BUSINESS ENGLISH 1 ORAL EXAM

1. Economics/Economy
Economics is the study of the way in which wealth is produced
and used. In other words it is the study of how individuals and
governments allocate scarce resources in an attempt to satisfy
unlimited wants.
Economics is present in our lifes from the first day when we
purchased something and by that became an economic
player. Every decision we make, whether it is which clothes we
buy, what car we drive, what college we go to, or what business
deal we make, those are all economic resolutions that affect
economy and economics. By studying it we become better
informed players.

Economy is the system by which country's goods and services

are produced and used. Money, industry and trade are
organised. An economy consists of the economic system of a
country or other area, the labor, capital and land resources, and
the economic agents that socially participate in
the production, exchange, distribution,
and consumption of goods and services of that area.

A given economy is the end result of a process that involves

its technological evolution, history and social organization, as
well as its geography, natural resource endowment,
and ecology, as main factors.
There are three types of economies: Planned, Market and Mixed
economy
2. Economic systems
The function of an economy is to allocate resources amongst
unlimited wants and to solve the basic economic problem often

broken down into three questions: What shoul be produced?

How should it be produced? For whom should it be produced?
How the above questions are answered will depend on the type
of economic system: the planned economy, the mixed economy and the
market economy. The way business activity is organised will be different in each
of the systems.
3. Planned economy
Planned economy is the type in which resources belong to the
state and government has a vital role. It plans, organises, and
co-ordinates the whole production. In planned economies, there
tends to be a more equal distribution of wealth and income,
production is for need rather than a profit, people tend to work
efficiently and the standard od living is often lower compared
with countries which use other types od economic system.
4. Mixed economy
In mixed economy resources are allocated by the government
(the public sector) and by the market forces of demand and
supply (the private sector). The role of government depends on
the level of development and the state usually provides a
minimum standard of living for those unable to work. Another
role of government is to ensure that there is a fair
competition.In mixed economy public goods are usually
provided free when used and are paid for by taxes.
5. Market economy
In market economies resources are allocated automaticaly by
the forces of demand and supply, which stimulates competition.
That should lead to lower costs, a wider choice of goods and
services. The role of government in a free market system is
limited. Some of its main functions are to pass laws, to provide
certain essential products and services such as policing,
national defence and the judiciary, and to ensure a level playing
competition.
Firms may often choose to sacrifise public interest in exchange
for lower costs.
6. Decline of manufacturing

7. GDP
Gross Domestic Product
goods & services produced within a countrys borders
GDP = C + G + I + NX
C = all private consumption/consumer spending
G = government spending
I = investment/all the countrys business spending on capital
NX = total net exports (total exports minus total imports)
More jobs - more money
Lower inflation cheaper production
More exports more money
Higher growth better standard of living
Social welfare health, comfort happiness
8. Good society (Galbraith)
The good society accepts the basic market system and its
managers, but there are some things the market system does
not do either well or badly. In the good society there are the
responsibilities of the state.
1.What areas does Galbraith describe as responsibilities of the
state?
Good low-cost housing, health care but also parks, recreational
facilities, police, libraries, the arts and others.
2.What does Galbraith say about the people who criticise
government services?
He says those are usually the affluent ones who can afford to
provide all the services for themselves and dont think about
the underclass.
3.Why the market system is not sufficient to guarantee
scientific research?
It doesnt want to risk so much money in something that
doesnt give profit right away but in a long term.

9. Sectors of economy
There are three sectors of economy: the primary, the secondary
and the tertiary sector.

10. Primary sector

The primary sector of the economy involves changing natural
resources into primary products. Most products from this sector
are considered raw materials for other industries. Major
businesses in this sector
include agriculture, fishing, forestry and
all mining and quarrying industries. Primary industry is a larger
sector in developing countries.
11. Secondary sector
The secondary sector processes the raw materials from the
primary sector. This means that they take the raw materials and
make them into finished items.
It includes manufacturing capital and consumers goods and
building and counstruction. Utilities, textiles, toiletries,
transport, software and automotive companys are some of the
most typical ones for this sector.
12. Tertiary sector
The tertiary sector of the economy is also known as the service
sector or the service industry.The basic characteristic of this
sector is the production of services instead of end products.
The focus is on people interacting with people and serving the
customer rather than transforming physical goods.
Services may involve the transport, distribution and sale of
goods from producer to a consumer,
wholesaling, retailing, entertainment, restaurant industry.
13. Public sector
The public sector is made up of organizations which are, directly
or indirectly, owned or controlled by central or local
government. They are funded by the government and in some
cases from their own trading surplus of profit.
The main goal in public sector is a socal wellfare and to serve
the public interest.

