English for Business

Level 4 Past Papers 2006 London Chamber of Commerce and Industry (LCCI) International Qualifications Platanenstr. 5 07549 Gera Tel: 0365 / 7 38 85 19 Fax: 0365 / 7 38 85 36 Webseiten: www.lccieb-germany.com Email: info@lccieb-germany.com

Contents English for Business Level 4 Past Papers 2006 Series 3 ……………………………………………………………………………………..3 - 12 Series 4 …………………………………………………………………………………….13 – 22 Note1 : There was no Series 1 in 2006 Note 2: English for Business Level 4 was not available in Series 2 2006 Model Answers for some papers are available free of charge. Contact info@lccieb-germany.com © LCCI CET The material contained in this booklet may be reproduced and/or photocopied for examination preparation purposes only.

SERIES 3 EXAMINATION 2006

ENGLISH FOR BUSINESS

LEVEL 4

(Code No: 4041)

FRIDAY 9 JUNE ________

Instructions to Candidates (a) The time allowed for this examination is 3 hours. (b) Answer all 4 questions. (c) All questions carry equal marks. (d) All answers must be clearly and correctly numbered but need not be in numerical order. (e) While formal accuracy is expected, adequate and appropriate communication is essential and

candidates must judge the length of their answers in this light. (f) When you finish, check your work carefully. (g) The use of standard English dictionaries and cordless non-programmable calculators is

permitted. Candidates whose first language is not English may use a bilingual dictionary.

______

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QUESTION 1 (a) Task: Read the following article from 'Business Week' and answer the questions that follow it. Credit will be given for answering the questions in your own words and demonstrating comprehension, rather than quoting directly from the text. Out One Door - and In Another Last July, Bank of America made one of those announcements that routinely come after a merger; it said it would slash some 9,000 to 10,000 management jobs to eliminate duplications arising from its pairing 2 years ago with Nations Bank. Since BofA is just now finishing those reductions, simple logic might lead to the conclusion that middle managers seeking employment need not apply. Well, not exactly. Even as the door is slamming behind its "duplicate" managers, BofA has a "Help Wanted" sign hanging in its window. In fact, its careers’ website lists dozens of open positions, many in middle management. Spokeswoman Kelly Hartis says the bank is hiring in areas where it sees the "biggest return for our dollar" − such divisions as asset management, technology and global corporate investment banking. The company encourages axed employees to apply, Hartis adds, but it didn't consider retraining them for open positions instead of handing out pink slips. Given that the job cuts were meant to eliminate expenses (other than severance pay, of course) it didn't "make much sense to spend money on training," she explains. Instead of retraining employees for growth areas of the business, many organisations simply toss them out and bring in workers who are ready-made for those jobs. "Companies aren't willing to evaluate each person and figure out what else they can do," says Jo Bennett at executive recruiters Battalia Winston in New York. In fact, she adds, when a displaced worker lands a job elsewhere in the company, it's usually because a manager rallies on their behalf. "It's pretty seat of the pants," she says. That's because it's a lot easier to simply wave goodbye than offer a more human solution, and because once the layoff train leaves the station, there's no way to slow it down. In large reductions, affecting hundreds or thousands of employees, companies are often so preoccupied with trying to get people out the door smoothly - and legally − that they have little time to think about recycling them. "People have 'I'm just following orders' mentality, instead of stepping up and saying 'we could do this differently,'" says Colleen O'Neill, talent management practice leader at consulting firm William M Mercer. Make or Buy In many cases, moreover − just like the consumers they depend on - many companies prefer new to used. "It's a make-or-buy decision," says Lisa Lynch, former chief economist at the Labor Dept and a professor of international economic affairs. "Companies are weighing the costs of making a worker through retraining or buying someone who already has the skills. If there's a ready supply of folks (in the market place) compared to making an extensive investment of time and money to retrain that's going to be considered." Retraining costs can vary widely, depending on what's required to prepare a worker for a different job. Overall, budgets for employee training have dipped in recent years: latest figures from the American Society for Training & Development show that the average US company spent $677 per eligible worker on training in 1999, down from $724 a year earlier.

