve felt, were kind of
useless. I don’t like closed-door meetings because they always mean something bad is going
to happen.’
Activity 4: Read your article quickly and decide which of these statements are true for
the CEO you read about.
They ...
1. think most meetings are a waste of time.
2. are good at making decisions quickly and firmly.
3. want people to know who is the boss.
4. think artificial deadlines are stressful.
5. believe in hiring the best staff they can.
6. think their staff feel happy working there.
Activity 5: Read your article again. In pairs, compare and contrast the styles of the two
CEOs.
Activity 6: Which of these adjectives do you think describe Anna Wintour?
approachable
demanding
perfectionist
ruthless
volatile
Activity 7: Match the adjectives in the box to the definitions below.
anti-authoritarian
ruthless
approachable
self-motivated
demanding
talented
1. not caring if you have to harm others to get what you want
2. not satisfied with anything unless it is exactly right
3. having a natural ability to do something well
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perfectionist
volatile
4. wanting to achieve something by themselves
5. against forcing people to obey strict rules
6. friendly and easy to talk to
7. expecting a lot of time and effort from others
8. liable to suddenly become angry
Activity 8: Complete this paragraph with adjectives from Activity 7.
At my last company, the managers were remote and not at all (1) …………... They were hard
to get to know. The only one who showed any emotion was the CEO, who had a (2)
………….. temper. He was completely ruthless and didn’t care about his staff at all. He acted
like a dictator. He had a (3) …………… management style, insisting that everything was
exactly right. He was also very demanding, making us work really unsociable hours. In my
new company, the managers are good communicators, decision-making is open and
transparent and the style is (4) …………... Management is by consensus. All the staff are (5)
………….. and experts in their own fields. They are (6) ………….. and trusted to work
without supervision.
Activity 9: Discuss these questions.
1. What are the advantages and disadvantages of each style of management described in the
articles?
2. Would you rather work for a male or female manager? Describe your ideal manager.
3. Do you agree with Buckmaster that most meetings are a waste of time?
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READING 2: WOMEN MANAGERS
Activity 1: Discussion
Do women have a more collaborative approach as managers than men? Give your reasons.
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Activity 2: Useful vocabulary
Word/Phrase
Part of
Definition and Example
speech
corollary
come round to
empathy
assert
Activity 3: Read this article from the Financial Times by Michael Skapinker and do the
exercises that follow.
Nature and nurture in the executive suite
Michael Skapinker
Women are calmer than men. They are more collaborative and they dislike self-promotion. It
is all in their genes. Progressive thought once held that men and women were essentially the
same and that it was social conditioning that made men aggressive and women cooperative.
Some writers still argue this way. In an article in The Harvard Business Review, Alice Fagly
and Linda Carli say the reason women managers generally adopt a softer style is unlikely to
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be genetic. They do it because people react badly to aggressive women and a collaborative
approach is how female managers assert their authority.
A new book, Why Women Mean Business, is bolder: biology matters, it says. The authors,
Avivah Wittenberg-Cox and Alison Maitland, approvingly cite recent research showing men’s
and women’s brains differ. This inevitably affects the way they manage. ‘Why would
differences in communication styles, biological rhythms, and brain functioning (to mention
only a few) stop just short of leadership styles?’ they ask.
If companies want to succeed they will have to come around to women’s way of doing things,
the authors argue. Faced with falling populations, companies in Europe will need more
women in senior management. In the new knowledge-based economy, they say, companies
need collaborative managers who can persuade people to work in teams. There is no need for
women to change their essential natures.
Why Women Mean Business is an innovative and stimulating book. But the resort to biology
raises problems. First, scans have indeed shown differences between male and female brain
functioning. Newborn girls look at human faces for longer than they look at mechanical
mobiles, while boys do the opposite. But the science is far from settled. We still do not know
the precise mixture of nature and nurture that makes men and women what they are.
Second, if you argue that women’s empathetic nature makes them particularly suited lo
helping run collaborative enterprises, a corollary would have to be that they are less well
equipped other tasks.
Third, the problem with characterising huge groups is that it takes no account of the large
variations within them. Women, on average, may be more empathetic than men, but we all
know collaborative male managers and sharp-elbowed female ones, just as we know boys
who cannot turn plastic sticks into tractors and girls who do not listen quietly while others
speak. Nature is important, but humans are endlessly complicated.
Activity 4: Read paragraph 1 & paragraph 2 and put these expressions from there, and
some related expressions, under one of the two headings a) ‘Nature’ or b) ‘Nurture’
1. ‘It’s the way you’re brought up.’
2. ‘It’s all in the genes.’
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3. ‘It’s social conditioning.’
4. ‘It’s unlikely to be genetic’
5. ‘That’s the way you’re born.’
6. ‘It all depends on your environment when you’re growing up.’
7. ‘Biology matters.’
Activity 5: Now match each of the writers mentioned in paragraph 1 & paragraph 2 to
a) the ‘nature’ argument and b) the ‘nurture’ argument.
1. Avivah Wittenberg-Cox
2. Linda Carli
3. Alice Eagly
4. Alison Maitland
Activity 6: Read paragraph 3 & paragraph 4 to decide if these statements are true or
false.
If …
a) you come round to an idea, you agree with it the first time you hear it.
b) people are collaborative, they believe in working together.
c) you change your essential nature, you behave in ways that you have to learn.
d) a book is stimulating, it is boring.
e) there is resort to a particular idea in your reasoning, you use that idea to support it.
f) an argument is settled, it has not been decided.
Activity 7: Which is the most important point in paragraph 3? Choose the best
summary.
a) Women need lo learn how to be collaborative in order to succeed as managers in the future.
b) There are decreasing numbers of women who can become managers because of Europe’s
future population decreases.
c) It is in women’s nature to be collaborative and this will ideally suit them to be managers of
the types of companies we will increasingly have in the future.
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Activity 8: Find words and grammatically related words in paragraphs 4-6 to complete
the table.
noun
adjective
precision
stimulation
empathetic
collaboration
equipment
varied
male
complication
Activity 9: Now match these definitions to the adjectives above.
Used to describe …
a) people who understand others and what they are feeling.
b) men and boys.
c) something that is exact.
d) something containing a lot of differences.
e) people who are good at working together.
f) people who have particular skills.
g) something interesting.
h) things that are complex.
Activity 10: Discuss these questions.
1. Is nature or nurture more important in the way people develop? Explain your reasoning.
2. Is collaborative working valued in your organisation, or one you would like to work for?
why? / why not?
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UNIT 8: TEAM BUILDING
READING 1: NEW WAYS OF TEAM BUILDING
Activity 1:
You are going to read an article entitled Recipes for team building. What do you think are the
advantages of sending teams on cookery courses?
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Activity 2: Useful vocabulary
Word/Phrase
Part of
Definition and Example
speech
foster
brisk
contrived
intrigue
dab hand
disperse
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Activity 3: Read the quickly and check if your answers to Activity 1 were mentioned.
What other advantages were mentioned?
Recipes for team building
Rhymer Rigby
When cutting-edge companies want to foster team spirit, relax or even entertain clients,
breaking bread together is no longer enough – they now bake that bread themselves.
Corporate cookery courses are the latest exercise in business bonding.
Venturi’s Table claims to be the UK’s only dedicated corporate cookery school. Anna
Venturi, the London-based school’s founder, says business is brisk, as teams from companies
including Abbott Mead Vickers, Merrill Lynch and eBay head to Wandsworth to cook up a
storm.
Ms Venturi says cooking appeals to companies because it brings people together: ‘It’s not
competitive. We just want everyone to relax and have a good time. In fact, it’s almost therapy.