State provides services as defence and some merit goods like

health care and education, and is an owner of some public
enterprises such as the National bank, utilities and rail. The
main role have ministers and the board of directors which is
commonly made up of politicians.
14. Public sector companies
15. Municipal enterprises
The municipal undertakings also belong to the public sector.
Some of them are cemeteries, street cleaning, waste dumps,
car parks, street lighting, fire protection, recreation facilities,
theatres, galleries, museums and airports.
From all these enterprises and taxes the government raises
money to pay for expences and funds.
16. Privatization
In the broadest sense, privatization means relying less on the government to
meet people's needs for goods and services, and more on private institutions
such as the marketplace, the family and voluntary organizations.
An oft-stated aim is to wring more efficiency out of the enterprises being
privatized, and thus to make the economy in general more productive.
Governments also use privatizations to raise money.
Another aim of privatizing, particulary in developing nations, is to invigorate
and expand to local capital markets and to attract foreign capital.
17. Advantages of privatization

competition lower prices

more choice
better quality
innovation /new products,
diversification/
sensitive to demands of consumers
managers make decisions freely
growing number of shareholders
selling the state owned industries
raises revenue for the government

18. Disadvantages of privatization

Laying off workers

Some services cannot be provided without state finance (e.g.
railway network)
Concentrating on profit

Privatised firms may hand over control to foreigners

Trade unions not able to protect workers
State owned firms can only be sold once

19. Private sector companies

The private sector is a part of the economy which includes
businesses set up by individuals or group of individuals. Their
goal is to make profit, and these companies are not controlled
by the government.
There is sole proprietorship, partnership, private and public
limited company. They are distincted by liability and whether
they are unincorporated or incorporated.
a) Sole trader (unincorporated)
b) Partnership (unincorporated)
X&Y
c) Private limited company (incorporated)
Ltd.
d) Public limited company (incorporated)
Plc.
20. Liability
There are two types of liability: limited and unlimited one. The
limited one is when the owner is responsible for only the
amount of money he invested. In case of a bankrupcy he
wouldn't be taken his personal wealth to pay for debts.
Unlimited liability, means that the owner risks to sell his
personal assets to pay for debts. Those assets could be land,
shares, buildings, machines, cash, in other words, anything that
has some material value. That's why unlimited liability is
considered more risky.
21. Sole proprietorship, 22. Partnership, 23. Ltd, 24. Plc
Sole trade
(Sole
proprietor
ship)
OWNERSHIP

1 sole
trader
DOCUMENTS Few legal
requirement
s

Partners
hip

2 20
partners
Deed of
Partnershi
p

Private
Limited
Company
(Ltd.)
2 - .X
shareholde
rs
Memorand
um of
Association
Articles of
Association
Certificate
of
Incorporati

Public
Limited
Company
(Plc.)
2 - .X
shareholde
rs
Memorand
um of
Association
Articles of
Association
Certificate
of
Incorporati

on

FINANCE

savings,
bank loans,
overdrafts

capital of
partners,
bank
loans,
overdrafts

CONTROL

one person

partners

ADVANTAGE
S

DISADVANT
AGES

direct
control
quick
decisions
few legal
requirement
s
claim on
profits
unlimited
liability
no
specializatio
n
business
ends on
death of the
owner

more
finance
specializat
ion
sharing
losses
unlimited
liability
sharing
profits
business
ends on
death of
any
partner

on

Sale of
shares
sale of
(in public,
shares
on the
(in private)
Stock
Exchange)
Board of
Board of
Directors
Directors
limited
limited
liability
liability
continuity
more
of business
finance
growing
larger scale capital
organizatio large scale
n
organizatio
n

legal
requiremen
ts
(strict laws)

legal
requiremen
ts
(strict laws)