4 4041/3/06

QUESTION 1(a) CONTINUED If a company is cutting back on employee development in good times, don't expect it to commit a large scale retraining effort when it hits a rough patch, experts say − even if it might be a cheaper alternative than doling out severance pay to thousands of workers. A typical severance package is one to 2 weeks' pay for every year of service, and it often includes such extras as career counselling and payment for unused vacation "Please DON'T Come" A good example of both the traditional approach and what some experts would call a more enlightened one is Intel, which announced in March that it would trim its worldwide headcount by 5,000 this year. It "never has a freeze on hiring," says company spokesperson Chuck Mulloy. Indeed, while it has been widely reported that the chipmaker is offering new hires who haven't started yet "please don't come" packages − 2 months' salary plus any signing bonus that was originally guaranteed - it isn't giving this option to all prospective employees. "There are certain critical positions for which the talent pool isn't big enough," Mulloy says. "PhDs in material science or physics don't grow on trees." Eye-Opener Of course, even if a company offers to retrain downsizing victims and move them to other divisions, few might be willing to take the offer in a healthy economy. With 4.5% unemployment in the US some workers - particularly those with skills that are in high demand − might prefer to jump back into the job market rather than learn something new. Helen Drinan, president of the Society for Human Resource Management, recalls what happened in 1998 when her then-employer, BankBoston, announced plans to cut 1,500 jobs following an acquisition. As the bank's executive Vice-President for Human resources, Drinan helped establish its first-ever training program to prepare displaced workers for vacant positions elsewhere in the organisation. BankBostons' management even gave participants an easy out − if they didn't like what they were doing after 3 months of retraining, they could leave the bank and still collect their full severance pay. Despite the “fail-safe”, less than 15% of the affected employees took the training. Those workers stuck with the bank after completing the program, but Drinan says the low turnout was an "eye opener" to senior management. The "uncertainty of doing something entirely different" even with the promise of severance if it didn't work out − dissuaded many workers from signing up, she contends.

(i) In which areas are companies hiring and in which are they firing and why are they doing it at

the same time? (3 marks)

(ii) According to Jo Bennett, why do some workers get rehired and what do you understand by "it's pretty seat of the pants".

(2 marks) (iii) Why, in general, does this system go unchallenged?

(2 marks) (iv) Why do companies prefer to "buy" than "make"? Is it, in fact, cheaper, according to the

writer? (3 marks) (v) What is significant about the general fall in training expenditure in this context?

(2 marks) (vi) What is the "Please don't come" policy and how is it being applied?

(2 marks) (vii) Why do some workers not want to be rehired? (1 mark)

4041/3/06 5 OVER

(b) Situation: You are the Human Resources Manager of a company that is planning to make a number of employees in the support services sector redundant. You are convinced that the management has not sufficiently considered the possibility of redeployment of these staff. There are currently vacant positions in other parts of the company (such as Sales and Marketing). Task: Write a memo to the Managing Director, making a brief case for further consideration of retraining and redeployment - using ideas from the text. Ask for a meeting to discuss this further.

(10 marks)

(Total 25 marks)

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QUESTION 2 Situation: You work as the professional assistant to the CEO of a medium-sized company. This new CEO has only been in the job about 3 months, after several changes of senior management, management structure and even CEOs during the previous year. One of the effects of this period of change and uncertainty that has been identified is a massive fall in staff morale and a huge loss of confidence by the employees in the business. This has been evidenced by a significant increase in staff turnover and a rise in absenteeism. There may also be growing discontent about employment terms and conditions that, it is feared, may eventually lead to industrial action. The current CEO is anxious to stop this slide before it gets any worse and has asked you to find out exactly what the problems are and how the situation can be improved. One of the things you did in order to achieve this was set up an on-line, anonymous discussion group, where employees could post their thoughts and opinions. Task: Based on the following notes from the on-line discussion group, write a report for the CEO, which will be used as a basis for discussion at a forthcoming board meeting.

