English For business management

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ThS. Phạm Thị Nguyên Thư 
ThS. Nguyễn Thị Huệ

Engllsh

FOR B U SIN ESS

M A N A G EM EN T

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L Ờ J T Á C Q J Ả

Trước tìn h h ìn h đổi mới của đ ấ t nước, rộng giao

Uu k in h tế,xã hội ngày càng p h á t tiếng A n h đ ã đ a n g
rỏ th à n h ngôn n g ữ giao tiếp của nhiều quốc g ia trẽn p h ạ m vi 
°à n cầu.Sau k h i Việt N a m g ia n h ậ p Tô chức Thư ơng th ế

ùới (W TO), các doa n h nghiệp trong nước ngày càng p h ả i trực 
lếp cạnh tra n h g a y g ắ t với các d o a n h nghiệp nước ngoài trên

'hỉ trường trong và ngoài nước. M ột trong các yếu của

loanh nghiệp nước ta là trìn h độ tiếng A n h của cán q u ả n 
’à k in h d o a n h còn k h á h ạ n chế.

Đ ế g iú p các d o a n h nghiệp Việt N a m tự và từ ng bước

iến vữ n g chắc trong tiến trìn h hội n h ậ p và cạnh tra n h , và các

inh viên chuyên n g à n h Q uản t k in h d o a n h tiếp th u

'lên thức A n h n g ữ chuyên n g à n h m ộ t cách có hệ thống, ch ú n g

bi đ ã n g h iên cứu,biên soạn và p h ố i hợp N h à x u ấ t bản B ư u

f-lện x u ấ t bản cuôh sách “E n g lỉs h fo r B u sin e ss M a n a g e m e n t”.

N ộ i d u n g cuôh sách g ồ m 10 bài học A n h )

óc lĩn h vực q u ả n trị k in h d o a n h T h ị trường,

'án p h ẩ m , Giá cả,Lạm p h á t, Tài chính, K ế toán và 
'ược sắp xếp và k h a i thác theo tr ìn h khoa học. H ơn ch

ớch cịn g iú p người học củng cô hệ th ố n g n g ữ câu trúc

ôu và s ự p h á t triển từ vựng theo m ức độ tă n g d ầ n đ ế người học 
h á t triển k h ả n ă n g tư duy,diễn đ ạ t trong

Cuốn sách sẽ góp p h ầ n n h a n h chóng n â n g cao độ

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q u ầ n lý - k in h d o a n h và các sin h viên chuyên n g à n h Q TK D CL 
trư ờ ng Đ ạ i học, Cao đ ẳ n g và bạn đọc q u a n tâ m đến vực nà

L ầ n đ ầ u tiên biên so ạ n cuốn sách n à y k h ô n g trán 
k h ỏ i n h ữ n g th iế u sót, c h ú n g tôi x in trâ n trọ n g cảm ơn n h ữ n g

k iế n đ ó n g góp q u í báu của các bạ n đ ô n g n g h iệp tro n g q u á

biên soạn, và r ấ t m o n g n h ậ n được n h ữ n g ý đ ó n g góp châ
th à n h của độc g iả và học viên g ầ n xa. /.

Đ ồ n g tá c g iả

ThS.

P h ạ m

Thị

N g u y ê n

Thư

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Ụnii I : T h e meaning o f economic 5

UNIT I

THE MEANING 0 F ECONOMIC DEVELOPMENT

TEXT 1.1. ECONOM1C GROWTH

There is general agreement amongst economists concerned with the
pi"0blems of less developed countries (LDCs) that a distinction should be
niade between economic growth and economic development.

Economic grovvth is deíined as an increase in the productive
Capacity of an economy over time, givine rise to an increase in real
National Income (NI). II'the rate of the growth of income is ữreater than
lhe rate of grovvth ofpopulation, 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
nnal 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 ditTerence
betvveen returns to the inhabitants of the country from propcrty located
0verseas mínus the returns accruing to íoreigners from their property
located within the reporting country). For most LDGs, net propertv
•ttcome from abroad is likely to be neeative and thus GDP will be greater
than GNP.

Both domestic product and national product can be expressed in net
tenns (that is, after a!lowing for Capital depreciation) and either at market
prices or íactor costs (that is, including and excluding respectively,
indirect taxes net of subsidies). Net National Product (NNP) at tầctor
“Ost is.identical to National Income.

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low-6 Engỉish fòr Business
income countries (36 vvith per capita incomes of less thai $370 per
annum) have been less successtul. World Bank prọịections tbr the 1980s
predict that hisher rates o f economic growth vvill be diiTicult 10 reach and
sustain and that there will occur a vvidening in both the relative and
absolute gaps bet\veen the richest and the poorest countries, including the
eap between the middle-and-low-income LDCs.

G N P p e r p e r s o n ( 1 9 8 0 D o lla r s ) 1 9 5 0 1 9 6 0 1 9 8 0

Ind u strial co u n trie s 4 1 3 0 5 5 8 0 1 0 6 6 0

M id d le -in c o m e c o u n trie s 6 4 0 8 2 0 1 5 8 0

L o w -in c o m e c o u n trie s 1 7 0 1 8 0 2 5 0

A v e r a g e a n n u a l g r o w th (p e rc e n t) 1 9 5 0 - 1 9 6 0 1 9 6 0 - 1 9 8 0

In d u strial co u n trie s 3.1 3 .3

M id d le -in c o m e c o u n trie s 2 .5 3 .3

L o w -in c o m e c o u n trie s 0 .6 1 .7

Tahle 1.1: Economic growth

Exercise ĩ: Ansvverthe following questions.

1. What is the basic ditĩerence betvveen real income and money
income?

2. Under what circumstances will income per ri se?

3. What is the difference betvveen GNP and CỈDP?

4. What is GDP likelỵ to be greater than GNP in most LDCs?

5. What evidence in Table 1.1 shows that there vvas niore economic
growth in the period 1960 - 1980 than in the period 1950 - 1960?

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Ọnit I:The meaning tìf economic d 7
Exercise 2: Decide whether the íbllovving statements are true or íầlse.

1. Economic grovvth vvill cause an increase in real National Income.

2. National Income is the same as Net National Product ai làctor cost.

3. It is predicted for the 1980s that there will be no economic erowth.

4. It is tbrecasted íor the 1980s that lovv-income LDCs will not arow
as quickly as middle-income LDCs.

L

angu age use

Structure 1: Relative pronouns

Notice how the two folIọwing sentences can be ịoined toaether:
Agriculture employs a large number of workers.

The workers are otten poorly paid.

= Agriculture employs a large number of workers who are often
poorly paid.

By ịoining the sentences in this way, the noun workers is not 
•'epeated. The relative pronoun who is used, íblIowed by the words.

which describe xvorkers(which forms a relative clause). The purpose of 
the relative clause is otten to give extra or more detailed intbrmation. or

to be more precise. In the text, a nurnber of relative clauses aro used: \vho

refers to persons; whichrefers to things; also refers to things (and
Sometimes persons).

Exercise 1

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8 English fòr Business

1. In many LDCs. agriculture is verv inelĩicienl. Agriculture is thí
lareest sector.

2. Economic grcnvth is not a suffícient condition on its own to ensure

an increase in economic welfầre.

3. Dudley Seers has iníluenced the thinking of many economists. He
has delìned development as almost a synonym for improvement.

4. Development can be determined by various criteria. The criteria
relate to poverty. inequality, unemployment and sell-reliance.

5. Hicks and Streeten conclude that there is no viable alternative to
using CiNP at present. Hicks and Streeten have analysed four
dilYerent approaches to the problem of measuring development.

Exercise 2: Combine these pairs of sentences as in the example.

Example:The Services are useful. The workers provide Services.

The Services whichhe \vorkers provide are useful.t

1. The goods are essential. They need the goods.

2. The schools and hospitals are essential. They provide schools and
hospitals.

3. The goods are valuable. He buys the goods.

4. The money buys essential commodities. People can earn this
money.

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Ọnit 1: The mecming o f economic devel 9

6. The work is called economic activity. We do this work.

7. The vvork provides them with money. People do this vvork.

8. The economic activities make up the economic System. People
undertake these economic activities.

Exercise 3: Rewrite the following sentences using the relative pronouns:

who, w h i c h , t h o t

1. I saw the man. He closed the door.

2. The girl is happy. She won the race.

3. The student is from China. He sits next to me.

4. The students are from China. They sit in the front rovv.

5. We are studying sentences. They contain adịective clauses.

6. I am using a sentence. It contains an adịective clause.

7. Aleebra problems contain letters. They stand for unknovvn
numbers.

8. The taxi driver vvas íViendly. He took me to the airport.

^tructure 2: Defínitions

1. Look at the two detìnitions given below:

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10 English fo r Business

- GDP [s the total tìnal output of aoods and Services produced Yvithin

an economy for any gi ven year.

2. Another way to give a deíĩnition. Notice the laneuage
construction:

Social econoinics may be defmed asthe branch ofeconomics

i s c o n c e m e d withthe measurement. causes and consequences of social
problems.

Exercise 4

Now write dellnitions for the following subịects using the
information given. Note a and b are vvritten in the tlrst stvle. and d are 
wrilten in the second slyle.

a. National income- measure oi'the monetary value ol'the total llo\v

o f soods and Services produced in an econom v over the speciiìed 
period o f time.

b. Elasticity -measure o f the degree oi' responsiveness of one 
variable to chanses in another.

c. Statistics -mathematics - use of collected numbers vvhich
represent iầcts or measurements.

d. Econometrics - economics - the application ot' mathematical and 
statistical techniques to economic problem?

TEXT 1.2. ECONOMIC DEVELOPMENT

ín the early year ot' the evolution of development economics as a
distinct area of study, economic growth and economic development were
senerally seen as being synonymous. The deílciencies ot using GNP
capita as an indicator ot'economic welíầre (and by implication. the level 
o f econoinic development) were recognised by economists. hovvevẹr. and
over time it became inereasingly evident that economic grovvth on its
own, although undoubledly a necessary condition, Yvas certainly not a

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Un ị/ I: Themecming o f economic 11

Implicit within the concept of economic development vvas some
notions ot' progress. Economic development was thus taken to mean
growth plus structural and institutional change which involved the move
towards certain normative goals or objectives. Clearly. sroxvth without
development was a possibility if increases in per capita incomes were not
accompanied either by structural changes or by the diíĩusion of the gains
in real incorne among all sectors of the population.

However, unless it is explicitly assumed that all sectors in the
economy arow at an equal rate so as to leave the proportions of the
national economy that they present unchanged. the concept of economic
growth as consisting of continuous increases in total or per capita

incomes \vithin unchanged structures cannot be deíended. Economic
grovvth wi11 almost inevitably lead to changes in the economic structure
of the economy and thus to dìne development as "growth plus change"
is not particularly helplìii.

With respect to the normative detìnition of development. it is in the
work of Dulley Seers that. we detìne the most intluential and \videly
reproduced dìnition. For Seers,

“...Development” is inevitablya concept.
synonym for improvement.To pretend ío hide one

yaỉue judgement.

Posing the question, “Where are these values to come from?” Seers
replies:

"Surely the values \veneed are face, soon as \ve

ask ourselves: what arethe necessary fo r a

acceptable aimthe realỉzationof the oỊhuman ”

(Seers. 1972. p.22)

The criteria that Seers suggests should be used to judgc whether or
not development taking place relate to property. inequalitv and
Unemployment. Other indicators relate to the political. social and
educational dimensions of development and in the PostScript to the re-
published article (Seers, 1979, pp. 27-8). a turther dimension is added -

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12 Englishfor Business

more o f the great power”. Selí-reliance thus becomes a crucial element ii
the contemporary concept o f the development.

Seers’ conception o f economic development has been adapted an<
extended by a number of authors and it remains the basis of \vhat mos
development specialists would argue that economic development shouk
be about.

Difficulties arise, however, when the attempt is made lo assess thí
extent to which such objectives are in practice being realised. Hicks anc
Streeten (1979. p. 568) Ídentiíy and review four different approaches tc
the problem o f measurement, namely:

1. Adjustment to GNP in order to capture some o f the welfare
aspects of development and improve international comparability:
2. Social indicators which attempt to dìne non-monetarv nieasures

o f social progress;

3. Social accounting Systems vvhich attempt to provide a IVamevvork
for some o f the social indicators; and.

4. The development o f composite indices which attempt to combine
various social indicators into a single index of human and social
development (the “quality o f life”).

They conclude:

“Attempt to introduce other costs and benìts o f development.
which would move GNP toward a broader welfare measure, lack a
logical basis and tend instead to result in a coníusion o f concepts.
Research on “social” indicators has failed to produce an alternative
vvhich is as readily accepted and comprehended as GNP per head...
System o f social accounts which could integrate social indicators through
some uniíying concept have not been able to overcome succes'sfully all
the diffícult problems encountered.

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Unií ì:The meaninẹ o f economic development 13

hoxvever, suggest the need for a single number which. like GNP per head.
can be quickly grasped and gives a rough indication of “social”
development”.

(Hicks and Streeten, 1979, p. 577)
The recognition that economic growth does not automatically solve
problems relating to poverty, inequality and unemployment has been an
'mportant step forward in the evolution of development studies. But the
^Ormative, essentially utopian, dìnition of development itselí create
problems. "Seers-type” detìnition of development reter to an ideal world
°r State o f affairs and, as a consequence, are both ahistorical and
aPolitical- ahistorical because they postulate idealised structures that do
lot, and never have, existed, and apolitical because development is
^elìned in an abstract sense and is not related to anv particular
3olitical/social/economic structure.

The division of the world into developed and less developed
“Ountries, and the utilisation of an idealised concept of development,

niply that the developed còuntries have in some sense “solved*’ the
5roblems of development, whereas clearly this is not the case. In
lddition, the popular, normative concept of development denies the
!pecifícity o f the processes of growth and change that are occurring in
'Ontemporary LDCs.

^Xercise 1: Answer the following questions based on the text.

1. In what ways, in theory at least, might there be grovvth without
development?

2. ưnder what circumstances might it be possible for economic
grovvth consist of continuous increases in total or capita 
incomes within unchanged structures?

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14 EnỊỊÌish fịr Businẹss

4. Why is none of the four approaches to measuring clevelopn
satisỉầctorv?

5. What seems to be the main problem vvith the "Seers-ty
delìnitions of development?

Exercise 2: Match the words from the text with their explanation

synonyms (words or phrases with the same meaning)

1. distinct a. lully and clearly stated

2. dìciencies b. similar to

3. implicit c. ideal or períect

4. normative d. separate

5. dilTusion e. not related to history

6. explicitly f. implied or suagested

7. PostScript o #ơ \vithout a political dimension

8. crucial h. propose somethina (which has not bet

proved) as a basis tor reasonina

9. adapted i. prescriptive. incọrporating value ịudgemeri

10. composite j. made up of several parts; compound

11. analogous k. spreading or dispersion

12. íruitless 1. very important. or decisive

13. utopian m. unsuccessíul, useless

14. ahistorical n. deíects, inadequacies

15. apolitical 0. modiíìed, altered

16. postulate P- additional section, supplement

Exercise 3: Reduced Velative clauses

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'Ui/ I; The rheanim* ofeconomic de 15

1. "There is general agreement amongst economists concemed vvith

1e problem of LDCs...” ( Whoare has been omitted atter

e- economists who are concerned with...)

