Limba Engleza Vintean

Introducere
Cursul de limb englez de afaceri este un instrument de lucru

pentru studenii Facultii de tiine Economice. Cuprinde referiri la
concepte din domeniu economic, informaiii specifice din aceast arie,
vocabularul de specialitate de baz, fiind structurat pe urmatoarele teme de
baz: Jobs and Advertising, Business and Businesses, Negotiations,
Meetings, The Company, Leadership, Marketing and Merchandising,
Tourism- the Worlds Biggest Industry, Economic Theory, International
Trade, The Banking System, Insurance, Macroeconomics and
Microeconomics and some supplementary reading.
Am dorit promovarea unor aborri motivate n limba englez de
afaceri pentru toi cei doritori de mbogire a cunotiielor. Materialele din
curs asigur folosirea extensiv a vocabularului, oferind subiecte pentru
discuii i analiz. Accentul cade pe cunotiine de specialitate, vocabular,
aptitudini de comunicare. Textul este un material pe coloana cruia se
lucreaz prin atenie acordat lecturii, exprimrii orale i scrise,
vocabularului.

Observaii:

1. Toate trimiterile bibliografice sunt necesare pentru nelegerea
aspectelor descrise.
2. Testele i exerciiile permit evaluarea cunotiinelor acumulate.
3. Dicionarul Oxford este cel mai recomandat
4. Textele sunt recomandate toate ca material de studiu.
5. Rspunsurile exerciiilor i a testelor se regsesc n texte.
6. Materialele suplimentare sunt o lectur facultativ.
7. Vocabularul final mbogete evantaiul limbajului de specialitate

Not: Astzi, limba englez nu mai sperie pe nimeni pentru c ea
este util, inestimabil, esenial pentru comunicare, instruire i progres,
universal ntr-o lume competitiv. Citim n limba englez to mai mult
pentru a ne informa. Cu statut de limb global, ea va duce povara
experienelor noastre, a gandurilor i viselor, a realizrilor, fiind o realitate.
Succesul va fi nu o destinaie, ci o cltorie cu geometrii n care vom tii tot
mai mult i mai bine cum s ne micm. Cu aceste gnduri bune pim mai
sigur i mai apsat i motivaia trebuie s conving pentru a schimba
costumul viselor cu hainele de munc.

Aadar:
1. facei un pic mai mult dect putei!
2. oferii un pic mai mult dect trebuie s oferii!
3. dai-v silina un pic mai mult dect ai vrea!
4. intii mai sus dect credei c este posibil!

i dac uneori nu poi avea tot ce i doreti, totui poi dori tot ce poi avea:
poi s nvei Limba Englez oricnd i oriunde chiar atunci cnd i se pare
greu!

Tema I. Theme I.
JOBS and AVERTISING

1.obiectivele specifice ale temei (the main objectives)
* nelegerea textului i a situaiilor prezentate
* crearea unor situaii- dialog cu exprimri ct mai corecte i cursive
* aprofundarea problemelor de lexic

2. competene specifice dobndite de student:(specific skills of the
student)
* abilitate n comunicare folosind bagajul lingvistic de specialitate
* fluen n exprimare
* cunoaterea etapelor unui interviu folosind exprimarea corect.
* cunoaterea avantajelor i dezavantajelor reclamelor i redarea lor
ct mai corect n limba englez.

3.cuvinte cheie:((key words) situation, jobs, appraisal,
advertisement, persuade

4. structura modulului de studiu:(the structure of the study) the job
interviews, the appraisal interviews, the aim of advertising, arguments for
and against advertising

5.rezumat:(abstract)
When people want to get a job they must go through
interviews.Interviews really arent out to trap people. Their purpose is to
evaluate people, they help you know how to assess your qualities. Because
to get a job its not enough to be good, but you must convince others that
you are good.
You have to manage your own work easily, to be flexible in any
situations, to come up with new ideas to inspire confidence, to have well
established priorities, to be a good team player.And they are linked to
advertising which now is exploiting every medium of communication.

The Content

People have always worked. So they have had different occupations
along centuries.
All professions require much training, learning and responsibility.
To get a job its not enough to be good, but you must convince
others that you are good.
You have to manage your own work easily, to be flexible in any
situations, to come up with new ideas to inspire confidence, to have well
established priorities, to be a good team player.
More and more people have part time jobs such as: babysitter,
waiter/ waitress, shop assistant, paper boy, taxi driver .Among the
advantages of part time jobs there might be:
-the sense of financial independence
-self reliance
-getting to know other people
-stronger links to real life

In different countries, different trades and different grades, the salary
that goes with a job may be only part of the package: perks like a company
car or cheap housing loans, bonuses paid, company pension schemes,
generous holidays, flexible working hours may contribute to the
attractiveness of a job.
Everybody has to go through interviews to be offered a position.
Recruiting a new member of your staff is likely to be the most expensive
decision you will make as a manager. If you do it right you can make a
fortune for your company. Most managers inherit a team of workers who
know what they are supposed to do, who know something about your
company, about the way your team works, about your customers, about the
business processes within the department.

What happens when you bring an outsider in to this situation?
Some of the possible outcomes if you do it wrong are:
-you and your staff spend ages helping the new team member to get
started.
-your team norms are threatened and possibly changed.
- you discover that the perfect qualifications on the new employees
C.V are no more than hype.
- you discover that the new employee is not fit for what you want.
Both parties the interviewer and the interviewee have to
communicate effectively: open questions, right answers, positive opinions.
A job appraisal interview is one of the major tasks of the leader of a
team of people. It enables to: plan the future, look at individual performance,
discuss and plan training and development needs, contribute to company
career planning, salary planning and job progression, evaluate the efficiency
of past targets and goals, establish priorities, identify, assess, solve
problems, look at resourceful needs.
Job appraisal needs to be systematic if it is to be of any use. All
effective managers have day to day or week to week contact with their team,
they will also be running up dating sessions where they inform the team of
corporate, market or local changes in working, policy or law and any
changes that affect the workings of their teams. These are day to day tasks of
management. The job appraisal interview is an opportunity for the team
member and their manager to think about the future months in an organized
manner. Before an appraisal they both have the opportunity to think in depth
about what they have been doing and where this will lead in the future,
where the success and shortfalls are, and what objectives they will set each
other in the future.
Applying good communication practices to the appraisal process
will ensure that career progression has the best chance of success from the
point of view of both parties.
Interviews really arent out to trap people. They evaluate people,
they know how to assess your qualities. And they are linked to advertising.
Advertising is the greatest art form of the 20
th
century. It may be
described as a science of arresting human intelligence long enough to get
money from it. It stimulates debate and sometimes controversy. It has a
powerful effect on the human consciousness as it is around us on television,
radio, cinemas, newspapers and magazines. The way we dress, talk and
behave sends a message to other people. It is about manipulating public
opinion and getting a message across to an audience so that they will behave
in a particular way.
The advertising industry has been in existence since the end of the
17
th
century when newssheets carried printed advertisements for products
and information. Merchants returning from voyages overseas needed to
generate markets for the products they imported and so they had to advertise.
By the end of the 19
th
century, advertising was big business. Advertisements
dominated the newspapers, posters were commonplace and spawned a whole
art form. But the new communication technology gave the industry its
biggest boost. Modern advertising exploits every medium of
communication. We tend to think of advertisements in terms of the
mainstream media but we also have posters, billboards, point of sale
displays, direct selling and cold calling by phone and fax, the internet which
taps into worldwide audiences.
If you work in advertising , you will for sure be part of an influential
band of people who can change public attitudes and behaviour.
The heart of this industry lies in the advertising agencies. The large
ones are multinationals with in such far flung places as Beijing and Buenos
Aires. If you work in a small agency, you may be expected to do
everything, including account management, client liaison, concept
development, creative work. In a larger one, job roles will be more
structured. You will have a specific role and a greater chance of more formal
career development. Advertising agencies vary in the services they offer.
The most familiar names are full service agencies but there are also other
companies that specialize in media services or focus on particular areas of
advertising, such as recruitment or business to business advertising.
Business needs to advertise so that we should learn of the existence
of different products.
Advertising is aimed at conveying information to potential
customers and clients.
Advertising is used to persuade the public to buy.
At the lowest level people need food, shelter, warmth and sex. Then,
people begin to think about personal possessions and finally we move on to
egocentricity.
The ultimate need is for fulfillment. This would come when we have
all that the advertisers say we so desperately need. For most of us it seems
that that day will never come!
Sometimes advertisements are misleading. Advertisers shouldnt
make untrue statements about their products but they so often do it. They
create a demand which would not otherwise exist.
Advertising goes far beyond T.V. and hoardings, newspapers and
magazines, they enrich our lives.

Arguments for advertising
It tells consumers about the products that are available,
allowing them to make a wider choice.
It encourages competition between firms.
By creating a wider market for products it makes large scale
production and sales possible.
Media would be more expensive without it.
Arguments against
It is expensive.
It can be wasteful, sometimes involving the same firm
advertising virtually identical products against each other. (eg. washing
powder )
It can be misleading.
It can exert control over media.
It can put pressure upon people to buy products that they dont
really need or cant afford.

Advertising media
National newspapers
Regional newspapers
Consumer magazines
Business and Professional Directories
Press production costs
Poster and Transport
Cinema
T.V, Radio
Banners on Internet sites

Television commercials
The most effective medium for reaching large numbers of
people.
They have to be brief.
But:
They cannot be very informative and display images rather than
information.
They are selective it is hard to reach a particular group of
people except for certain programs.
Radio
-advertising is cheap and can be effective in reaching certain types
of people: old people and housewives.

National press
- it is expensive too but if has a large geographical selectivity and
allows detailed information to be given.

Magazines and trade press
It is a way of reaching a specialized group of customers.
There are magazines for almost any interest and for any type of
product.
Posters and hoardings
-Effective if good locations can be found.
Sales promotions
-They include free gifts, competitions, give away samples, special
offers.
Sponsorship
-Of the arts, public works, sport can be very effective in putting a
product or company name before the public.
Packaging and display
-In shops; they maintain existing sales but also encourage first time
buyers.

This is the information about a job advertisement:
Asian Monetary Institute
Computer Programmer in the Statistics Division
The successful candidate will have
A University degree in economics or statistics
Work experience in banking and financial accounts
Fluent English and Mandarin
Applicants should send a C.V., a recent photo and references from
previous employers to the Asian Monetary Institute P.O. Box 6707

Additional Bibliography

Adriana Vintean, Practical English for Business, Psihomedia
Publishing House Sibiu, Adriana Vintean, Communication Skills in
Business English, Psihomedia Publishing House Sibiu, English Collection,
Langlais economique et commercial,(Business & Economics)
translated by Daniela Nicolescu.
Oxford Business English Dictionary,2008

Questions:

1.When do you have to go through an interview?
2.How important is the advertisement for an interview?
3.What does the job appraisal ask for?
4.Is advertising a big business?
5.What does modern advertising exploit?

Exercices and tests:

I.Complete the sentences:
1.You must be neat and well groomed when..
2. If you are natural, friendly, relaxed but not sloppy or overly
casual, then..
3. Sometimes advertisements are.
4. Direct selling.
5. Modern advertising..

II.Choose the correct form of the verb:

1. Merchants (need) to generate markets for the products they
imported.
2. We (to be willing) to consider advertisements in terms of the
mainstream media.
3. Competition (to be encouraged) between firms.
4. T.V commercials (to have)to be brief.
5. He(to work) in the advertising industry for 10 years.

III. Match the correct meanings:

Advertising outlays/tarife de publicare a reclamelor
Expense account/cifr de afaceri
Advertisement rates/cheltuieli de reclam
Rate of turnover/cont de cheltuieli
Persuasiveadvertising/publicitatepentru consumatori
Consumer advertising/tarife de publicare
Sales promotion/reclam de convingere
Advertisement rates/vnzare promoional

IV.True or false?

When you work in management , you will for sure be part of an
influential band of people who can change public attitudes and behaviour.
The best of the advertising industry lies in the advertising agencies.
The small ones are multinationals with in such far flung places as Beijing
and Costa Rica. If you work in a big agency, you may be expected to do
everything, including account management, client liaison, concept
development, creative work. In a larger one, job roles will not be more
structured. You will have any role and a smaller chance of more formal
career development.

V.Fill in the blanks with the correct words:

1. Business must advertise so that it learn of the existence of
products.
a) should b)must c) may
2. The advertisements allow. to make a wider choice
a) consumers b)transport c)market
3. Media would be more. without advertising.
a) better b)expensive c)cheap
4. Posters can be .. if they have good locations.
a) objective b)effective c)creative
5. The higher the audiencethe more expensive advertising space
is likely to be.
a) rating b) working c)planning

VI.Make the logical and grammatically correct sentences from
the following words:

has/powerful/human/is/around/effect/as/us/on/T.V/it/consciousness/
a/on/radio/the/it/cinema/and/newspapers/magazines/.

VII.Find the mistakes in the following sentences:
1.We looking at the commercials every day.
2.What do you prefer: magazines or posters?
3. Hoardings are located in towns.
4. Informations are conveyed to clients.
5. If you hard sell you make efforts in persuading consumers
buy.
6.An admen works in advertising industry.
7.To soft sell a product means persuade consumer to buy not
aggressive.
8.Outdoor advertising is find everywere.
9.An impact on advertising has been a mater of considerable
debate.
10.The biger the company are the bigger the relations
became.

VIII.Make an advertisement for a hypermarket.

IX.Find out about your partners career.
Using different forms of verbs ask about:
-present job
-work experience
-education and training
-ambitions and prospects for the future
-its rewards and frustrations

X.Imagine that a friend of yours is about to attend an interview.
Write at least ten pieces of advice that you would give him. You have as
suggestions:
Wear smart, formal clothes
Dont smoke
Sit up straight
Arrive on time

Tema II. ThemeII.
BUSINESS and BUSINESSES

1.obiectivele specifice ale temei:(the main objectives)

2. competene specifice dobndite de student:(specific skills of
the student)
* fluen n exprimare
* cunoaterea proceselor n economia de pia
* definirea ntr-un limbaj corect a parteneriatului, acionarilor, a
societilor, a profesionalismului.

3.cuvinte cheie:(key words) trader, partner, shareholder,
stockholder, excellency.

4. structura modulului de studiu:(the structure of the study) the
simplest form of the business, shareholder and stockholder models,
professionalism in business life.

5.rezumat: (abstract)

Many of todays well known businesses were started by one or two
people and the ownership of those businesses was very simple. It was during
the 19th century that businesses wanted to expand and increase the number
of owners. To do this they needed to sell shares. To encourage people to buy
shares, governments around the world passed laws which gave people
limited liability.
During the 20th century many people bought shares in sucessful
businesses for the following reasons: to have a share in the profit made by
the business, the hope that a profitable business would attract more and more
people to buy shares and this will make the price rise so that shares could be
sold at a profit.
Business is a long term, highly repetitious activity, frequently
requiring people to do the same thing today, tomorrow, the next day.
Business is the production,buying, and selling of goods and services.

The Content

Business is a long term, highly repetitious activity, frequently
requiring people to do the same thing today, tomorrow, the next day.
Many of todays well known businesses were started by one or two
people and the ownership of those businesses was very simple. It was during
the 19th century that businesses wanted to expand and increase the number
of owners. To do this they needed to sell shares. To encourage people to buy
shares, governments around the world passed laws which gave people
limited liability. During the 20th century many people bought shares in
sucessful businesses for the following reasons: to have a share in the profit
made by the business, the hope that a profitable business would attract more
and more people to buy shares and this will make the price rise so that shares
could be sold at a profit.
The simplest form of business ownership is the sole trader.
Here, one person owns the business, takes all the decisions and risks his own
money. People enjoy to be self employed and they are happy to have
complete control of their own business. But there is no one to share the
responsibilities involved in decision making and raising finance is a
problem. Sole traders finance their business through a bank loan and the
bank will charge a high rate of interest. A bank will ensure that it can get the
money back, if the loan is not repaid, by requiring security on the loan. Sole
traders are liable for any debts they have, even if they are not the traders
fault. A trader may do a job for a larger business; it may be worth 20 000$
but it will not be paid until the job is complete. The sole trader must spend 9
000 $ on equipment, but when the job is complete the larger business closes
down and the 20 000$ are not paid; still, the sole trader has to cover the 9
000 already spent as he has unlimited liability.
Sometimes, a pair of a small group of people will get together
to run a business. This is called a partnership. Partnerships face unlimited
liability as sole traders do.
Partners may put some money into the partnership in return for a
share of the profits but take no part in the running of the partnership, do not
work for it and have no say in any decisions.Under these circumstances, it
is only the money that has been invested that is liable to be used in order to
pay off any debts. This is a silent partner and he has only limited liability.
The technical name for both private and public limited companies is
joint stock company. It means that the stock in a company is owned jointly
by several people.
Some business activity is carried on by the government and this
forms the public sector.
Profit maximisation may not be the only aim of a busines; in public
companies there is a separation of ownership and control, so that directors
and managers may run a company in their own interests.
Business is the production,buying, and selling of goods and services.
A business, company or firm is an organization that sells goods or services.
A business may be referred to formally as a concern. Then, it may be
referred to approvingly as an enterprise in order to emphasize its
adventurous, risk taking qualities and business in general may be referred to
in the same way, in combinations such as free enterprise and private
enterprise.
A business requires tremendous effort to get it going and once going,
it requires minimum effort to keep it going. The role of business is to stay in
business, providing wages, goods and services into the community and
meeting the profit needs of the business and the key stakeholders in the
business. The source of funding and capital is considered to be the main
difference between the stakeholders and the shareholders. In the stakeholder
model, funding is being supplied through bank loans. This means that they
will ask for managerial consideration and response from those running the
company.
In the shareholder model, stockholders advance capital to managers
who act as their agents in pre-authorized ways. Shareholdes buy shares to
maximise the return on their investment; the responsibility of the manager in
a firm is to engage in activities designed to increase the profits, that is to
engage in open and free competition. To create shareholder wealth, the
management needs to outperform the expectations shareholders had when
they made their investment decisions. In the shareholder model of corporate
governance, the focus is on institutional agents monitoring corporate agents
in order to enhance the investment prospects of investors. In the stakeholder
model, the premise is that a company is more likely to perform well and the
shareholders are more likely to benefit, if opportunities are created for the
various groups holding an interest in the company to enter into binding
relationship. The emphasis in the stakeholder model is the way enterprises
are governed while in shareholder model the emphasis is on the way
enterprises are managed. The shareholder based entity is more responsive to
changes in market conditions.
Both approaches take account of the issues of board checks and
balances, abuse of authority and power, the role of boards, director rewards
and participation in setting standards for accounting, safety, employee
relations and risk management.
In todays business world we have to take into consideration the two
models. The shareholder model encourages a top down, command and
control leadership approach whereas in the stakeholder model a team based,
shared decision making, servant leadership approach is more likely.
Stakeholder based governance refers to how the organization makes
cost effective decisions in terms of wealth creation but with consideration of
stakeholders rights. Corporations have multiple responsibilities and need to
balance competing conditions, such as long and short term notion of gain,
profit and sustainability, cash and accounting concepts of value, democracy
and authority, power and accountability. This model is more common in
continental Europe and Japan.
The micro approach to corporate governance refers to shareholders.
This is concerned with maximizing wealth creation for shareholders. Control
is linked here to profitability, an Anglo American model.
Then business may be referred to as commerce, commercial
distinguishing the business sphere from other areas such as government or
arts or from non money making activities.
The social role of any business is linked to what we call as serving
the future: sufficient profits to satisfy the business and the stakeholders meet
todays profits needs. But as the expectations increase society has to invest
in ideas and technology that expands the economic base and the wealth of
the society. An essential requirement is that each and every business strives
to achieve profits over and above immediate business needs and the
stakeholders needs. Without this surplus profit there can be no venture
capital. Without venture capital, economic growth will struggle to match
population growth and the growth in social expectations.
Any business requires true professionalism- the courage to care
about people, clients, career.
True professionalism means the pursuit of excellence. If you value
something, then you must monitor your performance in that area, acept
nothing less than excellence and actively work to learn what to do differently
every time you fall short of excellence. Firms must provide help and counsel
to those who are encountering difficulties in living uo to their standards, in
order to help them get back on track. Once professionals have confirmed
their core values, they need to design systems which provide consequences
for noncompliance. By leaving each individual professional to decide for
himself what level to achieve in key value areas, firms say that the company
as a society has no standards that must be adhered to. Excellence in such
areas become a matter of personal professional choice. Professionals must
live by the slogan you are allowed to fail, you are not allowed to give up
trying.
The oposite of the word professional is not unprofessional, but rather
technician. These may be highly skilled, but they arent professionals until
they demonstrate characteristics such as:taking pride in their work, showing
a personal commitment to quality, reaching out for responsibility,getting
involved, looking for ways to make things easier for those they serve,
listening to the needs of those they serve, being team players, honest,
trustworthy, loyal, open to constructive critiques.
Professionalism is an attitude not a set of competences. A true
professional is a technician who cares. And if finding people with technical
skill is usually easy, finding people who are filled with energy, drive,
enthusiasm personal commitment to excellence is hard. Because real
professionalism has little to do with which business you are in, what role
within that business you perform, how many degrees you have. It implies a
pride in work, a commitment to quality, a dedication to the interests of the
client, a sincere desire to help.
Traditional definitions of professionalism are filled with references
to status, educational attainments, noble calling. Now, we refer to attitude
and character. So, firms should hire people for attitude and train for skill.
Being a professional asks for treating people as professionals that is invest in
them. Then professional success requires more than talent, it asks for
initiative, involvement, enthusiasm, commitment. Being good at business
development involves nothing more than a sincere interest in clients and
their problems and a willingness to go out and spend the time being helpful
to them.
Success in business life means not only good professionalism but
effective functioning of the firms, positive outlook.

Additional Bibliography

translated by Daniela Nicolescu,

Questions:

1. What does a business encourage people to do?
2. When are people attracted to start a business?
3. What do you invest in a business?
4. What do shareholders buy?
5. How do sole traders finance their business?


I. Complete the sentences:
1. I hope that a profitable..
2. To encourage him you.
3. He has bought shares.
4. The source of funding.
5. What do you consider..

II. Choose the correct form of the verb:
1. These traders(finance) their business two years ago.
2. I (to be encouraged) at all lately.
3. He (to own) a business for two years.
4. They (to set up) a firm this winter.
5. This activity(to carry on) by the government.

III. Match the correct meanings:
Business forecast/repartiie a profitului
Profit sharing/prognoz economic
Share market/aciuni n cretere
Investment funds/burse de aciuni
Growth stocks/fond de investiii
Economic growth/cretere a profitului
Profit increase/cretere economic

IV. True or false?
The crucial role of any business is linked to what we call as serving
the future: insufficient profits to satisfy the business and the stakeholders
meet todays profits needs. But as the expectations decrease, society has to
invest in profits and technology that expands the economic base and the
sustainability of the society. An essential demand is that each and every
business tries to achieve profits over and above delayed business needs and
the stakeholders needs.

V.Fill in the blanks with the correct words:
1. He owns the business and.all decisions.
a) takes b)has c)answers
2. A bank ensures that it can get the..back.
a)shares b)money c)profit
3. Profit maximization may not be the onlyof a business.
a)fault b)aim c)partner
4. The source of funding and capital is a difference between
the.and shareholders.
a)stakeholders b)traders c)government
5. We must take into.. several models.
a)business b)relation c)consideration

VI. Make the logical and grammatically correct sentences from

business/on/is/some/activity/by/carried/government/the/this/and/sect
or/public/the/forms/.

VII. Find the mistakes in the following sentences:
1. Do you buy shares to get successful?
2. I profitable business does not attract people.
3. he take all decisions by himself.
4. There are the money that have been invested.
5. We mustnt take into consideration any model.
6. Every business doesnt strive to achieve profit.
7. Where do you take the notion to?
8. What are you concern with?
9. Can you invest moneys into this?
10. What will economic growth struggle from?

VIII. Enlarge upon the following:
1. One good rule for being successful is: realize that knowledge
power!
2. The social role of any business is linked to what we call as serving
the future
3. A business requires tremendous effort to get it going and once
going, it requires minimum effort to keep it going.

IX. Start a business with some daring ideas

Tema III. ThemeIII.
NEGOTIATIONS


student)
* fluen n exprimare
* cunoaterea procesului de negociere, a principiilor, n economia de
pia

3.cuvinte cheie:((keywords):communication, bargain, persuade,
manager,effectiveness

process of negotiation,negotiating skills, positive aspects.

Negotiation in business is no doubt about facts, costs, profits, logical
decision making but also about people, their emotions(joy, surprise, fear,
doubt, anger, sorrow) , goals and the kind of human beings they are. An
understanding of peoples motivation and how their personalities can affect
their behaviour can be vital in discovering how you can do business with
them better and better.
To negotiate effectively one must communicate as such. The
message has to be conveyed, received, understood, accepted in order to
entail the right actions or responses.