(Total 25 marks)

Contributor 1 Too many things are happening in the company (change of management, sale of buildings, new business expansion) which the staff aren't told about and the reason for which is not clear. We are never informed of anything even after it has happened. This breeds a spirit of turn up, clock on, clock off, go home. Contributor 2 It is not only the management who don't care about us. In the old days, the staff used to look after each other more. But now that nobody knows how long anyone is going to stay in the organisation, it's everybody for themselves. There's a lot of competitiveness and aggression which is not good. There's no team spirit − witness the fact that we don't have any company sports teams anymore, I can remember a time when almost everybody turned out to support their friends in the inter-company competitions. Going out for a drink after work is now looked on with suspicion and unpleasantness, as though a secret club is being started. Contributor 3 We have hardly any staff meetings anymore and when we do, they are just for the sake of it, there's no real authority in them; the management, if they bother to come, just nod and then do what they intended to do anyway. Also there is a climate of fear at the staff meetings. Nobody says what they really think for fear of losing favour with the bosses. Contributor 4 I am not afraid to speak at the staff meetings − it's just that there's no point as nobody listens to you anyway - and it's true there's rarely any senior management there to listen. Contributor 5 There should be some way − like this one now − where we can give feedback to management anonymously; everybody has their own axe to grind so it is too risky to point fingers without risking your job or certainly any prospect of promotion in the company. Contributor 6 I don't only want to COMPLAIN about the managers, I have years of experience and knowledge which could be useful to them if only I had some power to make the decisions I know I am capable of. In another company I know of, they have department meetings where they have real power to decide budgets and spend money and even to recruit new people to the teams. And they make better decisions because they really know what is needed.

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QUESTION 2 CONTINUED Contributor 7 Perhaps if we had department meetings as C.6 says, the managers wouldn't have to spend so much time locked up together discussing goodness knows what and we would see them actually doing some work. What about an open door policy, so that it's not only them looking at us when they choose to, we can look at them as well. Or get out of their offices more and see what we are doing. I haven't seen the new CEO on my floor of the building yet! Contributor 8 I think everybody more or less agrees that the pay is average or better for the industry − but in no other way do people feel 'valued'. We used to have 'employee of the month' − a bit kitsch, I know, but you did at least feel someone was taking some notice of what you did. What about a company newsletter, part of which would recognise when people were doing useful, new and interesting stuff and it would just generally keep us better informed. Contributor 9 Yes, the pay's okay, but how do you feel about the profit-sharing and bonuses being reserved for middle management and above? Who is it that earns the money and who is it that costs? Contributor 10 It all comes down to all of us not having the first idea of where the company is going and why. They appoint inexperienced graduate trainees, when there are plenty of skilled people in the company who could 'fast-track' to management just as well. They down-size certain departments and expand others without a word of explanation why. Nobody can stay motivated when the whole culture of 'ask no questions, just follow orders' is rife within the management. I don't want to do the managers' jobs for them, but I am sick of being treated as though I don't have a brain, I'm just a machine that happens to breathe. It's no wonder we don't support each other anymore, we barely recognise each other as human beings.

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QUESTION 3 (a) Situation You work in London for an international firm of stock brokers whose head office is in Milan. The firm regularly uses the stock market research and recommendations service of Ebno MG (an American Investment Bank). The 'notes' they send are about which shares to buy, which to sell and which to hold. These are called upgrade (from sell to hold to buy) and downgrade (from buy to hold to sell) notes. Task You read the following news article in an English newspaper and you decide to write a memo to your Senior Investment Broker in Milan summarising its contents immediately, and respectfully suggesting some action should be taken. Ebno MG reins in analysts The independence of Ebno MG's stock market research is being questioned after analysts at the US investment bank were instructed to seek approval from corporate clients before publishing recommendations and ratings on the stocks of those clients. In a memorandum circulated to Ebno MG analysts last week, Paul Harvey, head of equity research, said he must personally sign off all changes in the analysts' investment recommendations. In addition, the memo further sets out rules, described as "mandatory", requiring analysts to seek out comments from both the companies concerned and the relevant investment banker at Ebno MG, before publishing the research. Mr Harvey then says: "If the company requests changes to the research note, the analyst has a responsibility to incorporate the changes requested or communicate clearly why the changes cannot be made." In a further effort to ensure nothing slips through the net without being reviewed by corporate financiers, Ebno MG requires that the banker of the client concerned e-mails approval to the publishing department prior to release of the research note. The attempt by Ebno MG to discipline its analysts will ring alarm bells among fund managers and investors. Concern is mounting over the integrity of research published by large investment banks where the main driver of business is not selling shares to investors but fees from their corporate clients for advice on mergers and takeovers. One anonymous source said, "It is a bit like a judicial system where the accused decides the outcome!" The urgent language of Paul Harvey's memo and its tone suggest that the firm is seeking to rein in its research team at a time when investment banking revenues are drying up. Mr Harvey acknowledges the difficulties of a bear market in his memo, thus: "Downgrade recommendation notes obviously attract more attention than upgrade notes and we need to reflect this in our procedures."