We get everyone, from directors to secretaries, from graduates to retirement dos.’
The team from Cereal Products Worldwide, a joint venture between Nestle and General Mills,
making mushroom ravioli, stuffed loin of pork and sweetened oranges with profiteroles in the
kitchen at Venturi’s Table, appears to prove Ms Venturi’s point that cooking can build teams.
The group members are of mixed culinary abilities: some are dab hands in the kitchen; others
have never caramelised an orange in their lives. Yet everyone happily pitches in – and slaving
over a hot stove and piping chocolate custard into a profiterole helps to break down barriers.
Masele Siatu’u, CPW’s Human Resources Vice President, says having your elbows in flour
and eggs brings together fellow employees who are dispersed across the world.
This is the reason the company chose to send the team on a cookery course, says Christi
Strauss, CPW Chief Executive. ‘We look for something that cuts across ages and backgrounds
and cultures. If we [played] golf, it would be great for good golfers, but not necessarily for
anyone else.’ With cookery, she says, anyone can take part and they can participate as much
or little as they want. Plus there’s a tasty meal on offer at the end of the day.
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Richard Pash, a Marketing Manager at Mars and another Venturi customer, says cookery feels
natural compared to some team-building activities. Constructing a bridge across a stream
when there is a perfectly good one 50 metres away may seem a little pointless, but cooking a
three-course meal you intend to sit down and eat certainly isn’t. ‘Unlike many courses we’ve
been on, it’s the opposite of contrived,’ says Mr Pash.
Venturi’s Table isn’t the only company offering corporate cookery courses. The Cookery
School at Lillie Portland Street in London has an increasing number of corporate clients who,
says Principal Rosalind Rathouse, comprise about a third of its business. These include
Investec, BP and Iron Mountain.
Many of the better-known cookery schools offer packages aimed at businesses. Mosimann’s
Academy allows teambuilders to be taught by the eponymous Anton, while the Lavender
House in Norfolk and The Food and Wine Academy also cater for corporate cooks.
The Cookery School differentiates itself by working with psychologists who observe the team
members as they cook before feeding back to the group. Organisations that want to see how
teams work under different circumstances can ask for a stressful or confrontational kitchen. ‘It
becomes a microcosm of the workplace,’ says Ms Rathouse.
Perhaps the most intriguing use of places like Venturi, however, is not as venues for team
building but for client entertainment. Ms Venturi’s daughter Letizia Tufari, who worked at
Pfizer before joining her mother’s business, says client hospitality is a growing income stream
for Venturi. She says that for cash-rich, time-poor businesspeople, fine dining has become
rather pedestrian. But cooking a three-course meal for oneself is more unusual.
Activity 4: Scan the article to find (where mentioned):
1. all the cookery schools
2. their clients
3. their locations
Activity 5: Read the article again and answer these questions.
1. Who are these people? Summarise the points they make in the article.
a) Anna Venturi
c) Christi Strauss
e) Rosalind Rathouse
b) Masele Siatu’u
d) Richard Pash
f) Letizia Tufari
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2. Apart from running team-building courses, what else do some corporate cookery schools
do? Why is this successful?
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Activity 6: Without looking at the article, complete these word partnerships.
1. f _ _ t _ _ team spirit
2. break down b _ r r _ _ _ s
3. joint ven _ _ r _
4. client ho _ p _ t _ _ _ _ _
5. income st _ _ _ m
Activity 7: Answer these questions.
1. Would you like to attend a cookery course as part of a team-building exercise? Why? /
Why not?
2. What would you find difficult about working in a team?
3. Which sort of people make the worst team members?
4. If you could go on or design any team-building course, what would it be?
Activity 8: Write a short paragraph summarising the advantages of sending teams on a
cookery course.
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READING 2: SPORTS COACHING AND CORPORATE TEAM BUILDING
Activity 1: Discussion
How easy is it to transfer ideas for team building from sports to business? Explain your
reasoning.
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Activity 2: Useful language
Word/Phrase
Part of
Definition and Example
speech
counterpart
veteran
prosper
renaissance
Activity 3: Read this article by Paul Betts and answer the questions.
Capello’s masterclass for on-the-ball Finmeccanica
Paul Betts
When Fabio Capello flew to South Africa as the England football manager to attend the 2010
World Cup finals, he stopped briefly in Rome on his way to give the Italian defence and
engineering group Finmeccanica a masterclass on leadership. Having previously managed one
of the Italian capital’s football clubs, AS Roma, Mr Capello was inevitably the centre of
attention. ‘So why are you doing this corporate coaching?’ I asked at one stage. ‘I suppose
because I have widespread international experience having led teams such as Juventus and
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Real Madrid as well as Roma and now England and I know a thing or two about managing
players, creating a team spirit, in short leading.’ he said. Mr Capello clearly knows a thing or
two about bringing discipline, direction and inspiration to the highest levels of his business.
Unlike in other countries, such as Brazil, he had to work hard to instil a hunger among some
top English players to pull on an England shirt. Morale was pretty awful when he took over.
Not surprisingly, he was the star at Finmeccanica’s convention attended by some 3,000
managers from around the world. And probably his biggest fan in the audience was none
other than his counterpart at Finmeccanica, Pier Francesco Guarguaglini. After all, the Italian
group’s veteran boss is also a fanatical supporter of Juventus, where Mr Capello once worked
his magic.
Finmeccanica under Mr Guarguaglini has prospered in recent years thanks to clear leadership
and a sense of purpose that previously was sorely lacking. Over the years up to Mr
Guarguaglini’s appointment, the partly state-owned Finmeccanica had suffered badly from
state interference that lacked any clear industrial vision for the group. More often than not
senior politicians saw Finmeccanica primarily as a convenient place to park friends in top jobs
to the detriment of its commercial success.
It was the UK that Mr Guarguaglini chose as his starting point for Finmeccanica’s
renaissance. Within two years he had acquired full control of AgustaWestland, the helicoptermaker where previously GKN had been his partner. Then he quickly moved on to buy out
BAE Systems from a joint venture in defence systems. All of a sudden Finmeccanica was the
UK’s second largest defence contractor by sales, employing more than 10,000 Britons.
Activity 4: Look through the whole article and find:
a) two leaders - one in sport and one in business.
b) the names of the organisations led by each leader above.
c) the names of five football teams.
d) the name of a helicopter manufacturer owned by one of the organisations in b) above.
Activity 5: Complete these statements with appropriate forms of expressions from
paragraph 1.
If …
a) people notice you more than others, you are .......... .......... .......... ..........
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b) you train managers, you give them ..........
c) you have done something a lot, you have .......... .......... of it
d) you get team members to work together better, you .......... .......... .......... .......... among
them.
e) you have a lot of knowledge about something, you know a .......... .......... .......... .......... it.
f) you cause an organisation to acquire particular qualities, you .......... these qualities to it.
Activity 6: Find nouns in paragraph 3 referring to ...
a) a team’s feeling of enthusiasm caused by someone or something outside it.
b) team members, obeying the rules.
c) a team’s sense of where it is going.
d) a team’s need to be successful and win.
e) the good or bad feeling that team members have at a particular time.
Activity 7: Find nouns in paragraph 2 illustrated by the examples (a-f).
a) the most famous person in a film
b) someone who admires e) above
c) the head of one company in relation to the head of another
d) someone who has worked for the same company for 35 years
e) the head of a company
f) someone who goes regularly to a team’s football matches
Activity 8: Match the adverbs (1-8) from paragraphs 2-4 with expressions that could
replace them without changing the meaning (a-h).
