| МИНИСТЕРСТВО ОБРАЗОВАНИЯ РОССИЙСКОЙ ФЕДЕРАЦИИ
ВСЕРОССИЙСКИЙ ЗАОЧНЫЙ ФИНАНСОВО-ЭКОНОМИЧЕСКИЙ ИНСТИТУТ
АНГЛИЙСКИЙ ЯЗЫК
Тексты для дополнительного чтения на английском языке
Для студентов I курса
по направлениям 521600 «Менеджмент» (бакалавр),
521600 «Экономика» (бакалавр)
МОСКВА 2009
Тексты для дополнительного чтения составили:
доктор филологических наук Чикилева Л.С.,
Зиннурова Ф.Ф. (филиал ВЗФЭИ в г. Уфа)
Учебно-методическое издание одобрено на заседании
Научно-методического совета ВЗФЭИ
Проректор, председатель НМС, профессор Д.М. Дайитбегов
СОДЕРЖАНИЕ
Введение
…………………………………………………..…....…….4
Case 1
(part 1) Where’s the Beef? Mcdonald's Sells Hamburgers
in a Hindu Country
………………………..…………………………………..5
Case 1
(part 2) Where’s the Beef? Mcdonald's Sells Hamburgers
in a Hindu Country
…………………….......................................................7
Case 2
(part 1)
Ted & Harry's Ice Cream Factory:
the Russian Experience
……………………………………………..….9
Case 2
(part 2)
Ted & Harry's Ice Cream Factory:
the Russian Experience
……………………………..…………...….. 12
Case 3
The Toledo Bicycle Company:
Peddling into
Eastern Europe
…………………………………………………..….. 15
Case 4
The Great Oklahoma
Oil Company:
MNC Joint Venture Responsibilities
………………………………………………….……..…..17
Case 5
P
roblems Taxing the Demon Weed:
T
obacco and Gray Market Activity
…………………….……………………………………………...20
Case 6
Tonia Motorbikes: a Case of Chinese Piracy
……………....23
Case 7
Pegasus Footwear: Trampling on Religion
…………..…….25
Bibliography
………………………………………………...............29
Введение
Пособие рассчитано на лиц, имеющих подготовку по английскому языку в объеме средней школы. В пособии представлены материалы, которые могут быть использованы на этапе перехода от изучения Basic English к изучению Business English, в частности, английского языка по специальности «экономика».
Пособие разработано на основе современных аутентичных материалов, оно профессионально ориентировано. Особое внимание уделено отбору слов и словосочетаний, имеющих экономическую направленность.
Целью обучения с использованием материалов данного пособия является овладение профессиональным языком специальности, а именно, развитие навыков чтения для извлечения информации, а также овладение экономическими терминами.
В пособии приводятся упражнения для развития навыков устной речи. После прочтения текста и его обсуждения требуется высказать собственное мнение по содержанию текста. В упражнениях использованы слова для активного усвоения. Ко всем видам упражнений даются ключи. Упражнения способствуют развитию умения кратко изложить основное содержание текста на иностранном языке.
Тексты данного учебно-методического пособия могут быть использованы как при работе в аудитории, так и для индивидуальной работы.
Пособие может быть использовано на занятиях по английскому языку на 1 курсе, а также на курсах ДОУ в экономических классах.
Case 1
Part I
WHERE'S THE BEEF?
MCDONALD'S SELLS HAMBURGERS
IN A HINDU COUNTRY
In 1954, a milkshake mixer salesman named Ray Kroc traveled to San Bernardino, California, to see why one restaurant had ordered so many of his Multimixers. The McDonald brothers had invented a new concept in the restaurant business and Kroc wanted to see for himself why the business was so popular. Dick and Mac McDonald had pioneered fast food based on high volume, low prices, limited menu, and quick service. The restaurant was a success, and Ray Kroc wanted it. He negotiated an agreement with the McDonald brothers in which he would become the exclusive franchiser of the McDonald name.
In 1955, the first McDonald's franchise opened in Des Plaines, Illinois. The McDonald's empire would be based on four core values—providing customers with quality, service, cleanliness,
and value
(QSCV). Kroc believed that consistency in these core values would allow McDonald's to build a strong brand image throughout the United States. He was right. The concept was a success, and by 1963 McDonald's was selling one million hamburgers a day.
The first international McDonald's opened in Canada in 1967. McDonald's continued its international expansion into Japan, Germany, Australia, France, and England in the 1970s. Additional outlets were established in Latin America, the Middle East, Central and Eastern Europe, Russia, and China. The motive for McDonald's international expansion was the realization that most potential sales existed outside the United States. As Kroc had said in 1954, when he witnessed the McDonald brothers' original restaurant concept, "This idea can sell anywhere." Based on the need for additional sales growth and the belief that the concept could be exported, McDonald's embarked on an aggressive international expansion effort beginning in the 1970s. Today, McDonald's has restaurants in over 100 countries and derives approximately 60% of its profits from sales overseas. On average, the company opens a new restaurant somewhere in the world every five hours, and a McDonald's can be found on every continent except Antarctica.
Prior to 1996, McDonald's did not have a restaurant anywhere on the Indian subcontinent. With a population of over one billion, many view India as a market with enormous potential. India's population is second only to China, and, with differing birth rates, India will become the most populated country in the world by 2020, according to some estimates.
1.
Find the English equivalents for the following words and expressions:
рост продаж, огромный потенциал, согласно некоторым оценкам, большой объем, темпы рождаемости, низкая цена, продажи за рубежом, быстрое обслуживание, продавец;
основываться на главных ценностях, создать известный брэнд, создать новую концепцию, открыть торговую точку, извлекать прибыль, быть успешным, быть инициатором организации быстрого питания;
2.