Write the memo.

(12½ marks)

4041/3/06 9 OVER

QUESTION 3 CONTINUED (b) Situation You work for the Business Information Unit of a major company and you are writing a briefing paper on the technology and communication industry. One section is on the comparative performance of different product groups from the same company and a second is on the performance of those products within different geographical markets. Task From the information below write the 2 sections giving an overview of the Nokia Communications Group (a Finnish technology company) in relation to these 2 issues. Include any comparison with the previous year and any trends over 5 years.

(12½ marks)

(Total 25 marks)

95 96 97 98 99

20,000

17,500

15,000

12,500

10,000

7,500

5,000

2,500

0

Nokia Mobile Phones net sales EUR million

95 96 97 98 99

20,000

17,500

15,000

12,500

10,000

7,500

5,000

2,500

0

Nokia Networks net sales EUR million

95 96 97 98 99

20,000

17,500

15,000

12,500

10,000

7,500

5,000

2,500

0

Nokia Group net sales EUR million

Nokia Mobile Phones 66% (60%)

Nokia Networks 29% (33%)

Other Operations 5% (7%)

Net sales by business group 1999 (1998)

Americas 25% (21%)

Europe 53% (58%)

Asia-Pacific 22% (21%)

Net sales by market area 1999 (1998)

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QUESTION 4 On the basis of the 2 following opening extracts, and according to the instructions accompanying them, continue and complete each extract in an appropriate way. The list of key words should be used for guidance; some or all of the words may, but do not have to be, included in the text. (a) Situation You are a journalist for a trade journal in the marketing industry. You receive information in the form of a press release of the appointment of a new Marketing Director, Kate Higgs, at a major supermarket chain (Frankco's). You know that the new woman is highly thought of in the marketing industry and her appointment to the supermarket will be seen as good news for them. They have recently suffered severe image problems related to media coverage of some cases of 'out-of-date' food being sold in the stores and a more general loss of brand identity in their competition with other supermarkets. Task Write a news article. Include: - Kate Higgs’s career history - details about the supermarket sector - her future strategy. Key words: specific responsibility/quit last company/brand identity/fierce price competition/scandal/regain customer confidence/strategy Invent any further content you need. (Heading) Former Marketing Director for United Carpet Stores, Kate Higgs, has been appointed Marketing Director of ……..

(12½ marks) (b) Situation You work in the Marketing Department of an insurance company. Task Write a promotional letter to a potential client advertising the car insurance services of your company. Include: - a letter layout - examples of how your service is better than the competition - any extra benefits you can offer - an incentive to sign now - contact details

4041/3/06 11 OVER

4041/3/06 2 © Education Development International plc 2006

11

QUESTION 4 CONTINUED Key words: compare quotes/premiums/cover/no-claims discount/extra benefits/extra services/incentives/freephone number Dear Ms Simson, A while ago, you told us that your motor insurance would be due for renewal this month. We believe.........

