Business English is… What do you think it is? Some people think that be is almost an unidentifiable subject and to some extent this view is justified. To work

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Business English is… ___________________________________ __________________________________________________________

INTRODUCTION

Business English is… What do you think it is? Some people think that BE is almost an unidentifiable subject and to some extent this view is justified. To work out a definition of BE is a tedious task. The simplest approach is probably to present it as a plain equation: Business+English. But is it as simple as that? And is it simple at all? What exactly does the word “business” imply and what part of English is the English we mean?

Let us start from looking at the constituents of the first member of equation: business. These are at least the following:

the structure and organization of business,
producing and selling,
financing,
advertising,
management of business,
marketing,
product development,
the workforce and industrial relations,
selection and recruitment,
training and development,
business environment,
business communication, etc.

Actually the list may be longer. Besides each of the entries in the account above can be presented as a list of its own constituents, e.g. “business communication”:

by device,
face –to-face,
in groups (small vs large).

Each of these could be developed further, i.e.:

communication “by device” means communicating by phone, mail, e-mail, fax, telex,
communication “face-to-face” means oral interacting of two interlocutors in various situations of business, like visiting a company or receiving and entertaining visitors, introducing people and being introduced, exchanging information and others – all united under one heading: socializing,
communication “in groups” means taking part in and chairing meetings, negotiating, giving and receiving presentations, interviewing and being interviewed.

Knowing business terms alone will hardly ensure your being effective in the enlisted situations of communication. What you will need is communicative competence, i.e. skillfulness in hitting the targets of communication. This will require

good command of general English – developed skills of reading, writing, listening and speaking, knowledge of general and specifically business vocabulary, solid knowledge of grammar and functions (the chunks we generally use to indicate our feelings, attitudes, intentions, etc.: agreeing / disagreeing, asking for / giving opinions, advising / suggesting, etc.)
mastering business communication skills (correspondence, telephoning, socializing, meetings, negotiations, presentations)
knowledge of the business world, including cross-cultural awareness
mastering the management skills of problem solving and decision making
mastering the ground skills of understanding business data and modifying business information.

So as you can see the equation above is not sufficient to explain comprehensively what is implied by Business English, which we now can try to define. It looks as if what we mean by Business English is either

English for the purposes of effective communication in business in a variety of specific business contexts

or

a delicious layer cake with a mix of different flavours.

Quick questions:

1. Why is BE sometimes viewed upon as an unidentifiable subject?

2. What are the most essential issues of business?

3. What three main divisions does business communication break up into?

4. What is meant by business communication skills?

5. Can problem-solving and decision-making be regarded as communication skills either?

6. What does the idea of cross-cultural awareness imply?

7. Which of the two BE definitions above is more consistent? Why?

It remains to be said that this course book is based upon the idea of Business English, we have tried to explain above. That is why the major division within every module of the book is as follows:

Section 1: Business World,

Section 2: Business Communication,

Section 3: Case Study.

The final touch in every module is

a glossary

and the crowning glory –

a test.

Nina Medvedeva

Tatyana Valentey

MODULE 1

B U S I N E S S ORGANISATIONS

Section 1: Business world

I. READING

1. Read the following texts. Discuss the answers to the questions below each text. Sum up the main points in writing (250 words).

A business organization can be defined as a firm, a company, a business or a corporation that makes, buys or sells goods, or provides services, to make a profit. The words:

firm,

company,

business,

corporation are often used interchangeably.

Different types of business fall into specific areas of activity. For example, a business may make things, such as furniture or cars, or it may sell items that have been produced by someone else. In addition, a company may be owned by the state, or by private individuals.

The basic terms below will help you talk about how a company fits into the economy.

Sector - a part of the economy (usually occurs after ‘private’ or ‘public’)

Industry - organized activity producing goods or services, for example food, banking, construction, steel, tobacco,, biotechnology.

Private sector - privately- owned and –run companies

Public sector - state-owned and –run organizations, e.g. government departments, and nationalized industries, such as the postal service.

Service sector - all the companies which provide services in areas such as tourism, banking and finance, communications, wholesale and retail trade

Manufacturing sector - all the companies which assemble components into finished products, or which make goods from raw materials (Industry and sector are sometimes used with the same meaning, e.g. the retail sector, the retail industry).

Ownership:

UNLIMITED LIABILITY COMPANIES

The sole trader (BrE) (a sole proprietorship- AmE) is an organization legally owned and controlled by one person. It is commonly called a ‘one-man business’, which implies that its employees have no legal responsibility for the conduct of the business.