2. "GDP is the total lìnal output of eoods and Services produced

ìthỉn an economy for any given year...” (xvhich has been omitted

f'ter Services -note: xvhich isrefers to totcil fmal

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16 English for Business

UNIX 2

ECONOMICS FOR DEVELOPMENT

TEXT 2.1.THE RELEVANCE OF VVESTERN ECONOMICS?

For a quarter o f a century, economists have argucd over th'
relevance and useíulness o f “Western” economics to l'non-Western
economies.

The debate was largely initiated by Dudley Seers in 1963 with thí

publication o f his article entitled ‘T h e Limitations of the Special Case”
The “special casev was the private enterprise. developed industria
economv, characterized by Seers as “an autonomous and tlexible socio-
economic structure, in vvhich each human being responds individually tc
the material incentives offered and which is subịect to no íbrmidabU
exogenous strains” (Seers, 1963, p. 83).

Seers conceded that certain elementary proposition retained theit
general validity in the context o f LDCs. but he \vas particularly critical ol
the application o f macro-economic concepts and models. He araued that
propositions derives from largely static analysis were irrelevant and
perhaps misleading. and that insufficient attention had been paid to the
speciíìc political and institutional structure of the LDCs. Most
importantly, the study of the LDCs could not be divorced from an
examination o f their position within the world economy,- not least
because o f the “openness" of their economies, their dependence on the
developed industrial economies as markets for their (mainlv) primary
product exports and their vulnerability to protective measures imposed
by such economies.

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^nit 2: Economics 17

1. The separation of parameters (social and legal institutions,
psychological attitudes) from variables: this might be appropriate
and justifíable in Western economies. but in LDCs as sirnple
distinction should not be made between “economicv and “non-
economic” factors;

2. The tendency to select one factor (for example, Capital and 
education) as the strategic íầctor in development;

3. The tendency to assign the role oi' suíTicient condition to what
may or may not be one of several necessary conditions for
development;

4. The íầilure to recognise that many concepts íịrmed by aggregation
(income, employment. savings. investment) are oltcn based on
implicit value ịudgements and presuppose the existence of
conditions that might vvell be absent in LDCs.

"Xercise 1: Answer the following questions.

1. According to Dudley Seers. what was the *‘special case"?

2. Why was Seers not in tầvour of using static analysis for LDCs?

3. According to Seers. what was the signitìcance of the LDCs’
position in the world economy?

4. In Streeten’s view, was it appropriate to choose one factor as
being crucial for development?

*ercise 2: Decide whether the following statements are true or false.
1. Dudley Seers.really started the arguments that have been going on

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18 English for Businessmanageme,

2. Although Seers admilted that some íundamental concepts wer
generally appropriate for LDCs, he found fault with th
application o f macro-economics to LDCs.

3. Accordina to Seers. the "openness” of LDCs’ economies was no
a reason for looking at their position in the vvorld economy.

4. Paul Streeten also criticised conventional economic theorv b)
arguine that economic models were likelv to have several hiases.

5. In reality. there may be a number of necessarv conditions foi
development. yet there is a tendency to allot the role of the onl>'
sufficient condition to merely one of them.

Exercise 3

Find the word or phrase in the text that it could replaee the following
words and phrases.

1. Originated. starled

2. Extremely diíTicult to overcome
3. Extern al

4. Admitted
5. Obtained. got
6. Separated froni

7. Tending or likely to have
8. Tendencies

9. Limitine tầctors

10. Items which may vary
11. Allot. allocate

12. Assume. itìiply

LANGUAGE ƯSE

Structure 1: Present siniple tense (verb tense)

In usine the present simple active tense. students oiten make a
mistake omitting the ímal-.ĩ from the third person singular ending e.g: he

thinks(but: they think)

Exercise ĩ

Complete the passage by writing down an appropriate verb trom the
list for each numbered space. Use each verb only once. The íìrst verb has

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Vnit 2: Economics 19

heen done for vou: argue, believe, dpoint

°nt, seek, sapport, v i e w , \vork.

Structuralists....see... the vvorld as intlexible, Little (I)... They
(2)... the price mechanism and (3)...to promote change in other
^ays. Neo-classicists, on the other hand, (4)... the world as being
Aexible. They (5)... that the price mechanism (6)... rather well.
^eo-classicists (7)... their argument by pointina to the success that a

hUmber of LDCs have had recently through the implementation of
policies that (8)... the export promotion ot'manutầctured uoods. They
also (9)...that empirical evidence (10)... vvhich (11)...support to
Iheir view.

Structure 2: Negatives

A. Negative has been expressed in a number o f ways. Look at some
examples:

a. It will not lead to...

b. It does not solve...

c. There is no generally accepted radical explanation...
In (a), vvhere verb tenses contain an auxiliary verb (e.g: not is
placed after the auxiliary, e.g: They have not been oble or
after the verbs be and have if they are full verbs.

ỉn (b) where a verb tense does not contain an auxiliary: does,
dici + n0ị + verb inlìnitive (without to) is used, e.g: He agreed He did 
llot agree.

In (c) no can be used as an adjective, e.g: He had answer.
Note- The phrase by no means = not at all, on no account. in no way.

Look at some other examples:

Unless it is explicitly assumes... =

To judee xvhether or not it is taking place... = if...or not

X was seen. not as Y. but as z = instead of (an altemative is proposed)

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20 Englishfor Business

The negative can also be expressed by:

None -used as pronoun e.g: they had none.

Neither... (nor...) = not one northe other, o f two,

e.g: Neithertheory is acceptable.
N

eith

erthis theory northat theory is acceptable.
Note: Certain verbs include a negative within their meanina. e.g:

To lack = to not have, to be without

To deny = to say that somethins. is not true
To reỷuse = not to accept or do or eive

Exercise 2

Complete the followine paraeraph by vvritine down an appropriate
negative form for each numbered space.

Streeten stressed that he rẹịected (1)...ali the analytical (2)...
all the planning modeỉs. Hoxvever, he emphasised that models should be
(3)...rigorous (4)... realistic. If a model had (5)...relevance, then
it was (6)...useful. He considered that many cuirent models (7)...
have "the vital organs"’.

Exercise 3

Using the iníbrmation in A and B above. make the folIowing
sentence negative in four diííerent ways. ensuring that bolh parts of the
sentence have a negative meaning.

l f a modeì had relevance,then it

1. If a model had relevance, then it was usetul.

2. If a model had relevance, then it was usetul.

3. If a modei had relevance, then it was useful.

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21
Exercise 4: Complete the foIlowing sentences in an appropriate vvay.

1. LDCs are often not only...but also...

2. In many cases, LDCs have neither...nor...
3. When discussing the causes o f inAation there is otten no...
4. Unless a theorv...

1 Ex t 2.2. ECONOMICS OR DEVELOPMENT ECONOMICS?

Streeten emphasised that he was not rẹịecting all analytical or
hlannine models.

“Rỉgorousabstraction, simplị/ìcatancl are

'lecessary conditions o f analysis and policy. But models be
etevcint and úseỷul.The trouble with manv current models that thev 
" e shapelyand elegant, bat lack the vital organ ”.

(Seers, 1967, p. 57)
Although Seers, Streeten and other like-minded economists mounted
1 Powerful and sustained onslaught on orthodox economics. both neo-
:'assical and Keynesian, the established orthodoxy was b\ no means
*efeated. The detenders of the neo-classical paradigm. such as Myint
^ 6 7 ) and Bauer (1971) continued to argue that the orthodox static
lleory of the allocation of scarce resources was as relevant to the less
Cveloped as to the developed economies, and that the market remained
le most effícient and effective mechanism for the proper allocation of
lose scarce resources.

ỉn niore recent work in the neo-classical tradition. Little (1982. Ch. 2)
as elaborated on the distinction that is made betvveen "structuralist” and
e°'Classical economics. Structuralist, he argued, see the world as
'^exible, with change inhibited by a variety of obstacles. bottlenecks,
§'dities and constraints. They thus distrust the price mechanism and
iek to promote change on other ways. The neo-classical view o f the
0rld, on the other hand, is one of Aexibility. The price mechanism is
:pected to work rather well. and neo-classical economics can be
;scribed as:

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22 English fòr Business

"... a paradigmthot tellsone to investigcite markets and price
perhaps expecting t h e m o f t e n to \vork but he on \vatc
fo r aberrations and waysof correctin Perhaps the be.

touchstone is aconcern for pricesand other ro/e
(Little. 1982. p. 2í

To support their arguments, neo-classical economists point to th
success thai a number o f LDCs have had in recent years in breaking int
export markets for manutầctured goods through the implemenlation c
policies conducive to export promotion. They also argued that empiricí
evidence is increasingly becoming available that supports the neo
classical contention that, if íầctor prices are “right'’ (that is, iíthey rellec
their social opportunity cost), tìrms will substitute cheaper labour to
more expensive Capital and thus create greater employment opportunitie
through the use o f niore labour-intensive techniques of production.

Perhaps the main achievement o f the neo-classical school. hovvever
has been the development of the techniques of social cost-benetì
analysis (SCB). This is a technique o f prọịect evaluation designed tc
ensure that projects are selected according to their social prìtability
Because market prices are likely to be "distorted”. shadoxv prices arí
estimated vvith which social costs and benìts are calculated. and sociaỉ
welíầre is maximised by maximising the net present value of the stream
o f benefits. net o f costs, using an appropriate discount rate.

SCB has been vvidely used by international agencies and national

planning ministries. It has not, however. escaped crilicism, and
economists such as Stewart (1975) and Lall (1976) have attacked both
the methodology o f SCB and the basic principles which underlie it. Lall
in particular has criticised what he conceived to be the ideological base
o f welfare economics (the assumption of a harmony of interests betweefl
all members o f sociely), its individualistic premises (its ignoring tho
tbrmation o f preíerences) and its State povver premises (thai the State is
neutral, that it acts in the “national interest”, etc...).

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2: Economics 23

aPplication of orthodox Keynesian macro-economics to LDCs. Macro-
economics is concerned with the economv as a vvhole in terms of
aêêregate variables and íocuses on the determinants of aggregate supply
ar>d demand for national output. Perhaps in this area more than in any
°dier, there was general agreement in the literature that Keynesian short-
' Ur> demand management analysis vvas not relevant to the prohlems íầced

by LDCs. The main area of controversy in the macro-cconomic tìeld vvas

lbe conílict betxveen "structuralists” and “monetarists” over the causes
and cures for, inílation.

More recently, a structuralists macro-economic theory has begun to
emerge. Taylor (1983. p. 3) argues that:

“An economy has structuresif and

1ts Members make some patterns o f resoarce alhcation and evoìution

bstantiallymore likely than o t h e r s . E c o n o m i c

[ị’hen ittakes these/actors as thè/oundation stones fo r theories

The attempt to incorporate the specific structural íeatures of LDCs
‘Ito ìnacro-economic theory represents an important advance in the
:°ntinued evolution of "development economics”. Many \vould still
ìrẽue. however, that “economic is not enough", and thai what is needed

s a move towards explicitly multi-disciplinary “development studies".'
The emereence o f “development studies" vvill not lead to the
-hsappearance of the individual disciplines vvithin the social Sciences, but
^ill rather create the opportunities for the breaking down ot' the barriers
iet\veen those disciplines and the encouragement of greater
'°nimunication betvveen the various development specialists in
ìc°nomics, politics, sociology, anthropology. economic history, and so
>n- It is to be hoped that a more complete understanding of the problems
poveity and inequality, at both the national and international level,
vill emerge from this broader. nuilti-disciplinary approach and that
)oMcy prescriptions can be made more relevant and realistic.

"xercise 1: Answer the following questions based on the text.

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24 English for Business

2. What is Little's view o f the role o f the price mechanism?

3. What evidence is there to support the neo-classical view of th
ro le o f prices?

4. How usetul vvas Keynesian macro-economics thoueht to be lo
LDCs?

5. What would seem to be the advantages o f the creation oi
"development stưdies"?

Exercise 2

Match the words from the text vvith their explanation or synonvms
(words or phrases with the same meaning)

Column A Column B

1. rigorous a. a test or criterion for determining the
quality or genuineness o f something
2. quantitìcation b. dispute. argument. debate

3. onslaught c. directive

4. paradigm d. statement on which reasonina is based

5. mechanism e. attack

6. iníìexible f. model

7. inhibited g. a blockage causing a sknvine dovvn

8. bottleneck h. deviation from the norm

9. constraint i. structure or arrangement

10. aberration j- form the basis of

11. touchstone k. likely to encourage. contributing to

12. conducive 1. strict and accurate

13. contention m. measurement

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Vnii 2: Economics developmenl 25

14. underlie n. instead

15. premise 0. prevented. hindered

16. controversy p- considerably

17. substantially q- limitations. restrictions

18. rather r. assertion, argument

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26 English fo r Business managemc

U N IT3

SOME ECONOMIC LAWS

TEXT 3.1

Basic human needs are simple, but everv individual has additionỉ

personal wants which may be very complex. These complex persona
wants are satisíled in different ways by diíYerent things. A car. a bottle 0

whisky and a newspaper satisíy very different wants and the whisky i
not a close substitute for the car. This special characteristic of satisfyiní
a want is known in economics as its “utility”. Utility is not the same aí
useíulness. A submarine, for example, may or may not be useful ir
peacetime, but it satisíìes a want. Many nations want submarines
Economists describe this kind o f utility as the relationship betvveen 3
consumer and a commodity.

Utility varies between different people and betvveen diíTerent
nations. A vegetarian does not want meat, but may rate bahanas very
highly. A mountain-republic like Switzerland has little interest in
submarines, while maritime nations rate them highly. Utility also varies
with time. In time of vvar, the utility oí'bombs is high and that o f pianoS
is low. ưtility is thereíore related to our sense o f priorities. The utility ot
a commodity is also related to the quantity available to the consumer. lí
men buy a large quantity of paper, they will lose interest in buying more
paper. The demand for paper will go down. The utility o f a commodity
consequently decreases as the consumer’stock increases.

In most economic Systems, the prices of the mạịority o f goods and
Services are íĩxed. The individuals cannot change the prices of the
commodities he wants. and when' planning his expenditure, he must
accept these prices. A consumer will go on buying cigarettes as long as
his satisíaction continues and they render utility. If he continues to pay
the current price, his satisfaction is greater than his íinancial sacriiìce.