1. surprisingly
a) almost certainly
2. probably
b) fast
3. previously
c) badly
4. sorely
d) partially
5. badly
e) earlier
6. partly
f) sorely
7. primarily
g) unexpectedly
8. quickly
h) mainly
Activity 9: Find the answers to these questions in paragraphs 3-4.
a) Which two qualities have allowed both Capello and Guarguaglini to succeed?
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b) Give the main cause and the resulting reasons for Finmeccanica’s poor performance before
Guarguaglini took over.
c) Where did Guarguaglini start to change his company’s fortunes?
d) How is this change referred to?
e) Which two companies did Finmeccanica take over? Are they both named?
f) Did Finmeccanica have holdings in them before?
g) Is Finmeccanica the second biggest defence company in the UK in terms of the number of
employees?
Activity 10: Discuss these questions.
1. What are the main differences between sports coaching and corporate team building?
2. Look again at the answers to questions in activity 6. Describe the state of these things in
relation to an organisation you know, for example a company or a sports team.
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UNIT 9: RAISING FINANCE
READING 1: FINDING FINANCE
Activity 1: How can start-up companies raise money?
…………………………………………………………………………………………………...
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…………………………………………………………………………………………………...
…………………………………………………………………………………………………...
Activity 2: Work in small groups. Before you read the article, check that you know
the meanings of these terms. Use a dictionary if necessary.
1. business angels
…………………………………………………………………………………………………...
2. bank finance
…………………………………………………………………………………………………...
3. equity finance
…………………………………………………………………………………………………...
4. debt fundraising
…………………………………………………………………………………………………...
5. venture capital funds
…………………………………………………………………………………………………...
Activity 3: Useful vocabulary
Word/Phrase
Part of
Speech
Definition and Example
go the
distance
pitch
to little/no
avail
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turn down
(sb/st)
settle (on
something)
hedge your
bets
keep/have
your ear to
the ground
disparate
syndicate
strike
web-feed
Activity 4: Read the whole article.
NO MORE EASY MONEY
By Jonathan Moules
Ambitious entrepreneurs are prepared to go the distance to gel financial backing for their
bright ideas. Sanchita Saha, founder of CitySocialising, a website to help people make new
friends after relocating, travelled all the way to southern France.
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This was not as pleasant an experience as it might seem. Once there, she spent months
pitching to hundreds of potential investors to no avail, only to get a lucky break at the end.
First, she looked into ‘angel’ networking clubs, which provide entrepreneurs with access to
large numbers of wealthy individuals interested in investing in early-stage ventures. However,
she turned down a number of these for reasons of cost: they were charging £1,500 ($2,488)
just to submit a business plan.
Eventually, she settled on London Business Angels, through which she could pitch to roughly
100 ‘angels’.
She also hedged her bets by securing a place on gateway2investment (g2i), a four-day
programme to help ambitious entrepreneurs hone their pitching techniques, delivered by
financial advisers Grant Thornton and backed by the London Development Agency.
‘A lot of it is about networking – finding out who to talk to, who can help you, and keeping
your ears to the ground,’ she says.
Through LBA, Saha discovered a third scheme. called the European Border Investment
Programme, which was running its own event in Nice.
Although it was a risk, she booked herself on a flight and found herself pitching to another
couple of hundred investors from across the European Union. Among those were a couple of
Finnish investors who, together with five wealthy individuals at LBA, agreed to back Saha’s
business with a combined investment of £300,000.
Her work was not yet done, however, as she had to bring the disparate team together to form a
syndicate with a lead investor, who would then become CitySocialising’s Chairman.
‘It was hard work and very stressful,’ Saha admits. However, she is also one of the lucky
ones.
Access to finance remains difficult for all sorts of companies, whether they are looking for
rich individuals to take equity stakes, debt or venture capital.
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Although bank finance is easier to get hold of than it was a year ago, the costs remain
stubbornly high.
The latest quarterly research by the Federation of Small Businesses (FSB) found more than
three-quarters of companies had seen the cost of their existing finance increase by up to 5
percentage points above the Bank of England’s base rate.
Two-thirds of those in the FSB survey decided not to seek credit at the moment, which could
suggest they are fearful of the cost.
The good news for start-ups is that the banks seem happier to lend to them, according to
Stephen so Alambritis at the FSB. ‘That is a fresh approach,’ he says.
Victoria Weisener, Programme Manager at g2i, is less optimistic about debt fundraising.
‘What you hear is still the same: that people are lending, but we are not seeing any of that
coming through,’ she says.
She is similarly pessimistic about equity finance. ‘While no one will say they are not actively
investing, it is still pretty difficult to raise funds,’ she says. ‘Most of the activity is with
business angels.’
Raising equity finance through venture capital funds is possible, but it is taking about twice as
long as before the recession struck, according to Simon Cook, Chief Executive of venture
capital firm DFJ Esprit, which has invested in some of Europe’s most successful technology
start-ups. In the past, both FeedBurner, the web-feed management system, and Skype, the
Internet telephony service, have received backing from Cook’s firm.
‘Fundraising is taking longer and is slower, but funds are being raised,’ he says.
Activity 5: Answer these questions in pairs.
1. What was the problem with some of the ‘angel’ networking clubs?
…………………………………………………………………………………………………...
2. What was the advantage of London Business Angels?
…………………………………………………………………………………………………...
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3. How did Saha improve her ability to pitch to backers?
…………………………………………………………………………………………………...
4. Who finally invested in Saha’s company?
…………………………………………………………………………………………………...
5. What is the problem with bank finance?
…………………………………………………………………………………………………...
6. What is the position with debt funding and equity finance?
…………………………………………………………………………………………………...
7. What is the problem with venture capital funds?
…………………………………………………………………………………………………...
Activity 6: Find idioms in the first six paragraphs that mean the following.
1. finish something you have started
2. a sudden or unexpected chance to do something that allows you to become successful
in your job
3. reduce your chances of failure or loss by trying several possibilities instead of one
4. make sure you always know what is happening in a situation
Activity 7: Complete these sentences with the idioms in Activity 6.
1. Do you think Isabella will ………….…………. this time?
2. There are hundreds of young musicians out there looking for a ………….………….
3. It’s a good idea to ………….…………. by applying to more than one MBA programme.
4. ………….…………. for information about the next fundraising event?
Activity 8: Discussion
1. What questions would you ask Sara if you were an investor?
2. If you were setting up a business in your country, how would you raise the finance?
24
READING 2: WILLING AND LESS WILLING LENDERS
Activity 1: Before you read
If you had an idea for a business star-up, where would you go for finance?
Activity 2: Useful vocabulary
Word/ Phrase
Part of
Definition and Example
Speech
frosty
tentative
throw
thrust on
fare
fret
Activity 3: Read this article from the Financial Times by Brian Groom and Jonathan
Guthrie and do the exercises that follow.
SMALL BUSINESSES AND THE BANKS
By Brian Groom and Jonathan Guthrie
The frosty relationship between business and banks over credit is at last showing tentative
signs of a thaw. Business leaders warn, however, that bankruptcies could rise sharply in the
25
next 12 months unless sufficient finance is available, especially for smaller companies, while
banks say companies must overcome their reluctance to borrow.
The EEF manufacturers’ organization reports on Monday an easing of credit conditions for
the first time in more than a year. In a survey of 410 manufacturers, 33 per cent said the cost
of finance had increased in the past two months – down from 47 per cent in the third quarter.
Just one in five reported a decline in availability of new borrowing, down from one in three.