The sources of financial capital available to establish and expand a sole trader business are quite limited:

● the sole trader’s own savings,

● borrowing from friends and relatives,

● borrowing from banks and building societies,

● trade credit, i.e. obtaining stock without having to pay until the goods have been sold and the business has had time to generate some cash,

● investing past profits.

Many people do make a success of a sole trader business, as it has certain advantages over larger organizations:

● they are easy to establish in terms formal procedures,

● the complete unity of ownership and control is in the hands of one person,

● there is better understanding between the owner and the employees,

● services offered to the consumer are more personal.

The drawbacks of a sole trader business can be summed up as follows:

● the sources of finance are very limited,

● the owner is entirely responsible for the debts of the business (unlimited liability),

● all the owner’s personal assets can be taken to settle the debts,

● the owner is unlikely to be a specialist in all aspects of managing the business,

● the owner has to work long hours, there is no continuity of the business.

The above problems often lead the sole trader to consider ways of expanding the firm which will involve changing the legal structure of the business.

QUESTIONS:

1. What kind of organization is sole proprietorship?

2. Why is sole trader type of business often called ‘one-man’ business?

3. What are the main sources of financial capital for a sole trader business?

4. What are the advantages and the disadvantages of sole proprietorship?

5. What is meant by ‘unlimited personal liability’?

Partnership (BrE) (general partnership AmE)

is the first form of organization, the owner is likely to consider when changing the legal structure of the business. Partnership is the type of organization where a business is jointly owned by 2 or more people. There exist two main types of partnership.

The ordinary type of partnership means that all the partners have unlimited personal liability for the debts

of the business. So if the business fails, all the partners can be declared bankrupt.

The limited partnership allows some partners to join the business contributing money only. They take no part in the management of the business and have no right to be consulted about decisions. However they can enjoy limited liability, i.e. they are not liable for the debts of the business beyond the amount they have already contributed. These partners are entitled to receive a return on the amount of money they contributed.

Partnerships have certain advantages over sole proprietorships:

● there are more sources of capital

● there are more people involved in the business

● the burden of management is reduced (decision-making can be shared),

● there is an opportunity for the partners to split responsibilities.
The drawbacks of this type of business unit do not make it suitable for all types of business:

● one partner’s decisions will be legally binding on the others,

● partners risk their personal assets,

● disputes between the partners may lead to the dissolution of the partnership,

● the continuity of the business is uncertain.

QUESTIONS:

1. What is the major difference between the two types of partnership?

2. Why might 2 independent traders consider going into partnership?

3. What are strong and weak points of partnership?

LIMITED LIABILITY COMPANIES

It is possible to establish a business which has a completely separate legal existence from the people who own and manage it and can work for itself and be responsible for itself. This process is known as incorporation and it creates a separate legal or judicial personality. The most common type of business unit established by the process of incorporation is the Limited Company. The principle difference between the private and the public limited company is in size and in how the shares are bought and sold.

The basic requirements to form a public company are:

● the minimum number of people – 2,

● a minimum authorized share capital -& 50 000,

● the name of the company must end with Plc (Public Limited Company).

The vast majority of companies are private. Their most essential features are:

● no limit on the number of shareholders,

● the company is not allowed to sell shares or debentures to the general public,

● the name of the company must contain Ltd (Company Limited).

The formalities for establishing a Plc are more complex because the shares have to be made available to the public through the stock market (floatation).

Private limited company –BrE = limited liability company (AmE)

Public limited company BrE) = Listed company (AmE)

QUESTIONS:

1.What is the purpose of incorporation?

2.Give 2 differences between a Plc and a Company Limited.

3.What are the strong points of incorporation?

2. Read the 5 texts below. Note the terms and the information you can not do without in business. Write 15 Wh-questions. Work in pairs asking and answering questions. Sum up the main points in the form of an oral talk.

1/ Other forms of organization:

You may come across other forms of organization. The following three are among the most common:

Franchise a business arrangement in which one party (the franchisee) pays for the right to use the name, and sell the products of, another company (the franchiser).

Co-operative is an association formed for a particular purpose, e.g. to give better service to its members, and in which each member has an equal vote.

Non-profit organization is an organization (usually a charity), that raises funds and offers products and services, but does not have to make a profit to stay in business.

2/ Relationships:

Businesses expand, they may buy shares in other companies, or join with other companies for a particular purpose. The words below describe the

relationships these companies can have with one another.

A group is a number of subsidiary companies operating under one leading company known as the parent company. A subsidiary is a company that is half or wholly owned by another company (the parent company).

A large corporation operating in many countries is called a multinational; most of the world’s largest corporations are multinationals. A holding company is the leading company in a group. It holds all, or more than half of, the shares in one or more other companies. The term conglomerate refers to a group of companies

o

perating in business activities which are not related to that of the leading company in the group.