25. Documents for limited companies

When forming a limited company the Memorandum of Association and the
Articles of Association are required.
The Memorandum of Association sets out:

 the name of the company

the type of business
the total share capital
It deals with the outside world.
The Articles of Association sets out:
the powers and duties of the directors
the issue and transfer of shares
the calling of general meetings
the salary and appointment of Managing Director
It deals with running the company internally.
26. Process of forming a limited company
If the Registrar is satisfied with all of the details he registers the
company and issues them with a certificate of incorporation.
This gives the new company permission to start trading.
PEOPLE WANTING TO FORM A COMPANY

LAWYER
CERTIFICATE OF
INCORPORATION
MEMORANDUM OF ASSOCIATION
AND
ARTICLES OF ASSOCIATION

THE REGISTRAR OF COMPANIES

27. Entrepreneurship
Entrepreneurship is the act of being an entrepreneur. The aim of production is to
provide with the goods and services that people need or want.
28. Characteristics of entrepreneurs

Successful entrepreneurs come in all shapes and sizes- the dynamic, the cautious
and the greedy. But all of them have a few things in common.
Most entrepreneurs, unlike managers dont come from fairly conventional
background. They are crackpots, dreamers, outsiders who drop out of college to
get a job, discover a flair for building companies from nothing, get bored
quickly and move on.
They are independent, have guts to take risks and chances, and whats more
important they have the killer instinct and are ingenious.
To become entrepreneur doesnt require much. All you need is to get an idea,
identify your customer and make a sale. Itll probably take you many years to
become successful in what you do, which is why you must be determined and
dedicated to what they are doing. However, not everyone can be prosperous
entrepreneur. Some people just arent good organizes and leaders who can start a
business and see the possibility of new products, technologies or production.

likely to be an outsider, a troublemaker, a rebel

drop out of school
discover a flair for business
get bored quickly
masters of risk - management

29. Reasons for start-ups

INDEPENDENCE
KEEPING ALL THE PROFITS
CREATIVITY
USING REDUNDANCY MONEY

30. Venture capital

--funds invested in a new enterprise, esp. a risky one
Provided by: a) the government
b) the private sector
Support by: legal, educational & financial systems

31. Company structure

Each company has its internal organization which depends on type of business
activity, size of business and the number of employees. It is also important to
stress that the company structure depends on the type of business organization
and the sector it is in.
However, generally speaking on the top of a company is always a manager or
the president of the board of directors, then there are executives which can be
senior, middle and junior managers. Below them are departments which contain
of staff or in other words employees and finally there is a shop floor.
Despite everything all companies have the same business purpose which is to
maximise productivity, creativity, innovation and wealth and to danger
competition. To achieve all this it is important to have functional and firm
structure where everyone knows who is in charge, who are they responsible to,
for what are they responsible and by who are they supported. In other words,
everybody should know they're place and their role in the company.
32. Hierarchy
hierarchy or chain of command - a system of authority with different levels,
one above the other, e-g- a series of management positions, whose holders can
make decisions, or give orders and instructions
Hierarchy also known as the chain of command is the type of structure with one
person or a group of people at the top, and an increasing number of people
below them at each successive level. All the people in the organization know
what decisions they are able to make, who their line manager is, and who their
immediate subordinates are. The owners of small firms want to keep as much
control over their business as possible, whereas managers in larger businesses
who want to motivate their staff often delegate decision making and
responsibilities to other people. A problem with hierarchy is that people at lower
levels can't take important decisions and the resposibility is passed on bosses.
However, there is a trend of flattening, which is reducing the chain of command
and taking out the layers of management.
33. Board of Directors
elected by the shareholders
look after shareholders interests
at the top
President/Chairperson
Chief Executive Officer (CEO) / Managing Director (MD)
Chief Operating Officer (COO)

 Chief Financial Officer (CFO)

a) Representatives from within the company
- Chairperson
- inside directors executive directors
- Managing Director (Chief Executive Officer)
b) Representatives independent from the company
- outside directors non-executive directors