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Ọnit 3: Some economic 27

^ ith each purchase, however. his satisfaction decreases although the
Prices remain the same. If a consumer’s supply of money is limited, a
3°int will come when the Anancial sacrifice is greater than the
5atisfaction of smoking cigarettes. He will stop buyine the commodity.
^he cigarettes are the same, but their utility has changed. ỉt'the prices

°se, he would buy fewer; if they fell, he might buy more.

We can see that the nature of a commodity remains the sanie, but its
ttility chanees. This indicates that a special relationship exists betvveen
=°ods and Services on the one hand and a consumer and his money on
he other hand. The consumer’s desire for a commodity tends to diminish
ls he buvs more units of that commodity. Thus. tendency is called the
ja\v of Diminishing Marginal Utility.

Utility is of course related to the Laws of Supply and Demand.
^hen economists talk about the Law of Supply, they mean that a rise in
'rices tends to increase the supply of a commodity. while a tầll in prices
ìr>ds to reduce it. When they talk about the Law of Deniand. they mean
3at a fall in prices tends to increase the demand for a commodity, while
1'ise in prices tends to decrease the demand. In any economic situation.
consumer will decide to buy a commodity only in terms of its particular
hlity to him.

If the prices of a particular commodity rise in the economy as a
'hole, the rise will naturally encourage producers to make more of that
3mmodity. If, on the other hand, prices fall locally or throughout the
'Orld, producers will reduce production. Supplies of many commodities
tn generally be adịusted to suit market conditions. This means that

langes in market prices lead to changes in the quantity of a particular
3rnniodity made available to consumers. Household goods and íìimiture
'e in this category. In such instances. supply is said to be elastic,
“Cause it can be increased or decreased rapidly to suit market prices.

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28 Engììsh for Business

When they exercise this choice. they work accordina to their personí
scale o f preíerences, beginning with top-priority essentials likc íoods ant
housing. Next on their scale come those commodities vvhich provid
comíort or convenience of some kind (telephones. Insurance, etc) an<
íìnally come the non-essentials like holidays and trips to the theatre
which are important parts o f life but not comparable vvith food aní
shelter. If it is necessary to pay verv hieh prices for the essentials of lite
people pay them - even if this means spending all their income. In sucl'
cases demand is inelastic. For non-essenlials. however. đemand is elastic
and particularlv responsive to changes in price.

Exercise 1

Decide whether the tbllovving statements are true (T) or tầlse (F),
and if they are faỉse say why.

1. Switzerland is a maritime nation, and places a high priority on
submarines.

2. If the current price o f cigarettes remains the same. consumers will
continue to huy more, even when their satisfaction is less than
their financial loss.

3. Because a consum ers desire for a commodity tends to diminish
as he buys more units o f that commodity. economists talk o f a
Law of Diminishing Marginal Utility.

4. Because the supply o f íbrniture and household goods can be
adjusted to suit market conditions. we say that their supply is
elastic.

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t ’nit 3:Some ec 29

Exercise 2: Insert a suitable preposition in each oí' the blanks in these

sentences.

1. He is interested_______ economics.

2. He is not concerned__________ non-essential commodities.
3. The dem and___________ bananas will probably increase.
4. The supply___________ cigarettes does not usually lluctuate.
5. The consum ers needs_______ such commodities is well-known.
6. There vvas a change_________ the quantity of material supplied.
7. He paid quite a lot of m oney_________ that car.

8. He paid the m o n ey__________ that man.

9. The American economic System is b a se d __________ capitalistic
principles.

10. Most citizens coníorm ________ the law of the country in
which they live.

11. Non-essential commodities like chocolates can not be compared
basic necessities like shelter.

U

nguage use

^tructure 1: Word forniation - Suffixes

When you are reading, you will come across uníamiliar words. It is
Tten possible to guess the meanings of these words if you understand the
vay words in English are generally formed.

Affixes

Pretlxes + stem + suffíxes

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30 English for Business

the stem. Consider as an example. the pre means "again" in a wor<
like “reconstruct-construct again”. A suffix is what is attached to the ení 
o f the stem. Consider as an example the suffíx (meanina "someont
who”) in the word "policy maker" (the person who makes policy).

Prelixes usually change the meaning of the vvord. for example.
changes the word to neeative. 'iUnqualifìeđ' means "not qualitìed enouglr’

STixes. on the other hand. chanee the word IVoni one part of speech

to another. For example, -lyadded to the word, the adịectivc complete

aives the adverb completely.Let novv consider some suffíxes and their 
usual meaninas.

Suffixes

Nouns Verbs Adịectives Adverbs

-ance -ize -able -ly

-or -ate -ible

-er -ify -less

-ist -en -ic

-ness -cal

-ism -ish

-ence -ive

Exercise 1: Make nevv words irom the given words

Example: Capital —» capitalism —> capitalist -> capitalistic

Note: The suffíxes -ism = System
-ist = person

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Vnit 3:Some ec 31

Exercise 2

Below are pairs of sentences. In the first sentence, there is a verb in
italics. In the second sentence, there is a blank. Make the italicized verb
mto a noun in order to fill the blank.

Example: manage manage - ment ->management.

1. It is sometimes necessary to cidjust the quantity of goods flowine
on to the market. This ____________ is made according to
market conditions.

2. He arranged the committee meeting. H is______were veiy elYìcient.

3. The government encourages private enterprise. Their _

sometimes takes the form of ílnancial help.

4. Some economists are interested in changes in the price
of essential commodities. T h is__________ extends over a period
of years.

5. The management tried-tò assess the amount of money needed for
the plan. T h e ______ __ was to be made by a special committee.

6. He decided to invest his Capital in the new enterprise. His

might be very proĩitable.

Exercise 3

Study the table. It shows how vvords can be formed by adding the
suffìxes -ịỷỳand -cation (with suitable changes in spelling).

Example:simple_sim plity_____ simpliíìcation

ưse the table and the example to help you fíll in the blank in the
Sentences:

Simple

Note ify

Pure
Class

Clear (= clar-) itìcation

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32 English for Business

1. This plan is not simple enough. We must th erelo re_______ i
T h e ______ of plan is essential.

2. The economy o f that country belones in the Marxist ẹroup c

class. We must therelbre______ it as communistic. T h e _______

o f the economy o f that country is not difficult.

3. That water is not pureenouah. Ít is necessary therelbre t

_______ it. T h e ________o f the water is a matter o f public health.
4. Please send a note to the members of the Council. You shouli

■ them o f the date of the next Council mceting. Th'
_______ should reach them this week.

5. The economics teacher tried to make the situạtion He triec
t o _______ his description by making it simpler. When he madt
th is______ , his students understood the whole matter much better.

Exercise 4

Seven words can be formed írom the basic vvord This table
shows you how to do it. Make a list of the words and put each word in its
suitable place in the sentences. You will also need the word nution itseir.

Stem Suffíx

1 2

ize d

Nation ai ation

ism

ist ic

1. The USA is the homeland o f the American

2. Most countries h av e ______ banks. such as the Bank of England.
3. The Socialist Party has plans to _________ various privately

owned Industries.

4. British Rai! is already a_____ industry, because it is publicly owned.
5. The name given to the change from private to public ownership

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Ọnit 3:Some economic laws 33

6. In the last twenty years________ has been a strong political force
leading to the iníbrmation of many new nations.

7. A person who is interested in the progress and history of his own
country may be called a ________.

8. Many governments have certain policies vvhich are not
international but sim ply________.

^ructure 2: Using the auxiliary verbs or for emphasis.
-Xercise 5

Change these sentences using the auxiliary verbs do or did. These 
’erbs are used for emphasis.

Example:

i. These goods and Services have a value.
^T hese goods and Services do have a value.

ii. These people went to the City to find work.
OThese people did go to the City to find work.

1. These factors have an effect upon the economic System.

2. The management tried to change the methods.

3. The representatives of the employers and employees met last week.

4. The decision made by the trade unions affects everyone in the
industry.

5. Short-term economic anarchy has a bad eíĩect on long-term
stability and investment.

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34 English for Business

7. Stable condition led to an improvement in the eeneral State of th
economy.

8. The govemment encourages new commercial enterprises.

9. A change in government usually means a change in policy.

10. The minister vvanted to make a fundamental change in thi
national economic policy.

TEXT 3.2

Bananas are a typical example of perishable goods. By ••perishable’
we mean vvhich goods cannot be stored for any length of time without
going bad. Most foodstuffs are in the perishable category. Such goods are
oíTered for sale as quickly as possible, and so the supply oí' perishables
and the stock o f perishables available at any time are usually the same in
quantity.

This is not true in the case o f non-perishable goods like coal, Steel
and cars, which cannot deteriorate easily. The supply of ears on the
market may not be the same as the actual stock o f cars in the factories.
Economists talk about the Law of Supply, in which the rise in prices
tends to increase supply, while a fall in prices tends to reduce it. If prices
rise for a particular commodity, the rise will of course encourage
producers to make more. On the other hand, if prices fa!l either locally or
throughout the world, producers will reduce production. This can result
in serious difficulties for many producers, and may cause them to go out
o f business completely. Over-production of any commodity can also
create diffículties, because it can lead to a glut on the market. which may
cause prices to fall sharply.

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Unit 3:Some economic 35

consumers. Household goods and fumiture belong to this category. In
such instances supply is said to be “elastic”, because it can be increased
or decreased rapidly in response to market prices.

Exercise 1: Answer these questions, basing your answers on the text.

1. What are perishable goods?

2. What two things are usually the same in quantity?

3. What happens when the Law of Supply operates?

4. What does a rise in prices encourage?

5. What does a fall in prices cause?

6. What serious effect may a fall in prices have on some producers?

7. What can over-production lead to?

8. What happen when the supply of a commodity is adịusted to suit
market conditions?

9. What kinds of goods belong to the category of commodities that
can be adịusted easily?

10. What is meant by “elastic” supply?

Exercise 2

Say whether these statements are true (T) or false (F), and if they are
false, say why.

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36 English for Business

3. The actual stock of cars in a factory is usually the same as tl
supply of cars available on the market.

4. According to the Lavv o f Supply, a rise in prices tends 1
reduce supply.

5. If prices tầll locally, production vvill be reduced throuahoi
the world.

6. When there is a glut on the market, demand decreases an'
prices fa.ll.

7. Changes in prices lead to a chanee in the quality oí'a commodity.
8. Supply is “elastic” because market prices rise and tầll.

Exercise 3

Combine these pairs o f sentences. using that and changing vvill tc

wouId.

Example: He told me something. The prices vvill change.
“^ H e told me that the prices would change.
1. They told him something. The committee vvill meet next week.

2. The economists expected something. The prices w i 11 íluctuate
considerạbly.

3. The government anticipated something. The workers \vill demand 
higher wages.

4. The management decided something. The new tầctory will be
located in a diflerent City.

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Ị/nii 3:Some ecỉaws 37

TEXT 3.3

Elasticity of supply, as a response to changes in price, is related to
deniand. Economists deiìne ‘•demand” as a consumer’s desire or want,
together with his willingness to pay for what he vvants. We can say that
deniand is indicated by our vvillingness to offer money for particular
ỗoods or Services. Money has no value in itselí, but serves as a means of
eXchange between commodities which do have a value to us.

People very seldoni have everythine they want. Usually vve have to
^ecide careíully how to spend our income. When we exercise our choice.

do so according to our personal scale of preterences. In this case of
pfeferences, essential commodities come first (ibods, clothing, shelter,
^edical expenses etc...), then the kind of luxuries which help us to be
Pìore comíortable (telephone. special turniture. Insurance etc...). and
*'hally those non-essentials. vvhích give us personal pleasure (holidays,
Parties, visits to theatres or concerts, chocolates etc...). They may all
Seem important. but their true importance can be measured by deciding
Vvhich we are prepared to live without. Our decisions indicate our scale

preíerences and thereíore our priorities.

Elasticity of demand is a measure of the change in the quantity of a
ỗoods, in response to demand. The chanee in demand results from a
change in price. Demand is inelastic when a goods is regarded as basic
^cessity, but particularly elastic for non-essential commodities.

^Ccordingly. we buy basic necessities even if the prices rise steepỊy, but

buy other things only when they are relatively cheap.

^Xercise I: Ansvver these questions, basingyour answers on the text.

1. What is elasticity of supply a response to?

2. Whal is the detlnition o f “demand”?

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38 Engỉish for Businesmanagem

4. What is money?

5. What do we do when we exercise choice?

6. What comes second in our scale o f preferences?

7. What is our third priority?

8. What is elasticity of demand?

9. When is demand inelasticity?

Exercise 2

Say vvhether these statements are true (T) or false (F). and if they ar
tầlse, say why.

1. When people offer money for particuiar goods, they indicate tha

a demand exists.

2. Money is usually valuable in itself.

3. People do not usually have everything they want.

4. Basic needs come bịre luxuries.

5. Our decisions on how to use our money show what we need moS1
and what we are willing to do vvithout.

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[nit 3:Some eclaws 39

'Xercise 3: Give suitable opposites for these words.

Example:capitalism -> communism

Words Opposites

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40 English for Business

U N IT 4

MARKETS AND MONOPOLIES

TEXT 4.1. MARKETS AND MONOPOLIES

1 Although in a perfect market, competition is unrestricted and
sellers are numerous, free competition and large numbers of sellers
are not always available in the real world. In some inarkets, there may

only be one seller or a very limited number o f sellers. Such a situation
is called a “monopoly”, and may arise from a variety of different
causes. It is possible to distinguish in practice four kinds of
monopoly.

2 State planning and Central control o f the economy olten mean
that a State government has monopoly o f important eoods and
Services. Some countries have State monopolies in basic commodities
like Steel and transport. while other countries have monopolies on
such comparatively unimportant commodities as matches. Most
national authorities monopolize the postal Services vvithin their
borders.

3 A different kind of monopoly arises when a country, through
geographical and geological circumstances, has control over mạịor
natural resources or important Services, as for example with Canadian
nickel and the Egyptian ovvnership of the Suez Canal. Such
monopolies can be called natural monopolies.

4 They are very diííerent from legal monopolies, where the law of
the countiy permits certain producers, authors and inventors a full
monopoly over the sale of their own Products.

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Unit 4:Mcirkets and 41

ln the USA. anti-trust laws operate to restrict such activities, vvhile in
Britain the Monopolies Commission examines all special
arrangements and mergers vvhich might lead to undesirable
monopolies.

-Xercise 1: Answer the followine questions based on the text.

1. What are not alvvays available in the real world?

2. What is a monopoly?

3. What are the íìrst three kinds of monopoly?

4. What examples of important State monopolies are given?

5. What are Canadian nickel and the Suez Canal examples oí?

6. What are certain inventors permitted by law to have?

7. What word in the last paragraph shows that the tburlh type of
monopoly is quite distinct from the other three?

8. What happens when certain companies obtain complete control
over particular commodities?

9. What do the Americans call their anti-monopoly laws?

10. What does Britain use to restrict special arrangement?

*ercise 2

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42 Engìish for Busines

2 . In theory, there are three kinds o f monopoly.

