Exercise 9. Answer the questions

Exercise 9. Complete the sentences by inserting one of the following.

Exercise 7. Complete each sentence by using the correct form of one of the following verbs. Use each verb once only.

build

sell

make

spend

overcome

take over

say

win

1. More than 6 million tins of beans are... every week.

2. They were... by an American company last year.

3. No attempt was... to explain the inconsistency in the figures.

4. Kent Industries are... to be thinking of expanding overseas.

5. Once initial problems had been... the re-organisation went like clock work.

6. Their new factory will be... on the outskirts of the town.

7. The contract was... in the face of strong competition.

8. Over $3 million was... on advertising last year.

Exercise 8. Combine an adjective from the list on the left with a preposi­tion from the list on the right to complete each sentence. You must use each adjective once only, but each preposition can be used more than once.

relevant capable of

proud well-known on

aware accustomed to

acceptable dependent for

1. I'm not …any regulations that should prevent us from export­ing to those countries.

2. We need somebody who is …understanding German.

3. That's an interesting point but it isn't really …our discussion.

4. It took me some time to become …using the new system.

5. They will only sign if the terms are fully … them.

6. It's risky to be …only one supplier.

7. He was so …his firm's achievements that he talked about them to everyone he met.

8. This company is …the high quality of its products.

all any each every

1. We sell... type you like.

2. We are involved in... the stages of wine production and distribu­tion.

3. We have studied... step in the distribution process.

4. We studied... of the major wine producers.... of them has some advantages.

5. You asked me if we can supply... retailer in the north of Eng­land. In fact, we can reach... one within a thirty mile radius of Newcastle.

6. We are involved in... aspect of wine distribution.

7.... major wine producers have suffered from the recession.

1. Do you know of a business firm where the personal attention of the owner is important to the firm's success?

2. Do you think that small firms can keep competent employees? How?

3. Why is it that not all Americans believe they would be successful owners and managers of their own.business?

4. Which two rewards of success would you place first if you had your own small business?

5. Would you include preownership experience in your list of re­quirements for successful management?

TEXT 16. CORPORATE ALLIANCES AND ACQUISITIONS

As business and the world economy become increasingly competitive, more and more companies have to strengthen their operations to remain profitable. Companies can go about this in a number of ways, including the following:

· Joint venture: Two or more companies agree to collaborate and jointly invest in a separate business project. This type of deal allows the partners to combine their strengths in one specific area.

· Merger: Two companies, often in the same industry, come together to form one company. Companies merge for many reasons, for example, to increase market share and cut costs in certain areas, such as research and development.

· Acquisition or takeover: One company accumulates enough of another company's shares to take over control and ownership.

Corporate egos cause problems but they seem to be inevitable in a business culture that prizes drive, determination and leadership above all. To climb to the top of the corporate ladder one should have the strength of personality and the ability to outmanoeuvre others. This is a fundamental prerequisite of the success. So with a power-hungry alpha male at the top of each company, it is not surprising that every time a mega-merger is announced, there's a high probability of a boardroom bust-up.

The spectacular collapse of the supposed alliance of drug giants Glaxo Wellcome and SmithKline Beecham is a textbook example.

There was a clear business logic to the union of the two Pharmaceuticals giants. The deal gave the companies a drugs research and development budget more than twice the size of their closest rivals, Novartis and Merck, and the combination of their complementary research technologies could have left them streets ahead of the competition; cost-cutting alone could have saved $1 bn. But because these two great beasts of the jungle chose to throw sand in each other's faces, the deal is off, at least for now.

Nicholas Bates, head of Human Resources Management at the European Business School, says many senior businessmen actually go off the top of the scale on personality tests. Nevertheless these are precisely the sorts of personalities that companies want because they can transform a business; the problems only appear when they have to get together with peers in their organization who don't share their views. Then clashes are inevitable.

Europe's most spectacular and public bust-up was between automotive giants Volvo and. Renault. In September 1993 Volvo and Renault announced they were to tie the knot, with Volvo holding a minority 35% stake. However, three months later Volvo shareholders and senior management rejected the marriage plans because of concerns that the deal undervalued Volvo.

Simmering resentment over chairman Pehr Gyllenhammer's dictatorial management style at Volvo added spice to the management revolt. The divorce is reputed to have cost Volvo several hundred million dollars and forced the resignation of Gyllenhammer after more than two decades in the driving seat.

Egos play such a large role when two giant corporations come together that it is hard to make them work unless one personality is prepared to take a back seat or step down. The $26 bn marriage between Swiss giants Ciba and Sandoz to form Novartis in 1996 is often held up as a textbook example of how mega-mergers can work. It is successful, but much of that success is dependent on the fact that key personnel were ready for retirement, or were prepared to relinquish old roles in favour of new opportunities in other scenarios.

Compromise is essential if mergers between two powerful corporations are to work to the advantage of both parties and their shareholders. Otherwise friendly discussions break down and can easily turn into all-out war. In the corporate jungle, the question is now whether the imperatives of shareholders can control the egos of managers, to force through deals that deliver them the financial return they expect. This is where independent directors ought to play a part, although they rarely do.

The European

EXERCISES

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