Translate into Russian:
to invent a new concept; to pioneer fast food; to be based on core values; to provide customers with quality; to build a strong brand image; to be a success; to establish an outlet; to derive profits;
salesman; high volume; low price; aggressive expansion; potential sales; sales growth; sales overseas; enormous potential; birth rates; according to some estimates; quick service;
3.
Match the following:
1. quick a. value
2. core b. service
3. strong c. volume
4. high d. expansion
5. potential e. brand image
6. aggressive f. sales
7. enormous g. potential
4.
Say whether these statements are true or false:
1. Kroc knew for sure that this idea could sell anywhere and that is why he became the exclusive franchiser of the McDonald name.
2. A new concept in the restaurant business turned out to be unpopular across the globe.
3. McDonald’s continued its international expansion into India because it was completely sure of the enormous potential of the Indian market.
4. It was consistency in the four core values and not other factors that made McDonald’s so popular.
5.
Point out the facts that turn out to be new for you
Case 1
Part 2
WHERE'S THE BEEF?
MCDONALD'S SELLS HAMBURGERS
IN A HINDU COUNTRY
India represented a big challenge to McDonald's because most Indians could not eat the main menu item—the beef hamburger. Over 80% of the Indian population is Hindu and this religion prohibits the consumption of cow products. Also, approximately 40% of Indians are strict vegetarians and eat no meat of any kind. A significant percentage of the Indian population is Muslim, which also prohibits the consumption of pork products.
India is a federal republic, which gained its independence from Great Britain in 1947. After many years of British rule, Mahatma Gandhi led a mass movement for independence. Since that time, India has been as its constitution states, a "sovereign, socialist, secular, democratic republic." The economic self-reliance or "swadeshi" begun under Gandhi influenced public policy in India for over 40 years. India finally began to liberalize economic policy after experiencing a severe foreign currency crisis. In 1991, major changes occurred that made foreign investment easier, including reduced tariffs, removal of non-tariff barriers to trade, and loosened foreign investment restrictions and currency controls.
India still remains a poor country and a difficult market for Western companies. Per capita GDP is $420 and at least 350 million Indians live on less than a dollar a day. The government recognizes eighteen languages, with Hindi being the most widely spoken. English is also spoken, especially in urban areas and among the better-educated component of the population. Violent religious clashes occur between Hindus and Christians and between Hindus and Muslims, and there is a current movement to establish an all-Hindu India. The religious and social class tolerances advocated by Gandhi do not seem to be as well accepted by many in India today. India is a country divided by languages, religion, and caste.
In 1996, McDonald's opened its first restaurant in India. The first McDonald's in India was located in Delhi and was the only McDonald's outlet worldwide not to offer beef on its menu. Due to dietary restrictions imposed by religion, McDonald's had to be creative in its product offerings. Without the possibility of serving beef or pork, McDonald's offered the lamb patty and a veggie burger. The Big Mac was named the Maharaja Mac and substituted ground lamb for beef. After opening its second restaurant in India, this one in
Mumbai (Bombay), McDonald's had invested $14 million, yet the company was not completely sure of the potential of the Indian market. Although business was brisk at both locations, some concerns were raised.
Some consumers complained about the bland taste of the food. Accustomed to the spicy traditional Indian food, McDonald's meals seemed too plain for some consumers. There was also a concern about the political stability of the country and long-term acceptance of McDonald's in India. The Indian government did not support the entry of McDonald's into the country and some Indians protested the arrival of the American multinational. Previous American franchises have been the target of vandalism in India in the past. KFC, Dominos Pizza, and Pizza Hut all have several locations in India, and some of the restaurants have experienced difficulties with political mobs. McDonald's is perhaps in an even more vulnerable position because its primary product worldwide (beef) is viewed by many Hindus as not appropriate for consumption. As one protestor remarked, "They are the chief killers of the cow." Other protestors see McDonald's as a symbol of the exploitation of the world's poor by rich American multinationals. Faced with the difficulties of product acceptance, low purchasing power among consumers, and the ever-present potential of political conflict, McDonald's must decide if further expansion in India is a good investment.
1.
Find the English equivalents for the following words and expressions:
устранять барьеры для развития торговли, испытывать жестокий кризис, вводить ограничения, ослабить ограничения, представлять большую проблему, снижать тарифы, находиться (в каком- либо месте), испытывать трудности;
важные изменения, многонациональная корпорация, основной продукт (в меню), низкая покупательная способность, уязвимое положение, потребление, потребители, предложение товара, значительный процент, на душу населения.
2.
Translate into Russian:
to represent a challenge; to experience a severe crisis; to reduce tariffs; to remove barriers to trade; to loosen restrictions; to be located; to impose restrictions; to experience difficulties;
significant percentage; major changes; consumers; a multinational; consumption; primary product; vulnerable position; low purchasing power; per capita; product offerings.
3.
Match the following:
1. big a. crisis
2. significant b. business
3. severe c. percentage
4. major d. position
5. reduced e. challenge
6. brisk f. changes
7. vulnerable g. tariffs
4.
Say whether these statements are true or false:
1. The McDonald brothers did not realize that India represented a big challenge, otherwise they would not have entered the Indian market.
2. The McDonald brothers did their best to follow the advice “think globally and act locally”.
3. The economic and political environment in India contributed heavily to a successful operation of McDonald’s in India.
4. McDonald’s menu in India was culturally correct.
5.