34. People to whom managers are responsible

owners - to achieve the best possible return on the capital
invested
clients - to provide goods and services of the specified
quality,
within the agreed time, at a fair price
employees - to provide the safest and most comfortable
working
conditions, to pay a fair wage

35. Management functions

1. planning making decisions / policy / methods - to achieve
the
objectives
2. co-ordinating integrating activities in order to form a united
strategy
3. motivating
encouraging
4. controlling supervising and checking

36. Two - tier corporate hierarchy

There is a two-tier corporate hierchy in management: board of
directors and management team. Board of directors is elected
by shareholders and consists of internal and external directors

and monitor managers. It role is to make strategic decisions

such as which market to enter or pull off, how to finance
expansion, develop new products and how to take over new
products by buying other companies. Management team
includes the CEO and departmental managers. It is involved in
day-to day operations.
a) Board of directors
- elected by shareholders
- internal inside directors (executive)
- external outside directors (non-executive)
- monitor managers (report to owners)
- make strategic decisions:
which markets to enter/pull off
how to finance expansion
develop new products
acquire / take over new products by buying other
companies
b) Management team
- the CEO the top manager
- involved in day-to day operations
- departmental managers
(Finance, Production, Marketing, Legal,
Research & Development, Distribution ........

37. Duties of managers

o set objectives
o work out methods to achieve them
o analyse the activities
o divide the work into individual jobs
o select people
o form effective teams
o motivate (pay, promotion)
o measure the performance of the staff
o train and develop their staff
38. Human Resources Department

recruit / lay off

provide a job contract (rights and obligations)
motivate (rewards systems)
measure productivity
train (new skills, new systems)
take care of lighting, heating, hygiene, canteen, sports
develop (opportunities, promotion)
negotiate with trade unions

HR DEPARTMENT
1. advertises the job / vacancy in the appointments page
( local, national,
international advertising; trade journals)
2. notifies Job Centres (employment agencies)
3. uses private recruiting agencies - head-hunters (for top
staff)

39. Recruitment process

When wanting to recruit new employees, recruiters first define their

needs.
Before meeting with the job applicant, the hiring manager must decide upon the
responsibilities of the position. He must be clear about the educational
background, professional experience and qualitative manners he seeks in the
ideal candidate.
Once the responsibilities, requirements and the salary range of a job is
determined, the hiring manager may post want ads on online job search sites or
in traditional publications like trade journals in the appontments page. He/she
may also utilize the services of a staffing agency that maintains a pool of
qualified, pre-screened candidates. Another way to find the adequate staff is to
use private recruiting agencies, head-hunters. If one decides for the
advertisement, he/ she must give job description. It should include job title,
responsibilities, working hours, working conditions, pay, fringe benefits and
holidays. Fringe benefits could be everything from bonuses, free meals, usage of
car, mobile phone, house, free insurance to profit sharing and social facilities.
When wanting to apply for a position, applicant sends a CV and the letter
of application. Resume should include information like personal detalis,
qualifications, work experience, personal qualities and skills and references.
When resumes begin to pour in, a hiring manager must screen each one. His
goal is to weed out those lacking the proper educational or professional
background. Once he/she has identified the most appropriate resumes, he puts
them on a shortlist. Those applicants will get the opportunity to attendt an
interview.
When an ideal candidate has been identified, the hiring manager extends
a formal offer of employment. The final step in recruitment process id signing as
a contract.

40. Job advertisement job description/ job specification

 Job description
- job title (responsibilities)
- working hours/conditions
- holidays
- pay (salary/wages)
- fringe benefits (perks)
Job specification (CV)
- personal details (age, place/date of birth, address, email)
- qualifications (diploma, degree, courses)
- experience
- personal qualities
- skills (computer, languages, driving licence)
- references
41. Job safety/job security
- knowing that there is little risk of loosing one's employment
42. Job satisfaction
Strategies for raising job satisfaction and quality of work life
(qwl)
improving work conditions and security
increasing the workers responsibility
providing financial stability
enhancing the workers sense of self- worth
providing opportunities for social
relationships within the organisation
43. Fringe benefits
bonus (additional payment)
free meals (subsidised canteen)
use of car/mobile phone/house
free insurance
profit sharing
social facilities (sports clubs)
44. Conflicts between managers and employees
a) the employers want to minimise wage costs
b) the employees want to achieve higher pay

