Unit 11. the Structure of the World Economy. International Integration and Trade

UNIT 11. THE STRUCTURE OF THE WORLD ECONOMY. INTERNATIONAL INTEGRATION AND TRADE.

I. Anticipating the Issue Discuss your answers to the following questions. 1. What is the world economy? What are its main concepts? 2. What is international integration? What is international trade? 3. What are the benefits of international integration and trade? 4. What countries does Belarus trade with? What are its imports and ex- ports?

II. Background Reading Read the following text. Focus on the meaning of the boldfaced words.

The Structure of the World Economy. International Integration and Trade. 1. The economy of the world is an international exchange of goods and services. Some economists call it the borderless world. It also refers to the increasing integration of national markets for goods and services into a single global market. In such a market, companies may source from one country, conduct research and development (R&D)1 in another country, take orders in a third country, and sell wherever there exists demand regard- less of the customer's nationality. While nobody would argue that national borders are completely irrelevant, certain influences have caused the globe to become smaller and smaller. These include technological advances in global communication and transportation, the dilution of culture, a de-

1 For You To Know Research and Development (R&D) refers to creative work undertaken on a systematic basis in order to increase the stock of knowledge, including knowledge of man, culture and society, and the use of this stock of knowledge to find/develop new applications. In the world of business, research and development is the phase in a product's life that might be considered the product's 'conception'. That is, basic science must exist to support the product's viability (capable of becoming practical and useful), and if the science is lacking, it must be discovered - this is considered the research phase. If the science exists, then turning it into a useful product is the development phase. Further terminology refinements might call it engineering to refine production so that the product can be made for a cost that appeals to con- sumers. 2 crease in tariff and non-tariff barriers. The world economy covers such spheres as international integration and trade, world banking system, international organisations and multinational corporations. 2. Global economic integration is not a new phenomenon. Some communication and trade took place between distant civilisations even in ancient times. 3. Nowadays one of the reasons for facilitating global integration is technological advances. Another common feature of the contemporary economic landscape and the experience of the past is the continued broadening of the range of products that are viewed as tradable. 4. Government policy plays a critical role in supporting and permitting global economic integration. Progress in trade liberalisation has continued in recent decades. Moreover, the institutional framework supporting global trade, most importantly the World Trade Organisation, has expanded and strengthened over time. Regional frameworks and agreements, such as the North American Free Trade Agreement and the European Union's "single market," have also promoted trade. 5. We can define international trade as economic transactions that are made among countries. Among the items commonly traded are consumer goods, such as television sets and clothing; capital goods, such as machinery; and raw materials and food. Other transactions involve services, such as travel services and payments for foreign patents. International trade transactions are facilitated by international financial payments, in which the private banking system and the central banks of the trading nations play important roles. 6. International trade is not very much different from domestic trade. The main difference is that international trade is more costly than domestic trade. The reason is that a border imposes additional costs such as tariffs, time costs due to border delays and costs associated with country differences such as language, the legal system or a different culture. Another difference between domestic and international trade is that factors of production such as capital and labour are more mobile within a country than across countries. 7. International trade and the accompanying financial transactions are generally conducted for the purpose of providing a nation with commodit- 3 ies it lacks in exchange for those that it produces in abundance. 8. The regulation of international trade is done through the World Trade Organisation at the global level, and through several other regional arrangements such as the North American Free Trade Agreement (NAFTA) between the United States, Canada and Mexico, and the European Union between a number of independent states.

III. Vocabulary Reinforcement 1. Translate the following words and phrases To impose tariffs; to negotiate non-tariff measures; the WTO; dilution of culture; domestic trade; global integration; free trade; supply-chain management; wage-price spiral; borderless world; ongoing decline in transportation costs; foreign reserves; input costs.

2. Complete: use an appropriate preposition where necessary. through (2), to, for, of (3), on, among, in 1. Governments … some countries impose restrictions … international competition … its measures. 2. China, Japan and South Korea have come … an agreement to manage the crisis … international cooperation. 3. The Prime Minister … India admits that India needs to be engaged … management … world economy as it has a lot to contribute. 4. International marketing continues to grow directly contributing to increased and freer trade … nations. 5. The WTO is entitled to impose … sanctions … breaking international trade rules.

3. Use appropriate information from the text to finish the following sentences: 1. The world economy can be presented as … . 2. Global economic integration began … . 3. International trade has emerged for the purpose of … . 4. International trade appears to be more costly than domestic trade due to … . 5. A decrease in tariff levels leads to … . 6. The global marketplace seems to be expanding because … . 4

4. Translate the following word combinations: Мировая экономика/национальная экономика; способствовать международной интеграции; возникновение свободной торговли; региональные рамки; проводить финансовые операции; нетарифный барьер; изобилие товаров; внешняя/внутренняя торговля; отдельные (состоящие из разрозненных частей) шаги; производственный процесс.

V. Reading 1. Translate each of these phrases used in the text. Borderless world; conduct research and development; dilution of culture; tariff/non-tariff barriers; proceed smoothly; tradable products; promote trade; impose additional costs; free trade; soft infrastructure; irrelevant national borders; a rising trend; high-tech consumer goods; ongoing declines in transportation costs.

2. According to the text, mark these statements T (true) or F (false). 1. The world economy is integration of national markets for goods and services into a single global market. 2. New technological advances in various spheres lead to the expansion of the globe. 3. The world economy is the system of processes happening in all countries of the globe individually and independently. 4. Nowadays the range of tradable products is being continually broadened. 5. In the contemporary world government policy plays an insignificant role in global economic integration. 6. Production processes are getting more and more geographically fragmented as it helps to minimise costs. 7. International trade is basically different from domestic trade. 8. Lately the population of some countries has become more engaged in the national economy as they are not willing to accept the process of globalisation.

3. Translate each of these economic terms. 5

Supply-chain management, economic integration, legal frameworks, technological advances, accounting rules, international trade, non-tariff trade, foreign reserves, advocates of free trade, to conduct financial transactions, a nation’s standard of living, trade liberalisation, global competitors, to meet trade and customs procedures, to coordinate production among suppliers, fragmented production processes.

4. Give profound answers to the following questions. 1. What is R&D? 2. Why is the globe considered to be getting smaller and smaller? 3. What is the reason for global integration? 4. What is the role of government in international economic integration? 5. What factors show that most countries are engaged in the global economy? 6. What goods and services are traded internationally? 7. What are the differences between international and domestic trade? 8. How is international trade regulated at different levels? 9. What forces have led to a more integrated economy?

UNIT 12 BANKING

I. Anticipating the Issue Discuss your answers to the following questions. 1. What functions do banks perform? 2. What is the Belarusian main financial institution? Do its functions differ from those performed by other banks?

II. Background Reading Read the following text. Focus on the meaning of the boldfaced words. Banking 1. Without financial markets, borrowers would have difficulty finding lenders themselves. Intermediaries such as banks help in this process. Banks take deposits from those who have money to save. They can then lend money from this pool of deposited money to those who seek to borrow. 2. Commercial or retail banks are businesses that trade in money. They receive and hold deposits, pay money according to customers' 6 instructions, lend money, offer investment advice, exchange foreign currencies, and so on. They make a profit from the difference (known as a spread or margin) between the interest rates they pay to lenders or depositors and those they charge to borrowers. Banks also credit because the money they lend, from their deposits, is generally spent (either on goods or services, or to settle debts), and in this way transferred to another bank account – often by way of a bank transfer or a cheque (check) rather than the use of notes or coins – from where it can be lent to another borrower, and so on. When lending money, bankers have to find a balance between yield and risk, and between liquidity and different maturities. Merchant banks in Britain raise funds for industry on various financial markets, finance international trade, issue and underwrite securities, deal with takeovers and mergers, and issue government bonds. Investment banks in the USA are similar, but they can only act as intermediaries offering advisory services, and do not offer loans themselves. The distinction between commercial and investment banking has become less clear in recent years. 3. Deregulation in the USA and Britain is leading to the creation of 'financial supermarkets': conglomerates combining the services previously offered by banks, stockbrokers, insurance companies, and so on. 4. A country's minimum interest rate is usually fixed by the central bank. This is the discount rate, at which the central bank makes secured loans to commercial banks. Banks lend to blue chip borrowers (very safe large companies) at the base rate or the prime rate; all other borrowers pay more, depending on their credit standing (or credit rating, or creditworthiness): the lender's estimation of their present and future solvency. Borrowers can usually get a lower interest rate if the loan is secured or guaranteed by some kind of asset, known as collateral. 5. The National Bank of the Republic of Belarus is the central bank and a government agency of the Republic of Belarus operating exclusively in the interests of the Republic of Belarus. Among others, it performs the following functions: it develops the Republic of Belarus Monetary Policy Guidelines and pursues common monetary policy of the Republic of Belarus, in accordance with the legislative acts of the Republic of Belarus; it issues money; it carries out foreign exchange regulation; it acts as a central depositary of Government and National Bank securities, it carries out state 7 registration of banks and non–bank financial institutions; it prescribes procedures for cash and non–cash settlements in the Republic of Belarus; in consultation with the President of the Republic of Belarus, it establishes gold and foreign exchange reserves and manages them within the scope of its authority; it sets prices for purchasing/selling precious metals and precious stones in carrying out banking operations. 6. Unfortunately, the key terms of finance have been recently associated with the word “crisis”. The global financial crisis of 2008–2009 emerged in September 2008 with the failure, merger, or conservatorship of several large United States-based financial firms and spread with the insolvency of additional companies, governments in Europe, recession, and declining stock market prices around the globe. The causes leading to the crisis had been reported in business journals for many months before September 2008.