(12½ marks)

(Total 25 marks)

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SERIES 4 EXAMINATION 2006

ENGLISH FOR BUSINESS

LEVEL 4

(Code No: 4041)

WEDNESDAY 22 NOVEMBER

________

Instructions to Candidates (a) The time allowed for this examination is 3 hours. (b) Answer all 4 questions. (c) All questions carry equal marks. (d) All answers must be clearly and correctly numbered but need not be in numerical order. (e) While formal accuracy is expected, adequate and appropriate communication is essential

and candidates must judge the length of their answers in this light. (f) When you finish, check your work carefully. (g) The use of standard English dictionaries and cordless non-programmable calculators is

permitted. Candidates whose first language is not English may use a bilingual dictionary.

________

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QUESTION 1 (a) Task: Read the following article from FT Connectis magazine and answer the questions that follow it. Credit will be given for answering the questions in your own words and demonstrating comprehension, rather than quoting directly from the text. Return of the Number Crunchers Investors in new-economy companies are still suffering the aftershocks of last year's seismic collapse in technology valuations. Paper millionaires were wiped out by the dozen as the liquidators were called in to salvage what was left of technology ventures across Europe and the US. In the aftermath, although investor confidence unsurprisingly remains low, funding is nonetheless still being awarded to technology ventures and there is a determined belief, among the sophisticated investment community, in the medium and long-term viability of many new-economy businesses. But the mood has decidedly changed. Investment decisions are now tempered by a rediscovered respect for the inherent risks, both to the investor's capital and the future of Europe's fledgling technology enterprises. However, as befits a young industry, rather than applying old-economy risk management techniques, investors and venture capitalists are developing their own approach to containing the threat of financial loss. And these risk-reduction measures are being applied in all stages of the investment process: from analysis, through to growth and, finally, in exiting strategies. These strategies are emerging informally and are the result of the investment community's collective experience of having gone through difficult times, and its determined optimism in the new economy's profitable future. There has been a return to exhaustive fundamental analysis - the kind of number crunching and thorough evaluation that went out of fashion in the beauty parades which dominated the previous investment cycle. In accordance with the appetite for more thorough evaluation, there is greater demand for information on new businesses and the personnel behind them. This is the case, for example, with angel networks and syndicates, although the secretive angels are perhaps the least affected by the turndown, they claim - since a substantial number of the private investors themselves come from the technical industries, they have a more sophisticated appreciation of the nature of the risks they are taking. Finally, nowhere is more attention being paid to pre- and post-investment than in the area of technology due diligence. New services, such as CTO web.com, are emerging in order to reduce the risk that technology companies will suffer accelerated levels of "burn rate" (increasing operating costs, but little or no revenue). Most notorious in this regard is the case of Boo.com, where much of the management team's spectacular spending of almost all its investor's commitment of $120 million in just six months was put down to extensive problems with the technology the site was attempting to employ in its innovative website design. Doing the Diligence CT web.com will provide a chief technology officer to oversee technical due diligence to venture capital funds and investors. As technical expertise is expensive to retain on a full-time basis, CTO web.com has found an enthusiastic response to its services. Co-founder Thomas Reitstetter points out that his business can assess both the viability of a technology product and the technology a business is using to bring non-technical products and services to market. Michele Appendino, managing director and co-founder of Net Partners, a Milan-based early-stage venture capital fund, addresses this problem by appointing a chief financial officer and technology officer to each of his young companies to ensure they remain on track. But he says that in the current environment, investors are buying the personalities behind the venture, as much as the end product. "You have to be very selective in the teams you back. They have to have strong managerial skills, but also the persistence to build a business in a difficult environment."

4041/4/06 15 OVER

QUESTION 1(a) CONTINUED While company analysis and due diligence prior to investment are once again fashionable, the most effective way to grow new-economy businesses is a trickier issue. Venture capitalists differ with regard to how closely they become involved in the startup (from providing advice to taking a board seat), but all believe they can offer guidance and real-world expertise to the management team. However, one of the fundamental problems with the pattern of startup investment is the extent to which venture capitalists attempt to impose old-economy structures, (focusing on income and expenditure targets, capital investment and cost-management) on new businesses. Peter Small, author of 'The Entrepreneurial Web' says "strictly imposed business plans restrict the creative abilities of web entrepreneurs to adapt to changing market conditions." Instead, investors should limit risk by investing the capital of their cash to produce an income stream for business. This imposes financial discipline and avoids the problem of not being able to raise second-round or additional funding if necessary.