3. States always monopolize important basic commodities.
4. Egyptian nickel is a good example of a natural monopoly.
5. Concerning the market is quite Iegal in the USA.

6. The monopolies commission considers that it is undesirable
restrict business mergers.

Exercise 3

Find single words in the text for which these vvords could I
substituted.

1. many (paragraph 1 ) ... 2. restricted (paragraph 1 )...

3. condition (paragraph 1 )... 4. separate out (paragraph 1 )...

5. essential (paragraph 2 ) ... 6. relatively (paraeraph 2 ) ...

7. írontier (paragraph 2 ) ... 8. tvpe (paragraph 3)...

9. allows (paragraph 4 ) ... 10. categories (paraaraph 5)...

11. commercial (paragraph 5 ) ... 12. unlawful (paragraph 5)...

13. limit (paragraph 5 ) ... 14. studies (paragraph 5)...

15. unions (paragraph 5)...

LANGUAGE USE

Structure 1: Using the present perfect and the simple past tense

* The present perlect tense:

Subject + Have + Past participle
* The simple past tense:

Subịect + V (past)

Look at these examples:

- These developments led as well to the development of polici^ 
frameworks to manage the sector. (The action is situated in the past ah1
is now íinished. Here we use the simple past).

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Unit 4:Markets 43

- A large number of innovations in the telecoinmunications sector

have taken place in a monopoly market structure. (The action happened

lr> the past and related to the present. Here we use the present períect).

Exercise 1

Now put the verb in the brackets into correct tense: simple past or
3resent períect

1. J ill______ (buy) a new car two weeks aao.

2. His hair is very short. H e _______ (have) a haircut.

3. Last night I _______ (arrive) home at haft past tvvelve. I
________ (have) a bath and then I (go) to bed.

4 . ________ (you/visit) many museums when you were in Paris?
5. My bike isn’t here any more. Somebody________ (take) it.
6. W hen__________ (you/give) up smoking?

7. I _______ (not/eat) anything yesterday because I _______(not/feel)
hungry.

8. Why _________(Jim/not/want) to play tennis last Friday?
9. The car looks very cịean, __________(you/wash) it?

10. When we were on holiday, the w eather________ (be) awful.

Structure 2: Because = for = since = as

There are many ways to say because

Example:

They ate becaase they were hungry.
They ate fo r they were hungry.
They ate since they were hungry.

They ate as they were hungry.

Êxercise 2

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44 English fòr Businesnuinagem

sentences, changes the words for, since into beccntse if possib 
(Note: fo r is seldom used).

1. They went for a walk as they were not busy.

2. She rode her bike as fast as she could.

3. We have been waiting since yesterday.

4. They canh go for they don’t have enough monev.

5. It’s a gift for your daughters birthday.

6. As the price was too high, she didn’t buy the bicycle.

7. She is only a housevviíe, but she talks as if she were a proíessor.

8. Since she was sleepy, she went to bed.

9. We must speak English for she doesn’t speak Vietnamese.

10. He became an animal doctor since he liked animals.

TEXT 42. THE IMPACT OF TELECOMMUNICATIONS INVESTMENĨ

ON THE ECONOMIC GROVVTH

The telecommunications industiy has been grovving at a higher rate
o f growth than the overall rate o f growth o f all Industries in most
countries. The industry has also been subịect to high rates ot' growth in
product innovation and process innovation. However, the pace oí
technological change can also beneílt the incumbent if it uses ne\v
technologies and Services to strengthen its market position.

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Unìi 4:Mơrkets 45

°ften accepted in the past bv policy makers. The evidence. hovvever.
°verwhelminely contradicts this argument. On the contrary. new entry
ar>d competition have helped expand markets to a signitìcant extern,
especially by placing down\vard pressure on price and stimulating
demand (e.g: in mobile communication).

Telecommunications is playing an important role in OECD
economies so that efficient Service provision is important. General
c°nsensus has emerged that effíciency is best achieved through
c°nipetitive structures, hence the importance of reẹulatory reform.
^elecommunications can lead to increniental national economic growth
,r> several ways. The sector plays a signitìcant role in reducing the
transaction costs oí' doing business. the costs of orderíng, eathering
lr>tonnation, searching for Services and using Services, and as the role of
"líormation in economies and the Service sector increases its share in
°Verall output, the importance of Communications is enhanced. Further.
leIecommunication Services provide signiíìcant externalities increase as
lhe intbi-mation content of production increases. That is as the
c°nimunication intensity of the production processes increase.

Several studies have been ụndertaken to try and show the impact of

lelecommunications investment on economic grovvth. For some of these
stUdies, the purpose has been to show that improved telecommunications
'hvestment and increased consumption of telecommunications (which
^Ould result from a Củmpetitive market envirònment) would have more
^r°ad positive impacts on the economy. Analysis in Japan suggests that
lt1vestment in communication broadcasting íacilities had a multiplier
effect o f 2.08 in terms of increased production in the .íapanese economy.

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46 Engỉish fov BusinessmanaiỊeme

time the Administration aimed at opening the telecommunicatior
markets to more competition (much of which has been incorporated i
the Telecommunication Act o f 1996), cou),d add $100 billion to GD
over the next decade. Further the estimates. indicate that t:he share o f th
telecommunications and iníịrmạtion secíor in GDP could double b
2003 and that there could be a net increase of 1.4 million ịobs in thỉ
sector. Incremental Capital investment over the next decade is estimate
to reach $75 billion. The signiíicance of the Council ol' Economi
Advisers’ study is the underlying recoenition that existina reaulator
frameworks are an impediment to investment. Service development an<
employment growth. A similar study estimated that by elimỉnating line o
business restrictions on the BELL Operating Companies (the present Ac
has in effect eliminated them), the economy would gain 3.6 millior
additional ịobs over the next 10 years, 0.5 percent in manuíầcturiní
output and $247 billion would be added to GDP.

Irrespective o f the magnitude of the economic impact o í informatiofl
inírastructures, the most important factor for policv niakers is tfl
understand the social cost of ineffìciencies in non-competitive markets ot
insuffíciently competitive markets. These costs arise in particular from

lower output in the less competitive markets, slower development and
diíTusion o f application. and higher price. Given that the commu.nication
industry and the main using Industries, especially i:he Service sector, from
an increasing part o f the economy, this can result in high social costs-
Empirical results have shovvn that the spillover eííects from inforr.natiofl
and communication technologies also have an important influence on thể
productivity level of the vvhole economy. and ineffícient markets will
limit these spillover effects.

Exercise 1: Answer the íollovving questions based on the text.

1. How is efficiency best achieved according to the consensus?

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Ọnit 4: Markets 47
3. What did the u s studies focus on?

4. w.hat is the most important factor to policy makers?

5. What form an increasing part of the economy?

Exercise 2

Find the verb or adjective from the text that coưesponds to the
following noutns.

Nouns Verbs or adjectives

Justiíìcation
Provision
Competition

Argument
Reduction
Legislation
Limitation
Signitìcance
Necessity
Effíciency

Exercise 3
PRODƯCT

- Product (n): something produced.

- Production (n): the act or process of producing.

- Productive (adj): producing or capable of producing. used especially
to talk about ability to produce abundantly.

- Productivity (n): rate o f production; the quality of being productive.

- Produce (v): to make or manutầcture.

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48 English forBusiness

Use the words given above to complete the sentenees:

1. He is the m o st__________________man in the group.
2. What should we do to reduce___________ cost?

3. His labour__________ is Iow because the W|Ork doesn t suit him.

4. Could you tell me about y o u r___________ plan?

5. They decided t o ____________ more items.

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Unit 5: In 49

Ư N IT5

INFLATION

ĨEXT 5.1. THE INFLATIONARY EXPERIENCE 0 F LDCs

Inílation is dìned as a persistent rise in the general level of prices
!or alternatively as a persistent fall in the purchasing power of money). A
'ise in a particular price is not inílationary if it is offset by falls in other
5rices, and in once-and-for-aỉl rise in prices (owning. for example, to
larvest tầilure) will not be inílationary unless it is accompanied by
'esponses that turn it into a process (an intlationary spiral) over time. The
atter point highlights the importance of the transmission or propagating
nechanism.

That intlation is a problem for the mạịority of LDCs is clearly
lemonstrated by the data presented in the table below. For the non-oil
eveloping countries, excluding the People’s Republic of China, intlation
Ccelerated throughout the 1970s and continued to rise in 1980 and 1981.
he mạịor exporters of manufáctured goods also experienced high rates
f inílation, inttuenced partly by the inclusion in that group of Argentina
nd Brazil, countries that traditionally seem to suffer from high rates of
rice increase.

Average Change from preceding year

1967-1972 1973 1974 1975 1976 1977 1978 1979 1980 1981
ỉil exporting countries

Veighted average 80 11.3 17.0 18.8 16.8 15.5 10.2 10.5 12.6 13.1
Jon-oil developing

ountries 23.0 20.0 24.7 32.1 31.4

Veighted average 
^cluding China

9.1 22.1 28.7 20.7 27.6 27.0 23.6 29.0 36.9 37.2

analytical group

Weighíed averages 4.1 11.1 20.6 14.6 14.9 22.8 17.7 17.7 24.2 24.6

Net oiỉ exporters - - - - - 23.0 20.3 25.8 33.3 32.4

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50 Englishfor Business

- Major exporters of 
manuíactures
- Low-income countries

excluding countries
- other net oil importers

14.1
6.5
8.4
21.3
29.1
31.9
24.9
30.2
40.3
40.1
11.9
29.1
55.8
-0.1
19.7
40.9
7.1
11.2
20.5
37.3 
3.7 
6.5
19.3
44.6
6.8
11.5
24.6
54.3
11.6

15.9
32.9
62.2
9.6
17.6 
20.2
By area

- VVeighted averages 4.6 9.7 15.4 15.0 14.9 19.3 15.2 19.2 19.3 22.7

- Aírica - - - - - 5.8 3.7 6.5 12.6 9.9

-Asia excluding China 6.5 21.5 30.3 10.2 0.3 7.8 5.7 9.4 16.0 15.4

- Europe 6.1 12.7 17.5 14.7 12.5 16.2 21.1 27.5 40.5 25.9

- Middle East 4.2 12.1 22.1 21.6 19.1 19.6 21.1 25.8 42.7 32.8

- VVestern hemisphere 15.3 32.1 I 37.5 52.0 66.2 51.2 42.4 49.6 58.3 65.7

( Source:IMFAnnuoỉ report, 1982. Washìngton D.C)

Table 5.1: Developing countries in

Regional variations are also o f signitìcance. The Latin American
(westem hemisphere) economies suffer the highest rates of intlation.
followed some way behind by the Middle East. Until the mid-1970s,
inílation had never been a pressing problem for the mạịority of AIYican
economies, but that situation changed then, partly as a consequence ot'
the oil-price rises o f 1974 - 1976 and 1979 - 1980.

All data from LDCs should be treated with caution. but special
care should be exercised with respect to price data. The consumer price
index (cost of living index) may well have a pronounced urban bias and
the vvholesale price index may well be heavily weighted by the prices oi
imports and exports. Data availability and reliability are thus mạịor
problems inhibiting the study of inílationary process in LDCs.

Exercise 1: Answer the following questions.

1. What is the difference between a price rise and an intlationary spiral?

2. What was one o f the reasons for high rates of inílation among
major exporters of manuíactured goods?

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Unit 5: In 51

4. Which part of the world had the lowest rate of inAation up to
1981 and which group of the companies experienced the lowest
rate of intlation up to 1981?

5. Is there any evidence in the table above to suggest that China had
a Iow rate of inílation (or lower than most countries)?

Exercise 2:

Decide whether the following statements are true or false.
1. Inílation is dìned as a persistent rise in the purchasing power

of money:

2. It is not inílationary if a rise in one price is compensated for by

íầlls in other prices.

3. A once-and-for-all rise in prices can never be inílationary.

4. The Middle East experienced the second highest rates of inílation.

5. Most Aữican countries did not suffer from serious inllation until
the mid 1970s.

6. It is very diffìcult to obtain dependable price data from LDCs and
this causes serious problems when tiying to study inllation in LDCs.

Exercise

3: Match the words írom the text with their synonyms or explanations

Words from the text Synonyms or explanations

1. persistent a. reproduction

2. transmission b. applied. employed, taken

3. propagating c. urgent

4. inclusion d. continued

5. pressing e. containing, adding, putting

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52 Engỉish forBusiness managemen

LANGUAGE USE

Structure 1: Comnienting on data (table)

1. The way o f referring to periods of years:

The 1950s (or the ’50s) = 1950 - 1959

The early 1950s (or the early ’50s) = 1950 - 1953

The m id-1950 = 1954 - 1956

The late 1950s =1957 -1959

2. Below are some of the ways of describins data:

rise slightly slightly ri se

increase sloxvly small increase

arow gradually aradual arovvth

fall steadily steady Ìầii

decline steeply a marked drop

drop rapidly big reduction

sharply dramatic decline

suddenly steep decrease

dramatically Sharp

signillcantly rapid

3. Notice some expressions for indicating magnitude vvhen comparing
quantities, amounts, percentages, numbers, etc.

- X is double Y Y is half X

twice a half of

two times

- X is three times Y Y is a/one third of X

treble

- X is four times Y Y is one/a tburth of X

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'Xercise 1

Find the appropriate data from the table that illustrate the tollovvine
Omments.

1. “For the non-oil developing countries, excluding the People’s
Republic of China. intlation accelerated throughout the 1970s and
continued to rise in 1980 and 1981”.

2. “The mạịor exporters o f manuíầctured goods also experienced
hieh rates of inflation”.

3. “The Latin American (western hemisphere) economies suffer the
highest rates of inỉlation, followed some way behind by the
Middle East”.

4. ‘Tnílation had never been a pressing probleni for the mạịority of
Aữican economies. but that situation changed in the mid-1970s”.

íercise 2

Brieíly comment on the data for Asia. excluding China in the table
the text 5.1. Then compare these data with those for Europe.

'ucture 2: Academic caution.

In economics \vriting, there is often the need to be (i.e. to
icate less than 100 percent certainty). The purpose is to show that a
ìeralisation is being rnade or that it is necessary to be cautious in
king a statement or arriving at a conclusion. In other words. one is

icating a hiỳh degree of certainty, probability or possibility instead of 
ỉ/ certainty.

Below are some examples given to illustrate this 1'eature academic
ting.

• The consumer price index may whave a pronounced nrban bias...

• Inllation will almost certainlỵaffect the distribution of income...

• The tunctional distribution may be aíTected by a redistribution ...

Below is a table shovving the most cominon ways of expressing
ion or tentativeness.

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54 Englishfor Business

Through a verb Through the adverb/adjective

appear(s) (more) (likely) to almost certainly

seem(s) likely

tend(s) to probably/ probable

be (more) likely to

-may well

-might maybe

may perhaps

could possibly/ possible

can

-Note:

• Caution can also be achieved by using adverbs of írequency

usua/ly, normally,general/y, and other qualiíying adverb
e.g: mainly,chiefly, largely...