Annika Bosanquet has been struggling to raise finance to fulfil orders worth more than
£200,000. The founder of upmarket packaging company Wrapology, which has clients such
as Harrods and Armani, first approached HSBC for a letter of credit this summer but she was
turned down. The bank also declined to support a loan via the government’s Enterprise
Finance Guarantee scheme.
‘HSBC said that the scheme was thrust on them the day that the government announced it to
the press and that they had no system for processing applications.’ Ms Bosanquet says. The
bank also tried to halve Wrapology’s overdraft to £50,000, she says. The former
anthropologist, who run Wrapology with her brother Tom, did not fare any better with
Barclays, which refused her request for a letter of credit and said it could not extend any
finance under the EFG because the scheme was ‘for refinancing, not working capital’.
Ms Bosanquet, who is a board member of Enterprise Insight, a government-sponsored body
that promotes entrepreneurship, says: ‘It is very depressing because we are not looking for
unfunded borrowing – we have confirmed orders.’ The company needs to pay for packaging
orders made overseas before it can collect payments from its own customers, which include
John Lewis, the department store, and Monsoon, the fashion retailer.
HSBC says it has kept Wrapology’s overdraft at £100,000 and denies threatening to reduce it,
‘even though she has gone well over her overdraft limit’. Barclays says it aims to lend
‘appropriately’ and that it would be ‘irresponsible’to put up sums that clients might find hard
to repay. Ms Bosanquet set up Wrapology in 2001. Last year it had a turnover of £1.4m and
according to the entrepreneur will make a profit this year. She says: ‘There is no point the
government fretting over economic policy if it cannot get money into the system.’
26
Activity 4: Look through the whole article to find the names of:
a) an employers’ organisation.
………….…………….
b) a woman entrepreneur.
………….…………….
c) her firm.
………….…………….
d) four of her clients.
………….…………….
e) a government organisation to back loans to entrepreneurs.
………….…………….
f) a bank.
………….…………….
g) the entrepreneur’s brother.
………….…………….
h) a government-backed organisation to encourage entrepreneurship. ………….…………….
Activity 5: Read paragraphs 1 and 2 and decide if these statements are true of false.
a) …… The relationship between business and banks is compared to weather conditions.
b) …… These conditions seem to be improving.
c) …… The number of bankruptcies will fall in the next year, according to business leaders.
d) …… Banks says that companies are unwilling to ask for loans.
e) …… More companies than before say that the cost of finance has gone up.
f) …… Fewer companies than before say that it’s possible to borrow.
Activity 6: Complete these statements with appropriate forms of verbs and phrasal
verbs (paragraphs 3 and 4)
If …
a) you ………….… to do something, you find it difficult.
b) you ………….… an order, you prepare and deliver it.
c) you ………….… an organisation, you make contact with it.
d) a request is ………….… ………….…, it is refused.
e) a request is ………….…, it is refused.
f) a task is given to you against your will, it is ………….… on you.
g) an organization ………….… an application, it deals with it.
h) you ………….… well, badly, etc. in a particular situation, this is what happens to you in
that situation.
i) a bank makes loans to firms, it ………….… finance to them
Activity 7: Look again at paragraphs 3 and 4 to find finance-related expressions that
mean:
a) an agreement by a bank to give credit. (3 words)
27
è ………….… ………….… ………….…
b) an arrangement by a government to pay back loans when the borrower cannot, contained in
the name of an organisation. (3 words)
è ………….… ………….… ………….…
c) when you take more money out of your bank account than you put in. (1 word)
è ………….…
d) when you get loans to replace earlier loans. (1 word)
è ………….…
e) the money needed to operate a business, for example to pay suppliers before you are paid
by customers. (2 words)
è ………….… ………….…
Activity 8: Match what the people (a-e) might say (1-5), based on the two last
paragraphs
1. ‘I’m sad that we can’t get finance. It’s
only because lenders don’t really understand
our situation.’
2. ‘It would be crazy to lend to businesses
a. …… HSBC spokesperson
that can’t repay.’
b. …… Annika Bosanquet
3. ‘We’re doing everything we can to get
c. …… Monsoon spokesperson
banks to lend to businesses, whatever some
d. …… Barclays spokesperson
entrepreneurs say.’
e. …… UK government spokesperson
4. ‘We haven’t reduced Ms Bosanquet’s
overdraft, whatever she says.’
5. ‘We’ve ordered goods from Wrapology,
but we haven’t paid for them yet.’
Activity 9: Discuss these questions
1. What is the relationship between small businesses and banks in your country?
2. Imagine you own a small business which is in need of finance. What are the advantages and
disadvantages of a) raising money from banks, and b) asking family members to contribute?
Compare and contrast the two approaches.
28
UNIT 10: CUSTOMER SERVICE
READING 1: CHANGING CUSTOMER SERVICE
Activity 1: Read the article quickly and say if the writer agrees with these statements.
Ignore the words in bold for the moment.
1. Customer service is very important.
2. Good customer service means always being able to speak to a person.
CUSTOMER SERVICE IS CHANGING THE WORLD:
UP CLOSE AND GLOBAL
By Mike Betzer, President of Relationship Technology Management at Convergys
Customer service has changed. Thirty years ago, for example, service was personal and
familiar and when issues arose, they were typically handled face to face with a local manager.
Now global corporations have millions of customers. By using customer service experts and
the latest technology, these companies were able to focus on dealing with their bread-andbutter business. The thinking was that by refocusing in this way, productivity and innovation
would increase, enabling organistions to bring new products to market more quickly.
This approach generated its share of bad press. It took many customers a long time to get used
to speaking to customer service representatives based in other parts of the world or
mechanical systems that didn’t offer the right choices.
A new approach was called for. Businesses needed to adapt locally in order to capitalise
globally. They needed to take the traditional, personal approach and apply it to their customer
service strategy across the world. They needed to get personal while operating on a global
scale. For example, confectioner Thornton’s listened to customer feedback and developed a
more personal service, using a new gift service to drive sales of its highend products.
Companies need to use all their resources effectively. The familiarity of technology today
means customers no longer recoil from voice and touch automated services, as long as they
meet their requirements, whether they are requesting account statements or need to replace a
broken phone. The response also has to be personal. This means pre-empting the customer’s
29
needs and acting intuitively to minimise the time they spend on the phone. This is where the
customer insight, mentioned above, coupled with the means to deploy this with the front line,
comes in.
Companies need to collate and analyse the huge amounts of customer data they store, creating
a central repository that can build profiles of customers. Using insights into their location,
previous purchases, personal data and other information, customer management systems can
react as soon as a customer contacts the business. A bank customer rings an automated
number and is prompted to enter an account number. Triggered by the unique number, the
technology ‘knows’ what services the caller already has, what issues they may have inquired
about in the past, and then builds a profile of the customer and offers choices or remedies to
suit their individual needs. Behind all this waits an agent, monitoring several calls. Should a
customer become irate or frustrated, the agent can intercede and provide a valuable human
contact, knowing exactly what the customer is so trying to achieve.
Using analytics can be the difference between a positive and a negative experience for the
customer. Yet businesses often don’t make the best use of these insights. Companies seem
happy to rely on canned, scripted responses, poorly trained agents and clunky systems to
deliver customer services. It’s therefore no surprise that so many people have horror stories.
While 30 years ago, word may never have leaked out about a poor customer service incident,
now it can be found as easily as searching on Google.
What companies need to remember is that maintaining, or perhaps even acquiring, an
outsourced customer service infrastructure could be the difference between maintaining a
cadre of loyal customers during the downturn and being first off the line when the race
restarts, and being left behind. Outsourcing like this is not an indulgence; it is a crucial part
of business.