Discuss the following questions:
1. In your opinion, is India a good market for McDonald’s?
2. Has McDonald’s responded to the advice often given transnational companies to “think globally and act locally”?
3. Do you think McDonald’s will be a success in India? Why?
6.
Give an outline of the text.
Case 2
Part I
TED & HARRY'S ICE CREAM FACTORY:
THE RUSSIAN EXPERIENCE
In 1975 Ted Cooper and Harry Greenberg began selling ice cream in a converted church in Little Rock, Arkansas. The two young men, who had recently completed a correspondence course in ice cream making, seemed an unlikely pair to eventually lead a multimillion-dollar enterprise, which would challenge corporate America's sense of social responsibility. The company began to manufacture, and sell on the retail level, a premium ice cream with unusual sounding names such as Silly Strawberry Surprise and Harry's Very Berries. The pair sold their product through retail shops, which they called Ted & Harry's Ice Cream Factory, and consumers could order ice cream by the scoop, or in packaged form for home consumption.
By 1985 Ted & Harry's was a publicly traded company with over 50 retail operations in the United States.
Gross sales were in excess of $35 million and the company had taken a very proactive stance in the area of social responsibility. The company employed disadvantaged members of society and donated 15% of its pretax profit to various charities. Ted and Harry were also actively involved in a worldwide peace movement and openly supported the bilateral disarming of the United States and the Soviet Union.
In 1989 Ted Cooper visited Russia and decided that international peace could be promoted through cooperative business ventures. Since domestic sales growth was still very strong, Ted & Harry's had not branched out into any foreign markets. In 1992 it was decided that Ted & Harry's would establish foreign direct investment in Russia. Although promotion of peace was a main objective, it was intended that the Russian venture would make a profit and provide a return on invested capital. It was hoped that profit from the operation would allow for further campaigns for peace and generate an entrepreneurial spirit in the Russian people.
Ted & Harry's developed a manufacturing and distribution capacity in Russia that included six ice cream shops. Ted & Harry's Russia sold its regular products, such as Whitewater Crunch and Kookie Chocolate, along with products unique to Russia, such as a vodka-laced ice cream, called Russian Holiday. Most of the products sold in Russia were identical to the products sold in the United States, including identical product packaging. Although Russian labels were placed over some of the packaging, the product was essentially the same product sold in the United States. The product was unique to Russian consumers, who were used to smooth ice cream as opposed to the "chunky" variety sold by Ted & Harry's.
Originally Ted and Harry planned on hiring a bilingual American to head the Russian operation. An external recruiting effort was undertaken, and recent business school graduates were interviewed from some of America's best
business schools. Ted and Harry had hoped that a bright M.B.A. who spoke Russian, possessed significant business experience, and shared the vision of the company in terms of social responsibility could be hired. It was felt that someone with good business training and a strong sense of social accountability could spark an entrepreneurial spirit in the Russian people and be a good role model for others. When no suitable candidate could be found, the search shifted to internal recruiting.
The internal search resulted in the selection of Billy Bob Whitson. Billy-Bob had been with Ted & Harry's for nine years, moving up from factory worker to production manager, Billy Bob did not speak Russian, and he had not received any business training other than on-the-job training at Ted & Harry's. He had never lived outside Arkansas; however, he did have a strong interest in Russia, and his enthusiasm impressed the selection team. He was appointed general manager of Ted & Harry's Russia, and the selection team was confident that he could handle the responsibility. There was a general
belief that experience with product quality and acceptance of corporate values were more important than experience with Russian culture. Billy Bob was technically well qualified to supervise the making of ice cream and he possessed the character Ted sought for the position.
1.
Find the English equivalents for the following words and expressions:
бросить вызов чему-либо, превышать, руководить предприятием, работать в компании, получать прибыль, обеспечить прибыль на инвестированный капитал, развивать производственную мощность, контролировать производство мороженого, нанимать на работу, продавать в розницу, быть назначенным на должность менеджера;
валовой объем продаж, обучение без отрыва от производства, должность, чувство социальной ответственности, потребление, прибыль до вычета налогов, рост продаж, корпоративные ценности, качество продукции, менеджер по производству.
2.
Translate into Russian:
to lead an enterprise (to head the operation); to challenge something; to sell on the retail level; to be in excess of; to employ (to recruit); to make a profit; to provide a return on invested capital; to develop a manufacturing capacity; to be with a company; to be appointed manager; to supervise the making of ice cream;
a sense of social responsibility; consumption; gross sales; pretax profit; sales growth; production manager; on-the-job training; corporate values; position; product quality.
3.
Match the following:
1. gross a. profit
2. social b. spirit
3. manufacturing c. capital
4. corporate d. capacity
5. entrepreneurial e. values
6. pretax f. responsibility
7. invested g. training
8. on-the-job h. sales
4.
Say whether these statements are true or false:
1. Ted & Harry's had taken a very proactive stance in the area of social responsibility and that is why the company employed disadvantaged members of society.
2. The only objective of Ted & Harry's in Russia was promotion of peace.
3. It was felt that having good business training and a strong sense of social accountability was enough to spark an entrepreneurial spirit in the Russian people.
4. Billy Bob was thought to be quite the man to act as general manager, because he possessed the character Ted sought for the position.
5.
Put some questions to the text and answer them
Case 2
Part II
TED & HARRY'S ICE CREAM FACTORY:
THE RUSSIAN EXPERIENCE
The Russian operation was established as a joint venture between Ted & Harry's and three Russian partners. Although the local partners had originally presented themselves as active members of the Russian business community, they were in fact very inexperienced and lacked connections. The three men impressed Ted Cooper with their intelligence, friendliness, and entrepreneurial spirit. Ted also found them appealing in that they represented the average Russian citizen.