(Abridged and adapted from a longer article.)

(i) What is continuing to occur after last year's collapse in technology markets and why is it surprising?

(2 marks)

(ii) How do 'new style' risk-reduction strategies differ from 'old style'? (3 marks)

(iii) What are syndicates and angel networks focusing on more than they were before and why?

(2 marks)

(iv) Why do angel networks think they have not suffered so much in the downturn? (1 mark)

(v) What is the reason for the emergence of, and the purpose of, companies such as

CT web.com? (4 marks)

(vi) What would be a new model for venture capital investment and what would be the

advantages of it? (3 marks)

(b) Situation: You are a Corporate Finance Manager in a Bank (Mundy Bank Plc, Havering Branch, 42 Times Square, Birmingham, B43 5JS) which offers startup capital to new businesses. Yesterday you visited a potential client (Chris Folgate, 45 Bradford Street, Wolverhampton WV78 2QT) and heard his presentation for a new technology-based company − a 'Business to Business' supply management Consultancy and Software company, called CF Consulting. You thought the presentation, figures and personnel were very good and expect that the bank will be able to offer financing. However, your senior has insisted that a full technological report − as outlined in the article above - be undertaken. Task: Write the follow up letter to Chris Folgate. Tell him you are optimistic about the prospects but explain the necessity for the attachment of a Chief Technology Officer to the company and make arrangements for a further visit to discuss this.

(10 marks)

(Total 25 marks)

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QUESTION 2 Situation You work as an analyst in the marketing department of a daily financial newspaper "Business Journal". Six months ago it started publishing a monthly free magazine/supplement about internet-based business called "Connection". You were asked to carry out a phone survey of one thousand regular readers of the newspaper to find out how much they read the supplement as well as their opinion of it. The results of the survey are given below: Task You have been asked by the editorial board of the magazine to write a report of the findings of the survey (as a 6-month appraisal) and to highlight issues for them to consider on how to improve the magazine for the current readership both for its own sake and to increase its attractiveness to advertisers. It does not have to be a comprehensive analysis as the full results will be available - draw what you consider to be the most important conclusions from it. It would also be appropriate to make some of your own recommendations from a specialist's standpoint.

(25 marks) READER SURVEY A About Yourself How old are you? Under 25 - 80

25-34 - 320 35-44 - 280 45-54 - 170 55-64 - 70 65+ - 80 Are you male or female? 520 - male 480 - female Are you resident in this country (ie the home country of the newspaper)? 830 - Yes 170 - No

Employment Status Employed full time - 500 Employed part-time - 280 Student - 120 retired - 58 unemployed - 42

Into which of the following bands does your annual salary fall? Under 25,000 - 72 25,001 - 50,000 - 280 50,001 - 100,000 - 480 100,001 - 250,000 - 120 250,001 - 500,000 - 30 500,001+ - 18 B Your Work Life Which of these industry groups best describes the one you work in? Manufacturing/Engineering/Energy/Utilities - 322 IT/Telecommunications - 273

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QUESTION 2 CONTINUED Finance/Banking/Insurance/Accounting - 305 Services/Media/Legal and consultancy/Training and Education - 100 How many people are employed by the company you work for? 1 - 49 - 106 50 - 249 - 580 250 - 999 - 214 1,000 + - 100 Which best describes your position in the company? Owner/Partner - 22 Chair/President/CEO - 9 Managing Director/General Manager - 38 Finance Director - 180 Other Board Director - 60 Executive - 126 IT Technical Specialist - 365 Politician/Public Sector worker - 58 Consultant - 92 The publications How often do you read "Business Journal"? 4/5 times per week - 720 3 times per week - 220 1/2 time per week - 60 How often have you read "Connection" All six issues - 82 At least three or four out of the six issues - 179 One or two of the six issues - 215 Never read it - 524

If you have read it, which sections do you/did you find the most useful? (Results, therefore, out of 476 who have read it.)