If companies pay lip service to customers, whether consumer or business, they run the risk of
missing out on valuable profits; those that value their customers and view them not only a
source of revenue but also a means to improve as a business can reap the rewards. They can
secure continuous business as well as positive word of mouth by keeping things personal
when working globally.
30
Activity 2: Useful vocabulary
Word/Phrase
Part of
Definition and Example
Speech
bread-and-butter
capitalize
recoil
pre-empt
couple with
deploy
collate
trigger
intercede
clunky
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cadre
reap
Activity 3: Read the article again and answer these questions.
1. How has customer service changed?
…………………………………………………………………………………………………...
2. What did some customers not like at first?
…………………………………………………………………………………………………...
3. What can companies do with customer data?
…………………………………………………………………………………………………...
4. Why do a lot of customers have bad experiences?
…………………………………………………………………………………………………...
Activity 4: Find idioms in the first and last paragraphs that mean the following.
1. to say that you support or agree with something without doing anything to prove it
2. while physically close to someone
3. information you get by someone telling you
Activity 5: Complete these sentences using the idioms in Activity 4.
1. I’d rather explain ………….…, not on the phone.
2. ………….… is one of the best ways of getting business.
3. Some companies don’t really care about career development, they just ………….… to it.
32
Activity 6: Discussion
Which changes in customer service mentioned in the article have you noticed, and in which
industries?
33
READING 2: OUTLET VILLAGES
Activity 1: Before you read
Retail outlet villages, out-of-town shopping centres selling branded goods at a discount, are
becoming important around the world. Which outlet villages do you know?
Activity 2: Useful vocabulary
Word/Phrase
Part of
Speech
Definition and Example
outlet village
snub
entice
albeit
on the ground
rife
Activity 3: Read this article from the Financial Times by Hannah Kuchler and do the
exercises that follow.
Bargain-hunting tourists find an outlet
Hannah Kuchler
34
Foreign tourists are fast becoming the primary customers for many of Britain’s outlet villages.
Some centres are even sending teams to emerging markets to lure wealthy tourists to plan
trips that snub London’s Bond Street and opt for their discounted designer brands instead. The
number of Chinese consumers visiting Bicester Village in Oxford-shire has almost doubled in
the past year, with tourists from China now making up more than a quarter of all shoppers at
the village.
Value Retail, which runs Bicester and eight other outlet villages throughout Europe, has a
team of 30 people who market the centres to foreign consumers. They visit the countries to
give presentations to tourist companies and use social media to engage with shoppers directly.
Bicester even has its own blog written in Chinese where it uses competitions to entice Chinese
bloggers to write for it. ‘Bicester is better known today in China than Selfridges or Harrods,’
says Scott Malkin, chairman of Value Retail.
‘We’ll get information that a Saudi princess is coming with 50 other women so we’ll create
special accommodation for them and bring in Arabic-speaking staff,’ says Mr Malkin. Taxrefunded sales, which are one way of tracking sales from outside the EU, increased 27 per
cent in the West End of London last year, but rose 88 per cent at Bicester.
McArthur Glen runs seven outlets in the UK and has seen international customers rise by 50
per cent in the past year, albeit from a lower base than at Bicester. ‘Our teams on the ground
noticed a shift in the number of tour buses, the Chinese became visible,’ says Heinrik
Madsen, managing director for McArthur Glen in northern Europe.
Even though they are choosing to buy brands at a discount, foreign customers are not
counting their pennies: the average spend per visit of an international visitor to Bicester is
about £1,000 but it is not unusual for them to spend more than £10,000. Outlet village
companies believe tourists are not embarrassed to buy discounted goods because of the
importance of genuine brands when counterfeited products are rife at home.
Mr Malkin thinks Bicester beats Bond Street not only because of its prices but because it
offers greater anonymity and the opportunity to visit Oxford or Warwick as part of a day out.
To accommodate the new visitors, retailers have started stocking smaller sizes and some are
employing sales staff who speak foreign languages. Value Retail runs courses to teach store
staff what Asian customers expect. ‘The level of customer service has to be very precise
35
because there’s the language barrier, the customers take a lot of time and want to see a lot of
products,’ says Jane Soper, store manager for Jimmy Choo.
Activity 4: Look through the whole article and find:
a) a London shopping street
………….…………….…
b) an outlet village not in London
………….…………….…
c) two London department stores
………….…………….…
d) two companies that own outlets
………….…………….…
e) their chairman and managing director respectively ………….…………….…
f) a retailer
………….…………….…
g) a store manager
………….…………….…
Activity 5: Look through the whole article and match these figures to the things that
they refer to.
8. the increase in international visitors to
McArthur Glen stores last year
9. the increase in tax-refunded sales at
1. …… 30
Bicester last year
2. …… 50
10. the number of women that a Saudi
3. …… 27 per cent
princess may bring shopping with her
4. …… 88 per cent
11. the amount that visitors to Bicester spend
5. …… 50 per cent
on average
6. …… £1,000
12. what a visitor to Bicester might spend
7. …… over £10,000
13. the increase in tax-refunded sales in the
West End of London last year
14. the number of people employed by Value
Retail to market it in Asia
Activity 6: Choose the correct alternative to replace the expressions in italics in the first
paragraph so as to keep the same meaning.
1. Foreign tourists are fast becoming the primary customers for many of Britain’s outlet
villages.
a) first
b) main
c) youngest
2. Some centres are even sending teams to emerging markets to lure wealthy tourists …
36
a) attract
b) trick
c) magnetise
3. … to plan trips that snub London’s Bond Street …
a) go to
b) ignore
c) take in
4. … and opt for their discounted designer brands instead.
a) exclude
b) add
c) choose
5. The number of Chinese consumers visiting Bicester Village in Oxfordshire has almost
doubled in the past year, …
a) gone up by nearly 100 per cent
b) gone up by nearly 200 per cent
c) gone up nearly twice
6. … with tourists from China now making up more than a quarter of all shoppers at the
village.
a) consisting
b) consistent
c) constituting
Activity 7: Find the infinitive form of verbs in paragraph 2 that could be replaced by
these verbs, with no change in meaning.
a) manage
b) sell
c) go to
d) employ (occurs twice)
e) communicate
Activity 8: Look through paragraphs 2 and 3. Which of these things are not mentioned
as part of village outlets’ customer service?
a) employing staff that speak foreign languages
b) employing Arabic-speaking staff
c) employing Chinese-speaking staff
d) giving language training to existing staff
e) getting Arab visitors to write a blog in Arabic
f) getting overseas visitors to use social media too talk about their experiences
g) training staff in what Asian customers expect
h) keeping smaller sizes in stock
i) keeping larger sizes in stock
37
Activity 9: Use appropriate forms of the expressions in brackets in paragraphs 4 and 5
to answer these questions.
a) Is the rise in the number of overseas visitors to McArthur Glen’s outlets directly
comparable to the rise in numbers visiting Bicester? (lower base)
b) Is it the managers at head office who have noticed the increase in numbers with their own
eyes? (on the ground)
c) Has the number of tour buses with Chinese visitors stayed the same? (shift)
d) Are overseas visitors watching how much they spend overall? (count their pennies)
e) Are visitors happy to buy discounted goods? (embarrassed)
f) Are there are a lot of counterfeit goods in the countries they come from? (rife)
Activity 10: Discuss these questions.
1. What could the retail outlets that you use do to improve their customer service?
2. Value Retail runs courses to teach store staff what Asian customers expect. Imagine that
you are running a course for a retailer that has a lot of visitors from your country. What would
the course cover?