The arrangement established an equal partnership between the two parties, with Billy Bob Whitson acting as general manager. It was agreed, however, that decisions would be made jointly between Billy Bob and the Russian partners. Ted & Harry's provided almost all of the capital required to establish the venture, and the Russian partners agreed to provide the necessary experience and effort required to establish the new business.
The Russian partners flew to Arkansas to learn how to make ice cream and Billy Bob moved his family to Russia to begin building the business. While the Russian partners learned the science of ice cream making, Billy Bob was learning how to conduct business in Russia. From the start Billy Bob experienced numerous problems with permits, construction crews, supplier agreements and employee recruitment. The Russian business environment was more difficult than expected, and it appeared at times that it would be impossible to ever establish Ted & Harry's Russia. Billy Bob discovered that it was quite common for bribes to be paid to Russian officials to expedite the needed permits, and that the Russian mafia was deeply involved in the transportation and construction industries.
Since it was against Ted & Harry's corporate culture (and illegal under the Foreign Corrupt Practices Act) to pay bribes or engage in other questionable
business practices, Billy Bob felt very frustrated with his inability to quickly get the business up and running. With the help of a Russian attorney and much
patience, Ted & Harry's Russia finally began operation in 1996. Although it had taken much longer than anticipated, Billy Bob was content in the knowledge that the business had been established without the use of bribes or other forms of payoff.
Ted & Harry's entered the Russian market at a very difficult time. As the political and economic environment rapidly changed, the firm constantly experienced difficulties. Supplier relationships were unreliable, product quality was inconsistent, transportation was a nightmare, and it was often unclear who was really in charge of many government functions. Russia was also becoming a dangerous place to do business, and it was not uncommon for foreign expatriates to hire bodyguards for personal protection.
Product sales were lower, and costs were higher, than expected. Additional capital had to be supplied by Ted & Harry's in order to keep the operation functioning. The relationship between Ted & Harry's and the Russian partners was becoming strained as the local partners pushed for more growth. The Russian partners had envisioned becoming wealthy in a short period of time, and were becoming dissatisfied with the progress of Billy Bob and the management team back in Arkansas. Lacking any signs of near-term profitability, Ted & Harry were not inclined to entertain any suggestions of a growth strategy. Billy Bob felt that he could not manage any further expansion at this time, and he began to question the integrity of the local partners.
By 1998 the business had lost so much money, and the relationship between the joint venture partners had deteriorated to such an extent that it was decided to end the partnership. Ted & Harry's would pull out of Russia, leaving the investment and equity interest to the local partners. Ted Cooper stated in a press release that the decision was made jointly, and that a mutual agreement had been reached to end the Russian venture. Both parties had "parted on good terms and the experiment had been a success." Cooper stated that the objective of the joint venture was to bring entrepreneurship to Russia, and that by turning over the operations to the Russians "that objective had been accomplished." The business would continue with Russian ownership and the name of Ted & Harry's would not be used by the local partners. While admitting that some unexpected problems had occurred, Ted continued to defend the operation as an experiment and proclaim it a success.
1.
Find the English equivalents for the following words and expressions:
практика деловых отношений, краткосрочная рентабельность, взаимное соглашение, команда управленцев, стратегия роста, экономическая обстановка, бизнес сообщество, наем работника,
совместное предприятие, связи с поставщиками, бизнес среда, предпринимательство, корпоративная культура;
вести дело, отвечать за что-либо, сталкиваться с проблемами, прекратить деятельность, принимать решения, предоставить капитал, создать предприятие, заключать соглашение, подкупать, иметь успех.
2.
Translate into Russian:
to establish an operation (to build a business); to make decisions; to provide the capital; to conduct business; to experience problems; to pay bribes; to be in charge of something; to end the partnership (the venture); to reach an agreement; to be a success;
joint venture; business community; equal partnership; employee recruitment; business environment; corporate culture; business practices; economic environment; supplier relationships; management team; near-term profitability; growth strategy; mutual agreement; entrepreneurship.
3.
Match the following:
1. joint a. partnership
2. near-term b. spirit
3. growth c. environment
4. business d. agreement
5. mutual e. profitability
6. supplier f. venture
7. entrepreneurial g. relationships
8. equal h. strategy
4.
Say whether these statements are true or false:
1. Billy Bob expected the Russian business environment to be the same as in his home country and that’s why he felt very frustrated with his inability to quickly get the business up and running.
2. As Billy Bob constantly experienced numerous problems he made up his mind to give up the idea of establishing Ted & Harry's Russia.
3. Billy Bob questioned the integrity of the local partners partly because they lacked a sense of social responsibility.
4. The decision to end the partnership was made jointly because the objective of the joint venture “had been accomplished”.
5.
Discuss the following questions:
1. Do you think Ted & Harry’s Russia was a success?
2. Do you think that Ted & Harry’s made any mistakes in either country, partner or management selection?
3. What could Ted & Harry’s have done more effectively?
CASE 3
THE TOLEDO BICYCLE COMPANY:
PEDDLING INTO EASTERN EUROPE
Hans Kohl immigrated to the United States in 1892 and shortly thereafter began to manufacture and sell bicycles out of his Toledo, Ohio, home. The company became an overnight success because of the strong demand for bicycles at the time and the exceptional quality of the bike produced by Kohl. The business was later named the Toledo Bicycle Company (TBC) and the company has remained in the hands of the Kohl family up to the present day. By 1950 the company was selling over 700,000 bicycles a year and commanded a 25% share of the market. By 1985, market share had dropped to just a little over 5%, and the company was desperately seeking ways to reduce costs and increase sales. The brand name was still strongly associated with quality bikes by consumers; however, the product was considered stogy.