III. Vocabulary Reinforcement 1. Translate the following words and phrases To take deposits; the market value of equities; retail banks; to raise funds; the International Monetary Fund; exchange foreign currencies; debt insurance; to finance international trade; governmental bonds; merchant banks; insolvency; maturities; to deal with takeovers and mergers; credit rating; insurance companies; creditworthiness; investment banks; recession; future solvency; 'financial supermarkets'; declining stock market prices; mortgage banks; declines in various stock indexes; liquidity; to face a credit crisis; multinational companies.

2. Complete: use an appropriate preposition where necessary. of(2,) for(2), in(2), at, against, without, to, on(2) 1. Today banks and savings institutions offer ... a wide variety ... services. 2. Different banks charge different fees ... their services. 3. Customers deposit money ... the bank and the bank stores currency ... theft or loss. 4. Customers must then pay back the money ... the bank, usually ... a high interest rate. 5. Depositing ... money, customers can earn money ... their deposit. 8

6. A mortgage loan allows a buyer to purchase a real estate property, such as a house, ... paying the entire value ... the property ... advance. 7. The lender and the borrower agree ... a time period ... the loan.

3. Translate: give English equivalents for the following word combinations. Заем в банке; кредитор/заемщик; финансовый посредник; получать прибыль; банк, занимающийся обслуживанием мелкой клиентуры; торговый банк; инвестиционный банк; банковский счет; комиссионное вознаграждение; учетная ставка; платежеспособность; обеспечение кредита; центральный депозитарий; ценные бумаги; рынок ценных бумаг; расчет наличными; ипотечный банк; спад международной торговли; безнадёжные долги; мировой финансовый кризис; государственные облигации.

IV. Reading

1. Answer the following questions. 2. What financial institutions operate on financial markets? List them. 3. How do banks differ? 4. What is the role of the National Bank of the Republic of Belarus? 5. What are the key terms of finance that have recently emerged?

2. Translate each of these phrases used in the text. Insurance company; to trade in money; stock exchange; to trade in money; to raise funds; to make profit from the fees or commissions; a country's minimum interest rate; creditworthiness; to make secured loans; controls for bad debts; common monetary policy; blue chip borrowers.

3. According to the text, mark these statements T (true) or F (false). 1. The Central bank is not authorized to restrict the quantity or size of credit supply in the country. 2. Merchant banks do not trade in money, they receive margins from the difference in the interest rates. 3. Most loans in Belarus are offered by the investment banks which act as intermediaries. 4. The borrowers are usually investors and businessmen or needy house- 9

holds asking for consumption loans. 5. The borrower of a banker can’t be also its own depositor since bankers issue advances in the form of a fresh bank account. 6. With the progress of the banking business, central banks are losing their primary and essential role. 4. Give the right economic term for the following definitions. 1. the amount that a bank charges on the money it lends 2. a debt that is not likely to be paid back 3. the money that is used in a particular country at a particular time 4. the discount rate, at which the Central bank makes secured loans to commercial banks 5. a company or investment that can be trusted and that is not likely to fail 6. getting control of a company by buying most of its shares 7. to remove regulations or controls from smth.

5. Give profound answers to the following questions. 1. What types of financial institutions do you know? What services do they provide? 2. How does a retail bank make a profit? 3. When lending money, what do bankers have to find out? 4. What do merchant banks deal with? What services do they offer to rich clients? 5. What do savers get in exchange for the funds they deposit with financial intermediaries? 6. What are the functions of intermediaries? 7. Why do banks receive financial assets when they make loans? 8. What functions does the National bank of Belarus perform? 9. What did the global financial crisis of 2008–2009 bring about? What attempts are being made by governments of different countries, including Belarus to overcome this financial failure?

UNIT 13. GLOBALISATION. TRASNATIONAL CORPORATIONS. INTERNATIONAL ORGANISATIONS: OPEC, APEC, WTO, EU. 10

I. Anticipating the Issue Discuss your answers to the following questions. 1. What is globalisation? How does globalisation affect national economy? How is Belarus involved in the process of globalisation? 2. How does globalisation affect world economy? 3. What, to your mind, are pros of globalisation? Are there any cons? Why?

II. Background Reading Read the following text. Focus on the meaning of the boldfaced words. Globalisation and Its Effect 1.There are many different definitions of globalisation, but most ac- knowledge the greater movement of people, goods, capital and ideas due to increased economic integration which in turn is pushed by increased trade and investment. It is like moving towards living in a borderless world. 2. There has always been a sharing of goods, services, knowledge and cultures among people and countries, but in recent years improved technologies and a reduction of barriers means the speed of exchange is much faster. Globalisation provides opportunities and challenges. Bigger markets can mean bigger profits, which leads to greater wealth for investing in development and reducing poverty in many countries. Weak domestic policies, institutions and infrastructure and trade barriers can restrict a country's ability to take advantages of the changes. Each country makes decisions and policies that position them to maximise the benefits and minimise the challenges presented by globalisation. 3. People regard globalisation in terms of black and white, but it is an extremely complex web of many things. The following facts present pros and cons often expressed about globalisation. Benefits of globalisation:  Economies of countries that engage well with the international economy have grown much faster than those countries that try to protect themselves.  Countries which have had faster economic growth have then been able to improve living standards and reduce poverty. 11

 Improved wealth has led to improved access to health care and clean wa- ter which has increased life expectancy.  Increased global income and reduced investment barriers have led to an increase in foreign direct investment, which has accelerated growth in many countries.  Improved technology has dramatically reduced costs and prices changing the way the world communicates.  Modern communications and the global spread of information have contributed to the growth in liberal democracies around the world.  International migration has led to greater recognition of diversity and respect for cultural identities, which is improving democracy and access to human rights. Problems of globalisation:  There are social and economic costs to globalisation. Trade liberalisation rewards competitive industries and penalises non-competitive ones, and it requires participating countries to undertake economic restructuring and reform.  Some countries have been unable to take advantage of globalisation and their standards of living are dropping further behind the richest countries.  The increasing interdependence of countries in a globalised world makes them more vulnerable to economic problems like the Asian financial crisis of the late 1990's.  The environment has been harmed as agricultural, forest, mining and fishing industries exploit inadequate environmental codes and corrupt behaviour in developing countries.  The major economic powers have a major influence in the institutions of globalisation, like the WTO, and this can work against the interests of the developing world.  Trade liberalisation and technological improvements change the economy of a country, destroying traditional agricultural communities and allowing cheap imports of manufactured goods. This can lead to unemployment.  Highly educated and qualified professionals, such as doctors, engineers and IT specialists, migrate to developed countries to benefit from the 12

higher wages and greater career and lifestyle prospects. This creates severe skilled labour shortages in developing countries. 4. Globalisation has costs and benefits. There have been examples of poorly managed globalisation but there are also examples of well managed engagement with the international community. 5. Globalisation is a reality. Many countries have committed themselves to reducing poverty and are co-operating together to work out smart ways to manage globalisation.

III. Vocabulary Reinforcement 1. Translate the words and phrases below Direct foreign investment; to improve living standards; trade; sharing of goods and services; global institutions; international migration; reduction of barriers; trade liberalisation; access to health care; to increase life expectancy; spread of diseases. 2. Complete: use an appropriate preposition where necessary. over, with, for, of (5), on, while, in (3), from (2), out of 1. Indigenous Bahamian Enterprise is recording robust growth … international activities this year. 2. “We have very strong demand … new business and want to be able to get new shareholders," said the Managing Director. 3. Do you think the rural poor can benefit … globalisation? 4. Taking globalisation as a given … terms … its effects, we can focus … how it affects poverty reduction and offers certain policy strategies to maximise the benefits … minimising the costs. 5. It is fair to say that the economic landscape has been fundamentally re-drawn … the last two decades, … growth … emerging economies, such as China, India and Brazil, lifting millions … people … poverty and shifting the pattern … global trade and investment flows. 6. It is absolutely vivid that individuals and corporations are taking advantage … increased flow … communications.

3. Complete: use appropriate information from the text to finish the following sentences. 1. Many people consider globalisation to be … . 13

2. Countries that are involved in the international economy … . 3. Such international institutions as the WTO and the World bank assist … . 4. In times of globalisation modern advanced technology has led to … . 5. Countries that are not engaged with the global economy face … . 6. Foreign technologies affect national economies by … . 7. Many professionals and specialists prefer moving to developed countries which creates … .