38
UNIT 11: CRISIS MANAGEMENT
READING 1: DEALING WITH CRISES
Activity 1: In groups, brainstorm the crises that these companies could have.
a) a pushchair (buggy) company
b) a mobile phone company
Activity 2: Work in pairs. Read your article quickly and choose the best headline.
1. Expect the unexpected
2. How not to take care of a brand
3. No way back from a crisis
Student A: Read Article A
Student B: Read Article B
Article A
By John Gapper
Maclaren is a small private company with a big public problem, one that it has not handled
well.
On Monday, Maclaren announced that it was issuing repair kits for up to 1 million pushchairs
it had sold in the US over the past decade after 12 cases in which children’s fingertips were
chopped off in the pushchairs’ hinges. By that afternoon, its website had frozen and its phone
lines were overwhelmed by parents. Meanwhile, the British company told non-Americans
they would be treated differently.
Instead of a formal product recall, it was simply issuing warnings to owners not to let children
stick their fingers in the folding mechanism as they opened the pushchairs. Repair kits to
cover the hinges would not be automatically dispatched to every Maclaren owner, as in the
US.
39
Outrage ensued, with messages on Twitter such as ‘WHAT?! Amputations from a stroller?!’
By the time Farzad Rastegar, Chief Executive of Maclaren in the US and the brand’s
controlling shareholder, had lunch with me in New York on Tuesday, he sounded shaken.
‘Did I expect this kind of coverage? No, I did not,’ he said. It was hard to grasp why. The
words ‘child’ and ‘amputation’ in a media release from the US safety regulator would surely
terrify anyone.
After talking to him, I concluded that Maclaren does not have a bad story to tell – its safety
standards are higher than cheaper rivals. But it has done a poor job of telling it.
Therein lie lessons for companies that face similar crises, of which there are a lot. Nokia has
announced a recall of 14 million phone batteries, while Toyota is still coping with a recall of
3.8 million cars with floor mats that can make the vehicles accelerate uncontrollably and
crash.
Lesson one: be ready. When the announcement of the recall leaked early, Maclaren was left
floundering. Lesson two: empathise. Maclaren is the latest of many companies to fall into the
trap of being inwardly focused and failing to realise how customers will react. Lesson three:
be polite. Lesson four: don’t discriminate. Maclaren’s biggest mistake was to appear to be
treating American children’s fingertips as more precious than those of children in the UK and
other countries.
Article B
By Morgen Witzel
Crises are an inevitable part of management, and the larger the business grows, the bigger the
crises seem to become. However robust a business seems, it is still fallible. Arthur Andersen,
the accountancy firm, and Marconi, the telecoms equipment maker, are two once-great
businesses that have disappeared in recent years.
Not every crisis can be foreseen. Sometimes managers will know that a threat exists, but will
not know when or where it will materialise. The chances of an airliner crashing, for example,
are extremely small, but every airline must still live with the possibility.
40
When an Air France Concorde crashed on take-off from Paris – the first accident involving a
Concorde – Air France was prepared to deal with the issue.
Managers moved quickly to withdraw Concorde from service, announce an investigation into
the accident and reassure the travelling public that it was still safe to fly Air France. The
following day the airline’s share price did decline, but not by much and not for very long.
Intel, the world’s leading maker of semiconductors, suffered a huge and unforeseen crisis
when it emerged that a small proportion of its Pentium microprocessors were faulty. Quickly
assessing the options, the company took the brave step of recalling and replacing the entire
production run of the series. The move cost more than $1bn (£550m) and probably saved the
company. Intel showed that it was committed to its product, whatever the short-term cost, and
customers responded positively.
Looking back on the incident, Andy Grove, Intel’s Chairman and then Chief Executive,
compared managing in a severe crisis to an illness. Strong, healthy companies will survive,
although at a cost to themselves. Weak companies will be carried off by the disease and will
die. In Mr Grove’s view, the key to successful crisis management is preparedness. Forward
thinking and planning are essential; understanding the nature of the crisis that might occur can
help managers be better prepared, as the Air France example shows.
However, while forward planning is necessary for crisis management, it is not sufficient. Not
every crisis can be foreseen or planned for. Good crisis management requires the ability to
react to events swiftly and positively, whether or not they have been foreseen.
Activity 3: Useful vocabulary
Word /
Part of
Phrase
Speech
Definition and Example
hinge
recall
41
outrage
ensue
amputate
amputation
shaken
coverage
flounder
empathise
empathize
robust
fallible
materialise
materialize
run
42
carry sth
ßà off
Activity 4: Read your articles again and take notes on these questions.
1. What crises happened?
2. How did the companies mentioned deal with their crises (if this is mentioned)?
3. What lessons can be learned?
Activity 5: Using your notes, tell your partner about the content of your article.
Activity 6: In pairs, make as many word partnerships as you can by matching the verbs
(1-7) to the nouns (a-g). More than one combination may be possible.
1. handle
a) a warning
2. issue
b) a problem
3. face
c) a crisis
4. announce
d) an investigation
5. cope with
e) a recall
6. deal with
f) the public
7. reassure
g) an issue
Activity 7: Discuss other companies you know who have handled crises well / badly.
43
READING 2: CRISIS PR
Activity 1: Discussion
In your country do public relations firms specialise in either corporate or private work, or do
they undertake both?
…………………………………………………………………………………………………...
…………………………………………………………………………………………………...
Activity 2: Useful vocabulary
Word /
Part of
Phrase
Speech
Definition and Example
spin doctor
scrutiny
revile
turn sth
ßà
around /
round
allegation
pummel
aftermath
orchestrate
= statemanage
44
step down =
step aside
grilling
referral
Activity 3: Read this article from the Financial Times by Matthew Garrahan and do the
exercises that follow.
The spin doctor of restructuring
By Matthew Garrahan
Mike Sitrick has a book with hundreds of media contacts and is the spin doctor’s spin doctor,
helping clients cope with extreme media scrutiny and advising them how to tell their side of
the story. He says, however, PR is about much more than stories in newspapers. ‘We ask the
client: who do you want to communicate with? Is it customers, employees, suppliers?’ His
talents are summed up in the title of his book Spin: How to Turn the Power of the Press to
your Advantage. But although most of his firm’s work is for businesses in trouble, he is
probably best known for his celebrity work.
Clients are often controversial – such as Chris Brown, the singer who was arrested after
assaulting his pop star girlfriend Rihanna, or Michael Vick, the football player who briefly
became one of America’s most reviled men for his involvement in a dog-fighting ring. ‘We
represent people trying to get their lives back in order,’ says Mr Sitrick. ‘I have to believe that
even if they have done something wrong, they are trying to turn their life around – or that
allegations against them are false.’
The celebrity work generates headlines but it is his corporate clients that generate most of the
firm’s revenues – more than 90 per cent, according to Mr Sitrick. The company does not
disclose its profits but in the past 12 months revenues were about $25m (€18.2m, £16.5m), he
45
says. His corporate work ranges from shaping the PR strategy for Exxon when it was being
pummelled by negative headlines in the aftermath of the Exxon Valdez oil spill, to advising
the late Roy Disney and Stanley Gold when he orchestrated their campaign to remove
Michael Eisner as chairman of Walt Disney in 2003. The campaign led to 43 per cent of
Disney shareholders withholding their support from him. Mr Eisner later stepped down
voluntarily.
Mr Sitrick acted for Patricia Dunn, the former Hewlett-Packard chairman, who resigned in
controversial circumstances after a boardroom spying scandal and put her up for a grilling on
CBS’s hard-hitting ‘60 Minutes’ television programme. ‘People said we were crazy,’ he says.
‘Some clients say to us: we’ll talk, but only to a softball reporter. But that’s wrong – you have
to go in front of tough but fair reporters and make your case.’ A California judge later
dismissed all charges against her.
