seria akademicka
business
matters
Elżbieta Jendrych
Halina Wiśniewska
Warszawa 2012
Contents
Unit 1. Sectors of the economy. . . . . . . . . . . . . . . . . . . . . . . . . . .
7
Unit 2. Setting up a business . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Unit 3. Company structure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Unit 4. Management. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Unit 5. Business communication . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Unit 6. Recruitment and selection. . . . . . . . . . . . . . . . . . . . . . . . . 59
Unit 7. Motivation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Unit 8. Earning a living. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
Unit 9. The market. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
Unit 10. Market research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
Unit 11. Production. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113
Unit 12. Pricing and prices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126
Unit 13. Advertising . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134
Unit 14. Promotion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147
Unit 15. Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158
Unit 16. Sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 168
Unit 17. International trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177
Unit 18. Transport . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187
Unit 19. Globalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 196
Unit 20. The growth of business . . . . . . . . . . . . . . . . . . . . . . . . . . 205
Unit 21. Customer protection . . . . . . . . . . . . . . . . . . . . . . . . . . . 213
Unit 1
Sectors of the economy
Key Vocabulary
allocate – decide officially that a particular amount of money, time, etc. should
be used for a particular purpose
asset – something belonging to an individual or a business that has value or
the power to earn money
bankruptcy – when someone is judged to be unable to pay their debts by a court
of law, and their assets are shared out among the people and businesses
that they owe money to
break even – make neither a profit nor a loss
free economy – an economy in which companies are not controlled by the government but decide for themselves what to produce and sell, based on what
they believe they can make a profit from
industry – the production of raw materials and of goods; the people and organizations that work in industry; businesses that produce a particular type
of thing or provide a particular service
labour – all the people who work for a company or in a country
mixed economy – an economy in which some industries are controlled by
the government and some by private companies
means – the money and resources that a person or organization has available
resources – something such as money, property, skill, labour, etc. that a company has available
Reading Section
There are three basic types of national economy: free economy, controlled
economy and mixed economy. Ownership and allocation of resources are
the key determinants here; if resources are owned and allocated by individu-
8
Business Matters
als (whose decisions are based on the market forces of supply and demand),
the economic system is classified as a market economy or a free economy. At
the other extreme, all resources are owned and allocated by the state. This type
of economy is called a centrally planned economy, controlled economy or command economy. In a state controlled economy it is the government who owns
the means of production and people work for the government rather than for
the company. They do not have the freedom of choice, for instance they cannot invest their money in a business because all businesses belong to the state.
In fact, most countries have mixed economies which means that there are two
sectors: a private sector and a public sector. Business organizations controlled
by individuals constitute the private sector, while those owned and controlled
by the state form the public sector. Investors can invest as they wish and they
have the right to keep the profits they generate (although some of the profits
are paid to the state in the form of taxes). State-owned companies are expected
to break even, while any profits they generate go to the government. Sometimes, however, they make losses and – in extreme cases – they may even go
bankrupt. The same holds true for private businesses. The size of the public
sector in proportion to the private sector varies from country to country, with
the public sector in most democratic countries being reduced over time.
Resources can be grouped into four main categories, which are: land (land
for the buildings of factories, offices or shops, but also raw materials, grains,
animals reared for meat and fish), labour (efforts and skills of people who
change natural resources into products and services), capital (anything owned
by a company – buildings, machines and equipment) and enterprise (entrepreneurs who know how to start a company and who allocate the other resources).
Manufacturing can be divided into traditional industries like, e.g.: light industry,
heavy industry, the food industry, chemical industry, pharmaceutical industry
or textile industry, to name just a few.
A national economy can also be divided into main industry sectors:
– materials (e.g. metals or paper),
– industrials (capital goods like machinery, electrical equipment or building
products),
– consumer goods (durable and non-durable),
– financials (banks, insurance companies),
– IT and telecommunication services,
– trade and commercial services (e.g. transport, advertising),
– energy,
– health care,
– science and education,
– entertainment,
– utilities.
Unit 1. Sectors of the economy
9
Comprehension Section
1. Answer the questions.
1.How can you characterize a mixed economy?
2.What industries do you know?
3.How can resources be classified?
4.Do all companies break even?
2. Decide if the sentences are true or false.
1.Land and labour are, to a certain extent, renewable factors of production.
2.Movement of goods is an indispensable aid to trade, both domestic and
international.
3.Good entrepreneurs are not always the most effective people to run a business in the long run.
4.A public company is a company owned by people or other companies, rather
than by the government, or a company whose shares are openly traded.
5.A private company is a company owned by people or other companies,
rather than by the government, or a company whose shares are not openly
traded and can only pass to another person with the agreement of other
shareholders.
6.At present, many experts believe that human resources contribute significantly more to business success than the other resources.
7.When a company does not have enough money to pay its debts, it can be
put under the control of a receiver – a person chosen by the court of law
to be in charge of a bankrupt company.
3. Classify the following from the customer’s point of view
as advantages or disadvantages of a free economy. Try to explain why.
1.Consumers determine what is produced.
2.Competition increases.
3.Big and powerful companies may buy up smaller ones.
4.Everybody who has resources is free to run a business.
5.It is not easy to control air and water pollution.
6.Producers keep costs down.
7.Producers try to be innovative.
8.There may be considerable fluctuations in prices.