Unable to reduce labor costs significantly in the Toledo plant, the company began to look internationally for a low-cost production site. In 1989 the company entered into a joint venture agreement with a Hungarian bicycle manufacturer. The Hungarian Bike Company (HBC) had a good reputation for quality in Hungary and its labor costs were only a fraction of
the current labor costs of TBC. Compared to other Eastern European workers, it was felt that Hungarian workers were less militant and strike prone.
The initial agreement called for TBC to import component parts to Hungary, where the bicycles would be assembled and sold throughout Eastern Europe. TBC would provide component parts and design, and HBC would assemble and market the product. Hungarian managers would run the plant as an autonomous unit. TBC hoped to later export bicycles from Hungary into the United States to be more cost competitive. It was felt that if production costs could be significantly reduced, TBC bikes could be sold through mass merchandisers in the United States and the company could once again regain its leadership role in the industry.
The negotiations for the joint venture agreement became more complex than ТБС had planned. The collapse of the Soviet Union brought uncertainty and, in some cases, chaos to Eastern European governments. International joint venture laws were constantly changing and no one seemed to know the specifics of the law. Finally, in 1991, an agreement was reached and production began.
From the start, the joint venture experienced problems with production. Managers of the old Hungarian Bike Company had been trained in a system that rewarded output and paid scant attention to quality issues. TBC was surprised by the low level of quality output at the plant, given the good reputation HBC
had in Hungary. When a total quality management (TQM) program was initiated at the plant, only marginal improvements resulted. When the same program had been implemented at TBC in the United States, quality had improved substantially.
Productivity was also a problem in Hungary. Workers were prone to absenteeism and seemed to care little about their jobs. Even though their wages had been raised because of the association with TBC, workers did not appear to be very motivated. TBC estimated that the productivity level at the Hungarian plant was about half the productivity level at the American plant.
In 1992 the Hungarian government increased tariffs on imported parts, raised the value added tax (VAT), and instituted an import- handling charge. These additional taxes significantly increased the costs of production for the Hungarian bicycles.
Faced with further deterioration in its U.S. market share, lower than expected sales in Eastern Europe, and rising production costs, the company went into debt, and by 1995, TBC had declared bankruptcy.
1.
Find the English equivalents for the following words and expressions:
доля рынка, затраты на рабочую силу, дешевое производство, вопросы качества, уровень производительности, устойчивый спрос на что-либо, совместное предприятие, потребители, конкурент, издержки производства, налоги;
сокращать расходы, увеличивать продажи, залезать в долги, управлять
предприятием, вернуть роль лидера, повысить заработную плату, объявить банкротство, повысить качество, появиться на рынке, производить, сталкиваться с проблемами, повысить тарифы;
2.
Translate into Russian:
to manufacture, to reduce costs, to increase sales, to enter the market, to run the plant, to regain leadership role, to experience problems with, to improve quality, to raise wages, to increase tariffs, to go into debt, to declare bankruptcy;
strong demand for, market share, consumers, labor costs, low-cost production, joint venture, competitor, production costs, quality issues, productivity level, taxes;
3.
Match the following:
1. labor a. share
2. quality b. demand
3. joint c. costs
4. strong d. production
5. market e. level
6. low-cost f. venture
7. productivity g. issues
4.
Say whether these statements are true or false:
1. Instability and chaos in Hungary was caused to a great extent by the collapse of the Soviet Union.
2. Hungarian managers and TBC managers didn’t differ at all in the way they looked at quality issues.
3. Productivity was quite a problem in Hungary because workers were not motivated.
4. As a result of the Hungarian government measures TBC pedaled into bankruptcy.
5.
Discuss the following questions:
1. What could TBC have done differently to avoid the problems it experienced in Hungary?
2. What should TBC do to pull itself out of bankruptcy?
6. Think of some more questions to the text
CASE 4
THE GREAT OKLAHOMA OIL COMPANY:
MNC JOINT VENTURE RESPONSIBILITIES
During the life of the joint venture, over 1 billion barrels of crude oil were extracted from the land. Great Oklahoma left Ecuador in 1992 and turned over all assets and responsibilities for the project to Petroecuador, as was In the early 1960s the great Oklahoma Oil Company entered into a joint venture agreement with the government of Ecuador to explore, and potentially develop, an area of land in the eastern part of the country that was believed to possess significant oil reserves. The agreement called for an equal partnership between Great Oklahoma and Petroecuador, the government-owned oil monopoly. Great Oklahoma was to provide technical expertise and capital, while Petroecuador was to provide rights to the land.
Petroecuador had very limited experience in the oil business and relied heavily on Great Oklahoma to provide advice. In effect Great Oklahoma was to make all decisions in the partnership, manage the day-to-day operations, and then simply provide the government of Ecuador with a source of revenue.
A large oil deposit was discovered in the El Oriente region of Ecuador, an environmentally sensitive region of the rainforest. The government of Ecuador officially held title to this land; however, it was generally accepted that the indigenous people of the region, the Ecuadorian Indians, owned the land. They had occupied the land even before the government of Ecuador was established. In order to gain their cooperation, Great Oklahoma and Petroecuador provided small incentives for these people, such as the use of electricity and the construction of sporting facilities. On the advice of Petroecuador, no monetary compensation was ever paid by Great Oklahoma to the Indians.