• The negative can be qualiíied in a similar way lo remove the senS'

o f “ 100 percent negative” e.g: not

Exercise 3

Select either your own country or one whose economv you haV< 
some knowledge o f and which has suffered from inAation. You can makÉ
use o f any books. articles. etc, if you wish.

Briefly describe the rate of inílation in the country in the recen1
years. Try to explain the the mạịor causes of the inílation. What steps haí
the government taken to control the intlation. Has the IMF been involve^
in any anti-inflationary stabilisation policies?

In your writing, try to use, where appropriate, some of the tentativS
languages that were shown above.

TEXT 5.2. THE CAUSES OF INFLATION

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'nit 5: InỊ 55
For example. in order to íìnance a war or carry out social programs.
le governinent may spend more money than it has received throush
iXes and other revenue. thus creating a delìcit. In order to offset this
síìcit, the Treasury department can simply expand the money supply by
ìing more paper money to meet the debts of government. This increase

I the money supply will cause the value of the dollar to automatically
ĩcrease. The second cause of inílation occurs vvhen the money supply
icreases íầster than the supply of goods. If people have more money.
iey will run out to buy popular goods like televisions or computers, íor
cample, a shortage will result. Industry will then produce more. at high
'ices, to satisíy demand. Furthermore. if people think that the prices of
ipular goods are going up. they will buy or even borrow money at high
terest rates to pay for them. Finally, if labour unions demand that
ages o f workers must be increased to cover the high cost of livine.
dustry will meet this demand and add other costs o f production on to
e customers.

In summary, all of these causes can create inílationary problems that
in affect the welfare of a nation. However, of these cases, excessive
)vernment spending may be the most imporỉant.

Kercise 1: Answer the following questions.

1. How may a dìcit be created?

2. What does a Treasury do in order to offset this detìcit?

3. What happens vvhen the money supply increases íaster than the
supply of goods?

4. What will people do if they have more money?

5. What happens in the society vvhen the prices of popular goods
rise?

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56 Engỉish for Busines

Ư N IT6

PRODUCTS

TEXT 6.1. GIVE BENEFITS NOT PRODUCTS

1 Successful marketers try to remain open and tlexible. yet there i

one unchanging maxim which they share: customers bu

Products; they seek to acquire beneỹits. Those i'ew words hold th

secret o f many innovative organization successes. It is a principl'
which can be applied to almost any Products / market decisions.

2 The principle itself is almost deceptively simple, which is wh)
some marketers pass it by. The successíul marketing organization \vil
pay more than lip Service to its meaning. because it represents the mosi
basic yet most important principle o f marketing. Customers do not bu>
a product for the product itselí. Customers buy clean tloors. not lìoot
polish. They buy security, not Insurance policies; high pertbrmance 
engines (or status), not Ferraris; better lubrication. noi industrial
cutting oil.

3 An innovative tool manutầcturer realized. throueh the course of its
relationship with its customers, that a mạịor problem on the production
tloor was the time lost in changing abrasive discs. The company
invested a great deal of time and money in seeking a solution, and

invented a highly specialized System of binding grit to disc. The result
was a new disc vvhich had a much longer life and could be removed
and replaced much tầster than the old type. This gave the
organization‘s customers the benìt o f more ìĩcient production time
and better value for money.

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The concept of customec benefíts sho\vs the importance. of an
organization being oriented towards the customer, or market, rather
than the product. The organization cannot afford to adopt a narrow
view of its role by concentrating only on the product. An organization,
íor example, manufacturing adding machines in a marketing
environment, which is moving towards calculators, will soon find itselí
and its product obsolete. It must consider what the benetìts o f its
product are - in this case, computing sums accurately and quickly - and
rnake sure that it is providing that benetìt better than any other
organization. If a better or more cost-effective method ol' computing
comes along. the customer will naturally be attracted to that product
which incorporates those developments and can theretore provide
increased benìts.

5 Marketers must be on guard against what one marketing specialist
has termed “marketing myopia”. Theodore Levitt described this
condition as the result of coníusing Products with markets.

The oreanization can avoid myopia of this kind by maintaining a
dvnamic and regular check on its product range. Ít must constantly
assess its product by asking :‘Does the product provide the relevant and
desired benetìts to meet our customers’ needs today?”

íxercise 1

Un it 6: Products 57

1. Record the Products named in the second paragraph and the
Orresponding beneiìts.

Products Benefits

Paragraph ( a ) ...vt*/ ...
( b ) ...

Additional

v*) ...

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58 Engìish for Business

Exercise 2: What do the following words and expressions reter to?

1. Paragraph 1 “those few words’\
2. Paraaraph 3 “the result”.

3. Paragraph 3 “this”.

Exercise 3: What is the meaning of?

Paragraph 1: Maxim

Paragraph 2: Pass it by

Paragraph 2: Lip Service

Exercise 4

a. word
b. principle
c. Products
d. beneíĩt
a. unaware of it
b. 20 past it

c. do not choose it
d. do not tell others
a. disapprove
b. approve

c. pretended to approve
d. pretended to disapprove

The words and phrases below could replace vvords and phrases used
in the text. Write the exact word(s) in the text that could be replaced
and give the paragraph number. (The words occur in the same nurnber as

the list). ______

Just mentioned In the last example Paragraph 4

Simultaneously
Long standing
Out of date

Includes

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Un ị í 6: Products 59

langưage use

Structure 1: Using can and be able to

In the present tense
Example:

- 1 can swim - 1 am able to swim.

- 1 cannot swim - 1 am not able to swim.
- Can you swim - Are you able to swim?
In the past tense

Example:

- 1 could svvim - 1 was able to swim.

- 1 could not swim - 1 was not able to swim.
- Could you swim - were you able to swim?
In the íuture tense

Example:

-I will be able to swim.
- 1 will not be able to swim.
- Will you be able tó swim?

Exercise 1

Revvrite these sentences in the future tense.
They cannot export rice to America.

—*• They will not be able to export rice to America.
1. Last year she could not speak English very well.

2. Can you write a paper about the Vietnamese tax System?

3. They weren’t able to visit their son in the hospital.

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60 English for Business

5. She couldn’t open the door because nobody gave her the key.

Structure 2: The use of Reílexive pronouns

Singular: Myself, yourself (one person). himselí. herseir. and itseir.
Plural: Ourselves. yourselves (more than one person). themselves.
Reílexive pronouns are used in the íịllovving situations:

• In cases where the same person is the subject and the object. it i:
normally necessary to use the rellexive pronouns.

Exơmple: He cut himsel/while he was shaving.

• When the action is one that people normally and ìen do to
themselves, the pronoun is írequently left out. We usually say that

“a small child is learning to dress him seir, because children are
ten dressed by other people.

• Retlexive pronouns can be used with nouns to give the special
meaning “that person/thing and nobody/nothing else”.

Exampìe: The manager him seỉf spoke to me.

The house itself is beautiíul, but the surroundings are rather 
unpleasant.

• Rlexive pronouns are not used aíter feel. relax. and concentrate.
Exampỉe: I feel great after having a swim. (not “I feel m yself great’’).

Exercise 2

Complete these sentences with reílexive pronouns when necessary.
1. It isn't her íầult. She really shouldnT b lam e...

2. I ’m trying to te a c h ... Spanish, but I’m not making
much progress.

3. Don’t worry about us. We can look a íte r ...

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Mit 6:Products 61

7. Did the children en jo y...Where they were on holiday?
8. Some people are very seliìsh. They only think o f ...
9. “Can you clean the windows for me?” “Why don't you clean them

9 ”

10. “Does Mr. Thomas have a secretary to type his letters?" “No, he
types th em ... ”

EXT 6.2.MATCHING PRODUCTS AND MARKETS

Marketing has been delìned as the process o f matching an
rganization’s resources with customer needs. The result of this process
; a product. The need. theretbre, for the organization to remain dynamic
) obvious because the product is the only key to the organization,s
Nvency and protìtability. No matter how else the organization runs
self cost-effectively and sensibly, if the product is not selling well then
le money simply vvill not be coming in. Company and customers are
Ìterdependent.

Successful product management depends on the or2anization
nowing how and if the cuưent product range meets customer and
rganizational obịectives. One way of doing this. as previously
escribed, is to conduct detail benìt analysis segmentation.

The most important attitude towards product management is to
iew the product as only one part of the marketing mix which also
icludes price, place and promotion. In this way. the product is vievved as
variable which can be adapted or even changed radically to meet a
langing market. Ho\v it can be changed vvill depend on several íầctors
ithin and outside the organization, including the organization’s
:sources, market conditions and opportunities and competitive threats.

Product market strategy

“Product market strategy” is the term used to describe all the
ĩcisions which the organization makes about its target markets and the

oduct it offers to those markets.

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62 English/or Business

from “tactical" activities which are used to achieve short term objective
by gaining immediate results. Product-market strategy rcpresents
decision about the current and íuture direction of the oreanization.

Product market strategy must be developed in the cost-effectiv
manner, paying attention to cash flow and prìtability requirements. T'
minimize cost at the outset, a sound marketing approach \vill usuall;
attempt to increase proíĩt and cash ílow from existing markets. Th
following examples can help to illustrate the total strategy at work:

1. Market penetration:Heinz revamped its marketing strategy t< 
increase consumption of its tin Soup. This product wa

traditionally a winter purchase. but Heinz successtully promote*
the idea of celery Soup, drunk hot or cold. as a suitable summe
purchase. The product attributes of celerv were linked witl
concepts o f slimming and reíreshment on summer davs.

2. Market deveỉopmenV. A British hotel Chain opened up a nev 
market by offering “Leisure Learning" vveekends in its hotel.

3. Product range extensiotr.A European breaklast cerea

manuíầcturer brought out o f a new variety paek to appeal tí
young children who like the íreedom of choosing a new cerea
each morning.

4. Product development: Manutầcturer o f dieital watches soot 
combined the watch ỉunction with an alann component. This no(
only attracted customers who liked the novelty of idea, bu1
seriously threatened the traditional watch market.

Do the following exercises based on the text:

Exercise 1

There is one dinition o f marketing.

ì.Which part of the text does it come from?

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ỉnit 6:Products 63

Ixercise 2

1. Why rnust an oreanization be dynamic?

2. List the factors that affect product change as internal or external.

3. Explain the difference between strateey and tactics.

4. There are examples oí' four product-market strategies in the text.
Which of those strategies do the following extra examples

illustrate?

a. The promotion of new ice-cream bars based on traditional
chocolate bars (such as Mar Bars, Snickers, Kit Kat).

b. Adding an automatic timer to a microwave oven.
c. ưsing cinemas and theatres for daytime talks.

EXT 6.3. BEUING POSTAL MARKETS AND PRODUCTS

Postal markets and Products!

Respond effectively, through improved market knowledge and
:)duct development, to the need and expectations of postal Service
stomers.

Description

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64 English fo r Businessmanaẹemen

including value - added Services. Increasingly, new techniqucs also need 
to be introduced in order to promote and sell postal Products and Services.

Government, one of whose tasks is to serve and promote the
interests o f both senders and receivers o f postal Service, also has the
policy role to play in the development o f postal Products and Services.
For example. taking into account the rapidly changing postal environment.
how much commercial treedom should eovernmenl give lo postal
administrations to develop and market postal Products and Services that 
are competitive? Or if they mandate extensive infrastructure presence to

serve all the people. then should they allow postal administrations to
diversilỳ product ranae in order to reach economies of scale.

An important role for the Unioir s bodies. therefore, is to help ensure
that government and postal administrations place Service to customers
amona their highest priorities. For example, they can ensure that new 01'
improved postal Products sent from one country are received under the
same conditions by customers in other countries. Or if the need for the
expectations o f a particular customer group can be successlully met
through the development o f a new postal product. then the same product
could be effectively marketed to more postal customers in other parts of
the world.

Elements that might be included under this objective bv any or all
o f the three groups (Government. Postal administration. Bodies of
the Union)

Carry out market and product development research aimẹd at 
producing better postal Products, a wider range of postal Products and 
more effective customer Service, leveraging the assets o f the poslal netvvork:

• Posta! Products such as letters post, parcels, EMS, direct mails,
consianment. door-to-door Service, etc.

• Products of other providers of goods and messages.

• Philately.

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• Postal payment Services (money orders, postal savines. etc).
• New technologies and new use of existing technology.

• Provision of socially important Services inteurated into
government policy.

Put in place a framework íor and implement prọịects aimed at
easuring customer satisíaction.

Improve policies and method with regard to the promotion and sales
postal Products and Services.

Improve policies and method with regard to customer support and
rvices.

Put in place a íramevvork for and implement proịecls design to
prove existing Products to introduce new Products, and to introduce
irket awareness and customer satisfaction.

Put in place a lramevvork for monitoring períbrmance in achieving
iective.

Do the following exercises based on the text:

ercise 1: Answer the following questions based on the text.

1. When can there be any postal Services?

2. What should Products and Services be based upon?

3. Why do the new techniques need to be introduced?

4. What is the new important role of the ưnion’s bodies?

5. What is the purpose oí' carrying out market and product
development research?

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66 English for Businessmonagemẻ

Exercise

2: Matchine a vvord or phrase in column A with a word in column I

A B

Excellent Priorities

Postal Range

Highest Inírastructure

Market Administration

Existing Knowledae

Customer-oriented Commerce

Product Business

Postal Service

Electronic Technology

Extensive Research

Exercise 3: Complete the text with word in the box.

be which being latter to

are narne several as ' if

branding between an by reduce

Product can (1)___________ sold as unbranded commodities. Ra
materials (2)___________ still treated this way. but increasingly brandii'
is becoming dominant, even in the supply of industrial components
in hitherto unbranded areas such as vegetables.

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ỉnit 6: Pro 67

tay have even previously specifíed the brand. We know the range of
ompatible software for the microcomputer.

Consumers learn (6)_________ place some reliance upon brand
ames when evaluating competing Products. In Service, too,

0 _______ can serve the consumer by offering consistent. identiíìable
ìrvices which might (8)_________ confusion and save on search time.

Mark and Spencer is the top brand in Britain according to a survey
1 1988. It scored highest on awareness and on how highly regarded it
as by members of the public.

An interesting comparison is (9)___________ Britain and Europe.

op brands across Europe are dominated by car manuíầcturers. In all
tses, it is the corporate identity that dominates.

There are (10)___________ options in brand strategv. A company
in sell under its own brand or under that ốf another company. In the
1)___________ case it is often a retaiTs ovvn label. In using the
)mpany’s brand, a choice will be needed between using a “íầmily”
'and name for all that firm’s brands, as opposed to giving each product
1 individual brand (12)_____ .

Some companies attempt to obtain the beneíits of both strategies by
mily branding and at the same time having several “sub-brands”. Ford
tts its name on its cars, (13)___________ also have individual brand
imes. The Lever subsidiary Bird Eye Walls is now creatine sub-brands

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68 English for Business

UNIT 7

PRICING

TEXT 7.1. IS PRICE ALL THAT MATTER?