45. Work and motivation

There are few factors that affect work motivation: individual differences, job
characteristics and organisational practice. Good motivation leads to more
productive environment, competitive workers and more profitable work.
Some employees like to work while others have to be forced.
Motivation is what drives us to try to reach certain goals.
Motivation is a decision-making process through which a person chooses
desired outcomes and behaves in ways that will lead to acquiring them.
Motivation is the willigness to make the effort to achieve certain goals.

46. McGregors Theory X/Theory Y

Theory X has a traditional and pessimistic approach. It assumes that people
are lazy and will avoid work and responsibility if they can, in other words
there is a lack of ambition. Workers have to be threatened and rewarded with
incentives because they can only be motivated by money. Theory X believes
that workers have to be closely supervised and controlled and told what to
do, since most people are incapable of taking responsibility. That's why
managers are autoritarian, they direct everything, from top down.
Theory Y is more progessive. It assumes that people have s psychological
need to work and given the right conditions, such as job security and
financial rewards, they will be creative, ambitious and self-motivated by the
satisfaction of doing a good job. This theory believes that workers are
motivated by many needs and they like to work.They are responsible-prefer
to participate in decision-making and like autonomy. Unlike Theory X,
Theory Y thinks that managers should trust workers and help them do their
best, be team-oriented and organise communication channels and listen to
their subordinate's opinion.
47. Herzbergs Hygiene Factors
Frederick Herzberg believes that 'hygiene factors' also known as satisfiers
can only keep workers contented but not motivated. They are: clean, quiet
and safe working conditions, adequate rest breaks, good labour relations,
good wages and benefits and job security. However, what really encourages
workers to do their best are so cold motivators. They include things such as
having a challenging and interesting job, recognition like praise from
management, responsibility and career advancement like promotion.
However, if the hygiene factors are poor then the motivating factors won't
work.

48. Trade unions

Trade unions regulate relations between employers and employees and protect
the interest of their members. To employ skilled officials to act on their behalf
workers have to pay a small subscription. When being a member of a trade
union workers have representatives that negotiate with their employers.
Apart from union members there are others that make the structure of a trade
union. Shop stewards also called union representatives are elected by members
of the union to represent them to management. Branches support union members
in different organizations locally. District and/or regional offices are usually
staffed by full time union officials. Finally there is a national office. It is the
unions headquarters which offers support to union members and negotiates or
campaigns for improvements to their working conditions.

Trade union aims to improve wages and working conditions, reduce working
hours, protect full employment, fight for job security and against unfair
dismissal, provide benefits for those who are sick, retired, on strike and to
participate in company decision processes. It provides collective bargaining
which are talks between representatives od employees and employers and
restrictive methods like industrial action.

49. Types of industrial action

Industrial action is a general term for strikes, go-slows, work-to-rules, etc.

There are a few forms of industrial action. First and most common one is strike,
a stoppage of work, as a protest against working conditions, low pay, and so on.
It can be official and unofficial one. Official is with union approval, and it is
paid from funds contributed by members, while unofficial one, also known as
wildcat is without union backing. Second form of industrial action is overtime
ban, when workers refuse to work additional hours. Third form is work-to-rule.
It is deliberately obeying every regulation in an organization, which severly
disrupts normal operation and slows the work. Go slow or slowdown is a
deliberate reduction in the rate of production. Work is at a slower pace and there
is a fall in output. Another form of industrial action is picket, a protest outside a
factory or other workplace, and try to persuade workers and delivery drivers not
to enter. Final form is blacking, when workers refuse to move machines.

50. Decline of trade union membership

However, there has been a decline in trade union membership. With the
economy being a free-market one there are less people working in
manufacturing which is why is harder to organize unions. Also, there are laws
that have reduced their power and more firms refuse to recognize and negotiate
with trade unions.