4. Translate the following word combinations. Разрушать национальную культуру, позитивные последствия для окружающей среды, видимые последствия чего-либо, осознавать все за и против, продолжительность жизни, ускоренный рост капиталовложений, вносить вклад в местные традиции, уязвимая (экономика страны, предпринимать экономическую реструктуризацию и реформы, вдохновлять людей на что-либо, доступ к медицинской помощи, политические и экономические напряжения, добровольное внедрение мировых стандартов условий труда, поощрять конкурирующие промышленные предприятия, применять несовершенное природоохранительное законодательство.

IV. Reading 1. Answer the following questions. 2. How can you define the process of globalisation? 3. What are the main benefits of globalisation? 4. What problems can countries engaged with globalisation face?

2. Translate each of these phrases used in the text. 1) to regard something in terms of black and white; 2) labour shortages; 3) corrupt behaviour; 4) increased life expectancy ; 5) to work out smart ways to manage globalisation; 6) reduction of barriers; 7) eroded culture and languages; 8) perceived effects of globalisation; 9) less-polluting technologies; 10) costs of globalisation; 11) to improve environmental awareness; 12) in- ternationalised production facilities; 13) to destroy traditional agricultural communities. 14

3. According to the text, mark these statements T (true) or F (false). 1. Globalisation leads to market expansion and poverty reduction. 2. Technological progress has proved to make the goods and services exchange process much faster. 3. Life expectancy has dropped down in countries engaged with globalisation. 4. Globalisation affects developing countries in a good way because qualified professionals migrating to developed countries create job vacancies. 5. Countries that have great political and economic power benefit more from globalisation than poor countries. 6. International cooperation has led to the spread of dangerous diseases across countries. 7. National cultures and traditions as well as languages are being ruined with international interference.

4. Translate the following economic terms. ‘a rules based’ approach, weak domestic policies, trade barriers, global income, accelerate growth, international production facilities, international labour standards, penalise non-competitive industries, vulnerable economy, trade liberalisation.

5. Give profound answers to the following questions. 1. In what way is economic integration connected with international trade and investment? 2. How do improved technologies affect international exchange of goods and services? 3. Is it right to regard globalisation in terms of black and white? Why?/ Why not? 4. Can globalisation contribute to life expectancy? How? 5. Is it good for national economies to adopt international labour standards? Why?/Why not? 6. Why do some countries have to undertake reforms to become engaged with globalisation? 7. What makes some countries be more vulnerable to economic problems? 15

8. Can globalisation lead to national unemployment? Why?/Why not?

UNIT 14 NATIONAL ECONOMY

I. Anticipating the Issue Discuss your answers to the following questions. 1. What is any country’s national economy focused on? What do you know about economic potential in Belarus? 2. What are the key industries in Belarus? Which industry would you like to work in? Why?

II. Background Reading Read the following text. Focus on the meaning of the boldfaced words. Economic Potential in Belarus 1. Belarus has always had a relatively well-developed industrial base. Recently, the Belarusian economy has shifted into sustained high gear. GDP grew by 10% in 2008. In terms of GDP growth rate Belarus also outperforms neighboring Poland, Latvia and Lithuania. 2. The Belarusian labour market is highly regulated. The decision to determine wages is left to firms, but the government can affect the structure of wages through the so-called tariff system, a type of centrally determined wage grid. The tariff system is binding in the budget sector. 3. Although not rich in minerals, Belarus has deposits of clay, sand, chalk, dolomite, phosphorite, and rock and potassium salt. Peat, the country's most valuable mineral resource, is used for fuel and fertilizer and in the chemical industry. Forests cover about a third of the land, and lumber- ing is an important occupation. Oil deposits on the territory of Belarus are located in a single oil and gas basin, the Pripyat depression. All the activities related to prospecting, exploration and production of oil in the country are carried out by the government-controlled concern “Belneftekhim” via its subsidiary and the unitary republic enterprise “Belorusneft”. Belorusneft ex- ports about 50% of its oil output. 4. Today, Belarus specializes in many industries which contribute to the development of the national economy: Heavy engineering industry (met- al-cutting machine tools, tractors, trucks, and motorcycles), Chemical indus- 16 try (chemical fibers, fertilizers), Light industry (textiles, garment, leather, and footwear, optical instruments and devices), Food processing industry, Electronic and computer industry, Forestry and agriculture (timber, furni- ture; livestock and crops), Electrical household appliances (radios and tele- visions, refrigerators and kitchen stoves). 5. ‘MAZ’ manufactures trailer trucks, dump trucks, trucks for trans- porting logs and pipes. The products of ‘BelAZ’ are designed specifically for mining in open quarries. ‘MoAZ’ specializes in highway construction machines and agricultural machines. 6. Belarus has perhaps the most modernized and powerful chemical industry among the FSU states besides Russia specializing first of all in the processing of oil products, synthetic polymers, mineral fertilizers, pharma- ceutics and household chemical products. Belarus is the world biggest supplier of potassium mineral fertilizers. "BelarusKali" is the world's largest potassium fertilizer manufacturer. 7. Belarus has always specialized in agricultural production though the massive nuclear accident at the Chernobyl nuclear power plant had a devastating effect on agricultural and forestry sector. Belarus absorbed the bulk of the radioactive fallout from the explosion and purified most of the territory. Despite the Chernobyl catastrophe, Belarus is a net exporter of meat, milk, eggs, flour, and potatoes to other former Soviet republics, although its ex- ports are routinely tested for radioactive contamination. Belarus can be divided into three agricultural regions: north (flax, fodder, grasses, and cattle), central (potatoes and pigs), and south (pasture land and cattle). Belarus' cool climate and dense soils are well suited to fodder crops and temperate-zone crops (wheat, barley, oats, buckwheat, potatoes, flax, and sugar beets). Belarus' soils are generally fertile, especially in the river valleys, except in the southern marshy regions. Subsidization of agricultural sector in Belarus amounts to 1-2 percent of GDP in the form of direct government credits, advanced payments for realization of state orders of major crops, at strongly negative interest rates. The Central Bank of Belarus issues subsidized credits to the agriculture sector at an interest rate of half the refinance rate. Privately run farms and private plots produce more than 40 percent of gross output. 8. Belarus is a country with ancient and rich history and unique culture. Ecotourism is a fast growing area in Belarus. Picturesque landscape of for- 17 est, blue spread of lakes and river valleys, meadows and marshes favour the resort infrastructure development and encourages different types and forms of tourism. In 2006 The Belarusian Government established free tourist zones in Belarus. III. Vocabulary Reinforcement 1. Complete: use an appropriate preposition where necessary. from, into, of(2), on, in(4), by, for, to 1. Russia invests more money… the Belarusian economy than any other country. In 2007 it contributed … 33.5% … all foreign investments … the country. 2. Belarusian Minister … Foreign Affairs said that apart … Russians, there are some other nations keen … investing … Belarus. 3. There is the Foreign Investments Consultation Council in Belarus chaired … the Prime Minister, which aim is to improve the business climate. 4. Belarus is said to be the leading CIS country … economy growth rates. 5. The tariff system is binding … the budget sector. 6. Belarus specializes … a number of industries which contribute … the development of the national economy.

2. Complete: use appropriate information from the text to finish the following sentences. A specific feature of Belarusian consumer goods industry is … . Belarus outperforms some neighboring countries in terms of … . Belarus is a net exporter of … . The agricultural sector and forestry account for … . The Belarusian tourist market is … . There are three agricultural regions in Belarus: … . The Central Bank of Belarus issues subsidized credits to … . The present top priorities of the economic policy in Belarus are … .

3. Translate: give the English equivalents for the following word combinations. Масштабная сфера деятельности; действовать через филиалы; свободная зона туризма; внедрение инновационных технологий; вносить вклад в экономику; крупнейший поставщик; многоотраслевой комплекс; брошенная земля; проверять уровень радиации; сырьё; лесное хозяйство и лесозаготовка; месторождение нефти и газа; 18

частные наделы; рост ВВП; обойти соседние страны по уровню роста ВВП. IV. Reading 1. Answer the following questions. 1) What agricultural zones can Belarus be divided into? What do they specialize in? 2) What mineral resources are found in Belarus? 3) Which industries contribute to the development of the national economy of Belarus?

2. Translate each of these phrases used in the text. Industrial base; sustained high gear; to purify land; natural ecosystem; to be in abundance; to be abandoned; World Heritage List; to have a devastating effect on smth.; energy intensity; financial aid; to absorb the bulk of the fallout; to account for; to have capacity.

3. According to the text, mark these statements T (true) or F (false). 1. During the Soviet era, agriculture in Belarus consisted mainly of state and collective farms, now it is transformed into joint-stock companies and family plots. 2. In terms of GDP growth rate, Belarus lags behind neighboring Poland, Latvia and Lithuania. 3. Tourism and ecotourism have always been key industries in Belarus. 4. The tariff system in Belarus is totally independent of the budget sector. 5. Belarus inherited one of the highest standards of living in the former Soviet Union (FSU). 6. Belarusian raw materials remain the main export going mostly to the Russian Federation, the country's main trading partner. 7. Peat used in the chemical industry is imported from neighboring Poland. 8. Former Soviet republics export Belarusian milk, meat, eggs, potatoes, etc.