The Content

Negotiation is not a science nor is it a branch of technology. It is a
life skill. We start to negotiate when we are very young and as we grow
older we build up patterns of behaviour that reflect what we feel works for
us. And this will be based partly upon the kind of personality we may have
inherited and partly upon the kind of personality we have lived and grown
up.
Negotiation in business is no doubt about facts, costs, profits, logical
decision making but also about people, their emotions(joy, surprise, fear,
doubt, anger, sorrow) , goals and the kind of human beings they are. An
understanding of peoples motivation and how their personalities can affect
their behaviour can be vital in discovering how you can do business with
them better and better.
To negotiate effectively one must communicate as such. The
message has to be conveyed, received, understood, accepted in order to
entail the right actions or responses. The process of transmission is very
important not all negotiations are conducted face to face but there are other
choices too: letters, the fax, the electronic mail, the phone. Still there might
be some problems such as: they may get missed or misunderstood.
To many personnel managers, negotiation implies collective bar-
gaining. To a sales executive, it will be thought of in terms of making a
commercial deal. Quantity surveyors, purchasing managers and lawyers all
have their own specialist interpretations of what, in essence, is a process
common to all managerial work. In reality, all managers negotiate, if not
with outside parties then with each other.
The procedures and language of formal negotiation vary with the
type of negotiation involved. A set-piece pay bargaining session has its own
system and jargon that differ from those of a meeting of solicitors to settle a
claim for libel damages. Yet the underlying principles and much of the
psychology of the process are the same for all forms of negotiation.
It is also easy for managers to overlook the fact that much of their
informal daily activity is, in effect, negotiation. All managers spend a large
proportion of their time trying to influence and persuade other managers over
whom they have no executive authority. Consider two examples:
A personnel manager attempts to 'sell' the need for a more systematic
form of employee consultation to a reluctant office manager. The company has
a general policy of support for employee involvement practices, but has not
laid down any specific system or procedure. Neither the extent to which the
personnel manager can use the general policy to require the office manager's
cooperation, nor the right of the office manager to reject the personnel
manager's suggestions is clearly defined. The outcome will be influenced by
their possibly differing perceptions of the formal position, and by the powers
of argument or persuasion of the personnel manager.
A sales executive tries to persuade the production manager to
change a manufacturing schedule to fit in a small order for a special
customer. The production manager has full authority to decide production
schedules against a weekly output plan set by top management. Officially, the
sales manager should make a request through the sales director for an urgent
variation to this plan but because the order is only a small one, he approaches
the production manager informally and must, therefore, rely on persuasion.
Negotiating skills are, therefore, a very important element in the
effective manager's portfolio of personal competencies.
Recognizing when negotiation is occurring is the first step towards
acquiring the necessary skills, and this is aided by an understanding of the
basic principles involved.
Negotiation is a process, not a single skill. A range of skills are
involved in handling this process effectively, but to identify the skills
relevant to any negotiating episode, it is important to recognize which elements
or principles of negotiation are involved. There are seven principles common
to all forms of negotiation:
Negotiation involves two or more parties who need or think they
need each other's involvement in achieving some desired outcome. There
must be some common interest, either in the subject matter of the negotiation
or in the negotiating context that puts or keeps the parties in contact.
Although sharing a degree of interest, the parties start with different
opinions or objectives, and these differences initially prevent the
achievement of an outcome.
At least initially, the parties consider that negotiation is a more
satisfactory way of trying to resolve their differences than alternatives such
as coercion or arbitration.
Each party considers that there is some possibility of persuading the
other to modify their original position. It is not essential - though it is usually
highly desirable for each party to be willing to compromise. But negotiation
can begin when parties have an initial intention of maintaining their opening
positions, but each has some hope of persuading the other to change.
* Similarly even when their ideal outcomes prove unattainable, both
parties retain hope of an acceptable final agreement.
* Each party has some influence or power - real or assumed -over the
other's ability to act. If one party is entirely powerless, there may he no point in
the other party committing itself to a negotiating process. The matter can be
settled unilaterally by the party with the untrammeled power to act. This power
or influence may, however, be indirect and bear on issues other than those that
are the direct subject of negotiation.
* The negotiating process itself is one of interaction between people
in most cases by direct, verbal interchange. Even when the negotiation is
being conducted through correspondence, there is an essential underlying
human element. The progress of all types of negotiation is strongly
influenced by emotion and attitudes, not just by the facts or logic of each
party's arguments.
Negotiation is a process of interaction by which two or more parties
who consider they need to be jointly involved in an outcome, but who initially
have different objectives, seek by the use of argument and persuasion to
resolve their differences in order to achieve a mutually acceptable solution.
It will probably be readily accepted that this definition is relevant to
formal negotiations such as pay bargaining or the settlement of a legal claim for
damages. Trade unions and employers or the solicitors representing two parties
to litigation obviously accept that they need jointly to evolve a mutually
satisfactory outcome, starting from differing positions. Each party knows that
the other has some power to influence the outcome. A trade union might apply
the sanction of industrial action: an employer might reduce the labor force: the
claimant's solicitors might stop negotiating and take the case to court: the
respondent has some defense if this occurs.
In the second of these examples, the sales executive has no direct
power to require the production manager to alter production schedules: the
production manager can just say no -- so where does negotiation come in? A
willingness at least to consider the request and thereby become involved in a
discussion about a possible jointly satisfactory outcome - will stem from
several aspects of common interest, or from a recognition of more subtle
forms of power.
The sales executive wants the production schedules altered, the
production manager does not, but both managers, it is to be hoped, share an
interest in the success of the business. To disappoint an important customer
may be of more immediate concern to the sales executive than to the
production manager, but a good production manager will pay heed to the
importance of good customer service. Similarly, the sales executive will
recognize the costs and perhaps delays to other orders that a change in the
production schedule might give rise to. So a common interest in the good of
the business enables both to see something in the other's point of view, and
thus encourages a dialogue, rather than the simple exercise of formal
authority.
It may be that the sales executive (or the customer on whose behalf
the request is being made) is known by the production manager to be highly
regarded by the managing director. It might thus be unwise, in terms of
company politics, for the production manager to run the risk of being
considered unhelpful.
Both managers also know that they have to continue to work
together. Without anything being said, both will probably be influenced by
knowing that this long-term working relationship could be adversely affected
by mishandling the particular incident. The production manager may have
the right to say no in other words, not to negotiate but will wonder whether
this would cause avoidable friction. There may also be the thought that by
agreeing some concession, an obligation may be created that might be
capitalized on at some future date.
In the other example, considerations of a similar kind might also lead to
the office manager's being willing to discuss the personnel manager's advice.
Both have an interest in the smooth running of the company and in compliance
with the company policy: the personnel manager may be known to have top
management backing: the managers have to go on working together, and
therefore the office manager will have to consider the implications of re-
jecting the personnel manager's advice if employee relations are then seen to
deteriorate.

Additional Bibliography:


Questions:

1. When do we negotiate?
2. Is negotiation in business different than in life?
3. How can you become a better negotiator?
4. How important is compromise?
5. What are face to face discussions important for?

Exercises and tests:

1.The message
2.An understanding of peoples.
3.Negotiation implies..
4.The manager must..
5.Each party..

1. There(may) be some problems here.
2. It(to be) also easy to overlook this fact.
3. (spend) more time here, there (not be) so many disputes.
4. Neither the manager, nor the staff(can) require more cooperation.
5. This policy (influence) the involvement of the executives in
future.

III. Fill in the blanks with suitable words:
Negotiation two orparties who need or think. They need
other'sin achieving some desired outcome. There be some common
interest,.in the subject..of the negotiation or in the negotiating ..
that puts or keeps..parties in contact.
Although sharing a degree interest, the parties start with different
opinions objectives, and differences initially prevent the
achievement. an outcome.

IV. True or false?
To negotiate effectively one must not communicate as such. The
message should be conveyed, received, understood, accepted in order to
have the expected actions or responses. The process of transmission is not
very important all negotiations are conducted face to face but there are
other choices too: letters, the fax, the electronic mail, the phone that we must
not take into account. Still we never meet problems such as: they may get
missed or misunderstood.

V. Make the logical and grammatically correct sentences from
the/to/neither/the/extent/which/ manager/ personnel/
use/can/policy/general/ the/ require/ to/ cooperation/
managers/the/office/the/right/nor/ the/ of/ to/reject/
office/manager/suggestions/the/managers/ personnel/ defined/clearly/ is/.

VI. Enlarge upon the following:
1. There are three kinds of people: those who make things happen,
those who look at things to happen, those who do not understand what is
happening!
2. Never negotiate without being afraid, but never be afraid to
negotiate!
3. There is no failure but results, only results!

VII. Negotiate the price of a product in a dialogue.
VIII. Consider compromise as constructive and comment upon
this.
IX. Outline the bad parts in a negotiation.

Tema IV. ThemeIV.
MEETINGS


student)
* fluen n exprimare
* cunoaterea impactului edinelor, a dialogului n edine.
* crearea unor dialoguri tipice

3.cuvinte cheie:((keywords): to chair, listen, decision, conversation,
ideas, dialogue

importance, types of meetings, principles,rules.

Meetings can be invaluable tools for getting things agreed or
discussed. Enjoyable meetings that are productive and help to get the job
done are an ideal that becomes possible with a little effort. An unsuccessful
meeting may do more harm than one which never takes place. So, the
success is judged by the actions that result from it.
We hold or attend meetings which serve a number of purposes.
People have to be sure why the meeting is being held. Not only does the
meeting need to achieve business but also people have to be satisfied that
this has been done. Meetings are at the very heart of management. More and
more time is spent in attending them. They can be inspiring, energizing and
fun.

The Content

Meetings have to be an efficient tool to assist us in getting decisions,
information and action. We discuss, decide, decree, demolish. Sometimes
they can take over our life. Some are efficient, others are not and for some of
us they have even become a way of life. The objective of a meeting should
never be to have a meeting. They are a means to an end, never an end.
If handled well, meetings can be invaluable tools for getting things
agreed or discussed. Enjoyable meetings that are productive and help to get
the job done are an ideal that becomes possible with a little effort. An
unsuccessful meeting may do more harm than one which never takes place.
So, the success is judged by the actions that result from it. And this is linked
to running the meeting as the responsibility of the whole group not only the
chairman.
We call a meeting for: briefing people, exchanging and evaluate
information, negotiating a deal, making decisions, taking things through
solving a conflict, establishing a plan.
We hold or attend meetings which serve a number of purposes.
People have to be sure why the meeting is being held. Not only does the
meeting need to achieve business but also people have to be satisfied that
this has been done. Meetings are at the very heart of management. More and
more time is spent in attending them. They can be inspiring, energizing and
fun. Sometimes meetings fail because of:
interruptions such as noisy rooms, mobile phones, messages, people
arriving late.
lack of focus: irrelevant discussions
objective not achieved: decisions are not taken, people say they
need more time.
politics motives are being brought in: confronting discussions
poor preparation: research has not been done properly.
poor chairing
poor environment: people crammed into a room, tables covered
with tea and coffee cups and room for the papers.
poor timing: people arriving late, meetings starting and ending
late.
right people absent: people with necessary input or information
are not invited or not available.
unnecessary meetings: you need a quick decision
wrong people present: they can ruin a meeting.
It is important to know in a meeting:

to clarify the purpose of the meeting
to have meetings only if they are necessary
to invite people who need to give approval, have the required
expertise or information, have the creativity or intelligence to help the group
generate ideas, will carry out decisions made, will support your issue, will be
directly affected by the outcome.
to send out a background information
to create an agenda in order to give the start time of the meeting
and location, list participants expected to attend, list issues, give the order in
which they will be dealt with.
to anticipate and prevent problems: problem people, hot topics,
alliances and politics, support.
the agenda can do half of your work before the meeting even
starts: assessing items, standard items, have an order for the items, time each
item, write the agenda.
to chair the meeting carefully and well balanced: bring in quiet
people, be open about input, stimulate a debate or discussion, listen actively,
control discussions, gain agreement and approval by bringing discussions to
an end, by letting people know it is time to make decisions or to agree,
summarize different viewpoints, discourage interruptions, ask for a decision
or consensus, make sure the quiet people speak up, take a vote if necessary.
to satisfy the participants as well as the agenda.
to consider that a compromise could achieve both completion of
business as well as satisfying the participants.
to be a good communicator by: making people feel good and
value them and their opinion, getting them involved in the meeting, by
showing you understand the way someone feels.

to handle challenges by focusing on the issue not the behaviour
or opinion of others, bring in others on your side, do not lose temper, give in
and then raise the matter with a higher authority or at another time.
to announce a finishing time, to limit the number of items on
the agenda to the time allowed.
to allocate a task owner to each item who will control the
conversation and take responsibility for any decision.
to summarize within items, at the end of them and at the end of
the meeting.

Types of Meetings
Team Meetings
Consultancy and client meetings
Negotiations

I. Team briefing develops the team meeting into a management
information system. The objective is to ensure that every employee knows
and understands what they and the others in the organization do and why.
Team leaders and their teams get together regularly to talk about issues
relevant to them and their work. There are some benefits to team briefing
such as:
it reinforces management
it increases commitment
it prevents misunderstandings
it helps to facilitate change
it improves upward communication

II. Whenever you meet a client to present a proposal, however
uncommercial the situation, something is being sold. So, the meeting will
fail if the clients requirements are not defined adequately beforehand. Part
of our job may be to help the client to clarify what he wants. So preparation
becomes essential, a pre- meeting is useful to define the problem and agree
the clients requirements as clearly as possible. First stage thinking has to be
used to clarify what the client wants, before suggesting solutions. The
following guidelines have to be used:
create agreement with the client.
identify the clients need.
present your solution.
explain the proposal in detail
anticipate any objections you know the client has.
restate the proposal by summarizing, discussing.
keep discussion separate from your presentation.

III. Doing deals is a fundamental way to achieve goals; but it is a
means not an end. A successful negotiation closes with everybody satisfied,
the negotiator is delighted when the meeting creates genuine agreement.
Once you recognized a meeting as a forum for negotiation we have
established as adversarial situation. As a result, scoring over the opposition
becomes an important strategy. The negotiation becomes an exercise in
game playing: secrecy, bullying, hood-winking. So, this tacit agreement
entails stress, wastes time and catastrophe may follow, new problems may
arrive, commitment will suffer, promises will be broken, reputations will be
bruised.
The responsibility will be to seek agreement: a specific plan of
action to which all parties can commit themselves.
Conflict is undoubtedly one of the most common sources of
anxiety in meetings. Many meetings seem to collapse into argument,
hostility and ritual recrimination almost as a matter of course. Do not
regard conflict as inevitable or desirable. You are not powerless in the face
of emotional hostility; but, in order to handle it well, you need to distance
yourself from it.
Begin by trying to locate the source of the problem. Sometimes this
is obvious: insecurity at a time of great change, stress, a new set of
working relationships or pressure from public exposure. On other
occasions, it may seem to bubble up from nowhere, starting with
something small and escalating quickly as it takes hold of the group.
Conflict thrives on confusion and doubt. Some group members may seek to
manipulate it for their own ends or use it to justify their cynicism about all
matters managerial. As conflict grows through a group, it becomes more
emotional, generalized and unfocused. Looking for a target, it can find the
Chair, turning the meeting into an all-purpose 'grouse session'.
Hostility often results from a sense of powerlessness. It is the
feeling of being at the mercy of forces outside our control that is so
disabling.
This is why anger often centers on what has happened in the past,
and in particular on what 'they' have done: senior management, other
teams, department heads ,rogue operators' who have bucked the system,
engineers or
sales staff who are never in the office, customers, suppliers, competitors. Be
prepared. If you are facing conflict or group resistance, you must give yourself
a single overriding objective: to empower the group to do something
practical. Only by focusing their thoughts on the future, and on what they can
do
will you transform people's energy from conflict into purposeful activity. Arm
yourself with a few guiding principles.
- Make the objective of the meeting clear at the outset. Write it up on
a flip chart and be ready to refer back to it frequently.
Challenge people to explain the relevance of their remarks to the
meeting's objectives.
- Remember that your task is to control the conversation.
Resist being drawn into the emotional maelstrom, however hard that
may be.
-Slow the conversation down. Do not mirror the tone, pitch or speed
of others' speech.
- Do not interrupt or cut people off in mid-sentence.
- Listen to the points people are making and display them openly on
the flip chart.
- Do not be tempted to argue, or to contradict opinions or
generalizations: about what 'they' do, or what 'always' happens. A good
response to such remarks would be: 'In what circumstances?
- Turn complaints into objectives by asking people to restate them
as 'how to' statements. Write these up on the flip chart and display them.
- Stop people from talking about others who are not at the
meeting. Insist that 'they' are not here and we are, and that only we can
address our objectives.
-Focus on solutions, not problems.
-Be a broken record! Repeat your questions to the group, over and
over - 'What are we trying to do? What can we do about it? How does this
relate to our objectives?'
Be specific. People should know what contribution they are being
asked to make, and how their contribution will contribute to wider objectives.
Being explicit about goals and targets is the only way to achieve this. If you
genuinely consult - asking for suggestions, inviting people to participate in
finding solutions -a great deal of resistance will melt away.
Focus on action. Draw the group's attention away from what
others have done or are doing, towards what we will do in the future. You
will have to be sensitive about this. Demonstrating that you understand
people's grievances can be useful in winning them over to your own
ideas; and in rooting out areas for improvement. However, there will come
a point in a 'grouse session' when you should start asking, insistently but
quietly: 'So what are we going to do?' In this way, you will divert
attention from damaging 'storytelling' and complaint towards
commitment and agreement. By showing that something can be done, you
can show people that they have power to change things.



Questions:

1.How important are meetings in life?
2.If a meeting is unsuccessful, what are the consequences?
3. Why do meetings fail?
4. Is it important to focus on solutions?
5. Who runs a meeting?


I. Complete the sentences;
1.Enjoyable meetings.
2.Making decisions.
3. When you establish a plan
4. People have to be sure.
5. Poor chairing always.

II. Choose the correct form of the verbs:
Conflict (to be) undoubtedly one of the most common sources of
anxiety in meetings. Many meetings (can) to collapse into argument,
hostility and ritual recrimination almost as a matter of course. (not to
regard) conflict as inevitable or desirable!. You (to be) powerless in the face
of emotional hostility; but, in order( to handle) it well, you (need)( to
distance) yourself from it.

III. Fill in the blanks with the correct words:
If handled.meetings can.invaluable tools getting.agreed or
discussed. Enjoyable meetings that.productive.help to getjob done
are.... ideal that becomes possible.a little effort. An unsuccessful
meeting.do more harm one which never takes So, the
success.judged.the actions that result from it. And this is linked
running the meeting as the responsibilitythe whole group not
only.chairman.

IV. True or false?
In a meeting there is no need to clarify the purpose of the
meeting. We never have meetings only if they are not necessary. We should
not invite people who need to give approval but have the required expertise
or information, not the creativity or intelligence to help the group generate
ideas. They must not carry out decisions made or support your issue,
otherwise you will be directly affected by the outcome. A background
information to create an agenda will be sent later on and there is not
necessary for the start time of the meeting and location neither the lists of
participants expected to attend or list issues. The order in which they will be
dealt with must wait until next day.

an/in/to/give/to/agenda/create/order/time/start/the/of/meeting/the/loc
ation/and/participants/list/to/expected/attend/important/is/know/to/.

VI Enlarge upon the following:
1.Meetings will not improve by magic. People must want change
and be willing to implement it.
2.Meetings are the very heart of management.
3.Getting agreement is easy. Getting everyone to confirm afterwards
about what exactly was agreed is the hard part!
VII. Make a dialogue imagining a meeting.
VIII. Write an agenda for a meeting.
IX. Good and bad things in a meeting.

Tema V. Theme V.
THE COMPANY


student)
* fluen n exprimare
* cunoaterea organizarii unei companii, a structurii de baza.

3.cuvinte cheie:((keywords): shareholder, to own, buyout, to
deliver, to run.

4. structura modulului de studiu:(the structure of the study)the
liability in companies, running the company, buying shares,

The companies is a special form of business. It is owned by the
shareholders but has a separate legal existence from the people who own it.
The shareholders elect a board of directors to run the company on their
behalf. If the company has 2- 50 shareholders it is a private one. The
liability is limited to the money that the shareholders have used to buy
shares. If the shares are traded on the stock exchange we have a public
limited company. Members of the public can buy these shares by going
through a stockbroker or bank. The company has to be viewed in future. The
strategic challenge for professional firms is not to forecast the future, but to
ensure that the firm is effective at adapting to already observable market
changes. Most professional firms are resistant to change.

The Content

A company is a very special form of business. It is owned by the
shareholders but has a separate legal existence from the people who own it.
The shareholders elect a board of directors to run the company on their
behalf. If the company has 2- 50 shareholders it is a private one. The
liability is limited to the money that the shareholders have used to buy
shares. If the shares are traded on the stock exchange we have a public
limited company. Members of the public can buy these shares by going
through a stockbroker or bank.
Large companies are being referred to as corporations. Corporate is
used to describe things relating to a corporation or to corporations. Large
companies operationg in many countries are multinationals. Big business
can refer to large business organizations or to any business activity that
makes a lot of money. Small companies are referred to as small businesses
or small firms.
When a private company is bought by the state and brought into the
public sector in a sell off, it is privatized. The first to be sold in a
privatization programme are often the companies responsible for the public
supply of electricity, water and gas: the utilities.
If a company A owns shares or equity in company B, then A holds a
stake, holding or shareholding in B. If A owns less than half the shares in B,
then it has a minority stake in B. If A owns more than half the shares in B, it
has a majority stake or controlling stake in B. If you have shares in a
company you are a shareholder.
A holding or holding company is the one that holds stakes in one or
more subsidiaries. If it owns all the shares in a subsidiary, then the
subsidiary is a wholly owned one. A holding companys relationship to its
subsidiaries is that of parent company and the subsidiaries relationship to
each other is that of sister companies. A holding and its subsidiaries form a
group. A conglomerate is a group containing a lot of different companies in
different businesses. Company A may be attempting to gain control of
company B in a takeover bid, maybe by increasing its holding or stake in
company B if it already owns shares in B. Company B makes or launches a
bid against company A, the takeover target. If company B does not want to
be taken ober, the bid is hostile. There are other ways of saying that one
company is taking over another one and it means that the company is
acquiring another or making an acquisition.
In a leveraged buyout or LBO, a company is acquired by a group of
investors, often financed by heavy borrowing. The debt is then paid out of
the target companys operating revenues or by selling its assets. The
borrowing involved inLBOs is often high risk debt called junk bonds. LBOs
financed by junk were frequent in the 1980s and after an absence following
the excesses of that period, they are now coming up again.
Two or more companies may decide to work together by setting up a
joint venture or alliance in which each holds a stake. When two companies
combine voluntarily, they merge in a merger.
A company has two ways of delivering value to clients: either the
clients obtain just the accumulated wisdom and talents of the specific
professionals who are servicing their work, or the clients can get this, plus
all the relevant accumulated wisdom, experience, tools, methodologies of
the rest of the firm. What does it mean for a company to have value above
and beyond the talents of individual professionals? What can a firm do that
will help a professional to be more successful than he or she would be at a
halfway decent competitor? Maybe:
- provide professionals with the benefit of shared skills and
experiences within the practice group.
- facilitate access to the skills of others in different disciplines.
- establish procedures to produce well trained junior professionals.
- achieve a high level of cross selling and access to clients of other
professionals.
- provide superior support staff and systems.
- instill a system of supportive challenging, coaching to bring out the
best in each professional.
- create an emotionally supportive friendly environment.
- provide for diversification of personal risk.
- establish a powerful brand name that makes marketing easier.
Interesting but more and more in our concern the firm, the company
has to be viewed in future. The strategic challenge for professional firms is
not to forecast the future, but to ensure that the firm is effective at adapting
to already observable market changes. Most professional firms are resistant
to change.
Old ways of doing business suffer from inertia and few firms are
either willing or able to implement significant changes in the way they
manage their affairs. Major trends are being identified and big schemes are
announced as responding to them. But a professional firm is not completely
at the mercy of unknowable fates. You can make things happen if you want
to. Why plan in an unpredictable world? Because you can make sure that the
way you run your affairs makes you more adaptable and adaptive.
Through a combination of planning and reexamination of current
management practices, firms can become better at listening to the
environment and picking up its change signals early. They can also become
better at ensuring that they have numerous experiments going on to test new
ideas and approaches. Firms should be testing what the market will and will
not respond to.They must avoid complacency, be adaptive by constantly
asking: is there a better way to do what we do?
Firms are very good at figuring out what they want their people to
do differently. They are not so good at figuring out management systems to
get them to do it. So, planning means managing in new and different ways.
Many companies miss a central truth: if you havent changed your measures
and rewards, you havent changed your strategy.
A firm has to be better than the competition in the following ways:
- Aggressive listening to the market.- good tactics: focus groups,
feedback survey, client panels, formal market research..
- Using market intelligence: each practice is actively gathering
market intelligence and is devising new things to do for clients.
- Raising the level of innovation- the managements job is to
stimulate experiments and encourage innovation.
- Sharing new knowledge- firms must become good at sharing
the results of their experiments.
- Pressure for personal growth through professional performance
counseling and practice leadership.
- Management behaviour- management must be perceived as
leaders of a changed effort; stimulating new ideas, willingness to provide
seed capital for those who wish to try new things.
- Measuring success not only by the volume of work
performance but by the type of work it brings in.


Questions:

1. What do shareholders do?
2. If the company has 2-50 shareholders how is it called?
3. How can you buy shares?
4. What do two companies combine voluntarily into?
5. Do big businesses refer to large business organizations?

Exercices and Tests:

1. The liability is limited.
2. Big business..
3. A holding company.
4. There are many ways..
5. The debt is paid..


Large companies (to be reffered) to as corporations. Corporate(must)
(to describe) things relating to a corporation or to corporations. Large
companies operationg in many countries (to be) multinationals. Big business
(can) (refer) to large business organizations or to any business activity that
(make) a lot of money. Small companies (to be) (refer) to as small
businesses or small firms.


A holding or ..... company is .... one that holds stakes ... one or more
subsidiaries. If it .... all the .... in ... subsidiary, then .... subsidiary is a wholly
owned one. A holding companys relationship to its subsidiaries... that....
parent company and the subsidiaries relationship... each other is..... of sister
companies. ...... holding and.... subsidiaries form.. group. ... conglomerate
is... group containing... lot of different companies in different businesses

IV. True or false?

A company has several ways of take value to clients: the clients can
bring just the accumulated wisdom and talents of the specific professionals
who are servicing their work, or the clients can get this, plus all the
irrelevant accumulated wisdom, experience, tools, methodologies of the rest
of the firm. What does it mean for a company to have value beyond the
talents of individual professionals? What can a firm do that will help a
professional to be more successful than he or she would be at a halfway
decent competitor? Maybe: provide non professionals with the benefit of
shared skills and experiences within the practice group.