1. Presentations
Presentation is a prepared talk which is used to inform on a certain subject. One
of the most popular is sales presentation, but one can also give presentations at
conferences, lectures, board meetings, forums etc.
Before presenting, it is necessary to be well prepared. For the beginning, the
content must contain only important information and relevant points.
Furthermore, structure must have three main parts : the beginning, the middle
and the end.
Presenter must take care of the internal and external factors. One must know
who is the audience, their level of knowledge and how many people will be
there. Also, presenter should be calm, confident, speak loud enough and make
eye content because without audience's attention all effort is useless.
2. Business plan

PURPOSE
1. Helps focus and research the businesss development
2. Provides framework for strategies over the next 3-5 years
3. Basis for discussion with third parties (shareholders,
agencies, banks, investors)
4. Benchmark (actual performance can be measured and
reviewed)
1. Vision
2. Mission
3. Objectives
4. Values
5. Goals
Strategies - rules by which the vision / mission / objecives may
be achieved
STRUCTURE& CONTENT OF A BUSINESS PLAN
1. Introduction
table of contents
2.

Executive summary (business description):

Overview of your industry (vision, mission, goals)
Description of products/services
Labour requirements
The market (customers, size and trends, competition)
Market opportunity (method of sales, advertising and
promotion)
Management (ownership, Board of Directors, support
services)
Financials (financial statements, profitability)
3. Conclusion

3. CV/Letter of application
4. Economic agents/the market
5. Role of government areas of responsibility
1. Maintenance of a low level of unemployment
2. Price stability (low levels of inflation)
3. High economic growth (GDP)

4. Balance on foreign trade (more exports than imports)

6. Public corporation vs. Plc
7. Partnership vs. Ltd company
8. PPP/P3 contracting out
PRIVATE PUBLIC PARTNERSHIP
public sector authority + private party
a) public service
b) public goods (infrastructure)
c) the company putting in the lowest bid the cheapest price
gets the contract
d) places in old peoples homes, catering in hospitals,
cleaning...has been put out to tender
9. Standard economic theory/Factors of production
FACTORS OF PRODUCTION
LAND - fixed in supply
geographical area
natural resources
LABOUR - mans physical and mental contribution
(skills/knowledge)
CAPITAL - a) fixed - buildings, machinery, equipment
b) working - stocks of raw materials, cash,
bank
balance
STANDARD ECONOMIC THEORY
The general equilibrium model:
Economic agents (consumers, households, companies, organisations)
influence prices and quantities adjust themselves until supply meets
demand.
10. Changes in company organizations

11. Downsizing / flat hierarchy

http://www.youtube.com/watch?v=STED8sSHJU8&feature=related
Downsizing reducing a firm in size by laying off employees to become more
efficient
Flat hierarchy
It is a type of hierarchy with just a few levels of hierarchy. It offers way to
reduce cost as the way of reduce cost is to reduce staff, which we can do by
delayering. In flat organization a manager has large number of staff

????
12. Maslows hierarchy of needs

13. Fat cats

http://www.investopedia.com/video/play/fat-cat-ceo
CEO is supposed to guide a company through vision and leadership, but for
some CEOs it's all about the money. They are nicknamed Fatcats. Those CEOs
can hurt the bottom line simply by costing the company more than they work.
They forget that their jobs are to serve the company and their shareholders and
not to pad their own wallets. Fatcats can ruin the company with his/her greed
and negligence. They are so focused on recieving production bonuses that they
will push the company to produce beyond sustainable levels. They take the

money and run, leaving for the next company before the damange is understood.
If a CEO is costing a company too much it's better to pass up the investment for
a company who's management acctually adds value.
14. Motivation for staff to perform better in work
Staff are mostly motivated by increment and bonuses
Staff feel motivated and perform better at work if they are given a chance
in decision making
Company events, like family outings, dinner and dance usually motivate
staff and they feel closer to each other
Flexible working hours motivate staff to perform better in work
Some employees adore challenges such as working overseas which keep
them motivated
Awards keep the staff going
Tea breaks usually allow employees to perform better
Caring bosses usually motivate staff