Indexes of e-businesses - 7 E-Company Profiles - 170 E-Finance news and views - 244 Contributer's columns - 0 Country Profiles on E-business - 62

If you have read it, what made you read the copies of "Connection" that you did. (Results, therefore, out of 476 who have read it.)

I try to read everything related to E-business for my job - 104 The cover design caught my eye - 67 A subject on the cover interested me - 106

I noticed the reference to it in the main newspaper, referring to a topic I was interested in - 178 Someone else brought an article in it to my attention - 32

Please state if you agree with the following statements about "Connection". (Results, therefore, out of 476 who have read it.)

It is useful for E-business analysis - 120 The cover reflects the true content of the magazine - 20 The design reflects the subject matter - 480 The level of sophistication in approach to complex matters is too low - 420 The level of sophistication in approach to complex matters is too high - 30 Write the report.

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QUESTION 3 (a) Situation: You work as the Corporate Communications Assistant in a multinational company that is considering drawing up an Ethical Policy Statement. You receive the following, advertising a conference on Corporate Ethics. You would like to attend the conference. Task: Write a memo to your superior, summarising the contents of the article below and asking for authorisation to attend.

(12½ marks) Conference: "Ignorance is Not an Ethical Policy" West Central Hall, London WC8 13 − 15 March 2002 On paper, the advent of a global trading system has enormously increased the power and profitability of those companies best able to exploit economies of scale: the multinational. And yet their reputations have become more vulnerable than ever before. This paradox has been all-too-evident in recent events. We have seen a major oil company's chairman barracked by shareholders for alleged links with unsavoury third world regimes; we have seen confectionery companies mired by presumed association with slave labour. Look back a little further and you will find that these are only the most recent in a long line of blue-chip public relations disasters. Never mind that specific allegations may be weak, partisan and to some extent misplaced. Companies do nothing at their peril. One company is struggling with the albatross of an infant milk formula scandal nearly 25 years later, mainly because activists won't let the issue go away, even though this particular infant formula has not been sold in European shops for years. The folk memory is implacable. But much worse than a slightly eroded brand image may now be in store for companies that fail to play the PR game effectively. There is an awful warning in the fate of the high profile chemical research company which was targeted by a determined and ruthless environmentalist lobby group over their testing on animals. Politicians deplore the use of violence, police protection is bolstered, but the investment community still walks away. What then can companies do to protect themselves and their reputation? A little more realism would be a start. Evidently it is not their responsibility to play the knight in shining armour in the politics of the third world. But nor should they delude themselves that consumer and human rights lobbyists are going to be fobbed off with a scrap of paper entitled Corporate Ethical Trading Policy. Companies should not commit the mental compartmentalism of thinking that they can make a "gung-ho" espousal of a new "caring" corporate identity and then be baffled by accusations of hypocrisy when they are discovered conniving with corrupt and brutal regimes. The purpose of this conference is to address the heart of the issue − that of management culture. Currently big companies are good on "hard issues", such as asset management and cost control but weak on "softer" issues, typically the province of the Corporate Communications department. We aim to lead companies to address the issues before the barbarians start hammering at the gates and the problem is pressed into the hands of "crisis management" teams who are expected to perform miracles.

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QUESTION 3(a) CONTINUED The conference agenda will include: - drawing up the initial corporate statement - carrying out a corporate audit - training and changing management and staff - presenting an ethical face to the press - dealing with worst-case scenario.

(b) Situation: You work as a market analyst in an advertising agency in England. One of your clients, a foreign supermarket, Meilleur Marché, is considering changing their print advertising from solely national newspapers to regional and local newspapers as well. They have commissioned a report on how far people orientate themselves locally and the importance of regional and local newspapers in influencing consumer choices. Task: Write the report based on the graphs below and on page 8.