V. . Make the logical and grammatically correct sentences from

strategic/the/ for/challenge/ professional/to/ firms/ is/ but to/not/
forecast the future/, ensure/ at/that/changes/ the firm/ is /market/effective/
adapting/ to /already/ observable.


1.Succesful companies make their best moves by brilliant and
complex strategic planning.
2. Visionary companies are great places to work
3.The firm of the future is very close to us!

VII. Company structure.

VIII. Imagine a visionary company.

IX. Draw up a strategic plan.

Tema VI. ThemeVI.
LEADERSHIP


student)
* fluen n exprimare
* cunoaterea principiilor, a lucrului in echipa,a succesului, a
insuccesului.

3.cuvinte cheie:((keywords): challenge, team effort, success,
positive, performance

4. structura modulului de studiu:(the structure of the study) goal
action principles, strategic plans, ways of delivering value to clients,
competition


Leadership is to be taken into account whenever we have in view
any business; and so, there are some steps to be followed: the agreement to
success for every team member. Everyone wants to be successful as far as
goals are clear and business processes are far from being clumsy. Everyone
has positive and negative thoughts in their minds most of the time
Successful business asks for good leadership and this is not some mystical
act performed by the few and only able to be performed by them through
some luck of upbringing or genetics that made them natural leaders. We can
become better leaders than we are; to achieve this means that we need to do
the right things at the right time more often than we usually do and we also
need to examine ourselves. We also need to have a clear idea of what to do
in order to gain the best possible result from others.
The Content

Successful business asks for good leadership and this is not some
mystical act performed by the few and only able to be performed by them
through some luck of upbringing or genetics that made them natural leaders.
We can become better leaders than we are; to achieve this means that we
need to do the right things at the right time more often than we usually do
and we also need to examine ourselves. We also need to have a clear idea of
what to do in order to gain the best possible result from others. The actions
identified must be the appropriate actions in what is broadly called western
society(North America, U.K., Europe, Australia, New Zealand).
any business; and so, there are some steps to be followed: the agreement to
success for every team member. Everyone wants to be successful as far as
goals are clear and business processes are far from being clumsy. Everyone
has positive and negative thoughts in their minds most of the time. We know
how easy it is for the negative thoughts: the company is not good, the boss is
badWe represent the positive assertively in our mind- work is
rewarding. But we select our thoughts and they influence us. If a person has
negative thoughts about the job and the company, work performance is
suffering. The negative impact can make the team output less than it should
otherwise be. But we are responsible for our own thoughts, so what a
manager can do is to point out the consequences. It is clear that when the
team becomes focused, gets people organized, celebrates success, then bad
attitudes disappear.
Defining success entails the idea of challenge which energizes
people.
The team leaders and managers must live as exemplary models of
how they expect others in their team to act. Each management team member
is expected to be an inspiring player. The team effort has to be understood
properly. The team spirit must be a consequence of doing other things well.
Coordinating the effort is to be achieved by the profit profile with each team
member being accountable for some number on the profile and this will
define success for a team. People have seen now the standards required.
Identifying the behaviours of success has to be take into consideration. As
the goals have been agreed, the steps to be followed are to make clear what
actions were most likely to bring about the goals.
In the goal-action principle, the idea of action becomes clear now,
we have those behaviours that will best fulfill the goal, derived from the goal
and belonging to it. It is important to find the balance between two things in
conflict as a crucial act of insight and creativity for the manager and the
team. If the issue is finding sales tactics, then the problem is one of
creativity for the team to brainstorm possible tactics and then select one or
several that best achieves the balance of the required result.
Provide monitoring and feedback on progress and performance. The
main concern among the teams was to provide useful guidance on what
should be changed to improve the results. Better reports were being sought,
better information.
Celebrate success, large and small. Teams celebrate success as
people have risen to the challenge. Team results were evident. The
progressive build up of life satisfaction was something that occurred beneath
the daily flux and it should increase each year. It was seen as related to goals
and work had the potential to be a major component.
Teams will remain the core of the business. Before demanding better
performance one have to be sure that this can be achieved. So, for every goal
there are tasks that must be acted out if the goal is to be achieved. Everyone
succeeds if the team succeeds. It is important to recognize individual
performance, but from within the framework of the team.
A management team should be a team, not a collection of
individuals with personal accountability. This means that every team
member understands that they can win only if the team wins and the team
wins by achieving the targeted operating profit. Within that, each person has
his or her role and tasks within this role. If people can fully perform their
own jobs and have the mental, emotional and physical energy to assist
others, and if the others accept and appreciate the assistance, then those
people should be encouraged and celebrated within the team.
A management team operates within the framework and policy
prescribed by the strategic plan and is accountable for creating sales revenue
and converting it into operating profit.
To develop a manager means to develop the person. That is, to
improve business management or business leadership is not merely an act of
adding some skills or some knowledge to the person; knowledge alone is not
power; only if it is backed by the ability and willingness of how, the
judgement of when to use that knowledge is power.
Intellectual honesty is an important quality that must be taken into
consideration. That means being truthful with yourself and not only. We
have wishes and dreams, sensitivities about ourselves; so often we do not
want to think poorly of ourselves; it is easier and more comfortable to find
reasons beyond us for the unfortunate things that happen or for results that
should have been . Such emotional forces can and do push us to think in
certain ways. Then, intellectual honesty comes to help us: a process of
conceiving the factors accurately as a scientist might, without the comfort of
the excuses. It allows us to avoid giving up too early and this is one of the
hallmarks of all champions.
There are some situations we meet within a company: There are all
kinds of reasons for wanting to be your own boss. Some people like the idea
of there being no one in authority over them, telling them what to do, saying
their work is not up to standard, turning down their ideas, or insisting on
methods that seem pointless. Others are attracted by the thought of deciding
their own hours, or days, of work.
Running your own business gives you the status of being self-
employed, perhaps also of being a company director. There is the general
feeling of independence, and that your income - and perhaps even your way
of life - is in your own hands. Some are attracted to the idea of starting a
small enterprise and making it grow, much as a gardener tends his plot and
makes a number of plants come to maturity, each in turn creating further
growth.
If you are your own boss, say some people, work is so much more
pleasant. You can get someone else to do the less interesting jobs and you
are not bogged down in annoying details. Work becomes easier, too, because
you can get someone else to do the more difficult tasks.
Many others want to set up a little business of their own to occupy
their spare time, and as a pleasant way of earning extra money from work
they like doing.
These are just a few of the reasons commonly given. Some have
good sense behind them; others are based on completely false ideas. Most
contain some element of truth which gets magnified out of all proportion,
and seized upon without it being borne in mind that there are other points to
consider as well.
As with so much else in life, running an enterprise of your own
entails disadvantages as well as advantages. It is surprising how rarely
people stop to consider in real detail just what the drawbacks are, yet this is
an essential first step for anyone thinking about whether it is even
practicable for him to be his own boss.
An important reason why there is such glamour about being in
charge of your own business is that when you are working for someone else,
many of the petty irritations of life, as well as the chore of often having to
get down to work that you do not feel like doing at that particular time,
become associated with being an employee. There is a feeling that, if only
you were your own boss, life would immediately become infinitely
pleasurable and free from irksome detail.
This is almost entirely misleading. Many of the little annoyances
probably have nothing to do with being an employee: being interrupted
when you have at last immersed yourself in some disagreeable task, missing
the bus when you are in a hurry, feeling tired or in other ways not really up
to working hard at the moment, and so on.
These occur just as much when you are your own master. In fact,
they tend to happen much more often, while at the same time, their effects
can be far more upsetting.
There are very real drawbacks to running your own business, though
for the right kind of person, immeasurable benefits also.
A company has two ways of delivering value to clients: either the
clients obtain just the accumulated wisdom and talents of the specific
professionals who are servicing their work, or the clients can get this, plus
all the relevant accumulated wisdom, experience, tools, methodologies of
the rest of the firm. What does it mean for a company to have value above
and beyond the talents of individual professionals? What can a firm do that
will help a professional to be more successful than he or she would be at a
halfway decent competitor? Maybe:
- provide professionals with the benefit of shared skills and
experiences within the practice group.
- facilitate access to the skills of others in different disciplines.
- establish procedures to produce well trained junior professionals.
- achieve a high level of cross selling and access to clients of other
professionals.
- provide superior support staff and systems.
- instill a system of supportive challenging, coaching to bring out the
best in each professional.
- create an emotionally supportive friendly environment.
- provide for diversification of personal risk.
- establish a powerful brand name that makes marketing easier.
Interesting but more and more in our concern the firm, the company
has to be viewed in future. The strategic challenge for professional firms is
not to forecast the future, but to ensure that the firm is effective at adapting
to already observable market changes. Most professional firms are resistant
to change.
Old ways of doing business suffer from inertia and few firms are
either willing or able to implement significant changes in the way they
manage their affairs. Major trends are being identified and big schemes are
announced as responding to them. But a professional firm is not completely
at the mercy of unknowable fates. You can make things happen if you want
to. Why plan in an unpredictable world? Because you can make sure that the
way you run your affairs makes you more adaptable and adaptive.
management practices, firms can become better at listening to the
environment and picking up its change signals early. They can also become
better at ensuring that they have numerous experiments going on to test new
ideas and approaches. Firms should be testing what the market will and will
not respond to.
They must avoid complacency, be adaptive by constantly asking:
is there a better way to do what we do?
Firms are very good at figuring out what they want their people to
do differently. They are not so good at figuring out management systems to
get them to do it. So, planning means managing in new and different ways.
Many companies miss a central truth: if you havent changed your measures
and rewards, you havent changed your strategy.
A firm has to be better than the competition in the following ways:
- Aggressive listening to the market.- good tactics: focus groups,
feedback survey, client panels, formal market research..
- Using market intelligence: each practice is actively gathering
market intelligence and is devising new things to do for clients.
- Raising the level of innovation- the managements job is to
stimulate experiments and encourage innovation.
- Sharing new knowledge- firms must become good at sharing
the results of their experiments.
- Pressure for personal growth through professional performance
counseling and practice leadership.
- Management behaviour- management must be perceived as
leaders of a changed effort; stimulating new ideas, willingness to provide
seed capital for those who wish to try new things.
- Measuring success not only by the volume of work
performance but by the type of work it brings in.
Questions:

1.Why should the goals be very clear in a business?
2. How can you become good in everything you do?
3. When is leadership to be taken into account?
4. How can you get rid of negative thoughts?
5.Who are the team leaders?

Exercices and Tests:

1. A leader will be very careful with.
2. The responsibility of the team.
3. The teams.
4. It is clear that
5. The negative impact.


You (can) (to make) things (to happen) if you (to want) to. Why (to
plan) in an unpredictable world? Because you (can) (make) sure that the way
you (to run) your affairs (to make) you more adaptable and adaptive.
management practices, firms (can) (to become) better at listening to the
environment and picking up its change signals early.


Leadership is. taken. account whenever we have in any
business; and so, there some steps to be followed: the agreement to
success every team member. Everyone wants successful as far goals
are clear and business processes are. from being clumsy. Everyone
has.and negative thoughts in their minds most the time. We know how
easy it is the negative thoughts: the company is not good, the boss bad.
We represent the positive assertively inmind- work is rewarding. But
we select thoughts and they influence . If a person has.. thoughts
about the job and the company, work performance.. suffering.

IV. True or false?

We can never become better leaders than we are; maybe in
future! To achieve this means that we need to do the wrong things at the
right time more often than we usually do and we also need to examine the
others. We also need to have strict and clear ideas of what to do in order to
gain the best possible result from others. The actions identified must be the
appropriate actions in what is broadly called eastern society(North
America, U.K., Europe, Australia, New Zealand).
any situation and we want to tackle things accordingly.


disappear/success/then/attitudes/bad/is/it/that/clear/when/team//the/g
ets/becomes/focused/people/organized/celebrates/.

1.Teams will remain the core of the business.
2.A management team should be a team, not a collection of
individuals with personal accountability.
3. To develop as a manager means to develop as a person.

VII. Describe a company and its management system

VIII. Outline the qualities of the charismatic leader.

IX. Write a dialogue on celebrating success.

Tema VII. ThemeVII
MARKETIN and MERCHANDISING

1. obiectivele specifice ale temei: (the main objectives)

2. competene specifice dobndite de student:( specific skills of the
student)
* fluen n exprimare
* cunoaterea proceselor de marketing n economia de pia

3.cuvinte cheie(key words): economy, product, process,
customer,consumer, price.

4. structura modulului de studiu(the structure of the study): roles of
marketing, components and elements, the consumer buying process.

5. rezumat(abstract):
Marketing is a process whose principal function is to promote and
facilitate exchange. It is through marketing that individuals and groups
obtain what they need and want by exchanging products and services with
other parties. Such a process can occur only when there are at least two
parties, each of whom has something to offe.Within the broad scope of
marketing, merchandising is concerned more specifically with promoting the
sale of goods and services to consumers (i.e., retailing) and hence is more
characteristic of free-market economies. The marketing process includes
designing and implementing various tactics, commonly referred to as the
"marketing mix," or the "4 Ps": product, price, place (or distribution), and
promotion.

The Content

More and more we speak about a process whose principal
function is to promote and facilitate exchange. Through marketing,
individuals and groups obtain what they need and want by exchanging
products and services with other parties. Such a process can occur only when
there are at least two parties, each of whom has something to offer. In
addition, exchange cannot occur unless the parties are able to communicate
about and to deliver what they offer. Marketing is not a coercive process: all
parties must be free to accept or reject what others are offering. So defined,
marketing is distinguished from other modes of obtaining desired goods,
such as through self-production, begging, theft, or force. Marketing is not
confined to any particular type of economy, because goods must be
exchanged and therefore marketed in all economies and societies except
perhaps in the most primitive. Furthermore, marketing is not a function that
is limited to profit-oriented business; even such institutions as hospitals,
schools, and museums engage in some forms of marketing. Within the broad
scope of marketing, merchandising is concerned more specifically with
promoting the sale of goods and services to consumers (i.e., retailing) and
hence is more characteristic of free-market economies.Based on these
criteria, marketing can take a variety of forms: it can be a set of functions, a
department within an organization, a managerial process, a managerial
philosophy, and a social process.
As marketing developed, it took a variety of forms. It was noted
above that marketing can be viewed as a set of functions in the sense that
certain activities are traditionally associated with the exchange process. A
common but incorrect view is that selling and advertising are the only
marketing activities. Yet, in addition to promotion, marketing includes a
much broader set of functions, including product development, packaging,
pricing, distribution, and customer service. Many organizations and
businesses assign responsibility for these marketing functions to a specific
group of individuals within the organization. In this respect, marketing is a
unique and separate entity. Those who make up the marketing department
may include brand and product managers, marketing researchers, sales
representatives, advertising and promotion managers, pricing specialists, and
customer service personnel.
As a managerial process, marketing is the way in which an
organization determines its best opportunities in the marketplace, given its
objectives and resources. The marketing process is divided into a strategic
and a tactical phase. The strategic phase has three components--
segmentation, targeting, and positioning (STP). The organization must
distinguish among different groups of customers in the market
(segmentation), choose which group(s) it can serve effectively (targeting),
and communicate the central benefit it offers to that group (positioning). The
marketing process includes designing and implementing various tactics,
commonly referred to as the "marketing mix," or the "4 Ps": product, price,
place (or distribution), and promotion. The marketing mix is followed by
evaluating, controlling, and revising the marketing process to achieve the
organization's objectives .The managerial philosophy of marketing puts
central emphasis on customer satisfaction as the means for gaining and
keeping loyal customers. Marketers urge their organizations to carefully and
continually gauge target customers' expectations and to consistently meet or
exceed these expectations. In order to accomplish this, everyone in all areas
of the organization must focus on understanding and serving customers; it
will not succeed if all marketing occurs only in the marketing department.
Marketing, consequently, is far too important to be done solely by the
marketing department. Marketers also want their organizations to move from
practicing transaction-oriented marketing, which focuses on individual
exchanges, to relationship-driven marketing, which emphasizes serving the
customer over the long term. Simply getting new customers and losing old
ones will not help the organization achieve its objectives. Finally, marketing
is a social process that occurs in all economies, regardless of their political
structure and orientation. It is the process by which a society organizes and
distributes its resources to meet the material needs of its citizens. However,
marketing activity is more pronounced under conditions of goods surpluses
than goods shortages. When goods are in short supply, consumers are
usually so desirous of goods that the exchange process does not require
significant promotion or facilitation. In contrast, when there are more goods
and services than consumers need or want, companies must work harder to
convince customers to exchange with them.
The marketing process consists of four elements: strategic marketing
analysis, marketing-mix planning, marketing implementation, and marketing
control.
The elements that play a role in the marketing process can be
divided into three groups: customers, distributors, and facilitators. In
addition to interacting with one another, these groups must interact within a
business environment that is affected by a variety of forces, including
governmental, economic, and social influences.
In order to understand target customers, certain questions must be
answered: Who constitutes the market segment? What do they buy and why?
And how, when, and where do they buy? Knowing who constitutes the
market segment is not simply a matter of knowing who uses a product.
Often, individuals other than the user may participate in or influence a
purchasing decision. Several individuals may play various roles in the
decision-making process. For instance, in the decision to purchase an
automobile for a small family business, the son may be the initiator, the
daughter may be an influencer, the wife may be the decider, the purchasing
manager may be the buyer, and the husband may be the user. In other words,
the son may read in a magazine that businesses can save money and decrease
tax liability by owning or leasing company transportation. He may therefore
initiate the product search process by raising this issue at a weekly business
meeting. However, the son may not be the best-qualified to gather and
process information about automobiles, because the daughter worked for
several years in the auto industry before joining the family business.
Although the daughter's expertise and research efforts may influence the
process, she may not be the key decision maker. The mother, by virtue of her
position in the business and in the family, may make the final decision about
which car to purchase. However, the family uncle may have good
negotiation skills, and he may be the purchasing agent. Thus, he will go to
different car dealerships in order to buy the chosen car at the best possible
price. Finally, despite the involvement of all these individuals in the
purchase process, none of them may actually drive the car. It may be
purchased so that the father may use it for his frequent sales calls. In other
instances, an individual may handle more than one of these purchasing
functions and may even be responsible for all of them. The key is that a
marketer must recognize that different people have different influences on
the purchase decision, and these factors must be taken into account in
crafting a marketing strategy.
In addition to knowing to whom the marketing efforts are targeted, it
is important to know which products target customers tend to purchase and
why they do so. Customers do not purchase "things" as much as they
purchase services or benefits to satisfy needs. For instance, a conventional
oven allows users to cook and heat food. Microwave oven manufacturers
recognized that this need could be fulfilled--and done so more quickly--with
a technology other than conventional heating. By focusing on needs rather
than on products, these companies were able to gain a significant share in
the food cooking and heating market. Knowledge of when, where, and how
purchases are made is also useful. A furniture store whose target customers
tend to make major purchases in the spring may send its mailings at the
beginning of this season. A food vendor may set up a stand near the door of
a busy office complex so that employees must pass the stand on their way to
lunch. And a jeweler who knows that customers prefer to pay with credit
cards may ensure that all major credit cards are accepted at the store. In
other cases, marketers who understand specifics about buying habits and
preferences also may try to alter them. Thus, a remotely situated wholesale
store may use deeply discounted prices to lure customers away from the
more conveniently located shopping malls.
Customers can be divided into two categories: consumer customers,
who purchase goods and services for use by themselves and by those with
whom they live; and business customers, who purchase goods and services
for use by the organization for which they work. Although there are a
number of similarities between the purchasing approaches of each type of
customer, there are important differences as well.
The purchase process is initiated when a consumer becomes aware
of a need. This awareness may come from an internal source such as hunger
or an external source such as marketing communications. Awareness of such
a need motivates the consumer to search for information about options with
which to fulfill the need. This information can come from personal sources,
commercial sources, public or government sources, or the consumer's own
experience. Once alternatives have been identified through these sources,
consumers evaluate the options, paying particular attention to those
attributes the consumer considers most important. Evaluation culminates
with a purchase decision, but the buying process does not end here. In fact,
marketers point out that a purchase represents the beginning, not the end, of
a consumer's relationship with a company. After a purchase has been made,
a satisfied consumer is more likely to purchase another company product
and to say positive things about the company or its product to other potential
purchasers. The opposite is true for dissatisfied consumers. Because of this
fact, many companies continue to communicate with their customers after a
purchase in an effort to influence post-purchase satisfaction and behaviour.
For example, a plumber may be motivated to consider buying a new
set of tools because his old set of tools is getting rusty. To gather
information about what kind of new tool set to buy, this plumber may
examine the tools of a colleague who just bought a new set, read
advertisements in plumbing trade magazines, and visit different stores to
examine the sets available. The plumber then processes all the information
collected, focusing perhaps on durability as one of the most important
attributes. In making a particular purchase, the plumber initiates a
relationship with a particular tool company. This company may try to
enhance post-purchase loyalty and satisfaction by sending the plumber
promotions about new tools.
Business customers, also known as industrial customers, purchase
products or services to use in the production of other products. Such
industries include agriculture, manufacturing, construction, transportation,
and communication, among others. They differ from consumer markets in
several respects. Because the customers are organizations, the market tends
to have fewer and larger buyers than consumer markets. This often results in
closer buyer-seller relationships, because those who operate in a market
must depend more significantly on one another for supply and revenue.
Business customers also are more concentrated; for instance, in the United
States more than half of the country's business buyers are concentrated in
only seven states. Demand for business goods is derived demand, which
means it is driven by a demand for consumer goods. Therefore, demand for
business goods is more volatile, because variations in consumer demand can
have a significant impact on business-goods demand. Business markets are
also distinctive in that buyers are professional purchasers who are highly
skilled in negotiating contracts and maximizing efficiency. In addition,
several individuals within the business usually have direct or indirect
influence on the purchasing process.
Although business customers are affected by the same cultural,
social, personal, and psychological factors that influence consumer
customers, the business arena imposes other factors that can be even more
influential. First, there is the economic environment, which is characterized
by such factors as primary demand, economic forecast, political and
regulatory developments, and the type of competition in the market. In a
highly competitive market such as airline travel, firms may be concerned
about price and therefore make purchases with a focus on saving money. In
markets where there is more differentiation among competitors--e.g., in the
hotel industry--many firms may make purchases with a focus on quality
rather than on price.
Second, there are organizational factors, which include the
objectives, policies, procedures, structures, and systems that characterize any
particular company. Some companies are structured in such a way that
purchases must pass through a complex system of checks and balances,
while other companies allow purchasing managers to make more individual
decisions. Interpersonal factors are more salient among business customers,
because the participants in the buying process--perhaps representing several
departments within a company--often have different interests, authority, and
persuasiveness. Furthermore, the factors that affect an individual in the
business buying process are related to the participant's role in the
organization. These factors include job position, risk attitudes, and income.
The business buying process mirrors the consumer buying process,
with a few notable exceptions. Business buying is not generally need-driven
and is instead problem-driven. A business buying process is usually initiated
when someone in the company sees a problem that needs to be solved or
recognizes a way in which the company can increase profitability or
efficiency. The ensuing process follows the same pattern as that of
consumers, including information search, evaluation of alternatives,
purchase decision, and post-purchase evaluation. However, in part because
business purchase decisions require accountability and are often closely
analyzed according to cost and efficiency, the process is more systematic
than consumer buying and often involves significant documentation.
Typically, a purchasing agent for a business buyer will generate
documentation regarding product specifications, preferred supplier lists,
requests for bids from suppliers, and performance reviews.

Additional Bibliography :

Adriana Sofletea, Marketing and Merchandising,Colectia
engleza,Editura Alma Mater Sibiu.
unde se vor consulta urmatoarele capitole:The Evolving Discipline
of Marketing ,Roles of Marketing ,the Marketing Process ,Strategic
Marketing Analysis ,Marketing-mix Planning ,Marketing Control, the
Marketing Actors ,Wholesalers, Retailers,Marketing Facilitators ,Marketing
in Different Sectors ,Economic and Social Aspects of Marketing

Questions:

1. How can you define marketing and merchandising? What are they
being concerned with?
2. Define the importance of the four four elements: strategic
marketing analysis, marketing-mix planning, marketing implementation, and
marketing control
3. As a managerial process, marketing is the way in which an
organization determines its best opportunities in the marketplace, given its
objectives and resources. What do you think about this?
4. What is the meaning of the elements that play a role in the
marketing process, namely the customers, distributors, and facilitators?
5. In order to understand target customers, certain questions must be
answered: Who constitutes the market segment? What do they buy and why?
And how, when, and where do they buy? What happens with them?

Exercices/ Tests

1. Complete with the right words:
Yet, in addition........., marketing includes a much broader set of
functions, including ...........development, packaging, pricing, distribution,
and customer service. Many organizations and businesses
............responsibility for these marketing functions to a specific group of
individuals ..........the organization. In this respect, marketing is a unique and
separate entity. Those who make up the marketing department may include
.........and product managers, marketing............, sales representatives,
advertising and promotion managers, ............specialists, and customer
service personnel. The elements that play a role in the marketing process can
be divided into three groups: customers, ...............and facilitators. In
addition to interacting with one another, these groups must interact within a
..........................environment that is affected by a variety of forces, including
governmental, economic, and social influences

2 Make the logical and grammatically correct sentences from the
following words:
a / when/ a/business / or/ can/buying/is/ process/ usually/in/the/
initiated / someone/ company /a/sees/ problem/way/ that/ needs/efficiency/
to be solved/or /recognizes/ in which/ the company /increase /profitability.