4. Translate the following economic terms. Economic potential; GDP; interest rate; resort infrastructure; a wage grid; 19 labour market; domestic currency deposit; unitary republic enterprise; exporter/importer, tariff system; local budgets; subsidiary; foreign trade; refinance rate; gross output; to subsidize; advanced payment; to outstand loans; free tourist zone.

5. Give profound answers to the following questions. 1. What is your image of economic potential in Belarus? 2. How is labour market regulated? 3. What deposits are found in Belarus? 4. What agricultural products are exported from the republic of Belarus to other former Soviet republics? 5. How does the Belarusian government assist the agricultural sector? 6. Which banks dominate the banking system of the republic? 7. Which light industries does Belarus specialize in? 8. What is a fast growing area in Belarus? Why? 9. What innovative technologies are implemented in Belarus? UNIT 15 MERGERS AND TAKEOVERS

I. Anticipating the Issue Discuss your answers to the following questions. 1. Do you know any companies which have existed since the time of their establishment without any changes in their structure or activities for many years? 2. Why do some companies split up or unite with other companies? Is this process painless for the both sides?

II. Background Reading Read the following text. Focus on the meaning of the boldfaced words. Mergers and Takeovers 1. Mergers and acquisitions (the latter are also known as takeovers) (M&A) and corporate restructuring are a big part of the corporate finance world. These two words represent how companies buy, sell and recombine businesses. They're also the reason why today's corporate landscape is a maze of conglomerations. Insurance companies own breakfast cereal makers, shopping mall outlets are part of military manufacturing groups, and movie studios own airlines, all because of mergers and acquisitions. 20

2. In business or economics a merger is a combination of two companies into one larger company. A merger can result in a new company name (often combining the names of the original companies) and in new branding. There are a few types of mergers, distinguished by the relationship between the two companies that are merging, like horizontal, vertical, purchase, market extension mergers and others. 3. A merger may be sought for a number of reasons, some of which are beneficial to the shareholders, some of which are not. One use of the merger, for example, is to combine a very profitable company with a losing company in order to use the losses as a tax write-off to offset the profits, while expanding the corporation as a whole. 4. Increasing one's market share is another major use of the merger, particularly amongst large corporations. By merging with major competitors, a company can come to dominate the market they compete in. This form of merger may cause problems when two dominating companies merge, as it may trigger litigation regarding monopoly laws. 5. Another type of popular merger brings together two companies that make different, but complementary, products. 6. The entire merger process is usually kept secret from the general public, and often from the majority of the employees at the involved companies. 7. A merger is very similar to an acquisition or takeover. But in the case of a merger existing stockholders of both companies involved retain a shared interest in the new corporation, and, by contrast, in an acquisition one company purchases a bulk of a second company's stock, creating an uneven balance of ownership in the new combined company. Acquisition usually refers to a purchase of a smaller firm by a larger one. Sometimes, however, a smaller firm will acquire management control of a larger or longer established company and keep its name for the combined entity. This is known as a reverse takeover. 8. An acquisition may be friendly or hostile. In case of a hostile acquisition (takeover) the company being purchased doesn't want to be purchased, or doesn't want to be purchased by the particular buyer that is making a bid. Usually such takeovers have an overall harmful effect on the economy. Though, this unique type of acquisition does not occur nearly as frequently 21 as friendly takeovers, in which the two companies work together because the takeover is perceived as beneficial. 9. International mergers and acquisitions are performed for the purpose of obtaining some strategic benefits in the markets of a particular country. Globalization and worldwide financial reforms have collectively contributed towards their development to a substantial extent. With the help of international mergers and acquisitions, multinational corporations can enjoy a number of advantages. 10. Mergers and acquisitions are complex processes. The companies have to keep in mind that mergers are not only business proposals but a corporate marriage of both the entities which require deeper and insightful solutions. The merger and acquisition activity in the past few years have become quite predictable and this trend is going to grow parallel with the desire and competitiveness of the society.

III. Vocabulary Reinforcement 1. Which of the words and phrases below are associated with the following: 1) a hostile acquisition, 2) a friendly acquisition? Translate them. Harmful effect on the economy, the takeover is perceived as beneficial, new management may not understand the technology, fears among employees about job security, the acquired company gets free access to new technologies, consolidation often results in layoffs, breaking into new markets using the brand of the acquired company.

2. Complete: use an appropriate preposition where necessary. in, into, after, with (2), as, over, off (2), from, to, of (2). 1. This merger can result … a failure, so let's keep it … secret … the public. 2. When a textile supplier is merging … a maker of clothes it is a vertical merger. 3. … the takeover a number … employees were laid … . 4. I do not find this merger beneficial … the shareholders as they may be unsatisfied … the new management. 5. While expanding the corporation … a whole, we should take … account not only risks and profits, but also job security … the personnel. 6. A lot of ways were sought for all the debts to be written … . 22

7. Strange as it may seem, but we are going to be taken … by a smaller company.

3. Finish the following sentences. 1. Mergers and takeovers are not the same things. A merger is …, while a takeover is … . 2. There are several types of merging, such as … . 3. Companies seek merging for a number of reasons. Firstly, … . Secondly, … . Thirdly, … . 4. A friendly acquisition means …, while a hostile one means … . 5. Hostile takeovers may result in the following risks: … 6. International mergers and acquisitions have become so popular because … .

4. Translate the following word combinations. Слияние компаний; выкуп; поглощение одной компании другой; предложение цены на аукционе, замедлять развитие бизнеса; сохранять, удерживать контроль над компанией; добиваться списания долгов; компенсировать убытки; основной стимул; судебное разбирательство, тяжба; мотив слияния; конгломерация.

5.Render the following text into English. Из воспоминаний коммерческого директора. Во времена мирового финансового кризиса положение нашей компании было нелегким. Руководство добивалось сокращения налогов, искало новых потребителей, но напрасно. В связи с этим компания Х выставила свое предложение цены на аукционе с целью выкупа нашей компании. Основным мотивом было установление монополии. Мы отвергли такое предложение. Слияние не дало бы тех преимуществ, на которые все рассчитывали. Непонимание новым руководством специфики и технологий деятельности могло бы остановить производство, которое и без того шло на спад. Генеральному директору удалось предотвратить враждебное поглощение путем получения кредита в инвестиционном банке. Однако это не помогло увеличить производительность и выплатить 23

долги. Если бы правительство не сохранило контроль над предприятием как одной из важнейших экономических отраслей, мы могли бы обанкротиться. Так случилось, что для банка оказалось боле выгодным списать наши долги, нежели начинать судебную тяжбу. Воспользовавшись ситуацией, мы компенсировали убытки путем внедрения новых технологий и более эффективных маркетинговых стратегий и удержались на рынке.

IV. Reading

1. Answer the following questions. 1. What is the difference between a merger and a takeover? 2. What kinds of mergers do you know? What can mergers result in? 3. What are the main reasons encouraging companies to merge? 4. In what ways does a friendly acquisition differ from a hostile one? 5. What are the purposes for which international mergers and takeovers are performed?

2. Translate the following word combinations. To get a tax write-off; to recombine a business; a merger; a takeover; to purchase a bulk of a second company's stock; to create an uneven balance of ownership; to expand a corporation; to trigger litigation regarding monopoly laws; to control a company’s assets; to make a bid; economies of scale and market dominance; to penetrate into new markets.

3. According to the text, mark these statements T (true) or F (false). 1. Only companies specializing in the same kind of activities can merge. 2. A merger, an acquisition and a takeover are similar processes. 3. The entire merger process is usually kept secret from the general public. 4. Some companies seek for merging because they want to use losses of other companies as a tax write-off. 5. Many companies merge because they want to expand and penetrate into new markets. 6. The process of an acquisition is always hostile and painful. 7. International merging is the result of the globalization. 24

4. Give the best definition for the following economic terms. A merger, a bid, a write-off, a conglomeration, an incentive, a hostile takeover, litigation, a target company, a reverse takeover.

5. Give profound answers to the following questions. 1. Is a merger activity possible only in case the companies of a similar type unite? Why? / Why not? 2. What do a merger, a buyout, a takeover and an acquisition differ in? What do they have in common? 3. What kinds of mergers do you know? Describe them. 4. When is merging advantageous? 5. What kinds of acquisitions do you know? What do they differ in? 6. What consequences may a hostile takeover cause? 7. What are the main objectives of international merging?

UNIT 16 ECONOMICS OF AN ENTERPRISE

I. Anticipating the Issue Discuss your answers to the following questions. 1. Have you ever worked for a company or a firm? If you have, describe the type of business organization you worked for. 2. Do you know any names of the country’s most famous en- trepreneurs? What are they famous for? What business do they run?