“Price cutting”, it has been said, “is a technique for slitting someone
else?s throat and bleeding to death y o u rseir. Price cutting wars erode
protlts right across the industry in which they are waged. and are often
started by a xvholly unnecessary panic reaction to price competition.

The view that a competitor’s price must always be matched in order
not to loose rnarkét share is an unduly pessimistic one. based on the false

assumption that the customer is only interested in price.

Even in price sensitive industrial commodity markets. this is so far
from being the case that price is not the most important marketing variable 
in the eyes o f customers. Survey in the UK and elsevvhere have shown
that in excess o f 60% o f DMUs would not change their best suppliers for
a drop in price of 5% plus, and for some, the íìgure would be 10%.

Sulphuric acid, for instance, is a bulk commodity that can be
described as price sensitive. The large buyer is likely to be involved in
running a continuous process. The acid cannot be stored in large
quantity, except at prohibitive expense, because it is corrosive. and so if
the supply is interrupted íor any length of time, the customer has to stop
production. For this reason he “multi-sources’’- that is, buys irom several
suppliers. Even so, supplies are far from guaranteed because at peak
business periods they will all be stretched. So the wise customer chooses
suppliers primarily for reliability, not price.

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Unit 7; 69

It follows that knowledge of precisely vvhich factors it is that
customers regard as of greatest important, will enable the marketer to
concentrate attention on these points, and steer the buyine decision away
from price.

Do the following exercises based on the text.

Exercise 1

In each paragraph or pair of paragraphs. the author has a particular

puipose. Match the paragraph numbers with the purpose from the box below.

Paragraphs

1&2
3
4
5
6

Purpose

Purposes

Stating a principle. Giving an example.

Preparing for the next topic. Making a claim.
Justifying a claim.

Exercise 2

1. a. What is the author’s claim?

i. Price is not the only issue for buyers

ii. A competitor’s price must ahvays be matchcd
iii. Price wars increase prìts

iv. Price wars cutting is his necessary

b. What evidence does he quote to justify his claim?

2. a. Name one substance where a buyer vvill look for supply reliability.

b. Why is supply so important?

3. Buyer will consider a number of factors.

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70 English fo r Business management

4. Look at the section heading listed below. Which would one follow
paragraph 6?

a. When should price cutting be considered?
b. Completing on value, not price.

c. Knowing what the customer values.

d. When the competitiorrs price is not knovvn.

5. The íìrst sentences o f this next section have been ịuinped up.
What should the order be?

a. For example, the same-day developine and printina Service for
film would have a very high value to short-stay tourists who
wished to see how successful his photography had been vvhile he
still had the chance to retake the pictures.

b. This is because the Products that seem entirely idenlical to their
producer may not rank equally in the eye oi'the purchase.

c. That same person at home would place a totally different value on
such a Service.

d. What the customer regards as important is sometimes íầr irom
obvious, and can only reliably uncovered through detailed market
research.

LANGUAGE USE

Structure 1: Still/ yet/ already: stHỊyend already can be used to talk a
about actions and events that are going on around the present.

• Still is usually put with the verb. in mid-position. h is used to talk

about the continuation or action that started in the past. especially
when we are expecting it to stop some time soon. or we are
surprised that it has not stopped. Still is almost cornmon in 
affìrmative sentences, but also possible in questions and
negatives.

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Unit 7: 71

• Yet is usually put at the end of the sentence. It is used to talk 
about things that are expected to happen, and is also used in
questions and negative sentences.

Exomple: Has the postman come yet?

• Already is usually put with the verb. in mid-position. It is used to 
suggest that something has happened earlier than expected. or
earlier than it might have happened. It makes a contrast vvith yet.
Example: He hasn’t tìnished it yet.

He has already tlnished (sooner than expected).

Exercise 1

Complete the following sentences with still, yet or already.

1. Is h e ________ working in a íầctory?

2 . 1’ve been thinking for hours, but I _________ can't decide.
3. They haven’t woken u p ________ .

4 . 1 haven*t decided what colour to paint the vvall_________ .
5. Does h e _________ .make a lot?

6. Have y o u _________ met Proíessor Hawkins?

7. He hasn’t replied to our letter_________ .
8 . 1 _______ know what I wanted.

9. Does h e _________ vvant to be a politician?
1 0 .1 ________ told you.

Structure 2: Either.

• Either is used instead of too and also in negative sentences.
Example:“I don’t like opera” - “I.don’t like opera either”.
In “short answer”, structures with nor and are also possible.

Example:“I don’t like opera” - "Nor / do I”

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72 English for Business

Example: You can either come with me now or vvalk Home.

Either you leave this house or r i l call the police.
You can either have Soup. fruit juice or melon.

• Either usually means “one or the other”. Occasionally it can

mean “both” (particularly with the words end and side).
Example: Come on Tuesday or Wednesday. Either day is OK.

There vvere roses on either side of the door. (= on both sides) 
Note: sineular noun with either.

• Either is used as pronoun, alone or with of + plural noun phrase. 
Example: “Do you want whisky or gin?" - “Oh. I don't mind. Either".

Has either of your parents visited you?

- When either is followed by a noun phrase. there must be another 
detemiiner (possessive. demonstrative or article).

You can say either o f the rooms. or either o f my rooms, but not

either of rooms.

- Beíore a personal pronoun, either of is always used.
Exampỉe: Either of you could do it.

- In sentences vvith either of, the verb is normally singular.

Exampìe: Either of the children is quite able to look after the baby.
- But in negative sentences a plural verb is quite common. especially
in an iníbrmal style.

Example: I don’t think either of them are at home. (O r... is at home).

Exercise 2: Make 10 sentences using the word “either”.
TEXT 7.2. SETTING THE PRICE

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Unil 7: PriciníỊ 73
2 Setting one for all buyers is a relatively modern idea. It was given

impetus by the development of large scale retailing at the end of the
nineteenth century.

F. w.

Woolworth Tiffany and Co., John
Wanamaker, J. L. Hudson and others advertised a "strictly one - price
policy because they carried so many items and supervised so many
employees.

3 Through rnost of history, price has operated as the major
determinant of buyer choice. This is still true in poorer nations, arnong
poorer groups, and with commodity - type Products. Hovvever, non-
price factors have become relatively more important in buyer-choice
behaviour in recent decades. Yet price still remains one of the most

important elements determining company inarket share and
prìtability.

ị Price is the only element in the marketing mix that produces
revenue; the other element represents cost. Yet rnany companies do
not handle pricing well. The most common mistakes are: pricing is too
cost oriented; price is not revised oíten enough to capitalize on market
change; price is set independently of the rest of the marketing mix
rather than as an intrinsic element of market-positioning strategy; and
price is not varied enough for diiìerent product items and market
segments.

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74 English for Business mtmagemen

Do the following exercises based on the text:

Exercise 1

1. The “one-policy” means:
a. All item are the same price.

b. All purchasers pay the same price.
c. All emplovees earn the same wage.

2. Why did the one-price policy come into existence?

3. What is the mạịor dilTerence between price and otlier 3 Ps?

(Note: 4Ps = place, price. promotion and product).

Exercise 2

1. Historically, which o f the 4 Ps has been most important?

2. Why should prices be reviewed?

3. What is the meaning o f “yet” (paragraph 3)?
a. For a while.

b. Even now.
c. But.

4. Find words in the text vvith the opposite meaning to those listed below.

Opposite Paragraph number

Buyers __________________ ________________________

Ancient __________________ __________________

Small-scale __________________ __________________

Employers __________________ __________________

Revenue __________________ __________________

Extrinsic __________________ __________________

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ưnit 8: International 75

U N IT8

INTERNATIONAL MARKETING

TEXT 8.1. BREAKING INTO UNRECEPTIVE MARKET

It is one thing to want to do business in a particular country, quite
another to be allovved into the country on reasonable terms. The problem
of entering an unreceptive or blocked country calls tor megainarketine-
using economic, psychological, political. and public relations skills to
gain the Cooperation of several parties in the country.

For example, Pepsi-Cola used megamarketing in its attempt to enter
the huge India market. Pepsi worked with an Indian business group to
seek government approval for its entry. Both domestic soft-drink
companies and anti-multinational legislators obịected to lettinẹ Pepsi in.
so Pepsi had to make an offer that the Indian government would find
hard to refuse. It thus offered to help India export enough of its
agricultural Products to more than offset the outlay for importing soft-
drink syrup. Pepsi also prorìiised to focus a good deal of sellina effort on
rural areas to help in their economic development. The company further
offered to give food-processing, package, and water treatment
technology to India.

Clearly, Pepsi’s strategy was to bundle a set of beneíĩts that would
win the support of the various interest groups influencing the entry
decision. Pepsi’s marketing problem was not one of simply applying the
four Ps in a new market, but rather one of just getting into the market in
the first place. In trying to win over the government and public groups -
and to maintain a reasonable relationship once admitted - Pepsi had to

add two more Ps: "politics” and “public opinion”.

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76 English fo r Business managemen

for Latin American children and gives agricultural advice to ihe Mexicar
government. Polaroid is helping Itaiy restore Leonardo de Vinci’s Las
Supper.

Do the follo\ving exercises based on the above text:

Exercise 1

1. When Pepsi wanted to sell goods in India:
a. Who did Pepsi work with?

b. Who did not want Pepsi Products in their country?

c. Who did Pepsi make agreements with?
d. What was Pepsi’s main problem?

2. a. In how many niain areas did Pepsi offer help to India?
b. How does the writer signal this in this text?

3. What are the Ps o f megamarketing?

Exercise 2

1. Fill in the table below to summarise the megamarketing techniques
o f the companies mentioned.

Company Product Special strategies

1. Pepsi 1.

2.
3.

2. 1.

2.
3.

3. 1.

4. 1.

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Jnit 8: Internationa! marketing 77

2. a. What does “mega” mean?
b. What do the following mean?
- Megamarketine

- Megaphone
- Megalomania

3. a. Look in the passage to tìnd the verbs that complete the

xpressions below:

____________ the co-operation of
____________ approval for

____________ an offer

____________ the outlay

____________ the support of

____________ good relations

b. Which two of these verbs are interchangeable?

c. What is the ditTerence in meaning betxveen: “to seek the
support o f ’ a n d _______ “to win the support o f ’?

d. What verbs would make the expressions mean the oppòsite?

.ANGƯAGE USE

tructure: the use of so for purpose.

• We use to ... to say why somebody does something (= the purpose 
of an action)

Example: “Why did you go out?” "To post a letter”

• We use to... to sav why something exists or why somebody

has/wants/needs something:

Example: This vvall is to keep people out of the garden.

• We use to... to say what can be done or must be done vvith 
something:

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78 Engỉish for Businessmanagemer
Also: money/time/chance/oppoitunity/energy/courage etc. to (d( 
something):

Example: They gave us

some money to buy

food.
• For... and to...

Compare:

- I’m goine to Spain

for a holiday.

- I’m going to Spain to learn Spanish. (not “ for learn Spanish”, 
not “for learning Spanishr.

We use for + noim (for a holiday) but to + verh (to learn).

•

So that:

sometimes you have to use so

that

for purpose. We use
so

that

(not

to...).

- When the puipose is negative (so that...won‘t/wouldn't)
Leave early so that you won’t (or don‘t) miss the bus.

- With can or couìd

(so that...can/could)

She is learning English so

that

she can study in Canada.

- When one person does something so

that

person does
something else.

I gave her my address so that she could contact me.

Exercise 1

Put in to, for or so that.

1. You need a lot of experience _________this job.
2. You need a lot of experience____________ do this job.

3. We‘ll need more tim e __________ __ make a decision.

4. We went to the dentist___________ a check-up.

5. I had to put on my glasses___________ read the letter.

6. I wish we had a garden____________ the children conld play in.
7. The man spoke very slo w ly ____________ we could understand

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hii! 8: ỉnternationaỉ 79

8. Please arrive early__________ we can stait the meetina on time.
9. She locked the door____________ she wouldn't be disturbed.

10.1 slowed dow n____________ the car behind could overtake.

EXT 8.2. THE WORLD CHAMPION MARKETERS: THE 
APANESE?

Few dispute that the Japanese have performed an economic miracle
ince World War II. In a very short time. thev have achieved elobal
tarket leadership in many industries: automobiles, motorcycles,
/atches, cameras, optical instruments, Steel, shipbuilding, computers,
nd consumer electronics. They are now making strong inroads into tires.
hemicals. machines, tools, and even designer clothes. cosmetics. and
ood. Some credit the global success of Japanese companies to their
inique business and management practices. Others point to the help they
;et from Japan’s government, powerful trading companies and banks.
ỉtill others say Japan’s success is based on Iow waae rates and uníầir
lumping policies.

In any case, one of the main keys to Japan's success is certainly
kilíul use o f marketing. The dapanese came to the United States to study
narketing and went home understanding it better than many u s

ompanies do. They know how to select a market. enter it in the right
vay. build market share, and protect that share against competitors.

Selectingmarkets. The Japanese \vork hard to identity attractive 
'lobal markets. First, they look íor Industries that require high skills and
úgh labour intensity but few natural resources. These include consumer
ỉlectronics, cameras, watches. motorcycles. and pharmaceuticals.
ỉecond, they like markets in which consumers around the vvorld would
)e willing to buy the same product design. Pinally. they look for
ndustries in which market leaders are weak or complacent.

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80 English for Business
quality or new íeatures. The Japanese also line up aood distributior
channels in order to provide quick Service. They also use etĩectiví
advertising to bring Products to the consum ers attention. Their basic
entry strategy is to build market share rather than early prìts: the
.lapanese are often willing to wait as long as a decade beibre realisins
their proiìts.

Buỉlding market share.Once Japanese firms gain a market loothold,
they begin to expand market share. They pour money into product

improvements and new models so that they can offer more and better
Products than the competition. They spot new opportunities through
segmentation, develop markets in nevv countries, and vvork to build a
netvvork o f world markets and production locations.

Protecting marketshare. Once the Japanese achieve market 
leadership, they become deíenders rather than attackers. Their defence

strategy is continuous product development and retìned market
segmentation.

ư s íìrms are now tìghting back by adding new product lines. pricing
more aggressively, streamlining production. buying or makins
components abroad, and tbrming strategic partnerships with foreign
companies. Moreover, many ư .s. companies are now operating
successfully in Japan itselí". American sell over 50.000 different Products
in Japan, and many hold leading market shares - Coke leads in soft
drinks (60 percent share), Schick in razors (71 percent), Polaroid in

instant cameras (66 percent), and Mc Donald’s in fast food. Since early
1980s, ư.s. companies have increased their Japanese Computer sales by
48 percent, pharmaceutical sales by 41 percent. and electronics parts
sales by 63 percent.

Do the following exercises based on the text:

Exercise 1

1. a. What reason does the author gi ve for Japair s success?
b. How many other reasons are mentioned?