3. Find out the mistakes

In fact, marketers point out that a purchase represent the end, not the
beginning, of a consumer's relationship with a company. After a sell has
been made, a satisfied consumer is more likely to purchase another company
product and to say interesting things about the company or its product to
other potential purchasers. The opposite is not true for dissatisfied
consumers. Because of this fact, many companies do not communicate with
their customers after a purchase in an effort to influence post-purchase
satisfaction and behaviour.

Tema VIII.Theme VIII.
TOURISM The Worlds Biggest Industry

1.obiectivele specifice ale temei:(the main objectives of the theme)

2. competene specifice dobndite de student(the specific skills of
the student)
* fluen n exprimare
* cunoaterea proceselor n economia de pia

3.cuvinte cheie(key words): facilities, convenience, service, hotel,
accommodation, visitor.

4. structura modulului de studiu(the structure of the study): the hotel
as a market concept, facilities, impacts on tourists.

5.rezumat(abstract):
Tourism now finds itself at a crossroads in its development. It is
heralded as the worlds biggest industry by a number of global
organisations including the World Travel and Tourism Council (WTTC) and
the World Tourism Organisation (WTO. At a time of increasing concern for
the environment and the retention of cultural identities, tourism is viewed by
governments and consumers alike as a potentially destructive force, causing
harmful environmental and socio-cultural impacts in destination areas and
on host communities. Today, tourism is seen as a major contributor to global
economic development, creating employment and generating wealth on a
truly international scale. An increasing number of countries rely heavily on
receipts from tourism for their economic and social well-being. Tourism is
mostly viewed in the relationship with hotel industry. From the point of view
of its users, a hotel is an institution of commercial hospitality, which offers
its facilities and services for sale, individually or in various combinations,
and this concept is made up of several elements.
The Content

Against the background. of unparalleled growth in the latter half of
the twentieth century, tourism now finds itself at a crossroads in its
development. On the one hand, it is heralded as the worlds biggest
industry by a number of global organisations including the World Travel
and Tourism Council (WTTC) and the World Tourism Organisation (WTO),
which highlights the fact that tourism overtook both crude petroleum and
motor vehicles to become the worlds number one export earner in 1994. Its
economic significance is also illustrated by the fact that tourism receipts
were greater than the worlds exports of other selected product groups,
including electronic equipment, clothing, textiles and raw materials.
In addition, receipts from international tourism have achieved
growth rates in excess of exports of commercial services and merchandise
exports during the period 1984 to 1994. For the period 1985 to 1995 the
trend is similar, with the following average annual percentage growth rates:
Tourism l2per cent
Commercial services 12 per cent
Merchandise exports 10 per cent
WTO data also indicate rapid and sustained growth in international
tourist arrivals and receipts from tourism over the last 30 years. Today,
tourism is seen as a major contributor to global economic development,
creating employment and generating wealth on a truly international scale.
An increasing number of countries rely heavily on receipts from tourism for
their economic and social well-being.
In direct contrast to this very positive outlook for the industry, many
national governments are reluctant to invest public funds in tourism
development and promotion, with tourism spending often being cut when
more pressing social and economic needs arise. The decisions, in 1997, by
the governments of Canada, the United States of America and Belgium to
transfer responsibility, for tourism to private sector enterprises or regional
authorities serve to illustrate this point well. In Britain, the funding of the
English Tourist Board has been cut drastically since the early 1990s, the
decision of a government that considered the industry to he sufficiently
mature and able to fund its own expansion with diminishing public financial
support. At a time of increasing concern for the environment and the
retention of cultural identities, tourism is also viewed by governments and
consumers alike as a potentially destructive force, causing harmful
environmental and socio-cultural impacts in destination areas and on host
communities. Paradoxically, it is not difficult to argue that the withdrawal of
public funding and control from tourism development may well accelerate
the industrys harmful environmental and socio-cultural effects.
It is against this background of a complex and rapidly expanding
industry seeking to maintain its credibility and promote its economic
benefits, often in the face of declining governmental and host community
support. Tourism is mostly viewed in the relationship with hotel industry.
From the point of view of its users, a hotel is an institution of commercial
hospitality, which offers its facilities and services for sale, individually or in
various combinations, and this concept is made up of several elements.
Its location places the hotel geographically in or near a particular
city, town or village; within a given area location denotes accessibility and
the convenience this represents, attractiveness of surroundings and the
appeal this represents, freedom from noise and other nuisances, or otherwise.
Its facilities which include bedrooms, restaurants, bars, function
rooms, meeting rooms and recreation facilities such as tennis courts and
swimming pools represent a repertoire of facilities for the use of its
customers, and these may be differentiated in type, size, and in other ways.
The service comprises the availability and extent of particular hotel
services provided through its facilities, the style and quality of all these in
such terms as formality and informality, degree of personal attention, and
speed and efficiency.
Its image may he defined as the way in which the hotel portrays
itself to people and the way in which it is perceived as portraying itself by
them. It is a byproduct of its location, facilities and service, but it is
enhanced by such factors as its name, appearance; its associations by who
stays there and who eats there; by what it says about itself and what other
people say about it.
Its price expresses the value given by the hotel through its location,
facilities, service and image, and the satisfaction derived by its users from
these elements of the hotel concept. The individual elements assume greater
or lesser importance for different people. One person may put location as
paramount and be prepared to accept basic facilities and service for an
overnight day, ignoring the image, as long as the price is within a limit, to
which he is willing to go. Another may be more concerned with the image of
the hotel, its facilities and service. However, all the five elements are related
to each other, and in a situation of choice most hotel users tend either to
accept or reject as a whole, that is the total concept.
There are varying degrees of adaptability and flexibility in the hotel
concept, ranging from the complete fixity of its location to the relative
flexibility of price, with facilities, service and image lending themselves to
some adaptation in particular circumstances with time
In the early days of innkeeping the traveller often had to bring his
own food to places where he stayed the night-bed for the night was the only
product offered But soon most establishments extended their hospitality to
providing at least some food and refreshments. Today, many apartment
hotels, and motels confine their facilities to sleeping accommodation, with
little or no catering provision. But the typical hotel as we know it today,
normally provides not only accommodation, but also food and drink, and
sometimes other facilities and services, and makes them available not only
to its residents but also to non-residents.
Although the range of hotel facilities and services may extend as far
as to cater for all or most needs of their customers, however long their stay,
and for a hotel to become a self-contained community with its own shops,
entertainments and recreation facilities, it is helpful at this stage to describe
the hotel concept in a simpler form, by including only the main customer
needs typically met by most hotels.
The main customer demand in most hotels is for sleeping
accommodation, food and drink, and for food and drink for organized
groups. These four requirements then relate to accommodation, restaurants,
bars and functions, as the principal hotel products.
Sleeping accommodation is provided for hotel residents alone.
Restaurants and bars meet the requirements of hotel residents and non-
residents alike, even though separate facilities may be sometimes provided
for them. Functions are best seen as a separate hotel product bought by
organized groups; these groups may be resident in the hotel as, for example,
participants in a residential conference, or be non-residents, such as a local
club or society, or the group may combine the two. The total hotel concept
of location, facilities, service, image and price - can he, therefore, sub-
divided according to the needs of the customer and the particular facilities
brought into play to meet them. The cluster of elements of the total hotel
concept is then related to each particular hotel product. Each hotel product
contains the elements of the location, facilities, services, image and price, to
meet a particular customer need or set of needs. The first approach to the
segmentation of the hotel market is, therefore, taken by dividing hotel users
according to the products bought.
Corresponding to each hotel product there are the buyers of that
product who constitute a market for it.
Hotel users who are buyers of overnight accommodation may be
classified according to the main purpose of their visit to a particular location
into three main categories as holiday, business and other users.
Holiday users include a variety of leisure travel as the main reason
for their stay in hotels, ranging from short stays in a particular location on
the way to somewhere else to weekend and longer stays when the location
represents the end of a journey. Their demand for hotel accommodation
tends to be resort oriented, seasonal and sensitive to price.
Business users are employees and others travelling in the course of
their work, people visiting exhibitions, trade fairs, or coming together as
members of professional and commercial organizations for meetings and
conferences. Their demand for hotel accommodation tends to be town- and
city-oriented, non-seasonal and less price-sensitive, except in the case of
some event attractions such as conferences and exhibitions, which may he
usefully regarded as a separate category.
Other hotel users comprise visitors to a particular location for a
variety of reasons other than holiday or business, e.g. those attending such
family occasions as weddings, parents visiting educational institutions,
visitors to special events, and common interest groups meeting for other than
business and vocational reasons, re-locating families and individuals seeking
permanent accommodation in an area and staying temporarily in an hotel,
people living in an hotel permanently. The characteristics of this type of
demand are more varied than those of the first and second group, and it is,
therefore, often desirable to sub-divide it further for practical purposes.
Within and between the three main groups, which comprise the total
market for hotel accommodation, there are several distinctions important to
individual hotels. We have noted already that some hotel users give rise to
demand for transit and shortstay accommodation; others are terminal
visitors with a longer average stay. Also, for example, much business
demand is generated by a relatively small number of travellers who are
frequent hotel users; most holiday and other demand comes from a very
large number of people who use hotels only occasionally. Moreover,
business users often book accommodation at short notice, whilst holiday and
other users tend to do so longer in advance. And in all three groups some
people are individual hotel users, and others stay in hotels in groups.
The rich variety of hotels can be seen from the many terms in use to
denote particular types. Hotels are referred to as luxury, resort, commercial,
residential, transit, and in many other ways. Each of these terms may give an
indication of standard or location, or particular type of guest who makes up
most of the market of a particular hotel, but it does not describe adequately
its main characteristics. These can be only seen when a combination of terms
is applied to an hotel, each of which describes a particular hotel according to
certain criteria. It is helpful to appreciate at this stage what the main types of
hotels are, by adopting particular criteria for classifying them, without
necessarily attaching precise meanings to them.
Thus according to location hotels are in cities and in large and
small towns, in inland, coastal and mountain resorts, and in the country.
According to the actual position of the hotel in its location it may
be in the city or town centre or in the suburbs, along the beach of a coastal
resort, along the highway.
By reference to its relationship with particular means of transport:
there are motels and motor hotels, railway hotels, airport hotels (the terms
also indicating location).
According to the purpose of visit and the main reason for their
guests stay, hotels may become known as business hotels, holiday hotels,
convention hotels, tourist hotels.
Where there is a pronounced tendency to a short or long duration
of guests stay it may be an important hotel characteristic, so that the hotel
becomes a transit or a residential hotel.
According to the range of its facilities and services a hotel may be
open to residents and non-residents, or it may restrict itself to providing
overnight accommodation and at most offering breakfast to its guests,
apartment hotel.
Whether a hotel holds a licence for the sale of alcoholic liquor or
not, is an important dimension in the range of available hotel services, and
the distinction between licensed and unlicensed hotels is, therefore, of
relevance in describing a hotel in most countries.
There is no universal agreement on how hotels should he described
according to size, but by reference to their room or bed capacities we
normally apply the term small hotel to one with a small amount of sleeping
accommodation, the term large hotel to one with several hundred beds or
bedrooms, and the term medium size hotel to one somewhere between the
two, according to the size structure of the hotel industry in a particular
country.
Whatever the criteria used in hotel guides and in classification and
grading systems in existence in many countries, normally at least four or five
classes or grades have been found necessary to distinguish adequately in the
standards of hotels and these have found some currency among hotel users.
The extremes of luxury and basic standards, sometimes denoted by five stars
and one star respectively are not difficult concepts; the mid point on any
such scale denotes the average without any particular claims to merit. The
intervening points are then standards above average but falling short of
luxury (quality hotels) and standards above basic (economy).
Last but not least comes the ownership and management.
Individually owned independent hotels, which may he managed by the
proprietor or by a salaried manager, have to be distinguished from chain or
group hotels, invariably owned by a company. Independent hotels may
belong to a hotel consortium or cooperative. A company may operate its
hotels under direct management or under a franchise agreement.
The above distinctions then enable us to describe a particular hotel
in broad terms, concisely, comprehensively and meaningfully, e.g.:
Terminus Hotel is a medium-sized economy town centre
unlicensed hotel, owned and managed by a small company, catering mainly
for tourists visiting the historic town and the surrounding countryside.
Hotel Excelsior is a large independent luxury hotel on the main
promenade of the coastal resort, with holiday visitors as its main market.
The Crossroads Hotel is a small licensed quality transit motor
hotel, operated as a franchise, on the outskirts of the city, which serves
mainly traveling.


Adriana Vintean, English Course for Tourism, with the
following chapters: The Business of Hotels, Hotel Products and Markets,
Hotel Organization, Hotel Services, Touristic Attractions.

Questions:

1. Why is tourism considered to be the worlds biggest industry?
2. Is there any classification for hotels?
3. The rich variety of hotels can be seen from the many terms in
use to denote particular types. In what respect?
4. A hotel is an institution of commercial hospitality, which offers its
facilities and services for sale, individually or in various combinations, and
this concept is made up of several elements. Name some of them.
5. What do hotel users include?

Exercices and tests

Holiday users include a variety of .travel as the main reason
for their stay in hotels, ranging ..short stays in a particular location on the
way to else to weekend and longer stays when the location represents
the end of a Their demand for hotel tends to be resort oriented,
seasonal and sensitive to .
Business are employees and others traveling in the course of
their, people visiting exhibitions, trade fairs, or coming together as
members of professional and .organizations for meetings and
conferences. Their ..for hotel accommodation tends to be town- and city-
oriented, non-seasonal and less price-sensitive, except in the case of some
event attractions such as conferences and exhibitions, which may he usefully
regarded as a separate category.

2. Make the logical and grammatically correct sentences from
of/acording/ for/to/ the/ purpose/ reason/ visit /and/ the/ main / their/
guests stay/,as/ hotels/known/ may/ become/ business hotels/, holiday
hotels/, convention hotels,/ tourist hotels.


The rich variety of hotels can seen from the many in use to denote
particular types. Hotels are refer to as luxury, resort, commercial, residential,
transit, and in many other way. Each of the terms may give an indication
standard or location, or particular type guest who make up most of the
market of a particular hotel, but it do not describe adequately its main
characteristics.

Tema IX. Theme IX.
ECONOMIC THEORY

1.obiectivele specifice ale temei: (the main objectives)

student)
* fluen n exprimare
* cunoaterea proceselor de teorie economic n economia de pia

3.cuvinte cheie(key words): supply, demand, competition, value,
distribution,

4. structura modulului de studiu: (the structure of the study) Market
competition, market performance, monopoly, oligopoly, rivalry among
sellers.

5.rezumat(abstract):
This branch of the study bears somewhat the same relation to
economic politics that pure physics bears to the engineering sciences. Hence
the problems of value and distribution have continued to hold their place
among the central concerns of economists
Economic theory is the name commonly given to the more general
and abstract parts of economics, the principles.The older classical
economists centered their attention on the long-run relations between value
and costs and were generally content to dispose of short-run variations of
price by merely invoking the formula of supply and demand. the role of
demand. Enlarged theories of production, distribution, consumption,
business fluctuations, and other economic elements have been introduced
and continually reconsidered from a variety of viewpoint.

The Content

Economic theory is the name commonly given to the more general
and abstract parts of economics, the principles. These parts are no less
practical than concrete-descriptive or applied economics but are less directly
related to immediate problems. The mechanics of price relations or of
markets afford a general explanation of the organization of production and
distribution insofar as this is actually worked out and controlled through
competitive buying and selling--which would largely be true even in a
planned or socialistic economy that stopped short of complete military
regimentation. This branch of the study bears somewhat the same relation to
economic politics that pure physics bears to the engineering sciences. Hence
the problems of value and distribution have continued to hold their place
among the central concerns of economists. However, there has been a
notable--one might say a revolutionary--change in the general character of
the analysis. The older classical economists centered their attention on the
long-run relations between value and costs and were generally content to
dispose of short-run variations of price by merely invoking the formula of
supply and demand. This was used without careful analysis of the short-run
situation, particularly of the role of demand. Work directed toward filling in
this gap had important effects in changing the whole conceptual picture.
Enlarged theories of production, distribution, consumption, business
fluctuations, and other economic elements have been introduced and
continually reconsidered from a variety of viewpoints.

Pure competition.

Market conduct and performance in atomistic industries provide
good standards against which to measure behaviour in other types of
industry. The atomistic category includes both pure competition and
monopolistic competition. In pure competition, a large number of small
sellers supply a homogeneous product to a common buying market. In this
situation no individual seller can perceptibly influence the market price at
which he sells but must accept a market price that is impersonally
determined by the total supply of the product offered by all sellers and the
total demand for the product of all buyers. The large number of sellers
precludes the possibility of a common agreement among them, and each
must therefore act independently. At any going market price, each seller
tends to adjust his output to that quantity that will yield him the largest
aggregate profit, assuming that the market price will not change as a result.
But the collective effect of such adjustments by all sellers will cause the total
supply in the market to change significantly so that the market price falls or
rises. Theoretically, the process will go on until a market price is reached at
which the total output that sellers wish to produce is equal to the total output
that all buyers wish to purchase. This way of reaching a provisional
equilibrium price is what Adam Smith was referring to when he wrote of
prices being determined by "the invisible hand" of the market
If the provisional equilibrium price is high enough to allow the
established sellers profits in excess of a normal interest return on investment,
then added sellers will be drawn to enter the industry, and supply will
increase until a final equilibrium price is reached that is equal to the minimal
average cost of production (including an interest return) of all sellers.
Conversely, if the provisional equilibrium price is so low that established
sellers incur losses, some will tend to withdraw from the industry, and
supply will decline until the same sort of long-run equilibrium price is
reached.
The long-run performance of a purely competitive industry therefore
embodies these features: (1) industry output is at a feasible maximum and
industry selling price at a feasible minimum; (2) all production is undertaken
at minimum attainable average costs, since competition forces them down;
and (3) income distribution is not influenced by the receipt of any excess
profits by sellers.
This performance has often been applauded as ideal from the
standpoint of general economic welfare. But the applause, for several
reasons, should not be unqualified. Pure competition is truly ideal only if all
or most industries in the economy are purely competitive and if in addition
there is free and easy mobility of productive factors among industries.
Otherwise, the relative outputs of different industries will not be such as to
maximize consumer satisfaction. There is also some question whether
producers in purely competitive industries will generally earn enough to
plow back some of their earnings into improved equipment and thus
maintain a satisfactory rate of technological progress. Finally, some purely
competitive industries have been afflicted with "destructive competition"--
the coal industry and the basic agricultural industries, for example. For some
historical reason such an industry accumulates excess capacity to the point
where sellers suffer chronic losses, and the situation is not corrected by the
exit of people and resources from the industry. The invisible hand of the
market works too slowly for society to accept. In some cases, notably in
agriculture, government has intervened to restrict supply or raise prices.
Leaving these qualifications aside, however, the market performance of pure
competition furnishes some sort of a standard to which the performance of
industries of different structure may be compared.
Monopolistic competition.

In the more complex situation of monopolistic competition
(atomistic structure with product differentiation) market conduct and
performance may be said to follow roughly the tendencies attributed to pure
competition. The principal differences are the following. First, individual
sellers, because of the differentiation of their products, are able to raise or
lower their individual selling prices slightly; they cannot do so by very
much, however, because they remain strongly subject to the impersonal
forces of the market operating through the general level of prices. Second,
rivalry among sellers is likely to involve sales promotion costs as well as the
expense of altering products to appeal to buyers. This is a competitive game
that all will play but that nobody, on the average, will win, and the long-run
equilibrium price will reflect the added costs involved. In return, however,
buyers will get more variety. Third, since not every seller is likely to be
equally successful in his sales-promotion and product policies, some will
receive profits in excess of a basic interest return on their investment; such
profits will come from their success in winning buyers. Monopolistic
competition may, like pure competition, include industries that are afflicted
with what has been called above destructive competition. This may result
not only from a failure to get rid of excess capacity but also from the entry
of too many new firms despite the danger of losses.

Monopoly.

While single-firm monopolies are rare, except for those subject to
public regulation, it is useful to examine the monopolist's market conduct
and performance to establish a standard at the other pole from pure
competition. As the sole supplier of a distinctive product, the monopolist can
set any selling price provided he accepts the sales that correspond to that
price. Since the market demand will generally be less the higher the price he
sets, the monopolist presumably will set that price that produces the greatest
profits, given the relationship of production costs to output. By restricting
output he can raise his selling price significantly--an option not opens to
sellers in atomistic industries.
The monopolist will generally charge prices well in excess of
production costs and reap profits well above a normal interest return on
investment. His output will be substantially smaller, and his price higher,
than if he had to meet established market prices as in pure competition. The
monopolist may or may not produce at minimal average cost, depending on
his cost-output relationship; if he does not, there are no market pressures to
force him to do so.
If the monopolist is subject to no threat of entry by a competitor, he
will presumably set a selling price that maximizes profits for the industry he
monopolizes. If he faces only impeded entry, he may elect to charge a price
sufficiently low to discourage entry but above a competitive price--if this
will maximize his long-run profits.

Oligopoly.

Market conduct and performance in oligopolistic industries
generally combine monopolistic and competitive tendencies, with the
relative strength of the two tendencies depending roughly on the detailed
market structure of the oligopoly.

Rivalry among sellers.

In the simplest form of oligopolistic industry, sellers are few and
every seller supplies a sufficiently large share of the market so that any
feasible and modest change in his policies will appreciably affect the market
shares of all his rival sellers and induce them to react or respond. For
example, if seller A reduces his selling price below the general level of
prices being charged by all sellers sufficiently to permit him to capture
significant numbers of customers from his rivals if they hold their selling
prices unchanged, they may react by reducing their prices by a similar
amount, so that none gains at the expense of others and the group has
probably reduced its combined profits. Or seller A's rivals may retaliate by
reducing their selling prices more than he did, thus forcing a further reaction
from him. Conversely, if seller A increases his selling price above the
general level being charged by all sellers (thus tending to lose at least some
of his customers to his rivals), they may react by holding their prices
unchanged, in which event seller A will probably retract his increase and
bring his price back to the previous level. But his rivals may also react by
raising their prices as much as seller A raised his, in which case the general
level of prices in the industry rises and the combined profits of all sellers are
probably increased.
Any seller A in an oligopoly will therefore determine whether or not
to alter his price or other market policy in the light of his conjectures about
the reactions of his rivals. Correspondingly, his rivals will determine their
reactions in the light of their conjectures about what seller A will do in
response. The process is not likely to bring the industry price level down to
minimal average cost (as in atomistic competition). Many different
"equilibrium" levels between the competitive and monopolistic limits are
possible, depending on further circumstances.
Thus in an oligopoly viable collusive agreements among rival sellers
are quite possible. They may be express agreements established by contract
or tacit understandings that develop as a pattern of reactions among sellers to
changes in each others' prices or market policies becomes customary. In the
United States, express collusive agreements are forbidden by law, but tacit
agreements or "gentlemen's understandings" are common in oligopolies. In
numerous other Western countries, formal collusive agreements (often called
cartels if comprehensive in scope) are legal. Whether tacit or explicit, legal
or illegal, one may say that oligopolistic prices tend to be "administered" by
sellers, in the senses mentioned above, as distinct from being determined by
impersonal market forces.

Sellers' dual aims.

The varying market performance of oligopolies results from the fact
that individual sellers intrinsically have two conflicting aims. One common
desire is to establish among themselves a monopolistic level of price (and of
selling costs, etc.), which will maximize their combined profits, giving them
the largest "profit pie" to divide. But each seller also has a fundamental
antagonism toward rival sellers and wants to maximize his own profits even
at the expense of theirs. The relative strengths of these conflicting aims--the
maximizing of combined profits and the maximizing of individual profits--
will likely depend on how concentrated the oligopoly is, because when
sellers are fewer and their individual market shares larger, their rivals'
reactions are stronger deterrents to independent actions.
This is why various sorts of market performance are to be expected
in oligopolistic industries. When the entry of other sellers is blockaded,
collusive or interdependent behaviour may lead to a full monopoly price. If
entry is only impeded, the resulting price may be far enough below the full
monopoly level to discourage further entry. But prices are not always what
they seem. An announced price that is well above cost may be undercut by
clandestine price reductions to individual buyers, bringing the average of
actual selling prices down somewhat.
If an oligopolistic industry is made up of a "core" of a few large
interdependent sellers plus a "competitive fringe" of several or numerous
quite small sellers, the competition of the small sellers may induce the large
ones to limit the extent to which they raise their prices.
Price behaviour approaching full monopoly pricing seems to be
found mainly in oligopolies having very high seller concentration and
blockaded entry. Where these characteristics are less pronounced, prices and
profits tend to be lower, though they are likely to be somewhat above the
competitive level. A few economists maintain that oligopolistic prices in
general do not significantly differ from atomistically competitive prices, but
the bulk of statistical evidence does not support them.
In oligopolies in which product differentiation is important, sales-
promotion costs and the costs of product improvement or development will
display roughly the same variety of tendencies found in pricing. Where there
are a few large interdependent sellers, these costs may be restricted to about
the same level as those of a single-firm monopolist; on the other hand,
rivalry in sales promotion and product development may be sufficient to
raise them higher. Oligopolists may also arrive collusively at relatively high
uniform selling prices but simultaneously engage in independent nonprice
competition (perhaps more so where seller concentration is lower).


Adriana Sofletea, English Course for Economics,with the
Chapters: Utility and Value, Theories of Utility,Theories of Value, Prices
and Incomes,Price,the Basic Functions of Economic Systems, Market
Structure: Competition, Oligopoly, Monopoly,Production: the Output of the
Factors of Production,Distribution: the Shares of the Factors of
Production,Consumption,Economic Fluctuations: stability and instability.


Questions:

1. What happens in a pure competition? And in a monopolistic
one?
2. The monopolist will generally charge prices well in excess of
production costs and reap profits well above a normal interest return on
investment. How will his output be?
3. What is to be taken into account in the simplest form of
oligopolistic industry concerning the sellers?
4. Where does the varying market performance of oligopolies
result from ?
5. Price behaviour approaching full monopoly pricing seems to be
found mainly in oligopolies having very high seller concentration and
blockaded entry. What happens when these characteristics are less
pronounced?