During the life of the joint venture over 1 billion barrels of crude oil were extracted from the land. Great Oklahoma left Ecuador in 1992 and turned over all assets and responsibilities for the project to Petroecuador, as was originally agreed to in the joint venture contract. Since that time, significant concerns have been raised about the techniques used by Great Oklahoma in its operations in Ecuador. It has been alleged that the company did not use the same standards in Ecuador that it used in the United States to prevent environmental harm and that significant problems now exist in the region as a result.
A lawsuit has been filed in New York on behalf of the Ecuadorian
Indians against Great Oklahoma, seeking $1 billion dollars in damages for environmental destruction and related health problems. It has been alleged that over 17 million barrels of oil were dumped in the jungle and that the water system of the area is now extremely polluted and hazardous. An independent team of researchers from the United States concluded that the wildlife population of the El Oriente region has been greatly reduced by the pollution, and that the increasing rates of cancer found among the local people can be traced back to the techniques of oil extraction and careless handling of oil byproducts.
Great Oklahoma defends its position by stating that it abided by the terms of the joint venture agreement and that the company is no longer involved in the project. The company insists that it followed typical standards in the industry for environmental safety and that the lawsuit is simply an attempt by a few American lawyers to exploit the situation for their own financial gain. Great Oklahoma points out that the Ecuadorian government does not support the Indians' lawsuit, and that the case was, in fact, thrown out of an Ecuadorian court.
The joint venture was very important to the government of Ecuador. During its existence, over half the Ecuadorian budget came from revenues from this project. The oil revenue was used to build roads, schools, and hospitals in the area. Great Oklahoma argues that the Ecuadorian Indians are better off because of the project and that the lawsuit in the United States should be
dismissed. The company feels that the case has no standing in an American court, and that if another trial is to be held, it should be held in Ecuador, since
it is essentially an Ecuadorian matter. Any alleged illegal activity was conducted in Ecuador and the injured parties are Ecuadorian. Furthermore, if the case is allowed to proceed in the United States, a dangerous precedent will be set in which American corporate activities all over the world will be subject to legal action in U.S. courts. Large judgments will encourage foreigners to sue in American courts in the hopes of winning unreasonably high awards.
Although Great Oklahoma concedes that the environmental landscape of the region needs attention, including the removal of the hundreds of open oil pits scattered throughout the area, the company asserts that the responsibility for these problems rests with its partner, Petroecuador. Great Oklahoma upheld its part of the agreement and followed all applicable laws while in Ecuador.
1.
Find the English equivalents for the following words and expressions:
имущество, источник доходов, обязательства, денежная компенсация, финансовая выгода, равное партнерство, разрушение окружающей среды, побочные продукты, безопасность окружающей среды, пострадавшая сторона, государственная монополия, стимул;
сократить популяцию (животных), создать прецедент, соблюдать условия соглашения, соблюдать стандарты, осуществлять деятельность, соблюдать законы, участвовать в проекте, предотвращать разрушение окружающей среды.
2.
Translate into Russian:
to abide by the terms of the agreement, to be involved in the project, to follow standards, to conduct activity, to follow laws; to prevent environmental harm; to reduce population, to set a precedent;
equal partnership, source of revenue, incentive, monetary compensation, assets, environmental destruction, financial gain, injured party, responsibilities, by-products, environmental safety, government-owned monopoly;
3.
Match the following:
1. environmental a. gain
2. significant b. rates
3. injured c. action
4. financial d. partnership
5. equal e. problems
6. illegal f. party
7. increasing g. safety
4.
Say whether these statements are true or false:
1. The agreement between the Great Oklahoma and Petroecuador provided for an exchange of specialists.
2. It was Petroecuador and not the Great Oklahoma that was to make all decisions in the partnership as it had great experience in the oil business.
3. Oil reserves had been nearly depleted in Ecuador and that is why the Great Oklahoma saw no point in entering into a joint venture agreement with the Government of Ecuador.
4. The techniques of oil extraction used by the Great Oklahoma caused environmental destruction and related health problems according to the Ecuadorian Indians.
5. The joint venture played a major role in raising the living standards of the Indians.
5. Discuss the following questions:
1. What are the responsibilities of a multinational corporation that operates in a less-developed country? Did the Great Oklahoma Oil Company fulfill these responsibilities?
2. Are the duties of a MNC different in an agreement with a company that is less knowledgeable or experienced?
3. Do you agree with Great Oklahoma that it is not responsible for any environmental damages since it fulfilled its part of the agreement?
4. What could have been done to avoid this problem?
5.
Make an outline of the article
CASE 5
Problems Taxing the Demon Weed:
Tobacco and Gray Market Activity
The price of smoking is going up. As the federal government increases taxes on tobacco products and tobacco companies raise prices to pay for state-initiated settlements, consumers will see the price of their favorite brands rise. In January 2000 federal taxes on tobacco were raised by 10 cents to 34 cents a pack, and various states have increased their taxes on tobacco as well.
A settlement in 1998
in which the tobacco companies agreed to pay over $200 billion to state governments was designed in theory to compensate state governments for increased health costs, reduce consumption of tobacco, and penalize the tobacco companies for their actions.
Because the foreign markets in which the American tobacco companies sell their products are competitive, domestic consumers will mainly pay the additional costs of higher taxes, litigation, and settlement expenses. Such consumers have seen prices rise by about 70 cents a pack, and higher prices are expected. The price charged for exported tobacco has remained basically unchanged because the American tobacco companies face stiff competition from foreign producers that were not affected by the court settlement or federal U.S. taxes.
When international companies sell in multiple markets and charge different prices, there is the potential that some of the cheaper products will find their way back into the exporting country. This market is referred to as the "gray market" and is more likely to develop when the price differentials are large and the product can be easily transported. Small price differences and products that are hard to ship do not lend themselves as well to gray market activity.