II. Background Reading Read the following text. Focus on the meaning of the boldfaced words. The Structure and Classification of Enterprises 1. If one wants to set up a business and form a company it is necessary to sign a document called a Memorandum of Association with the Registrar of companies. The owners file the name of the company, its objects, the amount of share capital and types of limited liability in this document. Businesses are usually classified on one of the three basic business structures: Sole Proprietorship, Partnership and Corporation. 2. In terms of numbers, sole proprietorship (or the one-person business) is the most common type of firm. It is a small-scale operation employing few people. The proprietor is normally in charge of the operation 25 of the business, and is likely to be highly motivated as he or she benefits directly from any increase in profits. As the one-person business is small, it can provide a personal service to its customers and can respond flexibly to the requirements of the market. Decisions can be taken quickly as the owner does not have to consult with any other directors. 3. Disadvantages of a sole proprietorship are that the owner cannot specialise in particular functions but must be a jack-of-all trades, and that the finance available for the expansion of the business is limited to that which the owner can raise. An even bigger disadvantage is perhaps that there is no legal distinction between the owner and the business. The owner has, therefore, unlimited liability for any debts incurred by the business, so if he goes bankrupt, all the assets (for example, house and car) are liable to seizure. 4. One-person businesses are common in retailing, farming, building and personal services, such as hairdressing. 5. The logical progression from a one-person business is to a partnership. An ordinary partnership contains from two to twenty partners. The main advantages over a one-person business are that more finance is likely to be available with the influx of partners, and that each partner may specialise to some extent 6. The major disadvantage is that of unlimited liability. As each partner is able to commit the other partners to agreements entered into, all of the others may suffer from the errors of one unreliable partner. 7. Partnerships are often found in the professions – for example, among doctors, dentists, solicitors and architects. 8. The joint-stock company with limited liability developed in the second half of the nineteenth century. The liability of the shareholders is limited to the amount they have subscribed to the firm's capital and each shareholder knows the extent of his or her potential loss if the company goes bankrupt. 9. A joint-stock company can be either a private limited company or a public limited company. The shares of a private company cannot be offered for sale to the public and thus are not traded on the Stock Exchange. The shares cannot be transferred without the consent of the other shareholders. 26

10. The shares of a public company can be offered for sale to the public. A public company requires a minimum of two shareholders, but there is no upper limit. Shares are freely transferable and the company is required to hold an annual general meeting where shareholders are able to question the directors, to change the company's articles of association, to elect or dismiss the board of directors, to sanction the payment of dividends, to approve the choice of auditors and to fix their remuneration. 11. The public corporation is the form of enterprise that has developed in the United Kingdom for those areas where the government has decided to place production on the hands of the state. 12. Setting up a corporation involves more work and expense than establishing a sole proprietorship or partnership. Stockholders (the owners of the corporation) elect a board of directors at the company’s annual general meeting. They are described as non-executive directors. Since they do not have departmental responsibilities within the corporation, they are outsiders. Having particular knowledge of the industry, they bring expertise to the board. The board hires corporate officers, such as the president and the vice-presidents in charge of sales, production, finance, personnel and so on. These senior executives head up different departments; the marketing director is the head of the marketing department, the IT director is the head of the IT department. The executives are responsible for determining the objectives and policies of a business, and a smooth running of the corporation.

III. Vocabulary Reinforcement 1. What type of organization is each of the ones listed below? 1. A group of engineers who work together to provide consultancy and design services. There are no outside shareholders. 2. A large company with 30000 employees. Its shares are bought and sold on the stock market. 3. A pharmaceutical company organized by two people who are both shareholders and directors of the company. 4. A hairdresser being an owner of a small beauty salon. 5. A selling company the shares of which are open to the public.

2. Complete: use an appropriate preposition where necessary. 27

of(3,) for(2), by(2,) at, during, to, on, with(2)

1. The Board … directors of a limited company is primarily responsible … determining … the objectives and policies of the business. 2. These executives are usually appointed … the shareholders, normally … the company’s annual general meeting. 3. The Chairman of the Board of directors is expected to account … their control … the year. 4. They will need to ensure … that the necessary funds are available and will appoint the staff … whom they will delegate the authority to run the business … a day-to-day basis. 5. The Board … directors designs an effective organization structure so that there is a chain of command linking one level of management … another. 6. The strategic decisions, made … the Board … directors, are concerned … the disposition of recourses.

3. Complete: use appropriate information from the text to finish the following sentences. 1. When the Board of directors are discussing the problems the company faces they have to consider ... . 2. Directors are usually required to have shares in the company, so they can … . 3. Non-executive directors will often be appointed because … . 4. The executives head up … . 5. A document called Memorandum of Association usually consists of … . 6. A sole proprietorship is … . 7. Corporations are businesses … . 8. A partnership is … . 9. A limited liability company (Ltd) is …, while a company limited by shares is …, and a company limited by guarantee is … . 10.An unlimited company is only appropriate if the company … .

4. Translate: give the English equivalents for the following word combinations. 28

Совет директоров; компания с ограниченной ответственностью; частная акционерная компания; ответственность перед кредиторами; стоять во главе компании; определять политику корпорации; франчайзинг; уставный капитал; держатель акций; товарищество; частное предпринимательство; учредительный договор; ликвидация предприятия, независимые директора.

IV. Reading 1. Answer the following questions. 1) How are businesses classified? What are legal forms of business in the UK? 2) Why do forms of corporate organizations keep on changing? 3) What are the distinguishing features of a limited liability company?

2. Translate the following word combinations. A multiple classification of companies; the complexity of business operation; to be liable for the company’s obligations; to bring expertise to the Board of directors; to foresee possible disagreements; to take on all the responsibility; to assume the risks; to pay debts up to a certain limit; organizations with ‘social’ aims; non-profit organizations.

3. According to the text, mark these statements T (true) or F (false). 1. If one wants to set up a business and form a company, it is necessary to sign a document called the Companies Act with the Registrar of companies. 2. Businesses are usually classified on one of the three basic business structures: a private company, a public company and a limited liability company. 3. A sole proprietorship provides the most of the capital, and establishes the total management. 4. Partnership agreements don’t foresee any areas of possible disagreements between the partners but usually define the authority, rights and obligations of each partner. 5. Profits of the corporation are distributed according to the liabilities. 6. Setting up a corporation involves less headache and expense than establishing a sole proprietorship or partnership. 7. In limited liability companies shareholders have to use their personal 29

property to pay their company’s debts.

4. Give the best definition for the following economic terms and translate them. Assets; an unincorporated business; debentures; 'limited by shares'; 'limited by guarantee'; to commence a business; unlimited liability; to donate money; the Stock Exchange; a nominal value; a trading certificate.

5. Give profound answers to the following questions. 1. How are most of the producers, commercial or industrial enterprises called in a market economy? 2. How do jobs in a public sector differ from jobs in a private sector? 3. How are businesses classified? 4. What are the characteristics of a corporation? Sole proprietorship? Part- nership? 5. What steps do new sole proprietorships usually need to take before starting a business? 6. Is sole proprietorship the most common form of business organizations? Why?/ Why not? 7. Are you aware of a corporate structure of any of Belarusian enterprises? 8. What determines the way partners share responsibilities, profits, debts? 9. Are there any non-profit organizations in Belarus? What is their business?

UNIT 17 PROFIT AND PROFITABILITY

I. Anticipating the Issue Discuss your answers to the following questions. 1. Is profit the purpose of any business? Are there any other purposes? 2. What are the main reasons for business managers to prefer keeping financial records clean?

II. Background Reading Read the following text. Focus on the meaning of the boldfaced words. Profit and Profitability 30

1. Every year the accounts of a limited company must be approved by auditors. They act on behalf of the shareholders. Their duty is to ensure that the directors are reporting correctly on the state of affairs of the company. 2. Results of a particular year are shown in the company’s annual report. The auditors examining the results have to be satisfied that everything which goes into making up the Profit Statement, the Balance Sheet and the company’s Annual Report is correct. These documents show how the profit for the year is arrived at. 3. The Balance Sheet is a summarized statement showing the amount of funds employed in the business and the sources from which these funds are derived. On one side is listed the capital employed, which usually consists of the issued share capital plus reserves and retained earnings. The statement shows the total cost of its fixed assets (land, building and machinery) and any trade investments (interests in other companies), followed by a breakdown of net current assets (cash and stocks and what is owed to its customers). The totals on the two sides of the Balance Sheet must agree; that is, come to the same figure. In theory, if a company makes more money than it spends, it makes a profit. If not it makes a loss. The final figure for profit or loss is what people call informally the bottom line. That is what they really worry about! If a company is making a loss, commentators may say that it is in the red. 4. Profit and profitability may appear to be the same thing but there is an important difference. Profit is a figure in absolute terms. It is the number that sits at the bottom of the statement of financial performance. Profit is related to the costs incurred by a business and the revenues that the business receives. It is calculated by taking the income earned and deducting the expenses incurred in deriving that income. 5. Profitability on the other hand is a measure of the profit compared to a number of relevant factors. Profitability tells us more about the efficiency and performance of a business. The revenue is found by multiplying the price paid by the amount sold. The costs can be divided into two main types: variable costs (direct costs) and fixed costs (overheads or indirect costs). 6. Fixed costs are the costs that the business has to pay whether they produce/sell anything at all! These can include the set up costs - premises, equipment, machinery and so on - that have to be secured before trading 31 begins, the insurance costs that businesses have to have, the business rates that have to be paid to government, the interest payable on loans and so on. 7. Variable costs are the costs that are directly linked to the amount produced. Such costs could include (but not always) wages for staff, the cost of raw materials and certain energy costs. Added together they give us total cost. III. Vocabulary Reinforcement 1. Which of the words and phrases below are associated with the following: 1) capital and reserves, 2) liabilities of the company? Translate them. Share capital, dividends, premises, running costs; cash, loans, credits, overhead charges, land and building, plant and equipment, fixed costs, revenue, loans, income, credits, plant and equipment, issued share capital, current assets, taxes, expenses, variable costs, invariable costs.