1.Complete with the right words:
In the more .situation of monopolistic competition
(atomistic structure with product differentiation) market and
performance may be said to follow roughly the tendencies attributed to
pure.. The principal differences are the following. First, sellers,
because of the differentiation of their products, are able to raise or lower
their individual selling prices slightly; they cannot do so by very much,
however, because they remain strongly .the impersonal forces of the
market operating through the general level of prices. Second, rivalry among
.is likely to involve sales promotion costs as well as the expense of
altering products to appeal to buyers. This is a competitive game that all
.but that nobody, on the average, ., and the long-run equilibrium
price will reflect the added costs involved. In return, however, buyers will
get more variety


Ideal/ pure/ is/competition/ truly/ if/ only/ or/ all/ most/ in/
industries/ the/ economy /are/if/and/ purely /free/competitive/ in/ addition/
and/there/ of/ is / easy/ mobility productive/ factors/ among /industries.

3. Find out the mistakes:
The varying market performance oligopolies result from the
fact that individual seller intrinsic have conflicting aims. One common
desire is establish among them monopolistic level price (and of selling
costs, etc.), which will maximize the combined profits, giving the larg
"profit pie" to divide. But each seller also has fundamental antagonism
toward rival seller and want maximize his own profit even at the expense of
their. The relative strength of the conflicting aim--the maximizing combined
profit and the maximizing of individual profit--will likely depend how
concentrat the oligopoly is, because when seller are few and the individual
market share large their rival reactions are stronger to independent actions

TemaX. Theme X.
INTERNATIONAL TRADE


2. competene specifice dobndite de student: (specific skills of the
student)

* fluen n exprimare
* cunoaterea proceselor legate de comerul internaional n
economia de pia

3.cuvinte cheie: (key words)transaction, commodity, goods,
services, policy.

4. structura modulului de studiu: (the structure of the study)
modern trade policies, the operation of futures markets, hedging, terms of
trade.

International trade includes all economic transactions that are made
between 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.

The Content

International trade includes all economic transactions that are made
between 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.
International trade and the accompanying financial transactions are
conducted generally toward the purpose of providing a nation with
commodities it lacks in exchange for those that it produces in abundance;
such transactions, functioning with other economic policies, generally
improve the standard of living of a nation. We have a historical and
contemporary overview of the structure of international trade, of the classic
controversy over free versus controlled trade, and of the problems that arise
in transactions between nations.
Accounts of barter of goods or of services among different peoples
can be traced back almost as far as the record of human history. International
trade, however, is specifically an exchange between members of different
nations, and accounts and explanations of such trade begin (despite
fragmentary earlier discussion) only with the rise of the modern nation-state
at the close of the European Middle Ages. As political thinkers and
philosophers began to examine the nature and function of the nation, trade
with other nations became a particular topic of their inquiry. It is,
accordingly, no surprise to find one of the earliest attempts to describe the
function of international trade within that highly nationalistic body of
thought now known as "mercantilism." Mercantilist analysis, which reached
the peak of its influence upon European thought in the 16th and 17th
centuries, focused directly upon the welfare of the nation. It insisted that the
acquisition of wealth, particularly wealth in the form of gold, was of
paramount importance for national policy. Mercantilists took the virtues of
gold almost as an article of faith; consequently, they never undertook to
explain adequately why the pursuit of gold deserved such a high priority in
their economic plans.
The trade policy dictated by mercantilist philosophy was accordingly
simple: encourage exports, discourage imports, and take the proceeds of the
resulting export surplus in gold. Because of their nationalistic bent,
mercantilist theorists either brushed aside or else did not realize that, from an
international viewpoint, this policy would necessarily prove self-defeating.
The nation that successfully gains an export surplus must ordinarily do so at
the expense of one or more other nations that record a matching import
surplus. Mercantilists' ideas often were intellectually shallow, and indeed
their trade policy may have been little more than a rationalization of the
interests of a rising merchant class that wanted wider markets--hence the
emphasis on expanding exports--coupled with protection against competition
in the form of imported goods. Yet mercantilist policies, as will be noted
later, are by no means completely dead today.

History of modern trade policies
Mercantilism.
Much of the modern history of international relations concerns
efforts to promote freer trade among nations. The 17th century saw the
growth of restrictive policies that later came to be known as mercantilism.
The mercantilists held that economic policy should be nationalistic and aim
to secure the wealth and power of the state. The concept was based on the
conviction that national interests are inevitably in conflict--that one nation
can increase its trade only at the expense of other nations. Thus,
governments were led to impose price and wage controls, foster national
industries, promote exports of finished goods and imports of raw materials,
and prohibit the exports of raw materials and the import of finished goods.
The state endeavoured to provide its citizens with a monopoly of the
resources and trade outlets of its colonies. A typical illustration of the
mercantilist spirit is the famous English Navigation Act of 1651, which
reserved for the home country the right to trade with the colonies and
prohibited the import of goods of non-European origin unless transported in
ships flying the English flag. This law lingered on until 1849. A similar
policy was followed in France.
Liberalism.
A strong reaction against mercantilist attitudes began to take shape
toward the middle of the 18th century. In France, the economists known as
Physiocrats demanded liberty of production and trade. In England, as
discussed above, Adam Smith demonstrated in his The Wealth of Nations
(1776) the advantages of removing trade restrictions. Economists and
businessmen voiced their opposition to excessively high and often
prohibitive customs duties and urged the negotiation of trade agreements
with foreign powers. This change in attitudes led to the signing of a number
of agreements embodying the new liberal ideas, among them the Anglo-
French Treaty of 1786, which ended what had been an economic war
between the two countries. After Adam Smith, the basic tenets of
mercantilism were no longer considered defensible. This did not, however,
mean that nations abandoned all mercantilist policies. Restrictive economic
policies were now justified by the claim that, up to a certain point, the
government should keep foreign merchandise off the domestic market in
order to shelter national production from outside competition. To this end,
customs levies were introduced in increasing number, replacing outright
bans on imports, which became less and less frequent. In the middle of the
19th century, customs walls effectively sheltered many national economies
from outside competition. The French tariff of 1860, for example, charged
extremely high rates on British products: 60 percent on pig iron; 40 to 50
percent on machinery; and 600 to 800 percent on woolen blankets. Transport
costs between the two countries provided further protection.
A triumph for liberal ideas was the Anglo-French trade agreement of
1860, which provided that French protective duties were to be reduced to a
maximum of 25 percent within five years, with free entry of all French
products except wines into Britain. This agreement was followed by other
European trade pacts.
Resurgence of protectionism.
A reaction in favour of protection spread throughout the Western
world in the latter part of the 19th century. Germany adopted a
systematically protectionist policy and was soon followed by most other
nations. Shortly after 1860, during the Civil War, the United States raised its
duties sharply; the McKinley Tariff Act of 1890 was ultraprotectionist.
England was the only country to remain faithful to the principles of free
trade. But the protectionism of the last quarter of the 19th century was mild
by comparison with the mercantilist policies that had been common in the
17th century and were to be revived between the two world wars. Extensive
economic liberty prevailed by 1913. Quantitative restrictions were unheard
of, and customs duties were low and stable. Currencies were freely
convertible into gold, which in effect was a common international money.
Balance-of-payments problems were few. People who wished to settle and
work in a country could go where they wished with few restrictions; they
could open businesses, enter trade, or export capital freely. Equal
opportunity to compete was the general rule, the sole exception being the
existence of limited customs preferences between certain countries, most
usually between a home country and its colonies. Trade was freer throughout
the Western world in 1913 than it was in Europe in 1970.
The "new" mercantilism.
World War I wrought havoc with these orderly trading conditions.
By the end of hostilities, world trade was in a straitjacket that made recovery
very difficult. The first five years of the postwar period were marked by the
dismantling of wartime controls proper. The 1920 crisis and the commercial
advantages accruing to countries whose currencies had depreciated, as had
Germany's, rapidly led to fresh measures in restraint of trade. The
protectionist tide engulfed the world economy, not because policymakers
consciously adhered to any specific theory but because of nationalist
ideologies and the pressure of economic conditions. In an attempt to end the
continual raising of customs barriers, the League of Nations organized the
first World Economic Conference in May 1927. Twenty-nine states,
including the main industrial countries, subscribed to an international
convention that was the most minutely detailed and balanced multilateral
trade agreement ever approved until that time. It was a precursor of the
arrangements made under the General Agreement on Tariffs and Trade of
1947. The 1927 agreement remained practically without effect. During the
Great Depression of the 1930s, unemployment in major countries reached
unprecedented levels and engendered an epidemic of protectionist measures.
Countries attempted to shore up their balance of payments by raising their
customs duties and introducing a range of import quotas or even import
prohibitions, accompanied by exchange controls. From 1933 onward, the
recommendations of all the postwar economic conferences based on the
fundamental postulates of economic liberalism were ignored. The planning
of foreign trade came to be considered a normal function of the state.
Mercantilist policies dominated the world scene until after World War II.
Trade in primary goods may take the form of a normal exchange of
goods for money as in any everyday transaction (referred to technically as
trade in "actuals"), or it may be conducted by means of futures contracts. A
futures contract is an agreement to deliver or receive a certain quantity of a
commodity at an agreed price at some stated time in the future. Trade in
actuals has declined considerably and in many cases (such as the Liverpool
markets in cotton and grain) has even come to a halt.
Operation of the market.
The great bulk of commodity trading is in contracts for future
delivery. The purpose of trading in futures is either to insure against the risk
of price changes (hedging) or to make a profit by speculating on the price
trend. If a speculator believes that prices will rise, he buys a futures contract
and sells it when he wishes (e.g., at a more distant delivery date). The
speculator either gains (if prices have risen) or loses (if they have fallen), the
difference being due to the change in price. "Hedging" means the offsetting
of commitments in the market in actuals by futures contracts. A producer
who buys a commodity at spot (current) prices but does not normally resell
until three months later can insure himself against a decline in prices by
selling futures: if prices fall he loses on his inventories but can purchase at a
lower price; if prices rise he gains on his inventories but loses on his futures
sales. Since price movements in the actuals market and the futures market
are closely related, the loss (or gain) in actual transactions will normally be
offset by a comparable gain (or loss) in the futures market.
The operation of futures markets requires commodities of uniform
quality grades in order that transactions may take place without the buyer
having to inspect the commodities themselves. This explains why there is no
futures market, for example, in tobacco, which varies too much in quality. A
steady, unfluctuating supply also is needed; this is referred to technically as
"low elasticity of supply," meaning that the amount of a commodity that
producers supply to the market is not much affected by the price at which
they are able to sell the commodity. If supply could be adjusted relatively
quickly to changes in demand, speculation would become too difficult and
risky because exceptionally high or low prices, from which speculators are
able to profit, are eliminated as soon as supply is adjusted. Monopolistic
control of demand and supply is also unfavourable to the operation of a
futures market because price is subject to a large extent to the control of the
monopolist and is thus unlikely to fluctuate sufficiently to provide the
speculator with an opportunity for making profits. There is, for example, no
market in diamonds, because there is only one marketing cooperative. In
1966 the London market in shellac ceased to function after the Indian
government applied control of exporters' prices at the source. Before World
War II London was the centre of international trade in primary goods, but
New York City has become at least as important. It is in these two cities that
the international prices of many primary products are determined. Although
New York often has the bigger market, many producers prefer the London
market because of the large fluctuations in local demand in the United States
that influence New York market prices. In some cases international
commodity agreements have reduced the significance of certain commodity
markets.
There are markets in both New York and London for numerous
primary goods, including cotton, copper, cocoa, sugar, rubber, coffee, wool
and wooltops, tin, silver, and wheat. Tea, wool, and furs are auctioned in
London, but in the case of many other commodities, auctions have been
superseded by private sales. In London the metal market is much more a
"spot" or delivery market than other futures markets. Many countries have
their own markets: Australia for wool, Sri Lanka and India for tea, and
Malaysia for rubber and tin.
The terms of trade.
The relation between the price of primary goods and that of
manufactures has long intrigued economists. The relationship is known as
the "terms of trade" and may be defined as the ratio of the average price of a
country's or a group of countries' exports to the average price of its imports.
The long-range trend of the terms of trade between primary products and
manufactures has been the subject of diametrically opposed conclusions:
some theorists hold that the trend is favourable to the less-developed
countries, others that it is unfavourable. Faulty statistical material and
methods in various countries are responsible for this lack of agreement.
Anycomparison of the terms of trade over a long period of time is
very difficult and may be misleading because the structure of trade changes,
as does the quality of the groups of goods studied. Many economists believe
that the terms of trade were adverse for less-developed countries from 1870
to 1938. They point to the fact that as developed countries become more
technologically advanced there is a tendency for them to require relatively
less in the way of primary products. A downward influence is thus exercised
on primary product prices. Another factor is that in the industrial countries
the benefits of progress find expression not in lower prices but in higher
wages. This, together with inflationary pressures, means that prices of
manufactured goods produced by the developed countries tend to rise
steadily. There is thus a tendency, it is argued, for the less-developed
countries to receive relatively less for what they have to sell and to have to
pay more for what they need to buy. But the statistical problems posed by
any attempt to verify this hypothesis are considerable. The countries
selected, the relative weight assigned to the various goods, changes in
transport costs, and the fact that the quality of manufactured goods has
improved much more than that of primary goods make the statistics
unreliable. There is also the problem that the terms of trade between primary
commodities and manufactures do not necessarily coincide with the terms of
trade between less-developed and industrial areas. Even if it were
established that the terms of trade have moved against the less-developed,
largely primary-producing countries, this would not necessarily mean that
their balance-of-payments situation has been adversely affected. A decline in
the terms of trade may in fact improve a country's balance-of-payments,
because, although the prices of that country's exports have fallen, it may, as
a consequence of this fall in price, be able to sell a far larger quantity. Total
revenue from exports may thus increase. Similarly, although imports may
become more expensive, the result may be that the country's demand for
imports drops very steeply, so that less is spent on them than when they were
cheaper.These problems make it extremely difficult to generalize about the
effects of commodity price changes on the economic situation of one or a
group of countries.


Adriana Sofletea, International Trade Alma Mater Publishing
House, English Collection Sibiu, with chapters: Comparative-Advantage
Analysis ,State Interference in International Trade, History of Modern trade
Policies ,Trade Agreements ,Economic Integration ,Patterns of Trade
,International Commodity Trade Primary Commodity Markets, Price
Movements Foreign Exchange Markets,the Gold Standard,the International
Monetary Fund, the imf System of Parity (pegged) Exchange Rates,Floating
Exchange Rates, the International Debt Crisis

Questions:

1. What does mercantilist analysis focus on?
2. Define hedging.
3. The purpose of trading in futures is either to insure against the
risk of price changes (hedging) or to make a profit by speculating on the
price trend. What hapens if a speculator believes that prices will rise?

4. The relation between the price of primary goods and that of
manufactures has long intrigued economists. The relationship is known as
the "terms of trade". Enlarge upon this.

5. What are international trade transactions facilitated by?

Exercices/Tests

Because of their ............bent, mercantilist theorists either brushed
.......or else did not realize that, from an international viewpoint, this policy
would necessarily prove self-defeating. The nation that successfully ........an
export surplus must ordinarily do so at the ..........of one or more other
nations that record a matching import surplus. Mercantilists' ideas often were
............shallow, and indeed their....... policy may have been little more than a
rationalization of the interests of a rising ..........class that wanted wider
markets--hence .............on expanding exports--coupled with protection
against competition in the form of imported goods. Yet ............policies, as
will be noted later, are by no means completely dead today.

2.Make the logical and grammatically correct sentences from the
following words:

are/international/ and/ trade/ the/ of/ accompanying/ the/ financial/
transactions/ conducted/ generally/ toward/ that/ purpose/ in / providing/ it
/a /nation/ with/ it/ for commodities/ lacks/ in/ exchange / those/ produces/
abundance

3. Find out the mistakes:
"Hedging" mean the offset of commitment in the market in by
future . A producer who buy commodity (current) prices but does not
normally resell until three months later can insure himself against decline in
price by futures: if prices fall he lose on his inventories but can purchase at
a low price; if prices rise he gain on his inventories but lose on his sales.
Since price movements in the market and the futures market are closely
related, the gain in actual transaction will normally be offset by comparable
gain (or loss) in the futures market.

Tema XI. Theme XI.THE BANKING SYSTEM

1.obiectivele specifice ale temei:(the main objectives)

2. competene specifice dobndite de student:( specific skills of the
student)

* fluen n exprimare
* cunoaterea structurii sistemului bancar, principiile, structura,
responsabilitiile.

3.cuvinte cheie: (key words) assets, liabilities, deposits,investment,
credit, statement of account

4. structura modulului de studiu: (the structure of the study)
company financial statements, purposes of the accounting system,
development of the banking system, structure of modern banking system

The business of banking consists of borrowing and lending. As
in other businesses, operations must be based on capital, but banks employ
comparatively little of their own capital in relation to the total volume of
their transactions. The purpose of capital and reserve accounts is primarily to
provide an ultimate cover against losses on loans and investments. The basis
of the banking business is borrowing from individuals, firms, and
occasionally governments--i.e., receiving "deposits" from them. With these
resources and also with the bank's own capital, the banker makes loans or
extends credit and also invests in securities. The banker makes profit by
borrowing at one rate of interest and lending at a higher rate and by charging
commissions for services. Accounting provides information for all these
purposes through the maintenance of files of data, analysis and interpretation
of these data, and the preparation of various kinds of reports.

The Content

The purpose of accounting is to provide information about the
economic affairs of an organization. This information may be used in a
number of ways: by the organization's managers to help them plan and
control the organization's operations; by owners and legislative or regulatory
bodies to help them appraise the organization's performance and make
decisions as to its future; by owners, lenders, suppliers, employees, and
others to help them decide how much time or money to devote to the
organization; by governmental bodies to determine how much tax the
organization must pay; and occasionally by customers to determine the price
to be paid when contracts call for cost-based payments. Accounting provides
information for all these purposes through the maintenance of files of data,
analysis and interpretation of these data, and the preparation of various kinds
of reports. Most accounting information is historical--that is, the accountant
observes the things that the organization does, records their effects, and
prepares reports summarizing what has been recorded; the rest consists of
forecasts and plans for current and future periods. Accounting information
can be developed for any kind of organization, not just for privately owned,
profit-seeking businesses. One branch of accounting deals with the
economic operations of entire nations. Among the most common accounting
reports are those sent to investors and others outside the management group.
The reports most likely to go to investors are called, and their preparation is
the province of the branch of accounting known as financial statements
financial accounting. Three financial statements will be discussed: the
balance sheet, the income statement, and the statement of cash flows.

The balance sheet.

A balance sheet describes the resources that are under a company's
control on a specified date and indicates where these resources have come
from. It consists of three major sections: (1) the assets: valuable rights
owned by the company; (2) the liabilities: the funds that have been provided
by outside lenders and other creditors in exchange for the company's
promise to make payments or to provide services in the future; and (3) the
owners' equity: the funds that have been provided by the company's owners
or on their behalf. The list of assets shows the forms in which the
company's resources are lodged; the lists of liabilities and the owners' equity
indicate where these same resources have come from. The balance sheet, in
other words, shows the company's resources from two points of view, and
the following relationship must always exist: total assets equals total
liabilities plus total owners' equity. This same identity is also expressed in
another way: total assets minus total liabilities equals total owners' equity. In
this form, the equation emphasizes that the owners' equity in the company is
always equal to the net assets (assets minus liabilities). Any increase in one
will inevitably be accompanied by an increase in the other, and the only way
to increase the owners' equity is to increase the net assets. Assets are
ordinarily subdivided into current assets and noncurrent assets. The former
include cash, amounts receivable from customers, inventories, and other
assets that are expected to be consumed or can be readily converted into cash
during the next operating cycle (production, sale, and collection).
Noncurrent assets may include noncurrent receivables, fixed assets (such as
land and buildings), and long-term investments. The liabilities are similarly
divided into current liabilities and noncurrent liabilities. Most amounts
payable to the company's suppliers (accounts payable), to employees (wages
payable), or to governments (taxes payable) are included among the current
liabilities. Noncurrent liabilities consist mainly of amounts payable to
holders of the company's long-term bonds and such items as obligations to
employees under company pension plans. The difference between total
current assets and total current liabilities is known as net current assets, or
working capital. The owners' equity of an American company is divided
between paid-in capital and retained earnings. Paid-in capital represents the
amounts paid to the corporation in exchange for shares of the company's
preferred and common stock. The major part of this, the capital paid in by
the common shareholders, is usually divided into two parts, one representing
the par value, or stated value, of the shares, the other representing the excess
over this amount. The amount of retained earnings is the difference between
the amounts earned by the company in the past and the dividends that have
been distributed to the owners. A slightly different breakdown of the owners'
equity is used in most of continental Europe and in other parts of the world.
The classification distinguishes between those amounts that cannot be
distributed except as part of a formal liquidation of all or part of the
company (capital and legal reserves) and those amounts that are not
restricted in this way (free reserves and undistributed profits).
The income statement is usually accompanied by a statement that
shows how the company's retained earnings has changed during the year.
Net income increases retained earnings; net operating loss or the distribution
of cash dividends reduces it.

Banks and Banking

The principal types of banking in the modern industrial world are
commercial banking and central banking. A commercial banker is a dealer in
money and in substitutes for money, such as checks or bills of exchange.
The banker also provides a variety of financial services. The basis of the
banking business is borrowing from individuals, firms, and occasionally
governments--i.e., receiving "deposits" from them. With these resources and
also with the bank's own capital, the banker makes loans or extends credit
and also invests in securities. The banker makes profit by borrowing at one
rate of interest and lending at a higher rate and by charging commissions for
services rendered. A bank must always have cash balances on hand in order
to pay its depositors upon demand or when the amounts credited to them
become due. It must also keep a proportion of its assets in forms that can
readily be converted into cash. Only in this way can confidence in the
banking system be maintained. Provided it honours its promises (e.g., to
provide cash in exchange for deposit balances), a bank can create credit for
use by its customers by issuing additional notes or by making new loans,
which in their turn become new deposits. The amount of credit it extends
may considerably exceed the sums available to it in cash. But a bank is able
to do this only as long as the public believes the bank can and will honour its
obligations, which are then accepted at face value and circulate as money. So
long as they remain outstanding, these promises or obligations constitute
claims against that bank and can be transferred by means of checks or other
negotiable instruments from one party to another. These are the essentials of
deposit banking as practiced throughout the world today, with the partial
exception of socialist-type institutions. Another type of banking is carried on
by central banks, bankers to governments and "lenders of last resort" to
commercial banks and other financial institutions. They are often
responsible for formulating and implementing monetary and credit policies,
usually in cooperation with the government. In some cases--e.g., the U.S.
Federal Reserve System--they have been established specifically to lead or
regulate the banking system; in other cases--e.g., the Bank of England--they
have come to perform these functions through a process of evolution.
Some institutions often called banks, such as finance companies,
savings banks, investment banks, trust companies, and home-loan banks, do
not perform the banking functions described above and are best classified as
financial intermediaries. Their economic function is that of channelling
savings from private individuals into the hands of those who will use them,
in the form of loans for building purposes or for the purchase of capital
assets. These financial intermediaries cannot, however, create money (i.e.,
credit) as the commercial banks do; they can lend no more than savers place
with them.

The development of banking systems

Banking is of ancient origin, though little is known about it prior to
the 13th century. Many of the early "banks" dealt primarily in coin and
bullion, much of their business being money changing and the supplying of
foreign and domestic coin of the correct weight and fineness. Another
important early group of banking institutions was the merchant bankers, who
dealt both in goods and in bills of exchange, providing for the remittance of
money and payment of accounts at a distance but without shipping actual
coin. Their business arose from the fact that many of these merchants traded
internationally and held assets at different points along trade routes. For a
certain consideration, a merchant stood prepared to accept instructions to
pay money to a named party through one of his agents elsewhere; the
amount of the bill of exchange would be debited by his agent to the account
of the merchant banker, who would also hope to make an additional profit
from exchanging one currency against another. Because there was a
possibility of loss, any profit or gain was not subject to the medieval ban on
usury. There were, moreover, techniques for concealing a loan by making
foreign exchange available at a distance but deferring payment for it so that
the interest charge could be camouflaged as a fluctuation in the exchange
rate. Another form of early banking activity was the acceptance of deposits.
These might derive from the deposit of money or valuables for safekeeping
or for purposes of transfer to another party; or, more straightforwardly, they
might represent the deposit of money in a current account. A balance in a
current account could also represent the proceeds of a loan that had been
granted by the banker, perhaps based on an oral agreement between the
parties (recorded in the banker's journal) whereby the customer would be
allowed to overdraw his account. English bankers in particular had by the
17th century begun to develop a deposit banking business, and the
techniques they evolved were to prove influential elsewhere. The London
goldsmiths kept money and valuables in safe custody for their customers. In
addition, they dealt in bullion and foreign exchange, acquiring and sorting
coin for profit. As a means of attracting coin for sorting, they were prepared
to pay a rate of interest, and it was largely in this way that they began to
supplant as deposit bankers their great rivals, the "money scriveners." The
latter were notaries who had come to specialize in bringing together
borrowers and lenders; they also accepted deposits. It was found that when
money was deposited by a number of people with a goldsmith or a scrivener
a fund of deposits came to be maintained at a fairly steady level; over a
period of time, deposits and withdrawals tended to balance. In any event,
customers preferred to leave their surplus money with the goldsmith,
keeping only enough for their everyday needs. The result was a fund of idle
cash that could be lent out at interest to other parties.
About the same time, a practice grew up whereby a customer could
arrange for the transfer of part of his credit balance to another party by
addressing an order to the banker. This was the origin of the modern check.
It was only a short step from making a loan in specie or coin to allowing
customers to borrow by check: the amount borrowed would be debited to a
loan account and credited to a current account against which checks could be
drawn; or the customer would be allowed to overdraw his account up to a
specified limit. In the first case, interest was charged on the full amount of
the debit, and in the second the customer paid interest only on the amount
actually borrowed. A check was a claim against the bank, which had a
corresponding claim against its customer. Another way in which a bank
could create claims against itself was by issuing bank notes. The amount
actually issued depended on the banker's judgment of the possible demand
for specie, and this depended in large part on public confidence in the bank
itself. In London, goldsmith bankers were probably developing the use of the
bank note about the same time as that of the check. (The first bank notes
issued in Europe were by the Bank of Stockholm in 1661.) Some
commercial banks are still permitted to issue their own notes, but in most
countries this has become a prerogative of the central bank. In Britain the
check soon proved to be such a convenient means of payment that the public
began to use checks for the larger part of their monetary transactions,
reserving coin (and, later, notes) for small payments. As a result, banks
began to grant their borrowers the right to draw checks much in excess of
the amounts of cash actually held, in this way "creating money"--i.e., claims
that were generally accepted as means of payment. Such money came to be
known as "bank money" or "credit." Excluding bank notes, this money
consisted of no more than figures in bank ledgers; it was acceptable because
of the public's confidence in the ability of the bank to honour its liabilities
when called upon to do so. When a check is drawn and passes into the hands
of another party in payment for goods or services, it is usually paid into
another bank account. Assuming that the overdraft technique is employed, if
the check has been drawn by a borrower, the mere act of drawing and
passing the check will create a loan as soon as the check is paid by the
borrower's banker. Since every loan so made tends to return to the banking
system as a deposit, deposits will tend to increase for the system as a whole
to about the same extent as loans. On the other hand, if the money lent has
been debited to a loan account and the amount of the loan has been credited
to the customer's current account, a deposit will have been created
immediately. One of the most important factors in the development of
banking in England was the early legal recognition of the negotiability of
credit instruments or bills of exchange. The check was expressly defined as a
bill of exchange. In continental Europe, on the other hand, limitations on the
negotiability of an order of payment prevented the extension of deposit
banking based on the check. Continental countries developed their own
system, known as giro payments, whereby transfers were effected on the
basis of written instructions to debit the account of the payer and to credit
that of the payee.