All his business comes by referral – ‘We don’t even have a brochure’ – and he tends to
employ only former journalists: his staff have, between them, won seven Pulitzer Prizes. ‘I
always felt it was easier to teach a journalist what PR was than teach a PR person what news
was.’
Activity 4: Read paragraph 1 and decide if these statements are true or false.
Mike Sitrick ...
a) has a ‘book’ that is referred to in line 1 and this is the same as the one referred to in line 5.
b) is a spin doctor.
c) is not admired by others working in PR.
d) helps his clients to deal with the media.
e) tells clients to concentrate on communicating with customers.
f) is best known for his work with famous people.
g) earns most of his money from working with companies.
Activity 5: Use appropriate forms of expressions from paragraph 2 to complete these
statements.
If someone ...
a) does something that not everyone likes, they are ...................
b) is taken by the police to a police station, they are ...................
c) is hated and despised, they are ...................
46
d) tries to behave better in the long term, they try to get their lives ............... ................
............... and turn their ................... .................... (2 expressions)
e) has ................... made against them, these are statements that may be true or false.
Activity 6: Answer these questions using the words given and correct forms of
expressions from paragraph 3 of the article.
a) Does Mike Sitrick’s corporate work generate most of his sales?
-Yes, even if it doesn’t generate as many ..................
b) Does his corporate work cover a wide area?
-Yes, it .................. from work related to the Exxon Valdez disaster to work with Disney.
c) Did he work for Exxon a long time after the disaster?
-No, he worked for them in its ..................
d) Did he organise the campaign to remove Michael Eisner at Disney?
-Yes, he was the one who .................. it.
e) Did a large number of shareholders stop supporting Eisner?
-Yes, 43 per cent .................. ................. ..................
f) Was Eisner fired?
-No, he ................ ................. ..................
Activity 7: Use the expressions in the box to replace those in italic in the extract so as to
keep the same meaning.
journalist who asks easy questions
dropped
left her job
difficult interview
mad
critical
Mr Sitrick acted for Patricia Dunn, the former Hewlett-Packard chairman, who resigned a) in
controversial circumstances after a boardroom spying scandal and put her up for a grilling b)
on CBS’s hard-hitting c) ‘60 Minutes’ television programme. ‘People said we were crazy,’ d)
he says. ‘Some clients say to us: ‘We’ll talk, but only to a softball reporter’ e). But that’s
wrong – you have to go in front of tough but fair reporters and make your case.’ A California
judge later dismissed f) all charges against her.
Activity 8: Correct the structures of the expressions as they are used in paragraphs 4
and 5. (There is one word too many in each structure.)
a) act up for a client
47
b) put someone on up for a particular event
c) go on in front of an interviewer
d) dismiss charges opposed against someone
e) employ on someone in a job
f) win up a prize
g) teach in someone what something is
Activity 9: Discuss these questions.
1. If you were a PR professional, would you act for ...
a) an oil company responsible for causing huge environmental damage?
b) a celebrity with a ‘wild’ private life?
Why? / Why not?
2. Think of a recent corporate or celebrity scandal. Describe the situation and the way it was
dealt with professionally in terms of PR.
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UNIT 12: MERGERS AND ACQUISITIONS
READING 1: ACQUIRING A GREEN BUSINESS
Activity 1: In groups, look at the table below and answer these questions.
1. What do the companies in column A do?
…………………………………………………………………………………………………...
…………………………………………………………………………………………………...
…………………………………………………………………………………………………...
2. Match the company in column A to the company that it acquired in column B.
Feel free to guess.
3. What do you think all the companies in column B have in common?
A
B
Danone
Ben and Jerry’s
L’Oreal
Stonyfield Yogurt
Colgate-Palmolive
The Body Shop
Unilever
Aveda
Cadbury Schweppes
Green and Black’s
Estee Lauder
Tom’s of Maine
…………………………………………………………………………………………………...
…………………………………………………………………………………………………...
…………………………………………………………………………………………………...
…………………………………………………………………………………………………...
Activity 2: Read the first paragraph of the article and check your answers to Activity 1.
Activity 3: Useful vocabulary
Word /
Part of
Phrase
Speech
Definition and Example
swallow up
conglomerate
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respectively
mere
revere
hippie
Darwinism
mainstream
folks
flag
premium
back and
forth
as it were
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Green targets
By Melissa Shin
It ain’t easy being green these days - especially if you’re an independent green business.
The list of smaller, green companies being swallowed up by global conglomerates is growing
in both prestige and numbers: responsible ice-cream producer Ben and Jerry’s, now owned by
Unilever; organic yogurt maker Stonyfield Yogurt, now in partnership with Danone;
alternative beauty companies The Body Shop and Aveda, now owned by L’Oréal and Estée
Lauder respectively; organic chocolatier Green and Black’s, now owned by Cadbury
Schweppes; Tom’s of Maine toothpaste, now owned by Colgate-Palmolive; personal-care
company Burt’s Bees, acquired by Clorox in November 2007; and Husky Injection Molding
Systems, acquired in December 2007 by Onex Corporation for $960 million.
It’s not hard to see why small companies are vulnerable – multinationals can offer increased
distribution, access to more markets, and most of all, cold, hard cash. And large corporations
often find it easier to acquire than to innovate.
Consumers are at the very least surprised to discover that their favourite brands have become
mere subsidiaries within a large multinational.
A recent poll by the website Treehugger.com (ironically, this once-independent site is now
owned by the Discovery Channel) found that 35 per cent of consumers take their business
elsewhere when corporations acquire their once-revered brands.
Skeptics of responsible retailing can easily suggest that small companies have simply reached
their expiration date – unfortunate hippie victims of corporate Darwinism. But these
partnerships can help bring ethical activities into the mainstream.
‘We’re fortunate,’ says Sean Greenwood, spokesperson for Ben and Jerry’s. ‘We could have
had a lot of businesses that could have bought us and [closed us down]. But they didn’t do
that. And I applaud them for that and for recognizing and understanding that that there’s a
value in keeping the folks who are trying to hold on to what’s really important: the essence of
Ben and Jerry’s.’
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In April 2000, the Anglo-Dutch Unilever NV announced it would buy flagging Ben and
Jerry’s stocks for $43.50 a share, a large premium over the previous day’s closing price of
$34.93.
Even though the initial takeover caused factory closings, job losses, and management
changes, Greenwood says that his company has helped change Unilever.
‘There’s been a good give and take, back and forth with the organizations,’ he says. ‘It feels
like this is a good fit.’
But co-founder Jerry Greenfield told the UK’s Green Futures magazine in 2006 that he
doesn’t feel that fit with Ben and Jerry’s any more.
‘I have no responsibility and no authority in the company,’ he said. ‘I have my good name. I
have an ability to influence things I want to, and to not be interested in things I’m not
interested in. That’s the extent of my role.’
He went on to add, though, that influence does exist.
‘I was skeptical about this supposed ‘transport of values’ from Ben and Jerry’s to Unilever,
but it has happened to some degree,’ Greenfield observed.
Kevin Ranney, Managing Partner and Director of Research at Jantzi Research, says that
positive transfers from the acquired company to the acquirer are difficult to quantify.
‘That’s one of the reasons why we’re not really excited to see these acquisitions occur,’ he
says. ‘The reality is that what Ben and Jerry’s was all about is now buried deeply within a
massive corporate structure, and it has relatively little impact on anyone’s assessment of
Unilever.’
Sean Greenwood says that while customers understand there has been a management change,
they still support the ice cream.