2. Complete: use an appropriate preposition where necessary. by(2), to(2,) of(2,) in(5 ), without, on 1. The profit made … Company 1 is $4 million compared … the profit … $3 million made … Company 2. 2. If you were given the choice to invest … either company … giving any further thought you would probably choose Company 1. 3. All the dollar amounts … these ratios are found … the income statement. 4. Profitability tracks how well one succeeds … generating … the benefit. 5. Profit margin analysis uses the percentage calculation to provide … a comprehensive measure … a company's profitability … a historical basis (3-5 years) and … comparison … peer companies and industry benchmarks.

3. Use appropriate information from the text to finish the following sentences. 1. The job of auditors is ... . 2. The company’s annual report consists of ... . 3. The Profit Statement is ... . 4. The Balance Sheet is ... . 5. Profit and profitability may appear to be the same thing but profit is supposed to be …, while profitability is ... . 32

6. The costs are presented in two categories ... .

4. Translate the following word combinations. Финансовые записи, счета компании, переменные издержки, постоянные затраты, отчет о прибыли и убытках, балансовый отчет, чистый объем продаж, доходы и расходы компании, активы и пассивы компании, с убытком.

IV. Reading 1. Answer the following questions. 1. What is the duty of auditors? 2. What is any company supposed to report on? 3. What are the main financial papers checked every year?

2. Translate each of these phrases used in the text. To approve accounts; the state of affairs; to arrive at a profit; net sales; overhead charges; retained earnings; totals on the two sides must agree; let's put all that together to see where it all fits in.

3. According to the text, mark these statements T (true) or F (false). 1. Every year the shareholders of a limited company must approve the accounts. 2. The duty of auditors is to report on the financial results of the company and the state of affairs. 3. Results of a particular year are shown in the company’s Profit Statement. 4. The Balance Sheet is a summarized statement showing the total cost of its fixed assets and any trade investments followed by a breakdown of net current assets. 5. If a company is making a loss, commentators may say that it is in the black. 6. Profit and profitability appear to be the same thing; it is a figure in absolute terms.

4. Give the best definition for the following economic terms. Fixed cost/variable costs; fixed assets/current assets; overhead charges; net sales; net income; issued share capital.

5. Choose the correct word for each sentence. 33

1. Our state-of-the-art machinery is our major______. a) possessions b) assets c) equity 2.The ______rate on the loan was 12%. a) fee b) charge c)interest 3.I started my business 15 years ago with______of $700000. a) capital b) cash c) shares 4.My ______were members of my family: my parents, brothers, sisters all put up money. a) Borrowers b) creditors c) shareholders 5.If a company is making much loss and owing money to the bank, it is in the______. a) black b) red c) whites 6. Find the words from the text that refer to the following: What the company owns/owes; things that permanently belong to the company; money that must be paid up for the loans; money borrowed to meet day-to-day running expenses; money supplied by shareholders/money owed to shareholders; costs incurred in buying raw materials/the loss in value of equipment.

7. Give profound answers to the following questions. 1. Why is good record keeping necessary? 2. Where are the results of operations and the present financial position of the firm reflected? 3. What does the Balance Sheet summarize? How often are these statements prepared? 4. What is the basic idea of the Profit Statement? What items are shown in the Profit Statement? 5. Why do directors worry about the bottom line of the Balance Sheet? 6. What is profit? How is revenue found? 7. What is the difference between profitability and profit? UNIT 18 TEAM BUILDING

I. Anticipating the Issue Discuss your answers to the following questions. 1. Do you have any qualities which would be useful for a team? What are they? 34

2. Is it difficult to work in a team? Why?/ Why not?

II. Background Reading Read the following text. Focus on the meaning of the boldfaced words. Team Building 1. The aim of team building is to achieve improvement in the way your staff view and do their work, to inspire them to action so that your organization runs more smoothly and your staff interactions improve. 2. Before an effective team can be developed, the organizational environment itself must foster teamwork. Accordingly, an effective organization must meet certain requirements: 1) Share a certain vision or sense of purpose that all its employees can articulate. 2) Develop a structure appropriate for the organizational environment. 3) Strike a balance between reason and intuition so that its employees are neither too oriented towards nor too disregarding of “hard” facts. A leader should examine all pros and cons so that everyone is going in the same direction, improve the way team members interact, thus improving their ability to solve problems. Better problem–solving means better efficiency in general. Increased efficiency tends to boost or increase morale and productivity. It also helps to decrease stress, turnover and operating costs and bolster your organization’s public image. There are four key variables in the team development process. They are:  Goals - individuals must understand and accept goals.  Roles - team members must know what others want and expect from them.  Procedures - All members must know how to get work done together e.g. making decisions, solving problems, managing time, communicating, resolving problems).  Relationship - People who like and or respect one another usually work more effectively. To make the team development process more effective, team building exercises and activities can be used. They are designed to be stimulating, informative and challenging. 3. Workshops Workshops are an extremely flexible and effective method for training, learning, development, change management, team building and problem 35 solving. Workshops are effective in managing change and achieving improvement, and particularly the creation of initiatives, plans, process and actions to achieve particular business and organizational aims. They are also effective for breaking down barriers, improving communications inside and outside departments, and integrating staff after acquisition or merger. Besides, workshops are particularly effective for (CRM) customer relationship management development. 4. Team building games Team building games, exercises and activities help build teams, develop employee motivation, improve communications and are a sort of fun. Quizzes also warm up meetings and improve training, and liven up conferences. 5. Role Playing During the preparation stage for the team building workshop, relevant special interest groups or (SIGs) are identified. The key during role playing, is role reversal, for instance rank and file employees role play senior management, then explain the art of give - and - take in handling the situation. Output from the team building process, such as problems, challenges, opportunities, weaknesses etc. are evaluated by SIGs. 6. Buzz sessions Buzz sessions can be inter-spaced through out the team building process to stimulate thought, discussion and add interest. These short sessions entail a guest-speaker delivering a short presentation on a relevant subject. 7. Site visits Site visits can be arranged and conducted prior to the workshop, during the workshop or post the workshop. They are used to develop organizational awareness to compare how the organization perceives itself internally and how it is perceived externally by suppliers and customers. Site visits also develop better working relationships and improved problem solving capability. 8. Risks and dangers of corporate events and social responsibility Corporate events in terms of effects on employees' families and people's broader life needs should be carefully considered in team building process. Nowadays organizations have a deep and wide responsibility, which is progressively reflected in law. Alcohol and discrimination where wining and dining is concerned are big issues in modern organizations. 36

III. Vocabulary Reinforcement 1. Which of the words and phrases below are associated with the following: 1)“team development process”, 2) “risks and dangers of corporate events” ? Translate them. To sustain and fuel the staff; to inspire the staff; to foster the team; organizational environment; turnover and operating costs; buzz sessions; to disregard facts; to hamper performance; to develop organizational awareness; to break down barriers; social responsibility; strive for the moral code of the team; to undermine/foster employee’s loyalty and motivation; to encourage healthy work and life balance; weaknesses; employees' families; life needs; employer's duty of care; law; disputes and litigation.

2. Complete: use an appropriate preposition where necessary. of, on, as, with(3), for, in(3), by 1. The success ... your company is based ... the work that your people do ... a team. 2. It has been said that a great leader is not the genius that surrounds himself ... supporters but the one who teaches and trains ... others to do heir job. 3. Great leaders develop a plan ... success that outlives their tenure. 4. Is your management team all pulling ... the same direction and aligned ... your organizational goals? 5. … some situations, tasks can be achieved more easily ... teams ... a common purpose, rather than individuals.

3. Complete: use appropriate information from the text to finish the following sentences. 1. When you are building a team to take, you have to be certain ... 2. The main goal of team building is … 3. Fostering teamwork comprises the following actions: … 4. … exercises and special tools designed to be stimulating, informative and challenging. 5. Divisive treatment of employees’ families can … 6. Businesses are often affected by … 7. By anticipating problems an aspiring manager should … 37

8. Every leader must learn that wars are not won or lost through the ef- forts of an individual but …

5. Translate the following word combinations. Повысить эффективность; мотивировать и стимулировать сотрудничество сотрудников; работать слаженно и согласованно; создать атмосферу доверия в команде; инсценировка игры «рядовые служащие и управляющий»; ролевая перестановка; пренебрегать ситуацией; подорвать преданность делу; двусмысленность; поднимать боевой дух; противоречить моральным принципам; улучшить взаимоотношения между сотрудниками; управлять ситуацией. IV. Reading 1. Translate each of these phrases used in the text. To sustain and fuel people in organizations; to foster teamwork; organizational environment; organization’s public image; to break down barriers; to liven up conferences; to reflect in law; to handle a situation; to undermine loyalty.