The business of banking

The business of banking consists of borrowing and lending. As
in other businesses, operations must be based on capital, but banks employ
comparatively little of their own capital in relation to the total volume of
their transactions. The purpose of capital and reserve accounts is primarily to
provide an ultimate cover against losses on loans and investments. In the
United States capital accounts also have a legal significance, since the laws
limit the proportion of its capital a bank may lend to a single borrower.
Similar arrangements exist elsewhere.

Functions of commercial banks
The essential characteristics of the banking business may be
described within the framework of a simplified balance sheet. A bank's main
liabilities are its capital (including reserves and, often, subordinated debt)
and deposits. The latter may be from domestic or foreign sources
(corporations and firms, private individuals, other banks, and even
governments). They may be repayable on demand (sight deposits or current
accounts) or repayable only after the lapse of a period of time (time, term, or
fixed deposits and, occasionally, savings deposits). A bank's assets include
cash (which may be held in the form of credit balances with other banks,
usually with a central bank but also, in varying degrees, with correspondent
banks); liquid assets (money at call and short notice, day-to-day money,
short-term government paper such as treasury bills and notes, and
commercial bills of exchange, all of which can be converted readily into
cash without risk of substantial loss); investments or securities (substantially
medium-term and longer term government securities--sometimes including
those of local authorities such as states, provinces, or municipalities--and, in
certain countries, participations and shares in industrial concerns); loans and
advances made to customers of all kinds, though primarily to trade and
industry (in an increasing number of countries, these include term loans and
also mortgage loans); and, finally, the bank's premises, furniture, and fittings
(written down, as a rule, to quite nominal figures).
All bank balance sheets must include an item that relates to contingent
liabilities (e.g., bills of exchange "accepted" or endorsed by the bank),
exactly balanced by an item on the other side of the balance sheet
representing the customer's obligation to indemnify the bank (which may
also be supported by a form of security taken by the bank over its customer's
assets). Most banks of any size stand prepared to provide acceptance credits
(also called bankers' acceptances); when a bank accepts a bill, it lends its
name and reputation to the transaction in question and, in this way, ensures
that the paper will be more readily discounted.


Adriana Sofletea, English Course for Finance Alma Mater
Publishing House Sibiu, English Collection with the Chapters: Company
Financial Statements, Measurement Principles,Managerial Accounting,Other
Purposes of Accounting Systems,The Development of Banking Systems, the
Business of Banking ,Functions of Commercial banks, The Principles of
Central Banking, Responsibilities of Central Banks,The Structure of Modern
Banking Systems,


Questions:

1.Among the most common accounting reports are those sent to
investors and others outside the management group. How are the reports
most likely to go to investors called? 2.The balance sheet, in other words,
shows the company's resources from two points of view. What relationships
must there always exist?
3. Which are the principles of the central banks?
4. What does the business of banking consist of?
5. A bank's main liabilities are its capital (including reserves and,
often, subordinated debt) and deposits. What does the latter come from ?



A bank must always have .......balances on hand in order to pay its
depositors upon demand or when the........credited to them become due. It
must also keep a proportion of its ........ in forms that can readily be
converted into cash. Only in this way can confidence in the banking system
be maintained. Provided it honours its promises (e.g., to provide cash in
.........for deposit balances), a bank can create .......for use by its customers by
issuing additional notes or by making new ......., which in their turn become
new deposits. The amount of credit it extends may considerably exceed the
sums ............to it in cash. But a bank is able to do this only as long as the
public believes the bank can and will honour its ............which are then
accepted at face value and circulate as money. So long as they remain
outstanding, these promises or obligations constitute ........against that bank
and can be transferred by means of checks or other negotiable instruments
from one party to another

2.Make the logical and grammatically correct sentences from

Their/of/being/ much/many/the/ of /the/ early/and/ the/ "banks"/
dealt/in/ primarily/coin/ and /bullion,/and/business / money /changing/
supplying of /foreign /and /domestic /coin/ of / correct /weight /fineness.


The essential characteristics the banking business be described with
the framework a simplified balance sheet. A bank main liabilities are its
capital (including reserves and, often, subordinated debt) and deposits. The
latter be from domestic or foreign sources (corporations and firms, private
individuals, others banks, and even governments). They may repayable on
demand (sight deposits or current accounts) or reepayable only after the
lapse of period of time (time, term, or fixed deposits and, occasional, saving
deposits).

TemaXII.Theme XII.
INSURANCE


2. competene specifice dobndite de student: (specific skills of the
student)

* fluen n exprimare
* cunoaterea tipurilor de contracte de asigurri, a avantajelor au a
pericolelor, a riscurilor.

3.cuvinte cheie: (key words)
risk, liability,property,compensation,cost,insovency.

4. structura modulului de studiu: (the structure of the study) kinds of
insurance, insurance practices, benefits b and risks.

Insurance may be defined more formally as a system under which
the insurer, for a consideration usually agreed upon in advance, promises to
reimburse the insured or to render services to the insured in the event that
certain accidental occurrences result in losses during a given
period.Insurance relies heavily on the "law of large numbers." Two main
types of contracts--homeowner's and commercial--have been developed to
insure against loss from accidental destruction of property. These contracts
(or forms) typically are divided into three or four parts: insuring agreements,
identification of covered property, conditions and stipulations, and
exclusions.

The Content

Insurance is a method of coping with risk. Its primary function is to
substitute certainty for uncertainty as regards the economic cost of loss-
producing events. Insurance may be defined more formally as a system
under which the insurer, for a consideration usually agreed upon in advance,
promises to reimburse the insured or to render services to the insured in the
event that certain accidental occurrences result in losses during a given
period.Insurance relies heavily on the "law of large numbers." In large
homogeneous populations it is possible to estimate the normal frequency of
common events such as deaths and accidents. Losses can be predicted with
reasonable accuracy, and this accuracy increases as the size of the group
expands. From a theoretical standpoint, it is possible to eliminate all pure
risk if an infinitely large group is selected.
From the standpoint of the insurer, an insurable risk must meet the
following requirements:
1. The objects to be insured must be numerous enough and
homogeneous enough to allow a reasonably close calculation of the probable
frequency and severity of losses.
2. The insured objects must not be subject to simultaneous
destruction. For example, if all the buildings insured by one insurer are in an
area subject to flood, and a flood occurs, the loss to the insurance
underwriter may be catastrophic.
3. The possible loss must be accidental in nature, and beyond the
control of the insured. If the insured could cause the loss, the element of
randomness and predictability would be destroyed.
4. There must be some way to determine whether a loss has occurred
and how great that loss is. This is why insurance contracts specify very
definitely what events must take place, what constitutes loss, and how it is to
be measured. From the viewpoint of the insured person, an insurable risk is
one for which the probability of loss is not so high as to require excessive
premiums. What is "excessive" depends on individual circumstances,
including the insured's attitude toward risk. At the same time, the potential
loss must be severe enough to cause financial hardship if it is not insured
against. Insurable risks include losses to property resulting from fire,
explosion, windstorm, etc.; losses of life or health; and the legal liability
arising out of use of automobiles, occupancy of buildings, employment, or
manufacture. Uninsurable risks include losses resulting from price changes
and competitive conditions in the market. Political risks such as war or
currency debasement are usually not insurable by private parties but may be
insurable by governmental institutions. Very often contracts can be drawn in
such a way that an "uninsurable risk" can be turned into an "insurable" one
through restrictions on losses, redefinitions of perils, or other methods.
Two main types of contracts--homeowner's and commercial--have
been developed to insure against loss from accidental destruction of
property. These contracts (or forms) typically are divided into three or four
parts: insuring agreements, identification of covered property, conditions
and stipulations, and exclusions.

Homeowner's insurance.

Homeowner's insurance covers individual, or nonbusiness, property.
Introduced in 1958, it gradually replaced the older method of insuring
individual property under the "standard fire policy."
Perils insured.
In homeowner's policies, of which there are several types, coverage
can be "all risk" or "named peril." All-risk policies offer insurance on any
peril except those later excluded in the policy. The advantage of these
contracts is that if property is destroyed by a peril not specifically excluded
the insurance is good. In named-peril policies, no coverage is provided
unless the property is damaged by a peril specifically listed in the contract.
In addition to protection against the loss from destruction of an owner's
property by perils such as fire, lightning, theft, explosion, and windstorm,
homeowner's policies typically insure against other types of risks faced by a
homeowner such as legal liability to others for injuries, medical payments to
others, and additional expenses incurred when the insured owner is required
to vacate the premises after an insured peril occurs. Thus the homeowner's
policy is multi-peril in nature, covering a wide variety of risks formerly
written under separate contracts.

Property covered.
Homeowner's forms are written to cover damage to or loss of not
only an owner's dwelling but also structures (such as garages and fences),
trees and shrubs, personal property (excluding certain listed items), property
away from the premises (such as boats), money and securities (subject to
dollar limits), and losses due to forgery. They also cover removal of debris
following a loss, expenditures to protect property from further loss, and loss
of property removed from the premises for safety once an insured peril has
occurred.
Limitations on amount recoverable.
Recovery under homeowner's forms is limited to loss due directly to
the occurrence of an insured peril. Losses caused by some intervening source
not insured by the policy are not covered. For example, if a flood or a
landslide, which usually are excluded perils, severely damages a house that
subsequently is destroyed by fire, the homeowner's recovery from the fire is
limited to the value of the house already damaged by the flood or landslide.
Recovery under homeowner's forms may be on the basis of either full
replacement cost or actual cash value (ACV). Under the former, the owner
suffers no reduction in loss recovery due to depreciation of the property
from its original value. This basis applies if the owner took out coverage that
is at least equal to a named percentage--for example, 80 percent--of the
replacement value of the property.
If the insurance amount is less than 80 percent, a coinsurance clause is
triggered, the operation of which reduces the recovery amount to the value
of the loss times the ratio of the amount of insurance actually carried to the
amount equal to 80 percent of the value of the property. However, the
reduced recovery will not be less than the "actual cash value" of the
property, defined as the full replacement cost minus an allowance for
depreciation, up to the amount of the policy. For example, assume that a
property is valued at $100,000 new, has depreciated 20 percent in value,
insurance of $60,000 is taken, and a $10,000 loss occurs. The actual cash
value of the loss is $8,000 ($10,000 minus 20 percent depreciation). The
operation of the coinsurance clause would limit recovery to 6/8 of the loss,
or $7,500. However, since the actual cash value of the loss is $8,000, this is
the amount of the recovery. Recovery under homeowner's forms is also
limited if more than one policy applies to the loss. For example, if two
policies with equal limits are taken out, each contributes one-half of any
insured loss. Loss payments also are limited to the amount of an insured
person's insurable interest. Thus, if a homeowner has only a one-half interest
in a building, the recovery is limited to one-half of the insured loss. The co-
owners would need to have arranged insurance for their interest.
Life and health insurance
Life insurance.
Life insurance may be defined as a plan under which large groups of
individuals can equalize the burden of loss from death by distributing funds
to the beneficiaries of those who die. From the individual standpoint life
insurance is a means by which an estate may be created immediately for
one's heirs and dependents. It has achieved its greatest acceptance in Canada,
the United States, Belgium, South Korea, Australia, Ireland, New Zealand,
The Netherlands, and Japan, countries in which the face value of life
insurance policies in force generally exceeds the national income.
In the United States in 1990 nearly $9.4 trillion of life insurance was
in force. The assets of the more than 2,200 U.S. life insurance companies
totaled nearly $1.4 trillion, making life insurance one of the largest savings
institutions in the United States. Much the same is true of other wealthy
countries, in which life insurance has become a major channel of saving and
investment, with important consequences for the national economy. Life
insurance is relatively little used in poor countries, although its acceptance
has been increasing.

Types of contracts.
The major types of life insurance contracts are term, whole life, and
universal life, but innumerable combinations of these basic types are sold.
Term insurance contracts, issued for specified periods of years, are the
simplest. Protection under these contracts expires at the end of the stated
period, with no cash value remaining. Whole life contracts, on the other
hand, run for the whole of the insured's life and gradually accumulate a cash
value. The cash value, which is less than the face value of the policy, is paid
to the policyholder when the contract matures or is surrendered. Universal
life contracts, a relatively new form of coverage introduced in the United
States in 1979, have become a major class of life insurance. They allow the
owner to decide the timing and size of the premium and amount of death
benefits of the policy. In this contract, the insurer makes a charge each
month for general expenses and mortality costs and credits the amount of
interest earned to the policyholder. There are two general types of universal
life contracts, type A and type B. In type-A policies the death benefit is a set
amount, while in type-B policies the death benefit is a set amount plus
whatever cash value has been built up in the policy. Life insurance may also
be classified, according to type of customer, as ordinary, group, industrial,
and credit. The ordinary insurance market includes customers of whole life,
term, and universal life contracts and is made up primarily of individual
purchasers of annual-premium insurance. The group insurance market
consists mainly of employers who arrange group contracts to cover their
employees. The industrial insurance market consists of individual contracts
sold in small amounts with premiums collected weekly or monthly at the
policyholder's home. Credit life insurance is sold to individuals, usually as
part of an installment purchase contract; under these contracts, if the insured
dies before the installment payments are completed, the seller is protected
for the balance of the unpaid debt.
Insurance may be issued with a premium that remains the same
throughout the premium-paying period, or it may be issued with a premium
that increases periodically according to the age of the insured. Practically all
ordinary life insurance policies are issued on a level-premium basis, which
makes it necessary to charge more than the true cost of the insurance in the
earlier years of the contract in order to make up for much higher costs in the
later years; the so-called overcharges in the earlier years are not really
overcharges but are a necessary part of the total insurance plan, reflecting
the fact that mortality rates increase with age. The insured is not overpaying
for protection, because of the claim on the cash values that accumulate in the
early years; the policyholder may borrow on this value or may recapture it
completely by lapsing the policy. The insured does not, however, have a
claim on all the earnings that accrue to the insurance company from
investing the funds of its policyholders.
By combining term and whole life insurance, an insurer can provide
many different kinds of policies. Two examples of such "package" contracts
are the family income policy and the mortgage protection policy. In each of
these, a base policy, usually whole life insurance, is combined with term
insurance calculated so that the amount of protection declines as the policy
runs its course. In the case of the mortgage protection contract, for example,
the amount of the decreasing term insurance is designed roughly to
approximate the amount of the mortgage on a property. As the mortgage is
paid off, the amount of insurance declines correspondingly. At the end of the
mortgage period the decreasing term insurance expires, leaving the base
policy still in force. Similarly, in a family income policy, the decreasing
term insurance is arranged to provide a given income to the beneficiary over
a period of years roughly corresponding to the period during which the
children are young and dependent. Some whole life policies permit the
insured to limit the period during which premiums are to be paid. Common
examples of these are 20-year life, 30-year life, and life paid up at age 65.
On these contracts, the insured pays a higher premium to compensate for the
limited premium-paying period. At the end of the stated period, the policy is
said to be "paid up," but it remains effective until death or surrender.
Term insurance is most appropriate when the need for protection runs
for only a limited period; whole life insurance is most appropriate when the
protection need is permanent. The universal life plan, which earns interest at
a rate roughly equal to that earned by the insurer (approximately the rate
available in long-term bonds and mortgages), may be used as a convenient
vehicle by which to save money. The owner can vary the amount of death
protection as the need for it changes in the course of life. The policy offers
flexibility and saves the owner commission expense by eliminating the need
for dropping one policy and taking out another as protection requirements
change.

Adriana Sofletea, English course for Finance Alma Mater
Publishing House, Sibiu, English Collection with the chapters: Kinds of
Insurance ,Property Insurance ,Marine Insurance, Liability Insurance,
Suretyship, Life and Health Insurance, Insurance Practice ,Legal Aspects of
Insurance ,Historical Development of Insurance

Questions:

1. Which are the requirements of an insurable risk and what do
they include?
2. Types of contracts.
3. From the individual standpoint life insurance is a means by
which an estate may be created immediately for one's heirs and dependents.
What about poor counties?
4. In the case of the mortgage protection contract, the amount of
the decreasing term insurance is designed roughly to approximate the
amount of the mortgage on a property. What is your opinion?
5. When is the term insurance most appropiate?

Exercices/ Tests:


From the viewpoint of the insured person, an ........ risk is one for
which the probability of loss is not so high as to require excessive premiums.
What is "excessive" depends on individual circumstances, including the
........attitude toward risk. At the same time, the potential loss must be severe
enough to cause financial ......... if it is not insured against. Insurable risks
include losses to .........resulting from fire, explosion, windstorm, etc.; losses
of life or health; and the legal liability arising out of use of automobiles,
occupancy of........ employment, or manufacture. Uninsurable risks include
losses resulting from price changes and competitive conditions in the
........Political risks such as war or ......... debasement are usually not
insurable by private parties but may be insurable by governmental
institutions.

/for/is/one/of/from/to/as/not/is/ so/the/ viewpoint/ the/ insured/of/
person,/ an/ insurable risk/ which/ the/ probability/ loss/ high/ require/
excessive/ premiums.

3.Find out the mistakes
The major type life insurance contract are term, whole life, and
universal life, but numerable combination of basic types are sold. Term
insurance contract, issue specified periods year are the simple. Protection
under the contract expire at end of the state period, cash value remaining.
Whole life contract, on the other hand, run for whole the insured's life and
gradually accumulate cash value. The cash value, which is less the face
value the policy, is paid to the policyholder contract matures or is
surrendered.Universal life contracts, relative new form coverage introduce
in United States in 1979, have become major class life insurance. They
allow owner decide the timing and size the premium and amount death
benefits the policy. In the contract, insurer make a charge each month
general expenses and mortality costs and credits the amount of interest
earned the policyholder. There are two general type of universal life

Tema XIII. Theme XIII. MICROECONOMICS AND
MACROECONOMICS

1.obiectivele specifice ale temei:((the main objectives)

2. competene specifice dobndite de student:(( specific skills of the
student)
* fluen n exprimare
* cunoaterea proceselor n micro i macroeconomie, n economia de
pia

3.cuvinte cheie: (key words)economy, product, process,
customer,consumer.

4. structura modulului de studiu: (the structure of the study) roles of
microeconomics, macroeconomics, the main issues, economic growth,
G.D.P, G.N.P

Microeconomic analysis offers a detailed treatment of individual
decisions about particular commodities. Microeconomists tend to offer a
detailed treatment of one aspect of economic behaviour but ignore
interactions with the rest of the economy in order to preserve the simplicity
of the analysis. Macroeconomics emphasizes the interactions in the
economy as a whole. It deliberately simplifies the individual building
blocks of the analysis in order to retain a manageable analysis of the
complete interaction of the economy.

The Content

Many economists specialize in a particular branch of the subject. For
example, there are labour economists, energy economists, monetary
economists, and international economists. What distinguishes these
economists is the segment of economic life in which they are interested.
Labour economics deals with problems of the labour market as viewed by
firms, workers, and society as a whole. Urban economics deals with city
problems: land use, transport, congestion, and housing. However, we need
not classify branches of economics according to the area of economic life in
which we ask the standard questions what, how, and for whom. We can also
classify branches of economics according to the approach or methodology
that is used. The very broad division of approaches into microeconomic and
macroeconomic cuts across the large number of subject groupings cited
above.
Microeconomic analysis offers a detailed treatment of individual
decisions about particular commodities.
For example, we might study why individual households prefer cars
to bicycles and how producers decide whether to produce cars or bicycles.
We can then aggregate the behavior of all households and all firms to
discuss total car purchases and total car production. Within a market
economy we can discuss the market for cars. Comparing this with the market
for bicycles, we may be able to explain the relative price of cars and bicycles
and the relative output of these two goods. The sophisticated branch of
microeconomics known as general equilibrium theory extends this approach
to its logical conclusion. It studies simultaneously every market for every
commodity. From this it is hoped that we can understand the complete
pattern of consumption, production, and exchange in the whole economy at a
point in time.
If you think this sounds very complicated you are correct. It is. For
many purposes, the analysis becomes so complicated that we tend to lose
track of the phenomena in which we were interested. The interesting task for
economics, a task that retains an element of art in economic science, is to
devise judicious simplifications which keep the analysis manageable without
distorting reality too much. It is here that microeconomists and
macroeconomists proceed down different avenues. Microeconomists tend to
offer a detailed treatment of one aspect of economic behaviour but ignore
interactions with the rest of the economy in order to preserve the simplicity
of the analysis. A microeconomic analysis of miners wages would
emphasize the characteristics of miners and the ability of mine owners to
pay. It would largely neglect the chain of indirect effects to which a rise in
miners wages might give rise. For example, car workers might use the
precedent of the miners pay increase to secure higher wages in the car
industry, thus being able to afford larger houses which burned more coal in
heating systems. When microeconomic analysis ignores such indirectly
induced effects it is said to be partial analysis.
In some instances, indirect effects may not be too important and it
will make sense for economists to devote their effort to very detailed
analyses of particular industries or activities. In other circumstances, the
indirect effects are too important to be swept under the carpet and an
alternative simplification must be found. Macroeconomics emphasizes the
interactions in the economy as a whole. It deliberately simplifies the
individual building blocks of the analysis in order to retain a manageable
analysis of the complete interaction of the economy. For example,
macroeconomists typically do not worry about the breakdown of consumer
goods into cars, bicycles, televisions, and calculators. They prefer to treat
them all as a single bundle called consumer goods because they are more
interested in studying the interaction between households purchases of
consumer goods and firms decisions about purchases of machinery and
buildings.
Macroeconomics is the study of the economy as a whole.
Macroeconomics is concerned not with the details the price of
cigarettes relative to the price of bread, or the output of cars relative to the
output of steel but with the overall picture.
The distinction between microeconomics and macroeconomics is
more than the difference between economics in the small and economics in
the large, which the Greek prefixes micro and macro suggest. The purpose of
the analysis is also different.
A model is a deliberate simplification to enable us to pick out the
key elements of a problem and think about them clearly. Although we could
study the whole economy by piecing together our microeconomic analysis of
each and every market, the resulting model would be so cumbersome that it
would be hard to keep track of all the economic forces at work.
Microeconomics and macroeconomics take different approaches to keep the
analysis manageable. Microeconomics places the emphasis on a detailed
understanding of particular markets. To achieve this amount of detail or
magnification many of the interactions with other markets are suppressed. In
saying that a tax on cars reduces the equilibrium quantity of cars we ignore
the question of what the government does with the revenue. If government
has to borrow less money it is possible that interest rates and the exchange
rate will fall and that improved international competitiveness of U.K car
producers will increase the equilibrium output of cars in the U.K.
Microeconomics is a bit like looking at a horse through a pair of binoculars.
It is great for details but sometimes we get a clearer picture of the whole race
by using the naked eye. Because macroeconomics is concerned primarily
with the interaction of different parts of the economy, it relies on a different
simplification to keep the analysis manageable. Macroeconomics simplifies
the building blocks in order to focus on how they fit together and influence
one another.
The main issues in macroeconomics:
1.Inflation the annual inflation rate is the percentage increase per
annum in the average price of goods and services.
What causes inflation? The money supply? Trade unions?
Why do people mind so much about inflation? Does it cause
unemployment?
2.Unemployment. It is a measure of the number of people registered
as looking for work but without a job. The unemployment rate is the
percentage of the labour force that is unemployed. The labour force is the
number of people working or looking for work. It excludes all those from
rich landowners to heroin addicts- who are neither working nor looking for
work.
.Why has it increased so much?Are workers pricing themselves out
of jobs by greedy wage claims? Is high unemployment necessary to keep
inflation under control, or could the government create more jobs?
3.Output and Growth .Real gross national product measures the
total income of the economy. It tells us the quantity of goods and services
the economy as a whole can afford to purchase. Increases in real gross
national product are called economic growth.
-What determines the level of real GNP? Why do some countries
grow faster than others?
4. Macroeconomic policy. Almost every day the newspapers and
television refer to the problems of inflation, unemployment, and slow
growth. These issues are widely discussed; they help determine the outcome
of elections, and make some people interested in learning more about
macroeconomics. The government has a variety of policy measures through
which it can try to affect the performance of the economy as a whole. It
levies taxes, commissions spending, influences the money supply, interest
rates, and the exchange rate, and it sets targets for the output and prices of
nationalized industries.
What the government can and should do is the subject of lively
debate both within the field of economics and in the country at large. As
usual, it is important to distinguish between positive issues relating to how
the economy works and normative issues relating to priorities or value
judgements.
Economic Growth
There is general agreement amongst economists concerned with the
problems of less developed countries (LDCs) that a distinction should be
made between economic growth and economic development.
Economic growth is defined as an increase in the productive
capacity of an economy over time, giving rise to an increase in real National
Income (NI). If the rate of growth of income is greater than the rate of
growth of population, income per capita will also rise.
Economists distinguish between the Gross Domestic Product (GDP)
and the Gross National Product (GNP) of an economy. GDP is the total final
output of goods and services produced within an economy for any given
year, by both residents and non-residents. GNP is equal to GDP plus net
factor (or property) incomes from abroad (that is, the difference between
returns to the inhabitants of the country from property located overseas
minus the returns accruing to foreigners from their property located within
the reporting country). For most LDCs, net property income from abroad is
likely to be negative and thus GDP will be greater than GNP.
Both domestic product and national product can be expressed in net
terms (that is, after allowing for capital depreciation) and either at market
prices or factor costs (that is, including and excluding respectively, indirect
taxes net of subsidies). Net National Product (NNP) at factor cost is identical
to National Income.
For many LDCs, economic growth has been rapid and sustained for
much of the post-Second World War period. World Bank projections for the
1980s predicted that higher rates of economic growth would be difficult to
reach and sustain and that there would occur a widening in both the relative
and absolute gaps between the richest and the poorest countries, including
the gap between the middle- and low-income LDCs.
In the early years of the evolution of development economics as a
distinct area of study, economic growth and economic development were
generally seen as being synonymous. The deficiencies of using GNP per
capita as an indicator of economic welfare (and by implication, the level of
economic development) were recognised by economists, however, and over
time it became increasingly evident that economic growth on its own,
although undoubtedly a necessary condition, was certainly not a sufficient
condition to ensure increases in economic, let alone social, welfare.Within
the concept of economic development was some notion of progress.
Economic development meant growth plus structutal and institutional
change which involved the move towards certain normative goals or
objectives.Growth without development was a possibility if increases in per
capita incomes were not accompanied either by structural changes or by the
diffusion of the gains in real income among all sectors of the population.