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Unil 8:Internalional 81

2.

a. How many strategies are

u.s.

fírms usina to combat Japan;s

intluence?
b. What are these?

3. Which goods are mentioned as Products for both the

ưs

and .Tapan?

Exercise 2

Summarise Japan's marketing strategy by completing the notes below:

Selecting markets

The three sets.of features that the lapanese look for are:__________

Entering markets

The three main actions:

Action

Purpose

1.

2.

3.

Main strategy =

Building market share

The three main strategỉes a re:_______________________________

Protecting market share

There are two main strategies:___________ ___________________ _
2. Explain these expressions from the text:

a. Making strong inroads into
b. ưnfair dumping policies
c. Stripped - down version
d. p.our money into

3. Scan through the text to find a verb that completes the following

ỉxpressions:

Paragraph 4." to distribution channels.

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82 English for Businessmanagement

U N IT 9

COST AND MANAGEMENT ACCOUNTING

TEXT 9.1. OVERHEADS AND THEIR RECOVERY

The costs of a business are of two types - direct and indirect. The
direct costs vary directly with production. If one additional unit of
production is made, there will be a measurable increase in direct cost.
Direct or raw material is normally the largest component of direct cost. It
includes all items o f material that are of suffícient size to warrant the
effort of charging directly to the job. Small items, such as glue, paint and
small quantities o f nails, screws and rivets, do not merit the clerical effort
involved in charging directly to the job, and would be recovered as an
overhead.

Direct vvages will vary directly with production where remuneration
is based upon piecevvork only. This means that a specitlc amount is paid
when a production operation is successfully finished. If it is not tìnished.
no payment is made. In this book, it is assumed that direct labour is of
this nature. Many organisations remunerate labour on the basis of a large
basic wage, topped up with a productivity bonus. The basic element is
paid regardless o f the level of production. In such cases wages will not
vary directly with production, and fall into the category o f an indirect
cost or overhead.

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Unit 9:Cost and manage 83

Cost centres

To help in this task, the organisation is split up into cost centres.
These are areas of activity to which are gathered all costs of a like nature.
A maintenance department, canteen and Stores are examples of cost
centres. Normally centre will identity with physical areas of the
organisation. A store cost centre is a physical area in which materials are
kept, while awaiting issue to production. A centre may also not be
identiíìable with a physical area. The finance cost centre vvill gather
together all the costs of raising fmance for the business. other than from
owners or shareholders. It is a íìmction of the administration department,
and can not be identiíìed with a physical area of the business.

Where a cost centre has a product which is being manutầctured, it
is knovvn as a product centre. Examples are a machine shop which is
machining parts for assembly into the saleable product in an assembly
shop. Where a centre has a product that is saleable, thus giving rise to an
income, it is also known as a proíĩt centre. It is capable of showing a
profít or loss on its overall activities.

Cost allocation

The management accountant’s task is to allocate the many, diverse
overhead, onto the cost of each product manufactured. It is a major task
requiring the use of many different bases oí allocation. The allocation of
direct cost to a product can be precise. In the case of overhead allocation
an element o f logical estimation enters. There is a two-fold process,
tìrstly to collect all overhead costs onto the product or proílt centres; and
secondly to load the overheads onto each product passing through the
centre.

Do the following exercises based on the text:

Exercise 1

1. The text says “direct costs vary directly with production” (line

2). What does this sentence suggest about ?

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84 English fo r Businessnumaẹement
b. All ravv material costs are included in the direct costs o f a

product except_________ .

c. Those raw materials of which only very small quantities are
u sed _______ .

3. Finish the statement below with the best endina accordinu to the text.
Wages are part o f direct costs vvhen:

a. They are linked to the speed o f production.
b. They are related to the quantity o f output started.
c. They depend entirely on the quantity produced.
d. They are partly tìxed and partly linked to output.

Exercise 2

1. Which o f the following statements are not true about overheads?
a. Thev include all costs o f a business.

b. They exclude those costs which can be directly related to a
product’s production.

c. They relate to certain aspects of the business only.

d. They are diíììcult to relate to individual Products 0l'a companv.

2. a. How do management accountants use “cost centres" in dividing

a company'S costs?

b. What important division can be made betxveen types o f cost
centre within a business?

3. According to the text. vvhat is the difference betvveen a "product
centre” and a “prìt centre"? Can a product centre also be a protìt
centre?

LANGUAGE USE

Structure 1: Do and make: these two words have very similar

meanings. and it is ten difficult to choose between them.

• When we talk about an activity without saying exactly what it is,
we use do.

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'Jnit 9:Cosl and manage 85

I don’t know what to do.

• Do is usually the correct word when we are talkina about work.
Example:I’m not going to do any work.

I dislike doing housevvork.

• Make ten expresses the idea of creation or constmction. 
Excnnple: Tve just made a cake.

LeYs niake a plan.

• In other cases there are no clear rules. If you are not sure which
word is correct. look in a good dictionary or choose make - it is 
more likely to be right. Learn the following expressions:

Do good / harm / business / one?s best / a favour / a good turn.
Make an offer / arrangements / a suggestion / a decision / an

ttempt / an effort / an excuse / an exception / a mistake / a noise / a habit
i f ... ing / a phone call / the most o f ... / the best o f .../ money / prìt /
ove / war / peace / a bed.

ìxercise 1

Complete the spaces with the appropriate form ot “do” and “make".

Stan Slade - private eye

My name is Slade. Stan Slade, private investigator. The story begins
ne Saturday morning in June. I hadn’t been very busy. In fact r d

1)______ only two jobs in a month. This big fat guy came into my
ffíce. He looked rich, very rich indeed - you kno\v, fur coat. big cigar.
le threw $1,000 on the table. He said, “that is for one vveek. You are
'Orking for me”. Well, I don’t usually (2)_______ $1,000 in a month.
What (3)_______ you want me to (4)__________?” I said. He sat down.

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86 English for Business
goes out, where she (10)______the shopping and what she buys. I wan
to know when she (11)_______ a phone call, and who she pliones. Cai
you (12)______ that?” “Sure” I said. “She won't know I m there. I won’
(13)______ any noise”.

“Right”, said the big guy. “By the way, can l (14)________ í
suggestion?” “Sure, you are paying’', I said. (15) “________ sure she
doesn’t see you. She has got some nasty íriends, and they coulc
(16)________ a lot o f trouble for you”.

The fat guy left rny offíce. I looked at the photo he had given me.
and the address. “W e ir, I thought to myself. “I suppose I should eo out
and (17)________ some work”.

Structure 2: Reporting using paraphrase: reporting uses paraphrase

(i.e. expressing the ideas of an author in your own words) to
acknowledge another author’s ideas. You can extract and summarise
important points, while at the same time making it clear from whom and
where you have got the ideas you are discussing. This is not the same as
copying verbatim (exactly word for word) and vvithout acknowledgement.

Example:

Brown (1983: 231) claỉmsthat a fa r more approoch

Brown is the name o f the author (alvvays refer to the surname). and
the iníormation in brackets refers to the year and page number oí' the
publication quoted, details o f vvhich should be presented in the
bibliography at the end o f your essay. Generally you should put the year
in brackets after the sumame but variations on this form are possible. It is
useful but not essential to give page numbers. In some disciplines, it is
common to gi ve only the page number in brackets after the author’s
name. You will have to check this with your department.

Some other common phrases that could be used include:

In an article / a study byX,...

As X p o in ts out,...
X has expressed a similar view.
A study by X indicates that...

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Jnit 9:Cosí and manaạe 87

X claim s that ...

X fo u n d / discovered that....

Research by Xsnggests that...

X argnes that...

Above. you see some examples of reporting verbs, e.g: claims. 
loints out, has drawn attention to. These words may be attitudinal in 
ìure; that is, the choice of a particular reporting verb will often indicate
vhat sort of attitude you, as a writer, have about the idea or iníịrmation
/ou are reporting and its relative importance to the content ot your paper.
rhereíbre, it is important to make sure you are fully aware of the
neaning and the level of emphasis of the verbs you choose. You will
ilso fínd it of value to collect your own examples of reportinc verbs from
/our reading.

Exercise 2

Look at the text below to find examples of the kind of phrases listed
ìbove and other examples of reporting verbs._______________________

Survival language skills or business needs are not the only compelling reason 
for leaming a second languagẹ. Neurolinguistic research is beginning to suggest 
that people who know more than one language make use ot more ot the brain than 
monolinguals do (Albert and Obler, 1978). Though the evidence is scant, it appears 
that the part o f the brain that is used in second language íunctioning remains 
undeveloped in monolingual brains. Albert and Obler (1978) reviewed a series o f 
post - niortem studies on polyglot brains - brains o f people vvho spoke t'rom three to 
twenty-six language - and found that certain parts o f these brains were especially 
well developed and markedly furrowed.

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88 English fo r Business

TEXT 9.2. COSTS IN THEIR PROPER PLACE

The peanut butter approach to accountine is not a technique widely

íầmiliar to the UK’s íìnancial executives. And yet. accordine to the
Proíessor Robert Kaplan of Harvard University, if business do not
become aware o f the dangers of this strangely named type of accounting.
they risk making the vvrong decisions and ỉosing out to the competition.

Kaplan is the co-author of a seminal work on management
accountancy. Unlike most tracts on this subịect, Kaplan’s book,
Relevance Lost, is surprisingly readable and makes a compelling case
that conventional accounting techniques are ill-equipped to deal with
modern manutầcturing.

Kaplan pointed out. both in the book and in manv articles betbre and
aíter its 1987 publỉcation, that the modern íactory environment was
different from its equivalent only a decade ago. Automation had replaced
labour in the move to so-called world-class manufacturing. CAD-CAM
and just in-time production. But the way o f accounting íor a many
íactoring business had not moved on in a century.

Thus managers made important decisions about pricing and product
mix with reíerence to íìgures which bore no resemblance to the true
economics o f making a batch go vvidget or a custom-built niotor. Costs
were apportioned to the Products on the tradỉtional basis of labour hours -
an inappropriate approach given the automated environment and, Kaplan
argued, equivalent to a random spreading of costs across the portíblio of
Products - the peanut butter approach.

In the last chapter o f his book, Kaplan and his co-author offered
some Solutions, Managers should pay more attention to non-tìnancial
criteria when making their decisions, they argued. And they should
scrutinise the precise make-up o f the costs involved in opting to

manuíacture one product rather than another, abandoning the traditional
accountants’ distinctions betvveen fíxed costs and variable costs, betvveen
direct and indirect costs.

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Unit 9:Cost and manage accounting 89
The philosophy of ABC proved alluring, especially to the
accountancy fìrms alert to a good marketing opportunity. But although
most of the big accountancy íìrms have in recent years taken on squads
of ABC consultants, it has always been very difficult to tease out any
example of ABC being used in practice. The argument against
identifying clients is usually that they are doing so well out o f ABC that
competitor should not be allowed to fínd out.

Exercise 1

1. a. “‘Peanut butter accounting” gets its name. according to the text,
because:

i. It is an easy method to apply.

ii. It was developed in the United States.

iii. It does not relate costs to particular Products.
iv. It spread costs too inaccurately.

b. Is "Peanut butter accounting" a good System for managers to
use? Identilỳ the lines in the text which give you the answer.

2. a. What point did Kaplan make betore the publication ot' his book?

b. Has accountancy changed to deal with this?

3. In the following paragraph choose the alternatives which are
correct according to the text.

Because of the previous System of (production / accounting) used.
managers’ decisions about (how / when) to produce were based on
[unrealistic / accurate) cost íĩgures. Thus a product’s costs were
:alculated according to the (materials / hours) needed to make it. This
method was (suitable / not suitable) because of changes in (production
Tiethods / labour costs). This means that costs (were/ were not) being
accurately related to (each product / all Products).

Exercise 2

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90 English for Business

Proposal Suggested by

Kaplan?

i. Concentrate only on the financial aspects o f
production.

ii. Pay careíul attention to an individual product’s
costs.

iii. Divide costs betvveen fixed and variable ones.
iv. Disregard whether costs are direct or indirect.
V. Seek to find the sources of costs.

2. a. What evidence do we have that ABC works?

b. What evidence is lacking about the success or othervvise of ABC?
c. What argument as support of ABC is used despite the answer

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Unit 10: Aitditing 91

ƯN1T 10

AUDITTING

TEXT 10.1. THE AUDITING FRAMEWORK

When the independent auditor beeins an audit assignment, he
assumes that (1) the internal control System of the enterprise is
appropriate and effective; (2) generally accepted accounting principles
have been applied in all accounting processes underlying the iìnancial
statements; (3) the generally accepted accounting principles utilized have
been applied consistently between the current and the prior periods; and
(4) there is an adequate amount of iníormative íìnancial disclosure in the
tìnancial statements and tbotnotes. Evidence gathering and its evaluation
enable the auditors to rẹịect or coníỉrm these a assumptions. We

are thus in its position to dìne auditing.

Auditing: the analytical process of gathering sufíĩcient evidential

matter on a test or sampling basis to enable a competent protessional to
express an opinion as to vvhether a given set of tĩnancial statements

meets established standards o f íìnancial reporting.

Now we can enumerate the major steps of the auditing process: (1)
become acquainted with the firm - its environment and its accounting,
personnel, production, marketing, and other Systems; (2) revievv and
evaluate the management and the accounting control System in operation;
(3) gather evidential matter on the integrity of the System; (4) gather
further evidence related to the representations made in the tìnancial
statements; and (5) íbrmulate a judgement opinion on the basis of the
evidence available.

Getting acquainted

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92 English fo r Business
íinancial data. This would jeopardize both audit effíciency and
effectiveness. Thereíbre, a getting acquainted phrase (vvhich usually
includes a visit to a client’s facilities and certain analytical preliminary
tests and inquiries) initiates the typical audit process. While ‘'eetting -
acquainted” preliminaries to the conduct o f an audit are Standard
procedures today, they were quite novel prior to 1965. Initially such
procedures were described as the “business approach to auditing .

Control System review

The auditor’s evaluation o f the control Systems operating within the
enterprise has a direct iníluence on the scope o f the examination he
undertakes and the nature of the tests he conducts. However. even though
preliminary evaluation of control Systems is an essential insredient of
planning the audit scope, we must remember that eventually both the 
System and the data it produces are covered by the audit process.

Evidential matter

Evidential matter supporting íìnancial statements consists of the
underlying accounting data and all corroborating inỉbrmation available to
the auditor. The auditor tests underlying accounting data by analysis and
revievv, retracing some of the procedural steps followed in the original
accounting process and reconciling the events with the iníbrmation reported.

The auditor’s evidential material is the result o f tests, selected
observations and statistical sampling where large compilations of data
are involved. The auditor must always balance the natural desire for
more evidential matter to support an opinion against the costliness and
social usefulness of completely reconstructing the underlying data and
process that produced the ílnancial statements. One key justitìcation for
independent audits, as we have seen, is the economy tliat results from
producing expert opinion-based judgements from limited but reliable
evidential matter.