2. According to the text, mark these statements T (true) or F (false). 1. Informal groups formulate a secret code of ethics or an unspoken set of standards establishing acceptable behavior in the department. 2. Increased efficiency of the staff boosts morale and productivity and decreases stress, turnover and operating costs. 3. There are four key variables in the team development process which bolster your organization’s public image. 4. Teams are popular in many business organizations and have proven successful in improving process and cutting costs. 5. Role playing helps to break down barriers, improves communications inside and outside of departments. 6. The willingness of all team members to draw on their own expertise and experience to contribute ideas and solutions is what does not make an effective team.

3. Give the best definition for the following economic terms and translate them. 38

To bolster company’s image; buzz session; team building games; recruitment and staff retention; to boost morale and productivity; succession planning; ethically-managed corporations.

4. Give profound answers to the following questions. 1. Before an effective team can be developed, what should the organizational environment itself do? 2. What does better problem–solving mean? 3. What are four key variables in the team development process? 4. What may ambiguity in these variables bring about? 5. What is the role of different team building exercises and activities? 6. If you were a team leader how would you get your team members to co-operate? 7. Do cultural and national differences create difficulties in effective team building? 8. Do you sometimes get stressed at university? What do you do about it? 9. How important are thinking styles in effective teamwork? 10. Does tension among team members hamper the team’s performance?

UNIT I9 RISK AND CRISIS MANAGEMENT

I. Anticipating the Issue Discuss your answers to the following questions. 1. What is a risk? What is a crisis? Are they interconnected? 2. What business-related activities can be risky? II. Background Reading Read the following text. Focus on the meaning of the boldfaced words. Risk and Crisis Management 1. All business is built on risk. By putting money into a new venture, investors are taking serious financial risks. Some businesses fail and this can happen increasingly quickly after they are founded. 2. The majority of all loss can be prevented or minimized and this should be the first part of any disaster recovery plan. Prevention is better than cure and there is a lot companies can do to stop such events from becoming a disaster in the first place. However, all risks can never be fully 39 avoided or mitigated simply because of financial and practical limitations. Therefore all organizations have to accept some level of residual risks. 3. Research shows that more than one-third of the world’s leading companies are not sufficiently prepared to protect their main revenue sources and have room for improvement. Effective, integrated strategies for dealing with tomorrow’s risks require a change in culture at board level now. 4. Management processes could easily help companies identify and address risks. Instead, too many companies take a low-level approach to risk management preferring to focus on easy-to-solve risks, such as asset protection and health and safety. 5. Risk management is a practice of systematically selecting cost effective approaches for minimising the effect of threat realization to the organization. The strategies of effective risk management include transferring the risk to another party, avoiding the risk, reducing the negative effect of the risk, and accepting some or all of the consequences of a particular risk. 6. A crisis is a major, unpredictable event that threatens to harm an organization and its stakeholders. It can be described as "an abnormal situation, or even perception, which is beyond the scope of everyday business and which threatens the operation, safety and reputation of an organization". 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. 7. Although crisis events are unpredictable, they are not unexpected. Crises can affect all segments of society – businesses, churches, educational institutions, families, non-profits and the government and are caused by a wide range of reasons. Although the definitions can vary greatly, three elements are common to most definitions of crisis: (a) a threat to the organization, (b) the element of surprise, and (c) a short decision time. 8. A crisis may well be an opportunity to test a company’s capabili- ties, but most companies would rather do without it. Crisis management consists of skills and techniques required to assess, understand, and cope with any serious situation, especially from the moment it first occurs to the point that recovery procedures start. An understanding of risk is essential in crisis management. Crisis is a facet of risk management, although it is prob- 40 ably untrue to say that Crisis Management represents a failure of Risk Man- agement since it will never be possible to totally mitigate the chances of catastrophes occurring. However, the constant monitoring of what is going on in the larger world is an essential activity. Once a range of possible future crises has been established, contingency plans can be put in place. Contingency planning is designed to prepare for the worst, with specific plans of action for disaster recovery, including handling of the media and protecting as far as possible the company’s reputation. 9. Good crisis management requires the ability to react to events swift- ly and positively, whether or not they have been foreseen. Forward thinking and planning are essential; understanding the nature of the crisis that might occur can help managers be better prepared.

III. Vocabulary Reinforcement 1. Complete: use an appropriate preposition where necessary. to(2), in(3), of(2), from, for(2) 1. Increased competition is a threat ... the survival ... our economy. 2. We need to protect ourselves ... negative changes ... customer demand. 3. Venture capitalists specialise … providing finance … new businesses. 4. They usually invest … smaller, risky ventures and often don’t ask … security. 5. For the venture capitalist, there is always a risk … losing their money if the business fails. 6. Many companies do not know how to manage the most significant risks … their businesses.

2. Complete: use appropriate information from the text to finish the following sentences. 1. Unless businesses regularly review risk, they could … . 2. A crisis can be described as … . 3. The following three basic elements are common to most crises: … . 4. Crisis management consists of … . 5. Good crisis management requires … . 6. A strategy for dealing with a crisis is … .

3. Translate: give the English equivalents for the following word combin- 41 ations. Уменьшить цену на пять процентов; рисковать; преуменьшать потери; источники дохода; равномерно распределить что-л; доставка точно в срок; вкладывать деньги в рискованное предприятие; предприятия, наименее предрасположенные к кризису; невыход на работу; текучесть рабочей силы (кадров, персонала). IV. Reading 1. Answer the following questions. 1. What types of risk are mentioned in the text? 2. What can help companies and societies cope with risks and crises? 3. What is the role of leaders in dealing with crises?

2. Translate each of these phrases used in the text. to be exposed to risk; disaster recovery plan; to assess the potential hazards; staff absenteeism; to take a low-level approach to risk management; to boost one’s bottom lines; beyond the scope of everyday business; a facet of risk management; high staff turnover is costly; to avoid pitfalls.

3. According to the text, mark these statements T (true) or F (false). 1. Businesses face greater risks because they are trying to expand in many different ways. 2. Businesses need to evaluate risks which can affect their profits. 3. Most European companies know how to manage risks. 4. Senior managers need to change their thinking to manage risks. 5. Many companies concentrate too much on risks neglecting business itself. 6. From time to time businesses should check their exposure to risk. 7. Businesses which have a low-level approach to risk management are sure to increase their profits. 8. Crises can affect only economies and businesses and no other sphere of social life. 9. Crisis Management represents a failure of Risk Management.

4. Give the best definition for the following economic terms and translate them. 42

Risk and crisis, increased competition, adverse changes, reduced productivity, staff turnover, asset protection, contingency planning.

5. Give profound answers to the following questions. 1. What developments in the market can threaten a company? 2. Why are companies so much concerned about proper risk management? 3. What is the most essential part of any disaster recovery plan? 4. What do companies need to do to best protect cashflow and profit? 5. What do effective strategies for dealing with future risks require now? 6. When does a business problem become a crisis? 7. What segments of the society can crises affect? 8. What are residual risks? Can they be avoided or mitigated? UNIT 20 NEGOTIATIONS

I. Anticipating the Issue Discuss your answers to the following questions. 1. Have you ever been involved in formal or informal negotiations? What was it like? 2. Do you like negotiating? Why / why not? Can you do it? 3. Do we negotiate only in business or in private life as well? 4. What qualities should a good negotiator possess?