Adriana Sofletea ,Written English for Economics Alma Mater
Publishing House, Sibiu, English Collection,with all vocabulary,texts and
exercises.


Questions:

1.What does microeconomic analysis offer? What is
macroeconomics concerned with?
2. Which are the main issues in macroeconomics?
3.Define GDP and GNP.
4. Both domestic product and national product can be expressed in
net terms. In what respect .
5. The deficiencies of using GNP per capita as an indicator of
economic welfare (and by implication, the level of economic development)
were recognised by economists. What happened?

Exercices and tests

1. Complete with the right words
Microeconomics and macroeconomics take ....... approaches to keep
the analysis manageable. Microeconomics places the emphasis on
a........understanding of particular markets. To achieve this amount of .....or
magnification many of the interactions with other ........are suppressed. In
saying that a....... on cars reduces the equilibrium quantity of cars we ignore
the question of what the government does with the revenue. If government
has to ........less money it is possible that interest ......and the exchange rate
will fall and that improved international competitiveness of U.K car
producers will increase the equilibrium output of cars in the U.K. .
a/microeconomic/at/ is/ a/ bit/of/ like/ looking/ horse/ through/ a/
pair/ binoculars/. It/a/ /great/ but/for/ details/ sometimes/a/get/ we/ clearer
/picture /by/of/ the/ whole/ race/the using/naked /eye.

3.Find out the mistakes:

Economists distinguish between Gross Domestic Product (GDP) and
the National Product (GNP) of economy. GDP is the total fin put of good
and service produced within a economy for any year, by both residents and
non-residents. GNP is equal to GDP net factor (or property) income from
abroad (that is, the difference between returns to the inhabitants of the
country from property locate overseas minus the return accrue to foreigner
from the property located with the reporting country). For most LDCs, net
property income from abroad is likely to negative and thus GDP will great
than GNP. Both domestic product and national product be expressed in net
terms (that is, after allowing for capital depreciation) and either at market
price or factor cost (that is, including and excluding respectively, indirect
taxe net of subsidie). Net National Product (NNP) at factor cost is identic to
National Income.

SUPPLEMENTARY READING

I. Business English

We are living in an increasingly interconnected economic
landscape. More than ever, our colleagues and customers might be half a
world away. Here are some opinions to some questions:

1.What is driving the need for improved business English
communication in global companies?
Global companies are going through transition as globalization
and global integration have taken hold. Because capital and labor are being
moved across borders, companies are organizing and operating differently.
In the past, companies used to organize more on a regional basis. Now they
are truly global. And as companies have gone global, so have the projects
and teams. Global communication is necessary at all levels in the
organization, not just at the executive level.
Layered on top of that is the availability of technologies that enable
and encourage instant communication. Email, virtual meetings, conference
calls, instant messaging all of these technologies are connecting people
like never before. And English is the common denominator, the language
that allows people to use these technologies to communicate and collaborate
effectively.
As local companies go global, they face the same challenges. In the
past, it was sufficient for employees and teams to operate in their local
languages. But now, to grow and succeed in the global marketplace,
everyone needs to be able to work efficiently in English.
2.Do you see that as something thats going to continue? As
places like China and Middle Eastern countries become more and more
economically active in the world, do you think that English is going to
continue to be the dominant business language?
We think it will. In the Middle East, there is no doubt that English is
the language of business. Without English skills it is very difficult to do
business across the region and the world. The growth of the GlobalEnglish
Corporate Learning Service in the Middle East, particularly in the UAE and
Saudi Arabia, has been largely driven by Emiratisation and Saudiisation.
Clients like Emirates NBD in Dubai have told us that GlobalEnglish is
making a direct contribution to their Emiratisation objectives by enabling
them to improve business English communication skills throughout the
organization, which allows them to hire and promote more UAE Nationals.
Also, if you look at ministries of education worldwide, you see that
many countries like Chile, Korea or even Poland and Czechoslovakia are
adopting English at lower and lower grades in schools, thus further
validating that English will continue to have significant importance for many
years to come.
3. How does English as a common language help global teams
reach common business goals?
English is an enabler. It is what allows employees anywhere in
the world to work together to accomplish their goals. Ill give you an
example. Lets say a pharmaceutical company is doing research and
development, and theyve just introduced or are about to introduce a new
drug. Its likely that the research team is global, with members from several
different countries all having to work together. The language theyre using
to communicate is English. And then, when the drug is ready to be released,
the global sales teams need to be educated on how the drug works, its side
effects, and other key information. All of this communication is happening
in a very rapid manner and in English. So global teams have to be prepared.
We dont expect that global employees will be proficient to the level of
reading Shakespeare. But they do need to be able to communicate effectively
in relevant business contexts so they can accomplish the organizations
goals.
4. What about remote online solutions like the GlobalEnglish
service? What are the keys to engaging users and keeping them
motivated?
Throughout history, people have learned in classrooms from
teachers. This has been an accepted and comfortable way to learn. But today,
in global business, this approach to accomplish their goals. Ill give you an
example. Lets say a pharmaceutical company is doing research and
development, and theyve just introduced or are about to introduce a new
drug. Its likely that the research team is global, with members from several
different countries all having to work together. The language theyre using
to communicate is English. And then, when the drug is ready to be released,
the global sales teams need to be educated on how the drug works, its side
effects, and other key information. All of this communication is happening
in a very rapid manner and in English. So global teams have to be prepared.
We dont expect that global employees will be proficient to the level of
reading Shakespeare. But they do need to be able to communicate effectively
in relevant business contexts so they can accomplish the organizations
goals.
5. What about remote online solutions like the GlobalEnglish
service? What are the keys to engaging users and keeping them
motivated?
Throughout history, people have learned in classrooms from
teachers. This has been an accepted and comfortable way to learn. But today,
in global business, this approach is no longer practical. So, in the
development of the GlobalEnglish service and through our implementation
approach, we address user engagement and ongoing motivation in some key
ways.
First, allowing users to personalize their learning experience by
creating a personal learning plan helps to engage them at the outset. They are
able to identify the learning that is most relevant to them based on their
specific needs and goals. Participants receive information about their
ongoing progress through reports and emails, which keep them focused on
their strengths and opportunities for improvement. We also send emails on a
regular basis that are specifically designed to keep people engaged. These
are just a few examples of how we address motivation through the online
service.
Equally important is the implementation process that supports the
deployment of the technology. We encourage our clients to secure strong
senior sponsorship for their program and to build the improvement of
English communication skills into their performance
management/development planning process. This further engages the users
and their managers, and then managers are prepared to provide ongoing
recognition and reinforcement for participants.
6. How does the GlobalEnglish Corporate Learning Service
compare to classroom-based training?
In todays increasingly globalized world, the Internet is bringing the
world closer together, and traditional face-to-face methods are simply
incapable of providing the consistent, measurable and scalable benefits that
GlobalEnglish provides. As opposed to classroom, online is extremely
consistent. People see the same interface, no matter where they are. The
instruction is uniform and not predicated on how good a teacher is. Its also
very scalable so you can deploy it all over the world, even in towns where
there are no teachers. English language teachers are not as common in
smaller places. So this is accessible to many more people. Its also extremely
measurable and we do a lot of assessments on its effectiveness.
Also, online learning with GlobalEnglish is highly personalized.
You are able to make your own plan so you can focus on the objectives and
skills that are most important and relevant to you. With classroom
instruction the teacher has to teach to the common needs of all learners. But
with online learning, users can have a much more efficient experience.
Online learning also offers the added benefit of ongoing reinforcement and
just-in-time support. For example, the GlobalEnglish service offers a number
of features like text-to-speech, writing templates, and translation tools
that provide users support when and where they need to use English on the
job.
7. How do you see the e-learning market developing over the
next few years? Do you think its something thats going to be
increasingly in demand?
Absolutely. There are a billion people learning English today, and
according to the British Council that number is going to go up to two billion
in the next 10 years. We dont expect the number of teachers to grow at that
kind of rate. I think the need for English is spreading throughout companies
to the point where it is no longer a requirement for only the upper levels. So
if you want a scalable solution, its going have to be online. Its highly cost-
effective and you can teach more people for the same amount of money.
Also, as younger generations enter the workforce individuals who
have grown up using technology in all aspects of their lives they will want
and demand learning experiences that are engaging, dynamic, flexible, and
technology-based.
We are excited about the opportunity that we have in front of us as
companies are becoming more global. Globalization will continue, and we
are helping organizations achieve their global growth goals as well as
democratizing the learning of English.

II. Difficult People and Awkard Situations

At work and in our leisure time we are often confronted by difficult
people and awkward situations and they seem to come at us from every
angle. How can we cope? People do not change easily.
What is a difficult person? In general they are people who
demonstrate bad behavior, who dont care how their behavior affects others
and who even use it to their advantage.
Being difficult is effective because it works but in the short term.
Long term relationships need a greater complexity of behavior. Difficult
people hope that due to their behavior we will either start to give priority to
their wishes or that you will leave them alone.
Difficult people are not restricted to the workplace. Working
relationships have few emotional ties and are more detached whereas within
the home environment lurks a complex web of history and emotions.
When you deal with difficult people effective listening is very
important; you must be able to tune in to what he/she is trying to tell you. A
good listening means: to hear the message- genuinely listen to what is being
said; to interpret the message- to take in all aspects of body language, tone of
voice and interpret their significance; to evaluate the message; to respond to
it.
It is not always the people that are difficult but sometimes it is the
situation. Working relationships and environments bring together a whole
host of situations for which you cannot always prepare. At some point in
your career you will have to deal with difficult situations. They come up at
the workplace. Difficult colleagues create added pressure.
Then, conflict can hardly be avoided. You also have to cope with
difficult managers and with difficult staffs. We are all busy people.
Regardless the type of work we do, more and more of the time people are
feeling crowded by events. Making busy and hectic life manageable
becomes a skill which anyone can benefit from.
What happens when we cannot be properly efficient with our
time?
What happens when we are confronted with difficult people and
situations?
How can we cope because people do not change very easily?
Well, behavior is difficult, understanding too, relationships and time
management are sometimes hard to work out with.
We can choose whether or not to spend time with difficult
people but unfortunately at work we do not have this luxury. Here, we may
deal with difficult coleagues or a difficult manager or difficult customers...
So, there are some tips to be taken into consideration:
we have to read behind the behavior.
differentiate between work and home environments.
deal out real feelings.
gain management support.
understand efficiency and effectiveness
find the barriers to time management
realize mental barriers and understanding people barriers
we have to live with difficult coleagues who barely fit into the
team
we have to understand the importance of anger and conflict
management
At work, situations in themselves are difficult; because some people
are not prepared and we can hardly face them. Structures are flatter and
therefore there is more autonomy; decisions that would previously have been
passed up the line of authority are now being taken by the workforce; the
threat of redundancy looms heavily even over what were once job for life
careers, making even the smallest decision critical. The speed at which these
decisions have to be made is ever increasing as more people want instant
results.
However difficult or awkward the person, we need to remember that
we are aiming for a win-win situation. If we adopt a I win, you lose stance
we will ensure that the other person loses face or is in danger of being
humiliated. If we adopt the I lose, you win stance we will be allowing
them to walk all over you. Then, to be in the I lose, you lose situation is of
no benefit to either of us. Any kind of communication will be found
difficult. Ensuring that a win-win is achieved takes great skill but also leaves
both parties feeling confident and ready to take communication further.
Effective listening is important when we deal with difficult people.
The person is trying to covey a message and we must be able to tune in to
what he is trying to tell us. A good listening means:
- to hear the message
- to interpret the message
- to evaluate the message
- to respond to the message
Dealing with customers features in many peoples working lives and
can be both rewarding and frustrating. We are all customers of one thing or
another and therefore we can identify with the role of the customer in
purchasing a product or service.
Customers are vital to business. Without them the business cannot
survive and today business is much morecustomer aware and customer
focused. There is much choice (for the customer) and competition(for the
businesses) that they need to forge relationships with their customers and
maintain customer loyalty to their clients.
When faced with a difficult customer we have to:
try to ascertain his name early in the conversation and continue to
use it throughout
let him know your name and position
maintain eye contact and use positive listening body language
allow him to outline the problem in his own words while taking
notes
ensure a coleague is nearby in case of threatening
do not be bullied into resolving the problem immediately if you are
unsure; promise a speedy response and give a day/date for settlement
Difficult people are not restricted to the work place. The difference
lies in the more complex relationships we have in our home and with our
families and our attitude to them.
Working relationships have few emotional ties and are far more
detached whereas within the home environment lurks a complex web of
history and emotions.
It is likely that you are more vulnerable in your home as sensitivities
are higher. The stakes are much higher in upsetting the status quo at home
than at the work place.
But working relationships and environments bring together a whole
host of situations for which you cannot always prepare.
All of us meet difficult situations at some point in our career because
the workplace in itself is complex and because we as human beings have an
inherent complexity.
So, we have to accept difficult people as they are to be found
everywhere. At work they are fixed somehow in our life and we can hardly
choose to walk away from them. Outside work they pervade our social and
private life but we do not necessary live with such people. Each time we deal
with a difficult situation, life will become easier as it will no longer hold the
same fears for you.
We will not fear the people and situations that haunt and hold back
so many others and may even feel the need to surge ahead in our own career.
The business of the future needs people who can communicate
effectively or carry out tasks and manage time effectively. It is in this way
that you can become successful.
If looking around we can see that the people at the top are the people
who can achieve results. More and more these results can be achieved
through good people management.
People management is a great skill and dealing with difficult people
is part of that skill. Then, we do have to work on our own methods and
techniques, injected with our natural personality and watch it pay dividends
in terms not only of our confidence but of our career.
Difficult people and awkward situations are everywhere; therefore,
running away is not really an option unless you want to live a hermit for the
remainder of your days. So, a far better strategy is to learn to deal with such
situations; this does not mean being weak or let everyone take advantage of
you; it means having some firm strategies for dealing with people and
situations

III. The Secrets of Achieving More with Less

Some things are likely to be considered more important than others.
You can achieve more with less effort, time and resources. We think that
there is an inbuilt imbalance between causes and results, inputs and outputs,
effort and rewards. But each individual can be more effective and happier,
each profit seeking corporation can become very much more profitable, each
non profit organization can also deliver more useful outputs, every
government can ensure that its citizens benefit much more from its
existence. For everyone and every institution it is possible to obtain much
more that is of value and avoid what has negative value, with less input of
effort, expense or investment. At the heart of this progress there is a process
of substitution. Resources that have weak effects in any particular use are
not being used sparingly. Those which have powerful effects are being used
as much as possible. Every resource is ideally used where it has the greatest
value. Wherever possible, weak resources are developed so that they can
mimic the behaviour of the stronger resources. Business and markets have
used this process for many years.
And so we call for a well known principle namely the
80/20Principle which tells us that a minority of causes, inputs, efforts lead
to a majority of the results, outputs or rewards and that our daily lives can be
improved by using this principle. A new way to use this principle is the
80/20 thinking, that is about any issue that is important to you and asks you
to make a judgement on whether the principle is working. This is the daily
life , non quantitative putting into practice of the principle. It is used to
change behaviour and to focus on the most important 20 per cent. It works
when it multiplies effectiveness. Action resulting should lead us to get much
more from much less. When using this principle we do not assume that its
results are good or bad or that the powerful forces we observe are
necessarily good. We decide whether they are good and either determine to
give the minority of powerful forces a further shove in the right direction or
to work out how to frustrate their operation.
By putting it into practice, this principle implies that we should do
the following:
- celebrate exceptional productivity, rather than raise average
efforts.
- look for the short cut, rather than run the full course
- exercise control over our lives with the least possible effort
- be selective
- strive for excellence in few things, rather than good
performance in many
- delegate or outsource as much as possible in our daily lives and
be encouraged rather than penalized by tax systems to do this
- choose our careers and employers with extraordinary care
- only do the thing we are best at doing and enjoy most
- look beneath the normal texture of life to uncover ironies and
oddities
- in every important sphere work out where 20 per cent of effort
can lead to 80 per cent of returns
- calm down, work less and target a limited number of very
valuable goals where the 80/20 principle will work for us, rather than
pursuing every available opportunity
- make the most of those few lucky streaks in our life where we
are at our creative peak and the stars line up to guarantee success.
The 80/20 Principle applied to business has one key theme- to
generate the most money with the least expenditure of assets and effort.
The classical economists of the XIXth and XXth century developed
a theory of economic equilibrium and of the firm that has dominated
thinking ever since. The theory states that under perfect competition firms
do not make excess returns, and profitability is either zero or the normal cost
of capital, the latter usually being defined by a modest interest charge. Then
the theory of the firm goes like this: in any market, some suppliers will be
better than others at satisfying customer needs. They will obtain the highest
price achievements and the highest market shares.
More than this, the objective of 80/20 thinking is to generate action
which will make sharp improvements in your life and that of the others.
Thinking escapes from the linear logic trap by appealing to experience,
introspection and imagination. If we are unhappy we do not worry about the
proximate cause. We think about the times we have been happy, we do not
look for causes of failure, we imagine and then create the circumstances that
will make us both happy and productive. We must take into consideration
that:
Our life can be affected by a few events and a few decisions.
The decisions are often taken by default rather than conscious choice; we let
life happen to us rather than shape it; we can improve it by admitting the
turning points and by making the decisions that will make us happy and
productive.
There are always a few key inputs to what happens and they are
often not the obvious ones; if the key causes can be identified and isolated
we can very often exert more influence on them that we think possible.
Everyone can achieve something significant. The key is not the
effort but to find the right thing to achieve. You are no doubt more
productive at some things than at others but one have to dilute the
effectiveness of this by doing too many others where our skill is nowhere
near as great.
There are always winners and losers and always more of the
latter. You can be a winner by choosing the right competition, the right team
and the right methods to win.
Most of our failures are in races for which others enter us. Most
of our success comes from races we ourselves want to enter. We fail to win
most races because we enter too many of the wrong ones: their ones, not our
ones.
Few people take objectives really seriously. They put average
effort into too many things, rather than superior thought and effort into a few
important things. People who achieve the most are selective as well as
determined.
Most people spend most of their time on activities that are of
low value to themselves and others. The 80/20 thinker escapes this trap and
can achieve much more of the few higher value objectives without
noticeable more effort.
An important decision is the choice of allies. Almost nothing
can be achieved without allies; but most people do not choose them
carefully. Some of us have too many and do not use them properly. 80/20
thinkers choose a few allies carefully and build the alliances carefully to
achieve their specific objectives.
Money used rightly can be a source of opportunity to shift
towards a better lifestyle.
Few people spend enough time and thought cultivating their
own happiness. They seek indirect goals (money, promotion), that may be
difficult to attain and will prove to be extremely inefficient sources of
happiness. Happiness not spent today does not lead to happiness tomorrow.
It will atrophy if not exercised. The 80/20 thinkers know what generates
their happiness and pursue it consciously, cheerfully and intelligently, using
happiness today to build and multiply happiness tomorrow.
The logic of professional success leads to ever greater
professional demands. To succeed you must aim for the top. To get there,
you must turn yourself into a business. To obtain maximum leverage, you
must employ a large number of people. To maximize the value of your
business, you must use other peoples money and exploit capital leverage- to
become even larger and more profitable.
If you decide which shares to buy it is good to specialize in an
area in which you consider yourself an expert. Possibilities are almost
endless; you could specialize in shares of the industry in which you work or
of your hobby, your local area or anything else you are interested in. if you
like shopping you might decide to specialize in the shares of retailers. Then,
if you notice a new chain springing up, where new store seem to be full of
keen shoppers, you might want to invest in those shares.
The key to making a career out of an enthusiasm is knowledge.
You must know more about an area than anybody else does; then work out a
way to market it, to create a set of loyal customers. It is not enough to know
a lot about a little. You have to know more than anybody else, at least about
something. You should not stop improving your expertise until you are sure
you know more, and are better in your niche than anybody else. Then,
reinforce your lead by constant practice and do not expect to become a
leader unless you really are more knowledgeable than anyone else.
Many years ago, Aristotle said that the goal of all human activity
should be happiness. It seems that we havent listened too much to him.
Perhaps he should have told us how to be happy. So, he could have started
by analyzing the causes of happiness and unhappiness. Happiness is
profoundly existential. Past happiness may be remembered or future
happiness planned, but the pleasure it gives can only be experienced in the
now. One of the 80/20 hypothesis would be that 80 per cent of happiness
occurs in 20 per cent of our time. It is interesting that those who are happy
with most of their lives are more likely to be happier overall; those whose
happiness is concentrated in short bursts are likely to be less happy with life
overall.
Are there some ways to be happier?
Identify the times when you are happiest and expand them as
much as possible.
Identify the times when you are at least happy and reduce them
as much as possible.
Or :
-spend more time on the type of activities that are very effective at
making you happy and less time on other activities.
- start by cutting off the spots of unhappiness, the things that
tend to make you actively unhappy.
The best way to start being happier is to stop being unhappy. You
have more control over this by avoiding situations where experience
suggests you are likely to become unhappy.
- for such activities that are ineffective at making you happy it
is good to think systematically of ways that you could enjoy more.
- by cultivating habits of optimism we can have a happier life
as optimism is an ingredient for both success and happiness.
- we must sometimes change the way we think about events;
we can train ourselves to break the self reinforcing pattern of depression by
simple steps such as seeking out company, changing our physical setting or
forcing ourselves to exercise.
- we can change the way we think about ourselves; we can make
ourselves happy or unhappy by the way we decide to feel. We must make
the choice that we want to be happy. We owe it to ourselves and to other
people too. A positive self image is very important, a sense of self worth can
and should be cultivated; you know that you can do it: give up guilt, forget
about your weaknesses, focus and build on your strengths, remember all the
good things you have done, all the small and big achievements.
- we tell ourselves stories about us. We have to do this and we
will increase the sum of human happiness by starting with ourselves and
radiating out to others.
- we can make ourselves happier by changing events we
encounter and that make us depressed or miserable.
- we can become happier by changing the people we see most(
the amount of time spend with them has to be changed.