When two or more companies come together to work on a particular project, or to form another company, they form a joint venture. In such cases, the two companies involved remain separate legal entities.

A consortium is a group of companies which come together to undertake a project which any one of the members can not carry out alone.

3/ Corporate restructuring:

In the world of business, it is usual to see news of changes to the structure of companies and groups of companies. Many companies join with or buy other companies in order to have better control of a particular market, or to diversify their business. As the resulting mergers and acquisitions have many effects, for example on share prices and employment, the business community watches them with interest.

When companies merge they combine to form one company in an agreement known as a merger.

To buy another company or to win a controlling share of a company is to acquire a business, make an acquisition or take over a company. There are different kinds of takeover: a hostile takeover is a situation in which a company is bought out, but where the owners do not want to sell. A friendly takeover on the other hand refers to a situation in which a company is willingly bought out. When someone wants to buy a company they have to make a bid for it, i.e. offer to buy it at a certain price. A buyout is the purchase of a company, especially by its management or staff.

4/ Organizational structure:

The structure of organizations varies greatly according to the nature of the business. There are several factors which influence this structure, including:

● the number of locations and employees

● the economic sector

● the type of market in which they operate

● the type of customer

● the degree of management control required

● the complexity of the business activities.

Some corporations will, therefore, have many levels of management, while others may have a flatter structure with fewer layers. In recent years, the trend has been towards reducing the number of layers in large corporation.

Listed below are the terms used to describe the basic layers of management in a public limited company in the UK and a listed company in the US.

UK Structure

Board of Directors

Chairman of the Board

Managing Director (MD)

Deputy Managing Director

General Manager

Department Manager

US Structure

Board of Directors

President

Vice President and Chief Executive Officer (CEO)

Senior Vice President

Director

Manager

Most organizations have a hierarchical or pyramidal structure, with a single person or a group of people at the top, and an increasing number of people below them at each successive level. A clear line or chain of command runs down the hierarchy, so that all employees know who their superior or boss is, to whom they report, and who their immediate subordinates are, to whom they can give instructions. Some people in an organization have an assistant who helps them; this is an example of a staff position: its holder has line authority, and is not integrated into the chain of command.

Businesses that can not be divided into autonomous divisions with their own markets can simulate decentralization, setting up divisions that use internally determined transfer prices when dealing with each other.

An inevitable problem with hierarchies is that people at lower levels are unable to make important decisions, but are obliged to pass on responsibility to their boss, unless responsibilities have been explicitly delegated.

One solution to this problem is matrix management, in which people report to more than one superior: e.g. a brand manager with an idea can deal

Yet the activities of most large organizations are too elaborate to be organized in a single hierarchy, and require functional organization, usually with production or operations, finance, marketing and personnel departments. Large companies manufacturing a wide range of products, e.g. General Motors, are normally decentralized into separate operating divisions, each with its own engineering, production and sales departments.

directly with the appropriate managers in the finance, manufacturing and sales departments. Another, more recent idea is to have a network of flexible groups or teams, instead of the traditional departments, which are often at war with each other; they are formed to carry out a project, after which they are dissolved and their members reassigned.

5/What do the departments of companies do?

PERSONNEL touches all parts of the business, because it touches all the employees. The personnel group manages employee affairs. They find and screen new employees, keep employee records and run training, recreation and education programs. The group

also manages employee benefits (or fringe benefits) such as medical coverage, life insurance, profit sharing plans and pension plans. Nowadays it’s fashionable among some companies to call the personnel function human resources, which to some may sound more important or glamorous.

INFORMATION SYSTEMS is also called management information system or EDP. This is the computer and telecommunications heart of a corporation. It gets and transmits timely information about business inside and outside the company.

PURCHASING can be little more than filling out purchase orders, approving bills from suppliers or vendors (firms that sell products and services to the company) and looking for the best deals on minor items such as calculators or desk chairs. Or it can be a very powerful group that is a key buying influence, perhaps specializing in basic materials, parts design or business systems.

MANUFACTURING This function covers a lot of activities. Raw materials and parts receiving, plant engineering, production, production scheduling, quality control or quality assurance and shipping. The place where manufacturing takes place is usually called the production line.

ACCOUNTING in the US is called accountancy in Great Britain. The people in this function are accountants. They keep track of all the company’s financial dealings and play an important role in setting the company’s annual budget. They produce the financial information that goes into the company’s annual and quarterly reports to shareholders.

R&D (Research and Development). Often business magazines and newspapers refer to this function simply as R&D. So do people in general. In R&D scientists and engineers engage in what are often called technical programs. They are assisted by technicians, specialists who are less educated or experienced.