II. Background Reading Read the following text. Focus on the meaning of the boldfaced words. Negotiations 1. We are negotiating all the time, whether we realize it or not. We enter into negotiations in order to start or continue a relationship and resolve an issue. In general terms, a negotiation is a resolution of conflict. It is also one of the most common approaches used to make decisions and manage disputes. 2. The negotiation itself is a careful exploration of your position and the other person’s position, with the goal of finding a mutually acceptable compromise that gives you both as much of what you want as possible. Peo- ple’s positions are rarely as fundamentally opposed as they may initially ap- 43 pear – the other person may have very different goals from the ones you expect! 3. Negotiation is an important tool for sales, but it is also a skill that we all use every day in business and in personal life. If people negotiate with each other, they talk in order to reach an agreement which is to their mutual advantage. For example: customer – supplier negotiations; merger or takeover negotiations; wage negotiations; trade negotiations. Negotiations also take place to settle disputes (decide arguments) such as: contract disputes, labour disputes, and trade disputes. 4. Some people are naturally stronger negotiators; they use it to better effect and are capable of getting their needs met more easily than others. Without the ability to negotiate, people break off relationships, quit jobs, or deliberately avoid conflict and uncomfortable situations. But negotiation is a skill that can be developed and cultivated with a little practice and effort. Highly effective negotiators are not born, they are made. 5. When you are involved in a negotiation, you are usually discussing something with a person with whom you don’t fully agree or that person is trying to sell you something… In an ideal situation, you will find that the other person wants what you are prepared to trade, and that you are prepared to give what the other person wants. 6. If this is not the case and one person must give way, then it is fair for this person to try to negotiate some form of compensation for doing so – the scale of this compensation will often depend on many factors. Both sides should feel comfortable with the final solution if the agreement is to be considered win-win. 7. The interdependence of the two parties can be either win-lose or win-win in nature, and the type of negotiation that is appropriate will vary accordingly. The negotiators will either attempt to force the other side to comply with their demands, to modify the opposing position and move to- ward compromise, or to invent a solution that meets the objectives of all sides. The nature of their interdependence will have a major impact on the nature of their relationship, the way negotiations are conducted, and the outcomes of these negotiations. 8. There has been a lot of research into the art of negotiation. Most re- searchers agree that good negotiators try to create a harmonious atmosphere 44 at the start of a negotiation. They make an effort to establish a good rapport with the other party, so that there will be a willingness on both sides to make concessions if it is necessary. 9. Good negotiators generally wish to reach an agreement which meets the interests of both sides. They therefore tend to take a long-term view, ensuring that the agreement will improve their relationship with the other party. On the other hand, a poor negotiator tends to look for immediate gains, forgetting that the real benefits of a deal may come much later. 10. Skilful negotiators are flexible. They do not “lock themselves” into a position so that they will lose face if they have to compromise. They have a range of objectives, thus allowing themselves to make concessions. 11. Successful negotiators do not want a negotiation to break down. If problems arise, they suggest ways of resolving them. The best negotiators are persuasive, articulate people, who select a few key arguments and re- peat them. 12. Finally, it is essential to be a good listener and to check frequently that everything has been understood by both parties.

III. Vocabulary Reinforcement 1. Which of the words below can form word partnerships with the word negotiations? Translate them. Break off; carry; create; mutual; compromise; conduct; settle; direct; enter into; take; open; hold; catch; resolve; comply; persuasive.

2. Which of the phrases below are associated with doing well in negotiations? Translate them. To create a harmonious atmosphere ; to look for immediate gains; to make concessions; to avoid reaching an agreement; to establish a good rapport; to meet the objectives of all sides; to find a mutually acceptable compromise; to settle a dispute; to get to a win-lose situation.

3. Complete: use an appropriate preposition where necessary. to (2), about, in, on, with (3), from, out, into 1. We are willing to compromise … this issue because it means so much … you. 2. If you deal … people … another culture, find … … its etiquette and ne- 45

gotiating styles. 3. If people enter … negotiations and negotiate … each other, they want to reach an agreement which is … their mutual advantage. 4. They were made to comply ... the other party’s demands. 5. When you make a concession, always get something ... return.

4. Complete: use appropriate information from the text to finish the following sentences. 1. The ability to negotiate is an important skill … . 2. We are negotiating all the time … . 3. Good negotiators create … . 4. Successful negotiators usually reach an agreement which … . 5. The best negotiators are … .

5. Translate: give the English equivalents for the following word combinations. Взаимная выгода; вступать в переговоры; установить контакт; отступать, сдаваться; разрешение конфликтов; идти на уступки; переговоры потерпели неудачу; вести деловые переговоры с кем-л.; урегулировать спор/конфликт; проявить дальновидность/предусмотрительность, позаботиться о будущем.

IV. Reading 1. Answer the following questions. 1. Is every negotiation potentially a win-win one? 2. What makes a good negotiator?

2. Translate each of these phrases used in the text. 1) to make concessions; 2) to establish a good rapport; 3) to get to a win- lose / win-win situation; 4) to find a mutually acceptable compromise; 5) to look for immediate gains; 6) conflict resolution; 7) to break off relationships; 8) to take a long-term view.

3. According to the text, mark these statements T (true) or F (false). 1. The ability to negotiate is the most important skill that we all use every day in business and in private life. 2. Negotiations take place to settle trade disputes. 46

3. All people are naturally strong negotiators. 4. Highly effective negotiators are not made, they are born. 5. What negotiators should be aiming for is a win-lose situation. 6. The interdependence of the two parties influences the way negotiations are conducted, and the outcomes of these negotiations. 7. Good negotiators try to create a peaceful and friendly atmosphere at the start of a negotiation. 8. Good negotiators will lose face if they have to compromise.

4. Translate the following terms. Negotiation, trade disputes, mutual advantage, immediate gains, tenacity, merger or takeover negotiations.

5. Give profound answers to the following questions. 1. When you are involved in a negotiation, what are you doing? 2. What is the aim of all negotiations? 3. What should a skilful and successful negotiator be like? 4. What is the difference between a good negotiator and a poor one? 5. Why is it important to know the art of negotiation?

V. Additional Reading Read the following text to learn more about the problem under discussion. Writing a Business Letter An effective letter in business uses short, simple sentences and straightfor- ward vocabulary. The easier a letter is to read, the better. Salutation First and foremost, make sure that you spell the recipient's name correctly. You should also confirm the gender and proper title. Use Ms. for women and Mr. for men. Use Mrs. if you are 100% sure that a woman is married. Under less formal circumstances, or after a long period of correspondence it may be acceptable to address a person by his or her first name. When you don't know the name of a person and cannot find this information out you may write, "To Whom It May Concern". It is standard to use a comma (colon in North America) after the salutation. It is also possible to use no punctuation mark at all. Here are some common ways to address the recipient: 47

Dear Mr Powell, Dear Sir or Madam: Dear Ms Mackenzie, Dear Madam Dear Frederick Hanson: Dear Sir, Dear Editor-in-Chief: Dear Sirs Dear Valued Customer Gentlemen: First paragraph In most types of business letters it is common to use a friendly greeting in the first sentence of the letter. Here are some examples:  I hope you are enjoying a fine summer.  Thank you for your kind letter of January 5th.  I came across an ad for your company in The Star today.  It was a pleasure meeting you at the conference this month.  I appreciate your patience in waiting for a response. After your short opening, state the main point of your letter in one or two sentences:  I'm writing to enquire about...  I'm interested in the job opening posted on your company website. Second and third paragraphs Use a few short paragraphs to go into greater detail about your main point. If one paragraph is all you need, don't write an extra paragraph just to make your letter look longer. If you are including sensitive material, such as re- jecting an offer or informing an employee of a layoff period, embed this sentence in the second paragraph rather than opening with it. Here are some common ways to express unpleasant facts:  We regret to inform you...  It is with great sadness that we...  After careful consideration we have decided... Final paragraph Your last paragraph should include requests, reminders, and notes on enclo- sures. If necessary, your contact information should also be in this paragraph. Here are some common phrases used when closing a business letter:  I look forward to...  Please respond at your earliest convenience.  I should also remind you that the next board meeting is on February 5th. 48

 For futher details...  If you require more information...  Thank you for taking this into consideration.  I appreciate any feedback you may have.  Enclosed you will find...  Feel free to contact me by phone or email. Closing Here are some common ways to close a letter. Use a comma between the closing and your handwritten name (or typed in an email). If you do not use a comma or colon in your salutation, leave out the comma after the closing phrase: Yours truly, Sincerely yours All the best, Yours sincerely, Thank you, Best of luck Sincerely, Best wishes Warm regards, Writing Tips Use a conversational tone. Ask direct questions. Double-check gender and spelling of names. Use active voice whenever possible. Use polite modals (would in favour of will). Always refer to yourself as "I". Don't use "we" unless it is clear exactly who the pronoun refers to. Rewrite any sentence or re- quest that sounds vague. Don't forget to include the date. Day-Month-Year is conventional in many countries; however, to avoid confusion, write out the month instead of using numbers (e.g. July 5th, 2007).

VI. Writing Write a letter to your business partner using the format provided below. Choose any topic you like. Invent an address for the people and companies concerned. Block format is the most common format used in business today. With this format, nothing is centred. The sender's address, the recipient's address, the date and all new paragraphs begin at the left margin, like this:

Wicked Wax Co. Ltd SENDER'S ADDRESS 22 Charlton Way may be printed company logo and address London, SE10 8QY

5th December, 2006 DATE 49

Ms. Maggie Jones Angel Cosmetics Inc. RECIPIENT'S ADDRESS 110 East 25th Street New York, NY, 10021 USA

Your ref: 123 RECIPIENT'S REFERENCE (IF ANY) Our ref: abc SENDER'S REFERENCE (IF ANY)

Dear Ms. Jones, SALUTATION

Forthcoming Exhibition SUBJECT

First paragraph...

Second paragraph... BODY OF LETTER

Third paragraph... CLOSING Sincerely, SIGNATURE (HAND-WRITTEN) Morris Howard NAME, TITLE (TYPED) Morris Howard, President COPY TO cc: Brian Waldorf Enc: catalogue ENCLOSURE