Exercise 1: Ansvver the following questions:

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Unit 10: A 93
i. The auditor does not assume that the company is regulating its

own íinance.

ii. The auditor assumes that a company is observing all Standard 
accounting procedures.

iii. The auditor accepts that a company may use different

assumptions over time.

iv. The auditor will believe, before an audit. that all necessary
company iníbrmation has been supplied.

2. What actions enable an auditor to maintain or abandon
assumptions made at the beginning of an audit?

3. In the follo\ving paragraph, choose the alternatives which are
correct according to the text:

Because auditing involves analysis, it (has no relation to / is
involved with) day-to-day business procedures. Relying only on íìnancial
iníormation wouId be (satisfactory / unsatisfactory) in carrying out an
audit. Getting to know a company before auditing it is (unnecessary /
worthwhile) and began (quitẹ recently / some time ago).

4. (a). If an auditor is vvrong in judging that the internal control
System of a company is satisfactory. does that prevent a
satisíầctory audit?

(b). What “fail-safe” mechanism is there even if an auditor 
wrongly judges a company’s internal control System?

5. What factor does an auditor have to consider when deciding how
much data to collect during an audit?

6. Why can external audits claim economy as one of their main
advantages?

Exercise 2

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94 Englishfor Business

Formal words Informal equivalent

1. assignment a. direct

2. underlying b. used

3. utilised c. starts

4. prior d. collections

5. a priori e. list

6. evidential matter f. job / task

7. enumerate g. making agree

8. íbrmulate h. already held

9. íìrsthand i. basic to

10. ịeopardise j. risk

11. initiates k. previous / earlier

12. corroborating 1. d a ta /íầ cts

13. retracing m. supporting

14. reconciling n. doing again

15. compilations 0. make

LANGUAGE USE

Structure 1: the use of aỉthough and tliougli.

Very often. both of these words can be used in the same way. There
are one or two differences.

- Though is more common in iníbrmal speech or writing. Although 
can be used in all styles.

Exampìe: Pd quite like to go out. (al) though it is a bit late.

- Though is often used vvith even to gi ve emphasis. “Even though’' 
means “not possibie”.

Example:Even though I didirt understand a word. I kept smiling.

- Though (but not aỉthough) can be put at the end of a sentence, with
the meaning o f “hovvever”.

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Unil 10: A 95

Example: The strongest argument, though, is Britain's economic 
and political dependence on the United States.

- In cases like these, though is an adverb. can only be used
as a conịunction.

Exercise 1

Combine these pairs of sentences by using although.
Example: X = His satisfaction decreases.

Y = The prices remain the same.
i. X although Y

His satisfaction decreases although prices remain the same.
ii. Although Y, X

Although prices remain the same, his satisíầction decreases.
1. X = The individual can not change the current price.

Y = He may want to do so.

2. X = The utility of the cigarettes has changed.
Y = Their quality ịs-the same.

3. X = He wants to buy that car now.

Y = He should wait until he has enough money for both the car
and other necessary things.

4. X = The work has not been done yet.
Y = It vvas planned fìve years ago.

5. X = The scheme has been started.

Y = It has not yet received government permission.

Structure 2: Collocation

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96 English fo r Business tnanagemen

Exercise 2

First part of 
collocation

Second part of 
collocation

1. pose a. redress

2. the root of b. competition

3. to work c. the debate

4. legal d. premium

5. ripe for e. the problem

6. price f. period

7. transition s. retbrm

8. intensity h. problems

9. holds i. no water

10. addresses j. on its behalí'

TEXT 10.2. TIME TO CLARIFY THE OBLIGATIONS OF AUDITORS

The 1990s pose íundamental problems for UK aecountine. firms. In
addition to increased commercial pressures, the profession taces a threat
from public policy makers. There is increasing suspicion about the
effectiveness o f self-regulation. Who audits the auditors? And \vho
should do so?

The root o f the regulatory debate is the auditor's position between,
on one hand. the manaeers of public companies. and. on the other. their
owners and other groups such as employees. pension fun beneiìciaries.
creditors and government departments which rely on the accuracy ot' the
audited accounts. The auditor is hired by the managers to protect the
interests of this latter group of “stakeholders".

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Unit 10: A 97
Traditional Solutions o f proíessional self-regulation backed up by 
Iegal redress as a last resort appear to be ripe for reform. Recent tìnancial 
scandals have cast doubts on vvhether the threat o f public disgrace is 
sufficient to saíeguard audit Standard.

These doubts are confirmed by the experiences o f investors who
have sớught redress for auditor malpractice in the courts. Almost all such
cases are settled out of court without any clarifícation of the leeal duties.

The*Caparo case, which claritìed auditors responsibilities, underlines the
gulf between what users expect, and what the auditor is prepạred to offer.

The auditors signature is treated by users o f company accounts as 
an assurance o f the quality o f the iníormation they contain - a kind o f 
Insurance policy against the risk that the company’s true íìnancial State 
is not what it appears.

The leading audit fĩrms, whose strong brand names command a
substantial price premium, have an interest in sustaining this belief. Yet
attempts to make claim on this policy show that payout terms are
unreliable and highly uncertain.

The most common fòrm of audit regulation proposed is to prevent
auditors carrying out consultancy assignments tor their audit clients - a
feature of several EC markets.

The NERA study showed that the mạịor accountine. tlrms rely
heavily on audit clients for their non-audit business. But it also found the
íìrms had managed to avoid the regulations in these countries.

A second mechanism, favoured in Italy and Spain and suggested
elsewhere, is to have periodic compulsory rotation of auditors, to
prevent a too cosy relationship betvveen the audit partner and the
management of the íirm. But this causes potentially high disruption costs
and raises questions as to the quality of the audit scrutiny during the
transition period.

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98 English for Business

Protection from competition mieht reduce the tendencv o f the Client 
to question the value for money offered by the auditor. But the idea that 
protectionism guarantees higher standards holds no more water in this 
context than elsewhere.

None o f the models for retbrm suggested by the other EC States
really addresses the principal/agent problem which underlies the need for
retbrm. If the question of auditor independence is to be tackled, rnore
fundamental issues need to be addressed.

Exercise 1:

Answer the following questions.

1. a. From what is said and implied in the text, what method of
control o f auditing exists in Britain no\v?

b. Is this System o f control considered entirely salisíactory? What 
sentences in the text eive you the ansvver.

2. a. Who are the ‘‘stakeholders" mentioned in the second paragraph?
b. What is the auditor’s role in relation to these stakeholders?

3. From the list below choose the dìnition o f the "principal/agent”
problem which appear in the te x t.

The "principal/agent'* problem in relation to auditing is caused by:

i. Auditors working for the “stakeholders”.

ii. Auditors owning their main loyalty to the company managers.
iii. Managers always wanting their company results to appear

íavourable.

iv. Auditors having responsibility to people other than those who
use them.

4. a. In Britain if the User o f an auditor’s report felt the report was
dishonest, which o f the following steps could this person take?
(more than one answer is possible).

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Unit 10: Auditinẹ 99
iii. Taking the auditing company to court and get monetaiy

compensation.

iv. Tell newspapers about the auditing company

b. In the opinion of the authors, how effective are the actions which
can be taken against dishonest auditors? Which sentence in the
text tells you this?

5. a. What is the “insurance policy” for those who make use of
company reports?

b. How good an “insurance policy” is it, according to the text?
6. a. Various proposals íor improving auditing standards are discussed

in the text.

Match the proposals on the left with their advantages according to

the text:

Proposal

Disadvantage of proposal

1. Lessen the amount of
competition for audit work.
2. Forbid auditors to do other

work for companies which
they audit.

3. Require companies’ auditors
to change from time to time.

a. Produces problems of continuity
and quality maintenance.

b. Restrictive practices do not
normally raise Standard.

c. Audit firms have managed to
avoid such a regulation.

b. What do the authors of the text think in general of these
proposals? Why do they think this?

Exercise 2

Match the vvords on the ieft with their correct dìnition on the right.

Word in text

Defínition

1. benelìciaries
2. diverge
3. seguard

a. dishonest / illegal behaviour
b. disturbance / upset

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100 English/or Business

4. malpractice d. those who gain from an action /
event

5. gulf e. change

6. sustain f. protect

7. periodic g. become diíTerent

8. rotation h. from time to tinie

9. disruption i. maintain

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REFERENCES

1. Michael, R. Accounting. Prentice Hall. Englewood cliff, Nevv 
Jersey, 1994

2. James, c. Marketing. Prentice Hall. Englexvood Cliíĩ. New Jersey, 1986.

3. Swan, M. Practical English Usage. Oxford University Press 1995.

4. Randolph Ọuirk and Sidney Green Baum. A o f

English. Longman, 1973.

5. Leo Jones and Richard Alexander. Ne\v International Business 
English. Cambridge ưniversity Press.

6. Nguyên Xuân Thơm. English fo r Fỉnance and Banking. The aioi 
Pulishers, 1999.

7. Tom Mc Arthur. A Rapid Course for o f

Economics.Oxíbrd University Press. 1990.

8. Tony Lenart. Effective Business Accounting.Australia, 1996.
9. Patrick Xavier & Trevor Barr. Telecoms Policy and Regulatory

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MỤC LỤC

Lời nói đầu...3

Unit 1. TH E M EANING O F EC O N O M IC D E V E L O P M E N T ... 5

Text 1.1. Economic grovvth... 5

Language use... 7

Text 1.2. Economic development... 10

U nit 2: EC O N O M IC S FO R DEV ELO PM EN T ... 16

Text 2.1. The relevance of western economics?... 16

Language use... 18

Text 2.2. Economics or development economics?... 21

Unit 3: SOM E EC O N O M IC LAVVS...26

Text 3.1...26

Language use... 29

Text 3.2... 34

Text 3.3... 37

Unit 4: M A R K ET AND M O N O P O L IE S ...40

Text 4.1. Makrets and monopolies... 40

Language u se... 42

Text 4.2. The impact of telecommunications investment ọn the
economic growth... 44

Unit 5: IN FL A T IO N ... 49

Text 5.1. The inílationary experience o f LDCs... 49

Language u se... 52

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Unit 6: PR O D U C TS... 56

Text 6.1. Give benefits not Products... 56

Laneuage use...59

Text 6.2. Matching Products and markets... ...61

Text 6.3. Beijing postal markets and Products... 63

Unit 7: P R IC IN G ...68

Text 7.1. ỉs price all that matter?... 68

Language use... 70

Text 7.2. Setting the price... 72

Unit 8: INTERNATIONAL M A R K E T IN G ...75

Text 8.1. Breaking into unreceptive market...75

Language use... 77

Text 8.2. The vvorld Champion marketers: the Japanese?... 79

Unit 9: COST AND M ANAGEM ENT A C C O U N T IN G ...82

Text 9.1. Overheads and their recovery... 82

Language use... 84

Text 9.2. Costs in their proper place...88

Unit 10: AU DITIN G... 91

Text 10.1. The auditing framework...91

Language use... 94

Text 10.2. Time to clarify the obligations of auditors... 96

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Englỉsh

FOR B U S IN ES S M A N A G EM EN T

Chịu trách nhiệm xuất bản

NGUYỄN THỊ THU HÀ
Biên tập

Chế bản 
Sửa bản in 
Trình bày bìa

: LÊ ĐẮC QUANG 
NGUYỄN TIẾN PHÁT 
: NGUYỄN MẠNH HOÀNG 
: NGUYỄN TIẾN PHÁT 
: LÊ QUANG THỦY

NHÀ XUẤT BẢN BƯU ĐIỆN
Trụ sở : 18 Nguyễn Du, TP. Hà Nội

Điện thoại : 04-5772138, 04-5772141 - Fax: 04-5772037, 5772194
E-mail :

VVebsite : www.nxbbuudien.com.vn

Chl nhánh TP Hồ Chí Minh : 27 Nguyễn Bỉnh Khiêm, Quận I, TP. Hổ Chí Minh 
Điện thoại : 08-9100925 Fax: 08-9100924

E-mail :

Chi nhánhTP. Đà Nắng : 42 Trần Quốc Toản, Quận Hải Châu, TP. Đà Nang 
Điện thoại : 05113-897467 Fax: 05113-897467

E-mail :

In 1.000 bản, khổ 16 X 24 cm tại Công ty TNHH In - TM&DV Nguyễn Lâm 
Số đăng ký kế hoạch xuất bản: 701-2008/CXB/5-141/BuĐ

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MỜI CÁC BỌN TÌM BỌC

- Từ điển thuật ngữ viễn thông Anh - Việt

- Tiếng Anh chuyên ngành Điện tử - Viễn thông
- Tiếng Anh dành cho giao dịch viên Bưu điện
- Hoạch định chiến lược kỉnh doanh

- Chiến lược Marketing trong Viễn thông

JềÁCH CỦA NHÀ XUẤT BẢN BƯU ĐIỆN CÓ BÁN TẠI:

1. Nhà sách Tiền Phong

175 Nguyễn Thái Học, Hà Nội

2. Nhà sách Bách Khoa

Sỏ' 1, Đường Giải Phóng, Hà Nội

8 6 - 1 0 7 Tô Hiến Thành, Quận 10, TP. HCM

3. Nhà sách Thăng Long

2 Bis Nguyễn Thị Minh Khai, Quận I, TP. HCM

4. Nhò sách Nguyễn Vãn Cừ

36 Xuân Thủy, Cầu Giấy, Hà Nội

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<a href=''>www.nxbbuudien.com.vn</a>

English For business management

Engllsh

FOR B U SIN ESS

M A N A G EM EN T

<b>ThS. </b>

<b>Thị </b>

<b>Thư </b>

<b>THE MEANING 0 F ECONOMIC DEVELOPMENT</b>

L

<b>ECONOMICS FOR DEVELOPMENT</b>

<b>SOME ECONOMIC LAWS</b>

U

<b>MARKETS AND MONOPOLIES</b>

<b>INFLATION</b>

Exercise 2:

Exercise

Exercise 3

TEXT 5.2. THE CAUSES OF INFLATION

<b>PRODUCTS</b>

íxercise 1

Exercise

<b>PRICING</b>

Exercise 1

F. w.

<b>INTERNATIONAL MARKETING</b>

Exercise 1

Exercise 2

some money to buy

for a holiday.

So that:

that

that

to...).

(so that...can/could)

that

that

Exercise 1

2.

u.s.

ưs

Action

Purpose

1.

2.

3.

<b>COST AND MANAGEMENT ACCOUNTING</b>

Exercise 1

Exercise 2

<b>AUDITTING</b>

Exercise 1:

Proposal

Disadvantage of proposal

Exercise 2

Word in text

Defínition

<b>REFERENCES</b>

<b>MỤC LỤC</b>

<b>Englỉsh</b>

FOR B U S IN ES S M A N A G EM EN T

<b>MỜI CÁC BỌN TÌM BỌC</b>

JềÁCH CỦA NHÀ XUẤT BẢN BƯU ĐIỆN CÓ BÁN TẠI:

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