With the price differential increasing between American markets and foreign markets, more cigarettes exported from the United States are finding their way back into the United States. It is estimated that 5 percent of the U.S. tobacco market is now gray, and that proportion may rise even further as the effect of new taxes raises domestic prices even further, According to a spokesman for the Brown & Williamson Tobacco Company, "When you raise taxes, you don't change smoking patterns, just buying patterns." Increasing taxation has created a financial incentive for middlemen to redirect the channel of distribution and sell products intended for export back into the United States.
1.
Find the English equivalents for the following words and expressions:
рынок конкурирующих продавцов, различия в ценах, “серый” рынок,
цены внутреннего рынка, материальный стимул, посредник, производитель, налогообложение, отечественные потребители, дополнительные расходы, канал распределения;
повысить налоги, сталкиваться с жесткой конкуренцией, сократить потребление, назначать цену, повышать цены, компенсировать что-либо.
2.
Translate into Russian:
to increase taxes, to raise prices, to compensate for something, to reduce consumption, to charge a price, to face stiff competition;
competitive market, domestic consumers, price differentials, gray market,
domestic prices, taxation, financial incentive, middleman, distribution channel, additional costs, producer;
3.
Match the following:
1. additional a. incentive
2. competitive b. taxes
3. domestic c. differentials
4. financial d. consumers
5. increased e. market
6. price f. costs
4.
Say whether these statements are true or false:
1. The price of smoking is going up because of the need to increase health costs.
2. The gray market will exist as long as there are large price differentials in multiple markets.
3. Middlemen are the ones who benefit most from increasing taxation.
5.
Discuss the following questions:
1. Which parties in this situation benefit and which parties are harmed by this gray market activity?
2. What can be done to reduce or eliminate this problem?
6.
Think of some more questions to the text
Case 6
TONIA MOTORBIKES:
A CASE OF CHINESE PIRACY
Tonia Motorbikes is the third largest manufacturer of motorized scooters in Japan. The company sells its product, a 125cc vehicle in Japan, Taiwan, Korea, Vietnam, and other Asian markets.
In an effort to reduce labor costs and to penetrate the Chinese market, Kenichi Hoskia, CEO of Tonia, decided to establish a manufacturing operation on the Chinese mainland. Tonia invested $17 million in a state-of-the-art production facility. The Chinese government had insisted on Tonia making a major commitment in order to enter China, including the establishment of a facility equipped with Tonia's most advanced manufacturing technology.
Tonia formed a joint venture with China's Happy Motors, a large, state-owned motorbike manufacturer. Tonia was required to share its technology secrets with Happy as a condition of the joint venture agreement. At first Kenichi resisted; however, the Chinese government assured him that it was in the best interests of both partners to keep the information secret. The Chinese government guaranteed that no one outside the partnership would be allowed access to any of Tonia's trade secrets. Since this guarantee came from high levels of the Chinese government, Kenichi felt more comfortable letting Happy Motors gain insight into the recent advances Tonia had made in small engine design. The thought of a market with 1.25 billion consumers was also a factor in his decision to share critical trade information.
After only five months of producing motorbikes in China, a Tonia employee noticed the Tonia 125 model being sold over the Internet for $1200. Since the machine sold for $2,400 in Japan and $1,600 in China, the employee questioned how a new bike could be sold so cheaply. Further investigation led Tonia to Yiwu, China, where the seller was located, ft was learned that Yiwu is the counterfeit capital of China—a place where counterfeiters from all over the country come to distribute their goods. Upon investigation, Tonia employees learned that the motorbikes being sold under the Tonia brand name were indeed counterfeit products.
With the help of an investigator in China, Tonia learned that not only were counterfeit bikes being sold in China, but that they were being exported to other Asian countries and some were even being exported to the United States and Europe. It was obvious to Kenichi that someone at Happy Motors had sold Tonia's technology. Not only was Tonia losing sales due to the counterfeit goods, but Kenichi also worried that if the quality of the product were inferior, consumers in important markets would be lost for future sales. Kenichi feared that if this situation were left unchecked, the potential existed to ruin the strong brand name Tonia had established.
Kenichi continued to investigate the source of the counterfeited goods but
was unable to determine where the products were being manufactured.
Rumor had it that a former Taiwanese counterfeiter, who was expelled from Taiwan when the government cracked down on product piracy, had moved to the Guangdong province of China and was manufacturing Tonia brand scooters there. It was also rumored that this individual had connections with Chinese government officials; however, there was no proof that these rumors were true.
After six months of investigation, Kenichi still could not determine the source of the counterfeit bikes and it was becoming clear that further investigation would probably not reveal the source. Kenichi did learn that, regardless of official government policy, product piracy was rampant in China. Weak laws, poor enforcement, and light penalties made counterfeiting a very lucrative and attractive business in China. Kenichi sat in his office and pondered his next move.
1.
Find the English equivalents for the following words and expressions:
сокращать затраты на рабочую силу, создать совместное предприятие, “терять” сбыт, проникать на рынок, создать производственное предприятие, делиться секретами технологий;
производственные мощности, худшего качества, доходный бизнес, контрафактный товар, работник, последние достижения, передовая технология, производитель, потребитель, продавец;
2.
Translate into Russian:
manufacturer, production facility, advanced technology, recent advances, employee, seller, counterfeit(ed) goods, inferior quality, lucrative business, consumer;
to reduce labor costs, to penetrate a market, to establish a manufacturing operation, to form a joint venture, to share technology secrets, to lose sales;
3.
