Vocabulary tasks

A Word search

Find a word or phrase in the text that has a similar meaning.

1. mergers between companies from two different countries (para1)

…cross…-…border… deals…

2. when one company buys another (para 1)

t…………………

3. when a company becomes more international (para 1)

g………………… g…………………

4. people who negotiate the terms of a merger (para 3)

d………………… m…………………

5. reduce the amount of money spent (para 3)

c………………… c…………………

6. increase income from sales (para 3)

b………………… r…………………

7. work that needs to be done after the merger agreement (para 4)

p………………… - m………………… i…………………

8. sent to a job in another country (para 8)

p…………………

B Understanding expressions

Choose the best explanation for each word or phrase from the text.

pull off (line 15) stop succeed 2. pitfalls (line 17) problems accidents 3. mesh together (line 20) combine mix up 4. popping up (line 21) exploding coming up

5. permeates (line 22) destroys permanently goes into every part 6. pride itself (line 34) be pleased with yourself for something tell everyone about your good points 7. ominous (line 40) easy to predict predicting something bad 8. in their own right (line 43) by themselves in a correct way

C Prepositions

Complete these sentences with an appropriate preposition

1. Cross-border deals accounted …for… a quarter of mergers in 1998.

2. Two ……. ……. every three deals have networked.

3. Success will depend ……. the merged companies' ability to create added value.

4. They assume sales managers and engineers wilt cut costs according ……. plan.

5. Executives are putting deals together ……. a hurry.

6. Employees of one company were accustomed ……. inviting spouses to the annual picnic.

7. An American manager may report ……. a German boss.

8. In Daimler-Benz, engineers are ……. charge.

Unit 6. Business in the 21st century

THE E-LANCE ECONOMY

S

1

5

10

ummary

Despite the wave of big mergers and acquisitions over the past few years, the days of the big corporation - as we know it - are numbered. While the cash flows that they control, are growing, the direct power that they exercise over actual business processes is declining. Because modern communications technology makes decentralised organisations pos­sible, control is being passed down the line to workers at many different levels, or outsourced to external companies. In fact, we are moving towards what can be called an “e-lance economy”, which will be charac­terised by shifting coalitions of freelancers and small firms using the Internet for much of their work.

Twenty-five years ago, one in five US workers was employed by one of the top 500 companies. Today, the ratio has dropped to fewer than one in ten. Large com­panies are far less vertically inte­grated than they were in the past and rely more and more on outside suppliers to produce components and provide services, with a conse­quent reduction in the size of their workforce.

A

15

20

25

30

35

40

t the same time, decisions within large corporations are increasingly being pushed to lower levels. Workers are rewarded not for carrying out' orders efficiently, but for working out what needs to be done and doing it. Many large industrial companies - ABB and BP Amoco are among the most prominent - have broken themselves up into numerous indepen­dent units that transact business with one another almost as if they were separate companies.

What underlies this trend? The answer lies in the basic economics of organisations. Business organisations are, in essence, mechanisms for co-ordination, and the form they take is strongly affected by the co-ordination tech­nologies available. When it is cheaper to conduct transactions internally, with other parts of the same company, organisations grow larger, but when it is cheaper to conduct them externally, with independent entities in the open market, organisations stay small or shrink.

T

30

35

45

he co-ordination technologies of the industrial era - the train and the telegraph, the car and the telephone, the mainframe comput­er and the fax machine - made transactions within the company not only possible but advantageous. Companies were able to manage large organisations cen­trally, which provided them with economies of scale in manufactur­ing, marketing, distribution and other activities. Big was good.

But with the introduction of powerful personal computers and electronic networks - the co-ordi­nation technologies of the 21^st century - the economic equation changes. Because information can be shared instantly and inexpen­sively among many people in many locations, the value of centralized decision-making and bureaucracy decreases. Individuals can manage themselves, co-ordinating their efforts through electronic links with other independent parties. Small becomes good.

In the future, as communica­tions technologies advance and networks become more efficient, the shift to e-lancing promises to accelerate. Should this happen, the dominant business organisation of the future may not be a stable, per­manent corporation but rather a flexible network of individuals and small groups that might some­times exist for no more than a day or two. We will enter the age of the temporary company.

From the Financial Times

Reading tasks

A Understanding main points

Read the text about how businesses will be organised in the future and answer these questions.

1. Which of these statements gives the best summary of the ideas in the article?

1. New communications technologies enable information to be shared instantly across the world.

2. In the future most people will be self-employed or will work as freelancers.

3. Companies are having to restructure due to developments in electronic communications.

1. What exactly do the authors mean by the term “e-lance economy”?

   1. Most work inside large companies will be done using e-mail and computers.

   2. In the future tasks will be done by individuals and small companies linked to the Internet.

   3. Business between companies will increasingly be done through the Internet.

B Understanding details

Mark these statements T (true) or F (false) according to the information in the text. Find the part of the text that gives the correct information.

1. Big corporations will soon go out of business. F

2. There is a move towards decentralisation of decision-making in many companies.

3. Many companies are now experiencing cash flow and similar financial problems.

4. No more than 10 per cent of workers in the US work for the top 500 companies.

5. ABB and BP Amoco have sold many parts of their businesses.

6. Large organisations can save money by centralising all transactions.

7. Computer companies have decentralised their decision-making process.

8. It is possible that the shape and structure of companies will be very different in the future.

С How the text is organised

These phrases summarise the purpose of each paragraph. Match each phrase to the correct paragraph.

1. illustrate the decline of big companies paragraph I

2. give a prediction about the future

3. give examples of changes in the way big companies are organised

4. introduce the idea that big companies are starting to change and even decline

5. describe the new way of working

6. explain why these changes are taking place

7. describe the old way of working