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‘I don’t think people say, ‘Wow, this pint today in January 2003 is different than the
December pint of 2002.’ I think they are saying Ben and Jerry’s has continued to be a Ben and
Jerry’s organization and product throughout our years.’
The proof is in the pudding - or ice cream, as it were. Ben and Jerry’s announced in 2006 that
it would be expanding its fairtrade ingredients to include Fair Trade Certified coffee, vanilla,
and cocoa, and it was also the first national American food manufacturer to move towards a
total transition of its products to ‘Certified-Humane’ cage-free eggs.
Nevertheless, the Ben and Jerry’s experience has served as a warning sign to other firms.
from Corporate Knight, The Canadian Magazine for Responsible Business
Activity 4: Read the rest of the article and say if these statements are true or false.
1. Sean Greenwood is more positive about the takeover of Ben and Jerry’s than Jerry
Greenfield and Kevin Ranney.
2. Large companies acquire small companies to help them with innovation.
3. The majority of customers shop elsewhere when their favourite brands have been taken
over.
4. Ben and Jerry’s shares were doing well just before Unilever bought them.
5. Ben and Jerry’s are using more freetrade ingredients than before the acquisition.
Activity 5: Answer these questions.
1. What do large companies have that smaller companies don’t?
…………………………………………………………………………………………………...
2. What problems did Ben and Jerry’s have just after the acquisition?
…………………………………………………………………………………………………...
Activity 6: Find the three expressions in the first paragraph that describe one company
being taken over by another company.
…………………………………………………………………………………………………...
Activity 7: Complete the paragraph below with the words in the box.
conglomerate
corporations
multinational
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partnership
subsidiary
Toshiba is a large (1) ………………….. that has acquired several (2) …………………..
engaged in different industries. It is also a (3) ………………….., as it has offices in many
different countries. Toshiba recently formed a (4) ………………….. with United Parcel
Services to design a more efficient repair process for laptop computers. In 1987, Toshiba
Machine, a (5) ………………….. of Toshiba, was accused of selling parts used to produce
submarine propellers to the Soviet Union.
Activity 8: Discuss this statement.
The transport of values from a smaller green company to a large multinational that has taken
it over is impossible.
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READING 2: EXPANDING ABROAD
Activity 1: Discussion
What is the attitude in your country to takeovers of companies from abroad?
Activity 2: Useful vocabulary
Word /
Part of
Phrase
Speech
Definition and Example
poise
stockbroking
entrenched
venture
portal
inroads
contender
contemplate
blitz
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logistics
Activity 3: Read this article from the Financial Times and answer the questions.
Japan’s Rakuten poised for overseas expansion
Robin Harding in Tokyo, Kathrin Hille in Beijing and Song Jung-a in Seoul
In its 13 years of existence, Japan’s Rakuten has expanded from online shopping into
everything from credit cards and stockbroking to golf rerservations and even a professional
baseball team. So when president Hiroshi Mikitani says that he plans to expand into 27
foreign markets – 10 of them by the end of this year – he deserved to be taken seriously.
Rakuten’s overseas push is part of a growing trend by Asian Internet companies to expand
abroad as their domestic growth starts to slow down. But in spite of the ambitions of Asia’s
young Internet billionaires, cultural barriers and entrenched local competition may prove
impossible to overcome. There have been a series of deals so far this year. In addition to
Rakuten’s tie-up with search engine Baidu to launch a Chinese version of its shopping site,
South Korea’s largest search engine NHN has bought the Japanese Internet access portal
Livedoor, and China’s Tencent has invested $300m in Digital Sky Technologies of Russia.
Kentaro Hyakuno, the head of Rakuten’s international business, says his company stayed
domestic on purpose while building up the eco-system of merchants that use its e-commerce
site. Now it is ready to expand abroad and, Mr Hyakuno says, ‘Japan is growing old, with less
children, and if you want to keep growing as a corporation then you need opportunity.’
South Korea, whose Internet companies began to venture abroad in the early 2000s, provides
some evidence. Its portals and search engines have struggled to make inroads into other
countries, but its online game makers have become serious contenders in overseas markets
such as China, Japan and the US.
Daum, the country’s largest portal, took over Lycos of the US in 2004 but had struggled to
turn around the loss-making US business as it could not compete effectively with bigger rivals
such as Google and Yahoo. ‘They face high entry barriers to offer portal and search services
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in foreign countries because such services are already dominated by big local players,’ says
Wayne Lee, analyst at South Korea’s Woori Investment & Securities. ‘Language and culture
are very important for Internet access portals and search services, compared with online
games. And it is not easy for foreign players to do well in offering such services based on
local languages.’
For Rakuten, as it contemplates its international blitz, the answer is to look for markets where
infrastructures such as broadband, credit cards and delivery logistics are improving but the
market is not yet saturated with established players. ‘We evaluated about 50 countries, we
grouped them, and then we worked out the best approach,’ says Mr Hyakuno. So far it has
included launches in Taiwan and China and an acquisition in Thailand, India – a huge
potential market – may be next on the list.
Activity 4: Look through the whole article and find:
a) a Japanese Internet company (with other activities too) and two of its executives
b) a Chinese Internet search company
c) a South Korean search engine and the Japanese Internet access provider that it has bought
d) a Chinese company and the Russian company in which it has invested
e) a South Korean Internet access provider and the US search engine that it bought
f) a South Korean financial institution and someone who works for it
Activity 5: Match the two parts of these expressions from the first two paragraphs.
1. online
barriers
2. domestic
trend
3. Internet
push
4. cultural
billionaires
5. entrenched local
shopping
6. overseas
growth
7. growing
competition
Activity 6: Match the expressions above to their meanings.
a) strong companies in markets that you want to enter
b) increase in your home sales
c) efforts by a company to expand abroad
d) a tendency that is getting stronger
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e) buying things on the Internet
f) ways of doing things in another market that make it difficult to enter
g) people who have made a lot of money from web businesses
Activity 7: Correct the expressions in italic as they are used in paragraphs 3 and 4, using
the same number of words.
a) If you do something intentionally, you do it with purposeful.
b) A company that enters foreign markets expansions broadly.
c) People and organizations that sell on the internet are merchandise.
d) If a company starts trying to sell outside its home market, it adventures abroad.
e) If a company is not very successful in a foreign market, it fights to do roads on those
markets.
f) Competitors new to a market can be referred to as contentious.
Activity 8: Match these questions and answers from paragraphs 3 and 4.
1. Did Rakuten want to expand abroad
a) Yes, but for real opportunity they need to
earlier?
look abroad.
2. Is Japan’s population getting
b) No, it stayed in Japan on purpose.
younger?
3. Can Japanese companies expand in
c) Yes, they have had trouble getting into
their domestic market?
other markets.
4. Is the experience of South Korean
d) No, they’ve become serious competitors
Internet companies abroad typical?
with overseas companies in at least three
countries.
5. Is the experience of South Korean
e) No, it’s getting older.
game makers the same as that of
Internet companies?
Activity 9: Find the answers to these questions in the last two paragraphs.
Find …
a) the first mention of the first reason for Daum’s difficulties in making a success of Lycos
b) the second mention of this reason
c) the second reason for Daum’s difficulties
d) four aspects of overseas markets that Rakuten looks at before deciding which ones to enter
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e) three steps that Rakuten went through in accessing overseas markets before deciding which
ones to enter
f) three countries that Rakuten has already entered
g) one country it might enter
Activity 10: Discuss these questions.
1. ‘Language and culture are very important for Internet access portals and search services,
compared with online games.’ Why is this?
2. Give advice on language and cultural issues to a foreign company that has acquired a
company in your country.
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