Match the following:
1. labor a. business
2. strong b. quality
3. production c. brand name
4. joint d. advances
5. manufacturing e. costs
6. inferior f. facility
7. lucrative g. operation
8. recent h. venture
4.
Say whether these statements are true or false:
1. CEO of Tonia thought it wrong to loose a market with 1.25 bln. consumers and that is why he agreed to the condition of the joint venture agreement.
2. It’s quite common for state-owned enterprises in China to engage in product piracy.
3. Chinese Government made every effort not to allow anyone access to any of Tonia’s trade secrets.
4. Kenichi’s next step was to end the partnership and pull out of China.
5.
Discuss the following questions:
1. Do you find it conceivable that state-owned enterprises in China are engaging in product piracy?
2. What should Kenichi do about this problem?
Case 7
PEGASUS FOOTWEAR:
TRAMPLING ON RELIGION
Pegasus Footwear was an international manufacturer, well known throughout the world for its product design and marketing savvy. Products were designed at company headquarters in the United States, and Pegasus used an extensive system of contract manufacturing to produce a variety of mostly athletic shoes sold throughout the world.
Charles Clark, or C.C., was the regional manager in charge of Pegasus operations in Southeast Asia. Clark, a British citizen, was responsible for manufacturing and marketing in the entire region. C.C. had been with Pegasus for 10 years and was recently promoted to his present position. The position was seen as a very important one, since most of
the contract manufacturing for Pegasus occurred in this region of the world. C.C. was a graduate of Oxford University and began work at corporate headquarters in Los Angeles shortly after receiving his M.B.A. from Stanford. His management style was often described as visionary; however, some of the local managers felt that C.C. possessed a somewhat condescending attitude toward employees from less-developed countries.
C.C. and his team in Southeast Asia were considered very successful by top management back at corporate headquarters. As a result, C.C. earned an unusual degree of autonomy for his group. C.C. oversaw the manufacturing
operations in the region (which employed over 1,000 people) and was primarily responsible for the marketing of products that were manufactured in the region.
Most of the products, however, were sold in the United States and Europe, and responsibility for marketing in these regions was held by the respective regional managers. All product design was created in the Los Angeles office.
When C.C. arrived in his office on Tuesday morning, he received word of a problem. Storeowners in Indonesia were reporting problems with a particular shoe that had recently been designed by Pegasus.
Figure 1
Pegasus Shoe Design
The shoe called AirBurner was upsetting Muslim consumers who objected to the design found on the outer heel of the shoe. The design (Figure 1), which spelled "air," was written to resemble fire, but some consumers felt that the design spelled "Allah" in Arabic (Figure 2).
Figure 2
Since the shoe is considered by many to be the dirtiest part of clothing, it was considered a major insult to find the word for
Allah, or God written there. Storeowners tried to explain that the word was not "Allah" but rather "air," written in flaming letters. Most consumers were not satisfied with the explanation.
C.C. asked for an accounting of the number of shoes produced with the design and was told that 100,000 pairs had already been produced, and that more were being made. One-fourth were to be sold in his region and the rest were on sale in other parts of the world. Although each shoe had a direct cost of production to Pegasus of $6.75
and a recall of all 25,000 pairs in his region would not significantly affect profitability, CC decided not to recall the controversial shoes. He stated: "Pegasus is proud of the fact that we have never had a product recall and we don't intend to start one with this silly design issue. The design clearly spells the word air
and it should not be an insult to anyone." C.C. felt that the whole issue would "blow over" in a few days and that a recall would just tarnish the image of Pegasus Footwear.
The problem did not go away, and on Thursday C.C. received an urgent call from an employee in Indonesia who informed him that angry crowds were damaging stores that carried the shoe. Newspapers in the country had reported the story and implied that the product was part of an America plot to discredit and insult Muslims. An international Muslim organization was now calling for a worldwide boycott of all Pegasus products and there was fear that the problem would spread to other countries with significant Muslim populations. C.C. had just been told that the CEO of Pegasus Footwear was waiting on the telephone to speak with him and that she was quite upset about the whole affair.
1.
Find the English equivalents for the following words and expressions:
прибыльность, стиль руководства, производственные операции, высшее звено управления, потребитель, стоимость производства, должность, изъятие товара из продажи, производство, работник, прямые затраты;
нанимать на работу, производить, работать в компании, призвать к
бойкоту, быть в продаже, получить повышение (в должности), управлять производственной деятельностью, влиять на рентабельность, отвечать за что-либо.
2.
Translate into Russian:
manufacturing, position, employee, top management, consumer, cost of production, direct costs, profitability, management style, manufacturing operations, product recall, top management ;
to be in charge of (to be responsible for), to be promoted, to employ, to manufacture (to produce), to be on sale, to call for a boycott, to be with a company, to oversee manufacturing operations, to affect profitability.
3.
Match the following:
1. contract a. costs
2. management b. manufacturing
3. manufacturing c. operations
4. direct d. style
4.
Say whether these statements are true or false:
1. C.C. had no special training in business, but was appointed the regional manager due to his management style being visionary.
2. Storeowners succeeded in persuading consumers that the design clearly spelled “air”.
3. The whole affair sparked mass protests across the country and the event got full coverage in the local newspapers.
4. The problem did not go away and so C.C. took a decision to recall the product.
5.
Discuss the following questions:
1. What went wrong in this situation?
2. Do you think that an early recall of the product would have headed
off the problem?
3. What would you recommend to C.C. and Pegasus?
4.
What is the main idea of the text?
Bibliography
1. Cases and Exercises in International Business / Charles A. Rarick, Andreas School of Business, Barry University, Prentice Hall, USA.
|