TRANSPORTATION, also called Traffic, manages the movement of raw material and parts into the company and finished products to the customers in domestic or foreign markets. Often the manufacturer and the customer prefer different delivery dates: the customer wants the products delivered on time as requested (OTAR), but the manufacturer wants a later, more convenient date when the goods are delivered on time as promised (OTAP). The best companies deliver on time as the customer requires.

MARKETING is bringing a product to market and building its market share. Marketing has become almost scientific, thanks to computers and modern market research. Marketing programs have to consider the competition, market share and margin (the difference between product cost and sale price). To meet their objectives marketing people devise strategies such as market segmentation and positioning. Marketing includes advertising.

SALES is sometimes a part of a company’s marketing operation, but it’s a distinctly different business activity. While marketing people develop market strategies, salespeople pursue sales objectives. Effective sales representatives have good contacts in the market place and good working relationships with the other departments in their companies. Most sales reps work in the field: their sales territories are away from the home office (headquarters).

(from ‘Business Studies Today’ by John Ryan and John Richards & ‘Chambers Guide to English for Business’ by Barbara Campbell)

3. Find the answers to the following questions in the text that follows:

What is the role of the board of directors?
What is the senior executives’ role?
What happens at the annual general meeting?
What is the difference between a strategic and a tactical decision?
What part can non-executive directors play in the proceedings?
What objections can be raised against the appointment of non-executive directors?
What is meant by an interlocking board of directors?
How is that a board of directors can control a company though they only meet, say, once a week?

The board of directors of a limited company is primarily responsible for determining the objectives and policies of a business. It is the directors who determine the direction the business is going to take. They will need to ensure that the necessary funds are available and will appoint key staff to whom they will delegate the authority to run the business on a day-to-day basis. They will need to design an effective organization structure so that there is both a chain of command linking one level of management with another and an effective communication network so that instructions can be passed downward and information passed upward.

The directors are appointed by the shareholders, normally at the company’s annual general meeting, at which the chairman of the board will be expected to account for their stewardship during the previous year. The company’s accounts will be presented to the shareholders at that time so they can judge for themselves whether or not the board has been successful.

Direction in business is like strategy in a war situation. The strategic decisions determine the areas in which the company’s resources will be employed. Above all it involves planning to ensure that the business first survives and then flourishes. Strategic decisions, made by the board of directors, are concerned with the disposition of resources. These contrast with the tactical decisions by means of which the senior executives (appointed by the directors) carry out in detail the plans conceived or approved by the board of directors.

The fact that boards of directors tend to meat rather infrequently, say once a week, means that part-time directors can be elected to the board. Since they will not have departmental responsibilities within the company they are often described as non-executive directors. There are arguments in favour of such directors though they may lack a detailed knowledge of the company’s activities. They may bring expertise to the board. Some are lawyers, or experts in tax affairs. Some represent influential groups of shareholders whose support is necessary if the board is going to carry out its plans, while others are directors in a number of companies and are used to interlock boards within a group of companies. For example, a holding (or parent) company may appoint a director from their board to serve on the board of a subsidiary company, with a view to keeping a watching brief on the director’s activities.

(from ‘English for Business’ by J. Chilver)

II. KEY VOCABULARY OF THE SECTION:

Give the Russian equivalents of the following words and word-combinations. In case of problems return to the texts above and elaborate on them further.

To account for one’s stewardship- нести ответственность за должность управляющего

To acquire a business- обзавестись делом

To approve bills- одобрять законопроекты

To appoint key staff- назначать ключевых сотрудников

To assemble components- собирать детали

Accountancy- бухгалтерское дело, счетоводство

Accountant- бухгалтер, счетовод

Annual and quarterly reports- годовые и квартальные отчёты

At each successive level- на каждом последующем уровне
B

To be available- быть доступным, полезным

To be declared bankrupt- объявить себя банкротом

To be decentralized- быть децентрализованным

To be divided into autonomous divisions- быть поделённым на самостоятельные части

To be dissolved-быть растворённым

To be entirely responsible for the debts- нести всю ответственность за долги

To be jointly owned by 2 or more people- находиться в совместном владении 2 или более людей

To be integrated into a chain of command- быть объединённым в цепь инстанций

To be legally binding on smb- принимать на себя законные обязательства

To be legally owned and controlled by- находиться в законном владении и под управлением

To be liable for the debts- быть ответственным за долги

To be reassigned- быть вновь назначенным

To bring expertise to the board- доводить компетентность до руководства

To bring a product to market- продвигать товар на рынок

To build market share (of a product)- получить долю (продукта) на рынке

To buy and sell shares- покупать и продавать акции