IV.ADVERTISING

One of the most powerful tools in marketing is the prudent use of
words in advertising. Judiciously used words have the power to entice and
hold the attention of potential customers. This leads to either immediate sale
or sales in the future, but most importantly it can establish the all important
relationship between customer and brand. On the flip side words can result
in the loss of potential customers and create distaste towards your product.
Using the right words in the right place under the right
circumstances is key to any advertising effort, but it is especially important
when ads are purely based on terminology like in the case of text ads. Text
ads are common in e-mails and on the web but many marketers are only
beginning to realize it's potential. Statistics claim that text ads gain better
results on search engine sites than on other websites, the explanation being
that web users enter search engines looking for these ads while they fail to
notice them in other websites because they simply aren't looking for it.
Using the right words can make all the difference in attracting customers to
your text ad and holding their attention long enough to make a sale.
Here are ten words that will help you hone your sales vocabulary
and lead to productive advertising home business.
1. FREE- this is a timeless motivator. It may sound clich but it still
works and probably will continue to work for many years to come. Sub
consciously human beings just can't seem to resist something that's free.
2. GUARANTEE- makes a customer feel secure.
3. SAVE- this suggests that you are offering the customer an
opportunity to save his money. Although in reality this may not be true,
customers still react favorably to the "save whatever%" offer.
4. LIMITED- the word creates a sense of urgency that is appealing
to many potential customers.
5. NEW- everyone wants to get in on what's new. This word arouses
our curiosity and never fails to deliver resulting in the phenomenon that
sales spike just after the launch of a new product.
6. EXCLUSIVE- most high end brands are built on this philosophy.
'Exclusive' arouses the attention seeking alter ego from within.
7. PROVEN- human beings are wired to fear the unknown. If a
product is tried, tested and proven it will eliminate fear and smoothen the
path towards closing sale.
8. RESULTS- customers want to know what they can expect from
the purchases they make.
9. IMPROVE- evolving is basic human instinct therefore consumers
always react favorably to products and services that they perceive to have
improved.
10. IMMEDIATE- consumers expect everything on the web to be
instant, so much so that if something is not immediate, it is unacceptable.
Businesses exist to sell products and services to the public for a
profit. If the public does not know that your business exists, finding
customers to make enough purchases for your business to survive will be a
failure without some additional help. It is an important factor in business
because it gets the word out about your company and establishes a presence
and a brand about what you are offering.
One of the best ways to advertise is by word of mouth, also known
as referral marketing or referral advertising. When other people hear good
things about your business or they have a positive experience shopping with
your business, they become walking billboards for your business without
you having to spend additional money on ads to create it.
Advertising locally through newspapers and fliers as well as
billboards can be an effective source of it when your business is up-and-
coming, but expanding your advertising sources becomes important as you
grow. You can extend your advertising approach out to television
commercials as well as radio in order to reach wider audiences, but the
revenue from your business should be able to pay for it costs for these
methods to bring you the value you are looking for.
Creating an assortment of advertising and marketing techniques will
help you to reach many different customer bases. Identifying a target market
to advertise your business to is also very valuable, because a target market of
customers will be more interested in your business than trying to appeal to
masses of people with varying interests. Making sure that enough people
know that you exist who are naturally interested in your product as a target
is a great way to bring in customers and increase the profit of your business.
Creating an impulse in potential customers to purchase your product
is very important when it comes to advertising. It can be easy to create it that
puts your customer in a mindset not to purchase your product, either by
unintentionally avoiding the sale of your product by focusing on information
or topics that draw attention away from your product. Be sure to study the
needs of your target market to get the best results.
There are many decisions to make in terms of media and advertising
for the successful promotion of your business. Should you employ an
advertising agency? When is the right time to promote your business? What
should you promote, how and to whom? What are the best ways of reaching
the target audience? Effectively, this all comes down to one thing - how can
you achieve best value for money in order to increase sales?
There are many ways in which advertising and promoting your
business can be achieved, and with more opportunities and channels through
which your message can be communicated, the choices and options available
are wider than ever. This can make the challenge of deciding on the best
route to follow for the promotion of a product or service much harder, but at
the same time, very exciting.
One of the things to bear in mind is that the world we live in today is
far more cynical and skeptical than it was only a couple of decades ago. We
have all become familiar with the constant bombardment of messages,
promotions, advertising and offers, that we have become adapted to this
culture. Part of that adaptation involves being able to filter out those
messages, forms of media and advertising which we do not find immediately
relevant or of any importance to us personally.
This is perhaps the biggest challenge which any business faces when
considering running an advertising campaign, or actively promoting goods
or services. In a culture flooded with advertising, how is it possible to ensure
that your messages get through?
The key to creating a successful form of advertising is to know five
things:
A) What are you promoting?
B) Why are you promoting it?
C) To whom are you promoting it?
D) How will you reach them?
E) What are your criteria for success?
These five questions are, if you like, the five rules to which you
must tie any advertising campaign, for without rock solid answers to each of
these questions any promotional campaign is destined to, at best, fail
entirely, and at worst, also cost you a fortune.
What are you Promoting?
The first of these questions relates to considering specifically what it
is that you are going to promote. Certainly if your business has a very small
number of products or services, this may involve promoting the business as a
whole, but generally, people aren't interested in the business - it's the
products and services which will be of more relevance. Remember, if the
media and advertising do not strike people as being relevant, they'll be
filtered out. Keep your promotion specific.
Why are you Promoting It?
The second question might seem odd, but is often ignored. Once you
know what it is that you are promoting, understand clearly why you are
promoting it. This could be to increase sales, or it could be to help you
balance the business more in that direction, to counter a competitor's
product, or to promote an entirely new product or service. Understanding
why you are promoting it will help you to understand the how.
To Whom are you Promoting It?
Now you know what you're promoting and how, you need to think
carefully whom it is that you need to reach. It is very rare, if indeed it ever
happens, that your message is destined to be heard by everybody. There will
always be a group that you need to reach more than any other. Perhaps this
could be based on age, interests, needs, financial position, employment
position, geographical location, educational level, health condition and so
on. Try to be as specific as possible in determining your target audience.
How Will you Reach Them?
Knowing to whom your promotion is targeted allows you to consider
the best way to reach them. If you're targeting the unemployed, then how
will you reach that kind of person most effectively? If you're targeting
children, then clearly offering free coffee mugs on the street corner is going
to be as effective as trying to reach city executives by placing adverts on
bingo websites.
With all forms of media available, from website advertisements to
flyers, from glossy color adverts in magazines to television and radio
advertisements, and from billboards to email marketing, there are a
tremendous number of options from which to choose, and each will help you
to reach a specific audience type.
What are your Criteria for Success?
With all four of these questions clearly answered, you may well
think that you are on the way to a successful advertising campaign, but there
is still one very important question that remains. How will you know if your
media and advertising has been successful or not? Having performance
criteria allows you to determine whether the tactics chosen have, in that
particular combination, worked. If not, then perhaps you need to reconsider
the answers to the first four questions. But no race was ever won that didn't
have a finishing line, and no sea ever crossed with land on which to plant the
flag of success.
All media and advertising has a goal, a means of attaining that goal a
means of measuring how successfully it has been attained. If you are unsure
to do all of that yourself, there are professionals available to help you. Many
of the most successful businesses contract out the more specialized aspects
of what is not their core business: media and advertising.
There are many decisions to make in terms of media and advertising
for the successful promotion of your business. Should you employ an
advertising agency? When is the right time to promote your business? What
should you promote, how and to whom? What are the best ways of reaching
the target audience? Effectively, this all comes down to one thing - how can
you achieve best value for money in order to increase sales?
There are many ways in which advertising and promoting your
business can be achieved, and with more opportunities and channels through
which your message can be communicated, the choices and options available
are wider than ever. This can make the challenge of deciding on the best
route to follow for the promotion of a product or service much harder, but at
the same time, very exciting.
One of the things to bear in mind is that the world we live in today is
far more cynical and skeptical than it was only a couple of decades ago. We
have all become familiar with the constant bombardment of messages,
promotions, advertising and offers, that we have become adapted to this
culture. Part of that adaptation involves being able to filter out those
messages, forms of media and advertising which we do not find immediately
relevant or of any importance to us personally.
This is perhaps the biggest challenge which any business faces when
considering running an advertising campaign, or actively promoting goods
or services. In a culture flooded with advertising, how is it possible to ensure
that your messages get through?
. The business vocabulary contains words for different areas:
management, finance, banking, insurance, marketing, advertising, trade,
tourism
The most useful business English vocabulary includes the following
words:
advertising - show your products to customers through radio,
television or newspapers
"What is the best way for us to advertise our product?"
afford - able to buy, have enough money to buy
"Television is the best advertising, but the most expensive. Can we
afford it?"
agenda - a detailed plan for a meeting.
"The first item on our agenda is advertising."
booming - business is growing very fast
"This year business is booming, so we can start thinking about
increasing our investments."
borrow - getting money from someone else, or from a bank, which
we must pay back later"We need to borrow $100,000 to expand our
business."
brand - the name of a well-known product (McDonald's, Coca Cola,
Volkswagen, etc.)
"We'll need to borrow money for advertising, then we'll build our
brand awareness."
break even - when our spending equals the amount we receive from
sales
"The company didn't make money nor lose money during the last quarter.
They just broke even."
bribe - secretly paying money to get special favors from a company
or government official
"She was sent to prison for 30 years for trying to bribe a high
official."
budget - a detailed plan for spending money
"The second item on our agenda is the budget. We need to pay
special attention to advertising, marketing and building our sales staff. Oh,
and we need to significantly increase our budget for English teachers!"
calculate - to count, add, subtract, multiply, divide numbers
"It's not hard to calculate - if we keep spending more money than we
take in, we'll have to sell more!"
cancel - to decide NOT to buy something that you had agreed to
before
"Before they cancel the order, find out what the problem is and fix it!"
capital money
"If we had more capital to invest, we would build a new factory."
charge for - ask money for payment
"We never charge for repairs. Making sure our products work is
included in the purchase price."
CEO - the top officer in a company, the chief executive officer
"How can we find a good CEO who knows how to run a business in
today's business environment?"
CFO - the top financial officer in a company
"The CFO will be attending today's meeting to talk about
fundamental accounting principles."
commission - a percentage of each sale that goes directly to the
salesperson
"Our salespeople get 10% for each item sold, but that increases as he or she
sells more."
competition - other companies that make the same product as yours
"We face tough competition, but our product has some important
advantages."
consumption - the total amount of product bought in a market
"Although prices have fallen, overall consumption is higher, so we
can still make money."
credit - when you buy first, but pay later
"You can buy this product on credit. The payment will be due in 90
days."
currency - the money of one country
"If you exchange currency in the airport, you'll pay a large
commission. Go to a bank instead."
deadline - the time by which some project must be finished
"We have to finish this by Friday. That's the final deadline."
demand - the wish of customers to buy a product
"Until demand increases, we won't sell many of our most expensive
products."
discount - a lower price
"If you buy more than 100 of these, we will give you a 10%
discount".
distribution - getting the product to the final consumer, or customer
"Our distribution system needs to be improved if we are to meet
increased demand."
diversify - start many new businesses instead of doing just one
"If we diversify, we can make more money, but sales of our main
product may go down."
economics - the study of finance and money
"If you want to succeed in business, you should study economics."
employee - a worker
"Employees today need to learn so much to be able to move up in
the company."
employer - the person who finds and pays workers
"My employer told me I have to work overtime or I'll lose my job!"
estimate - a guess about how much something will cost
"We estimate the new factory will cost less than 20 million euros."
export - to send goods out of a country
"As the local currency drops in value, our exports to that country
also drop."
extend - to give more, especially a loan of money
"The bank said they cannot extend the deadline. We have to pay by
Friday or face the consequences."
finance - the study of money and how to use money well
"After you study finance, you will know how to increase profits and
limit losses."
fund - to provide money in general.
"The CFO said the company plans to fund 50% of the project. The
rest will come from the government."
gross - amount of money received from sales
"We took in more than $100 million in gross sales last year.
import - to bring goods into a country
"When our currency is strong, we can import more goods into our
own country."
incentive - a special price to get customers to buy
"By offering a 15% discount as an incentive, we'll attract many new
customers."
income tax - money paid to the government, based on total money
received
"I thought I made enough money last year, but after paying 25%
income tax, I didn't have enough to buy that new house."
inflation - rising prices
"Rising energy prices have caused many other prices to increase.
The rate of inflation has increased to 7%."
install - to put in and prepare for use, as with a machine
"If you buy now, we'll install this machine for free."
interest - extra money needed to pay back borrowed money
"When you pay back the 100,000 euros, you must also pay 10%
interest, so the total will be 110,000 euros."
inventory - unsold items that you keep so that you can sell them in
the future
"Our inventory is very low right now. We have to increase build up our
inventory to meet demand in the coming year.
invest - spending money so that we can make more in the future
"If we invest so much money in a new factory, we won't have any money in
our budget for new advertising."
invoice - a paper which explains what was sold and at what prices
"Look at the invoice. You charged us for repairs that you said were
free!"
leadership - the skill of managing people
"He has natural leadership skills, so he will surely be successful."
lend - giving money to someone else, which they will pay back to us
later
"When did you lend him the money? I lent it to him two months
ago."
loss - when we spend more money than we receive from selling our
product
"We took a loss last year, but this year we are spending less and selling
more."
lucrative - the possibility of making a great amount of money
"This could be a very lucrative contract! Well make money for each
sale as well as for each installation!"
maintain - keep a machine in good condition
"If you maintain this product, it will last for years."
management - the study of how to run a business and lead people
"I plan to study management before I open my own business."
memo - a paper with a message, sent to other people in the same
company
"The CFO read the CEO's memo at the meeting, to remind the
employees of the company's strategic goals."
monopoly - when only one company controls a whole market
"With this new product, we can break our competitor's monopoly."
negotiate - try to get a better price or make a better arrangement
"We negotiated for hours before they finally gave us a 20%
discount."
net - the amount of money received from sales, after expenses are
subtracted
"Our gross sales were very good, but we need to cut expenses to add
to our net sales."
principal - the main part of a loan, before interest is added
"We can pay back the principal in 10 years, then we will only have
to repay the interest."
process (verb) - get something ready.
"Please process his employment application, then send him to the
accounting office."
profit - the money left over after all expenses are paid
"Our profits are lower this year, but at least we're not losing money!"
quarter - three months of the year, the usual time for planning and
reporting financial reports
"Last quarter was our best ever, and I am confident next quarter will
be even better."
recruit - search for and choose workers
"We'll need to recruit new employees before the factory starts
operation."
refund - giving money back to the customer if there is a problem
with the item you sell
"We cannot give you a refund after 90 days. Sorry!"
resign - quit a job suddenly
"Nobody knows why the CFO quit, but some people say he didn't
get along with the CEO."
retail - selling to the final customer
"The retail price is 150 euros, but you can buy it for less if you
bargain."
retire - finish work after a long career (at age 65 in the U.S., 60 in
Japan, 55 in China...)
"I've saved enough money for my retirement, but if I want to retire
to Hawaii, I have to save even more!"
sales tax - money paid to the government, based on sales made
"In most states in the U.S., sales tax is added on after the sale. It
varies from state to state."
salary - a monthly or yearly pay to managers of important workers
"We will have a salary increase of 7% this year, just enough to keep
up with inflation."
saturated - too many companies producing the same product
"The market for product A is already saturated. We need to diversify
if we wish to increase our profits."
sluggish - when business is slow (opposite of "booming")
"In this sluggish economy, the best we can hope for is to break
even."
supply - the total amount of a product available in a market
"The supply of computer parts is too high, so the price is falling
fast."
target - the amount that you plan to sell in a month (also "quota")
"The salesman reached his target by the 24th. He'll get a larger
commission on any sales after that."
tariff - a tax on imports from another country
"If the government puts a tariff on electronic products, sales will
fall."
terms - the details of an agreement or contract
"The terms of this contract are quite good. I think we have a deal!"
trend - movement in one direction, especially about product
becoming more and more popular
"The trend towards more colorful fashion is getting stronger. We
need to develop new products."
unit cost - the average amount needed to produce a product
"If we can produce more of these, our unit price will fall, and we'll
be able to make a better profit."
warranty - a promise that the things you sell will be of good quality
"This product has a one-year warranty, but if you pay a small fee, we
can extend it to five years."
wholesale - selling to a salesman who will then sell to the final
customer
"The wholesale price is generally 50% of the retail price."
Some words might be considered dangerous in business English
such as:
Just
This is used to make a huge request or error seem trivial as in: Could you
just do this (500 page) document by Monday?, a request best made late on a
Friday afternoon.
But
That was a great presentation, but, or I would like to help, but
From
Much loved by advertisers, as in Fly to Rome from 10 excluding 100 of
taxes and other optional extras for a flight leaving at 4am, going to an
airport about 100kn away from Rome and the ticket has to be booked one
year in advance.
Might (and any other conditional verb)
Might is used to achieve two things: first it sets up a negotiating
position as in, I might be able to do that if Second, it lays the ground
work for excusing failure later on: I would have done it, if only.
Only
Closely related to Just, it is an attempt to make a big request or problem
seem small. It was only a small error.we only dropped one nuclear bomb
over London
Important (and urgent)
Used to puff up any presentation: This important new
product/initiative. Important to who? And why? Maybe it is important to
the speaker, but why is it to me?
Thank you
Normally Thank you is good, except when used by automated
voices at call centres saying, Thank you for calling, we value your
call(and we have so much contempt for our customers that we can not be
bothered to answer your call promptly, so we will put you on hold until you
give up and try to use our impenetrable and useless online help instead).
Interesting
Fear this word. When your lawyer uses it, you are doomed. When your
doctor uses it, check your will is up to date. The recession is certainly
interesting. A slightly less interesting time would be preferable.
Opportunity
Because the word problem has been banned in business speak, all
problems have become opportunities. This means many opportunities are
problems. There is a limit to how many opportunities I can solve. Interesting
and strategic opportunities really scare me.

Additional Vocabulary

To set up in a business- a se lansa n afaceri
Bid- ofert
Bidder- licitant
Bond- obligaiune
Business forecast- prognoz economic
Business data processing- informatic de gestiune
Business assets- active comerciale
Business environment- mediu de afaceri
Business expenditure- cheltuieli de reprezentare
Business outlook- prespective economice
Business manager- director comercial
Corporation earnings- veniturile societilor pe aciuni
Corporation income tax- impozit asupra veniturilor corporaiilor
Corporation sole- corporaie individual
Corporate acquisition- achiziie de firm
Corporate banking- servicii bancare pentru firme
Corporate body- persoan juridic
Corporate bond- obligaiune emis de o societate
Corporate equity- capital social/ fonduri proprii
Corporate securities- titluri de societate
Corporate venturing- furnizare de capital de investiie de ctre o
companie altei companii
Equity- capital al acionarilor ntr-o companie
Equity shares- capital investit n aciuni cu drepturi asupra profitului
To hold- a cuprinde,a reine,a ine sub control,a organiza, a menine,
a se aplica.
Holder- deintor, purttor, proprietar, concesionar
Junk bonds- obligaiuni riscante
Joint venture- societate mixt
Interest- dobnd
Leverage-putere, influen, randament,raport dintre creane i
capital, indice de ndatorare, mijloc de majorare a profitului.
Leveraged buyout- preluare asistat, pe credit.
Leveraged management buyout- cumprare de ctre salariai
Liability- responsabilitate, rspundere
Security- titlu de valoare
Security market- burs de valori
Sole trader- comerciant pe cont propriu
Take over- preluare
To merge- a fuziona
Trader- speculator la bursa de valori, comerciant
Merchandise- marf
Merchant- comerciant
Willingness- bunvoin
Willing- dispus, binevoitor
chartered company- companie nfiinat pe baza unei Carte Regale
joint stock c.- societate pe aciuni
unlimited c.- societate cu rspundere nelimitat
limited c.- societate cu rspundere limitat
parent c.- societate mam
wholly owned c.- societate n propietate integral
unincorporated c.- societate nenregistrat
winding up of a c.- ncetarea activitii unei societi
greenfield c.- societate la nceput de drum
bogus company- societate fictic
close c.- societate nchis
dormant c.- societate inactiv
company funds capital al firmei
company identity- imagine de marc
to stay afloat- a se menine pe linia de plutire
shareholder-acionar
shares- aciuni, titluri de valoare
preference shares- aciuni priviegiate
deferred shares- aciuni cu plata dividendului dup satisfacerea
celorlalte
outstanding shares- aciuni n circuaie
share capital- capital social, n aciuni
share market- burs de aciuni
share prices- curs
share index- indice
share split- divizare a aciunilor
to share the profit- a mpri profitul
to share ones views- a mprti prerile cuiva
to share ones experience- a mprti experien
to assess-a evalua
assessment- evaluare
assessed- evaluat
turnover- cifra de afaceri
loss-pierdere, deficit
to run at a loss- a lucra n pierdere
loss ratio- rata pierderilor
relocation- mutare
core business- activitate de baz
break up- lichidare
liable- responsabil de
to grant- a acorda
storage- depozitare
subsidized price- pre subvenionat
brand name- marc de fabric
to book an order- a nregistra o comand
sale- vnzare
sale by sample- vnzare cu mostr
sale for future delivery- v. la termen
sale on hire purchase- v. cu plata n rate
sales outlet-punct de desfacere
sales quota- cota de vnzri
sales records- evidena vnzrilor
sales department- serviciul commercial
overstock- depire a stocului
price advance- majorare
price alignment- aliniere
price collapse- cdere
price cut- reducere
price gap- decalaj
price maintenance- meninere
price shading- reducere mic
price freeze- ngheare
price ceiling- plafon de preuri
blanket price- pre global
bid price- pre oferit
bottom price- preul cel mai sczut
ceiling price- preul maxim
flat price- pre unic
floor price- pre minimal
peg price- stabilizare
purchase price- pre de cumprare
sell price- pre de vnzare
invoice- factura
delivery- livrare
middleman- intermediary
convenience stores- magazine locale
out of stock- lipsete din stoc
sole selling rights- drepturi de vnzare exclusivist
world market price- pre de pe piaa mondial
store layout- configuraia magazinului
to negotiate a loan- a negocia un mprumut
ongoing negotiations- tratative n desfurare
negotiations in progress- tratative n desfurare
joint- comun
joint bargaining- negocieri commune
joint owner- copropietar
joint management- conducere colectiv
outcome- rezultat, consecin
to settle- a stabili, a soluiona, a reglementa
to claim- a pretinde, a cere, a revendica
to score- a nregistra, a nota, a marca, a obine, a realiza
scheme- plan, aranjament, combinaie
damage- daun, prejudiciu
to adjourn- a amna, a suspenda
adjournment- amnare, suspendare, ntrerupere
to adjust- a adapta, a ajusta, a corecta, a aranja, a pune n ordine, a
aplana
adjustment- ajustare, potrivire, corectare, adaptare, aplanare,
acoperire.
to involve- a implica, a antrena
involvement- implicare,participare
to enforce- a aplica, a pune n vigoare
enforceable- aplicabil
enforceability- aplicabilitate
enforcement- aplicare a unei legi
to bind- a lega, a ncheia, a impune, a oblige, a se lega, a se oblige
binding- legtur
concession- concesie, recunoatere
to incur- a contracta, a asuma, a suporta, a suferi
to induce- a convinge, a determina la, a impinge la, a hotr la
guaranteed- garantat
guarantee- garanie, siguran
to chair- a prezida
chairman- preedinte
to decree- a decide, a emite un decret
meeting- ntrunire, edin
to call a meeting- a convoca o edin
notice of meeting- notificare a aunrii generale
to brief- a rezuma, a instrui
briefing- instruire, informare
briefing conference- conferin de ndrumare
to exchange- a face schimb
to establish- a stabili,a institui, a ntemeia, a instala
establishment- instituie oficial, stabiliment,organizaie public sau
privat, fondare
timing- sincronizare
outright- deschis, cistit, total
outright loan to a project- mprumut direct pentru proiect
outright grants for research- alocaii integrale pentru cercetare
bias- eroare sistematic, distorsiune
disability- neputin, incapacitate
disabled- incapabil de
to trigger- a declana, a porni, a lansa
liable- rspunztor, supus
commitment- angajament
to reinforce- a consolida,a ntri
reinforcement- consolidare
to share- a mpri
to share in- a lua parte la
to share out- a repartiza, a distribui
guidelines- directive
deputy manager- director adjunct
sales manager- director commercial
acting manager- director interimar
layout of a meeting- amplasare
to take charge- a-i asuma responsabilitatea
turnover-cifra de afaceri
merger- fuziune
outright loan- mprumut direct
outlet- pia de desfacere
slump- criz
funding- finanare
boom- avnt
long term- pe termen lung
medium term- pe termen mediu
short term- pe termen scurt
restrictive practices- practice anticoncureniale
leveraged- ndatorat
divestitures- sciziune
to bail out- a salva
golden parachutes- compensaii financiare garantate
lay offs, redundancies- concedieri, disponibilizri
joint ventures- societi mixte
ailing- n dificultate
to spin off assets- a distribui activele
tender offer- ofert public de cumprare
junk bond- obligaiune speculativ
corporate governance- conducerea nterprinderii
leveraged buyouts- preluarea controlului prin mprumut, cumprarea
de ctre salariai.
to bid- a face o ofert financiar
buyout- cumprarea unei firme n totalitate
Boundless- nemrginit
Bottom line- de baz
To dispatch-a trimite, a rezolva rapid, promt
Cash flow- flux monetary
To draft- a redacta, a ntocmi
To exchange- a face schimb
Web browser- program software pentru navigare pe internet
Joint venture- societate mixt
To display- a expune, a afia
Impending- imminent
Expenditure- cheltuial
Allowance- reducere
Scalability- capacitate de a grada
To hook- a prinde, a aga
Hook up- program comun, nlnuire
To knuckle down- a se apuca de
Tip- informaie
Secure- n siguran, care nu prezint risc, garantat
To secure- a proteja, a asigura
To store- a stoca, a memora
Ongoing- nentrerupt
Backer- susintor,girant
To back- a sprijini, a susine, a gira,a da ndrt
To back down- a o lsa mai moale, a bate n retragere
To err- a grei, a face o eroare
To bud- a ncepe
To litter- a murdri
Fickle- nestatornic, capricios
To highlight- a evidenia
Claims- cereri, revendicri
To comply with- a se conforma
Encasement- ncasare, plat n numerar
Rental- valoare locativ
Obsolete- demodat, nvechit
Would be customers- clieni poteniali
In sequence- n succesiune, unul dup altul
Venture capital- capital de risc
Venture- speculaie, risc,aciune comercial
Watertight- ireproabil, impecabil, clar
To default- a fi n restan, n ntrziere cu plata
Diligence- osteneal
Due- cele cuvenite
To slant- a denature,a prezenta tendenios
Slant- punct de vedere, opinie, nclinaie, tendin
Onerous- apstor,mpovttor

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