(12½ marks)

(Total 25 marks) Local Press Source: DETR/ONS/Newspaper Society/The Future Foundation

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QUESTION 3 (b) CONTINUED Source: Consumer’s choice IV©Newspaper Society Source: Consumer’s choice IV©Newspaper Society

Perceptions of various media

0.43%

0.24%

0.13%

0.35%

0.12%

0.05%

0.34%

0.18%

0.03% 0.03%

0.34%

0.11%

0.2%

0.13%

0.04%

0.18%

0.08%

0.02%

0.11%

0.04% 0.01%

0.21%

0.03% 0.01%

%

Is enjoyable

Is trustworthy

Understands my concerns and lifestyle

Agreement with statements about local newspapers

Local paper is best way to find out about local events

Local newspaper play vital role in the community

Local newspapers offer a more balanced view than national newspapers

I would miss my local newspaper if I moved away

%

41% 40% 11% 2%

1%

21% 43% 20% 6% 3%

13% 25% 34% 9% 9%

14% 21% 25% 43% 40%

Definitely agree Tend to agree Neither agree/disagree

Definitely disagree Tend to disagree

4041/4/06 21 OVER

QUESTION 4 On the basis of the 2 following opening extracts, and according to the instructions accompanying them, continue and complete each extract in an appropriate way. The list of key words should be used for guidance; some or all of the words may, but do not have to be, included in the text. (a) Situation You work in the Marketing Department at Bandex Plastics (see below) and deal with media relations. Bandex Plastics employs about 250 factory workers. Unfortunately income has fallen significantly over the past 3 years and this, combined with the introduction of new technology, means that it has now become necessary to reduce the factory staff by 10%. At a meeting of the Finance Committee, different systems for selecting those redundancies were discussed - notes relating to each are given below. Number 4 was the system finally preferred, although any offers from the staff for voluntary redundancies would be considered first, but not necessarily accepted. NOTES FROM MEETING 1 Reduced hours contracts for all staff ie job-sharing − reduce the number of hours worked and

the wages by 10%, but keep the same number of people doing it. Negatives: increased admin costs; increased staff turnover as they take other jobs or tiredness

from taking extra work; low morale of staff; difficulties of liaison between increased number of shifts.

Positives: no redundancies; less bad press; possible to increase production again quickly with no retraining if things get better.

2 Voluntary redundancy and early retirement - Positives: people are willing to go; better press; better staff morale. Negatives: may actually lose best people; can't offer anything better than legally required

redundancy payments so probably will not interest many. 3 Last in and first out - newest people in the company are made redundant - Negatives: those people with the shortest time in the company may still be better and more

skilled workers than ones who have been here longer; management cannot influence it in any way.

Positives: automatic system so cheaper and less time-consuming to administer; seems 'fair' to all the staff because can't be accusations of favouritism or discrimination.

4 Selection on merit - Positives: management can decide which employees were best and worst depending on a

profile form the employees would fill in to show all their skills and abilities. Negatives: unless the system is very open, employees will think it is still discriminating and

unfair; we may, in fact, want to make decisions based on things which we don't want the staff to know.

Task Using the information above write a press release for the local newspapers about the changes (eg a 10% reduction in staff, etc) which are taking place at Bandex. (Remember to emphasise the positive.) Invent any further content which is appropriate.

(12½ marks) Key words streamlining/fall in profits/turnaround/production systems/restructuring/a quote from executives/current targets PRESS RELEASE HEADLINE Bandex Plastics, in the face of recent revenue shortfalls, has decided to ....

4041/4/06 22 © Education Development International plc

QUESTION 4 CONTINUED (b) Situation You manage the Business Services Centre of an international hotel. The guests at the hotel can use the facilities of the centre during their stay − it has all the usual secretarial and office support services and communications facilities − e-mail, fax, Internet access etc. Charges are added to the guests' final bill. Task Write an information leaflet giving details of the centre.

(12½ marks) Key Words word-processing/presentation preparation and support/hourly rates/IT experts/final hotel bill BUSINESS SERVICES CENTRE The hotel is pleased to offer its guests access to a full range of secretarial and office facilities in the Business Services Centre on the first floor.

(Total 25 marks)