12. Интернациональные коммерческие термины (цель, классификация). Объяснить значение терминов EXW, CIF, FOB для импортера и экспортера. Международные торговые организации. Торговая война между США и ЕС.17
2 ways to raise capital: By selling shares to investors, investors become part-owners of the public limited company in question. By obtaining loans from investors, in the form of government stocks and debentures (долговые). securities- shares and loans collectively
Gov stocks or bonds (долговые ценные бумаги или облигации)= gilt edge securities= gilts.
Loans to the gov, can be bought at Post Office or through banks or stock exchange, fixed high rate of interest, repaid after a certain number of years o undated, absolutely safe (gov is not likely to go bankrupted), yields are high, but they don’t provide protection against inflation.
Local authorities bonds (местная облигация)
Issued by city, town or country councils when they need more income. Fixed rate of interest (higher than gilts have). Repayable after a number of years (fixed date), but shorter period than gilts. Sold on the Stock Exchange or directly to the public through the local authorities own finance departm. Secure.
Company shares can be bought when: 1- a firm starts trading or issues more shares, 2- other investors are selling their shares. Can be: debentures, preference shares, cumulative shares, deferred shares, ordinary shares, blue chips shares.
Ordinary shares = equities. bear the largest part of the risk, Ordinary shareholders are entitled to one vote per share, which gives them the right to take part in running the company-control of the business; not fixed rate, but the amount of dividend they receive (if any) is determined by the directors depending on how much profit has been made. but if company is doing well, returns can be much higher than with other forms of investment. Paid after preference shareholders.
Preference shares -fixed dividend which must be paid before the ordinary shareholders (but after debenture holders), which guarantees a return on investment as long as the company is making a profit. if the company doesn’t make a profit, the preference shareholder will not be paid his dividend either. No voting rights on the meetings. Little control over the company.
Cumulative preference shares — class of preference share which offers a safer return on investment. if the company cannot pay the dividend one year, the outstanding amount is carried over to the following years. the shareholder can expect to receive it one or more years later along with the dividend from the following years.
Convertible preference shares -this is another type of preference share which pays a fixed rate of interest until a certain time. After this time, it is converted into an ordinary share on which the holder receives a dividend rather than interest.
Deferred shares = founders shares второочередные- paid last of all, have the strongest voting rights, held by the people who run the company, they can have control over the firm and its directors, very unusual form today. Comtol is more important than dividends.
Blue chip share – shares in well-known comp-s, a share in a well-managed company with a large amount of paid up capital оплаченный and a long record of paying profits to shareholders during good and bad economic conditions. Reliable and efficient.
Debentures- direct loans made to joint-stock companies; carry fixed interest, debenture holders are not members of the company, do not share the members’ risks, they receive a regular income from their investment(the company makes profit or not, assets may have to be sold to repair them) and take precedence over the shareholders if the company is liquidated. Are paid before shareholders (preference).
Unit Trusts(паевые инвест фонды) – organizations that enable people with limited savings and little financial knowledge to invest in а wide range of stocks and shares without paying high Stock Exchаnge charges. The Trust managers offer Units for sale direct to the public: with the money received they buy shares in many companies and/or Government stocks. Остальное на всякий случай:
Secured (mortgage debentures) If a company cannot repay the loans debentures or pay the interest, the holders of secured debentures are automatically entitled to payment from the company’s assets. Unsecured (naked debentures) Holders are not automatically repaid from the company’s assets if the company is unable to pay in the usual way. can go to court to recover their money, but are not treated differently from the shareholders. An unsecured debenture is just a promise to repay a loan. Registered -The holders of registered debentures are listed in a company register. These debentures can only be transferred in accordance with certain terms and conditions, and every transfer must likewise be entered into the register. The company can refuse a transfer, the person to whom the debenture was to be transferred can appeal against the decision. Bearer (unregistered) - debenture which can be negotiated by just handing it over to the new holder. Redeemable срочные are repaid debentures on a fixed date or within a certain period, often at a higher price than the issue price. Irredeemable There is no fixed date for payment of irredeemable debentures; the loan is only repaid when the company is liquidated. holders of irredeemable debentures may ask the company to redeem them if it fails to keep up its interest payments. Convertible -can be ex-debentures changed for ordinary shares.
When a company wants and needs to recruit or employ new people, it may decide to advertise the job position in the appointments section of a newspaper. People who are interested can then apply for the job by sending in a letter of application (or covering letter) and curriculum vitae containing details of their education and professional experience, personal details (sex, age…), kills, activities, hobby, personal traits, qualities, recommendations. A company may also ask candidates to complete a standard application form. The company’s human resources department will then select the most suitable applications and prepare a short list of candidates or applicants, who are invited to attend an interview. Another way to hire is by using the services of a recruiting agency that will provide them with a list of suitable candidates. They promote position as a product. Useful if u want to hire a foreigner. Consolidation(companies grow on size) and globalization (penetrate to a foreign market) in every industry.
When a company needs to recruit or employ new people, it may decide to advertise the job or position in the appointments section of a newspaper.
Interested people can apply for the job by sending in a letter of application (covering letter) and a curriculum vitae (CV).
Curriculum vitae – key information about individual’s educational background, previous work experience, skills and personal qualities.
foreign language abilities
clear to read, present an attractive image
not too long
chronological or functional order
interesting features highlighted
Covering letter may be attached to create a good impression (so that the recruiter will want to read CV):
* briefly: where you heard about the job and why you fit it
* confirm your wish to apply
* information you learned about the job
* formal tone of the text
* no mistakes
* concise and precise
* why you are interested in the position
* possible contribution to the job (highlight relevant skills)
* indicate willingness to attend interview
company may also ask candidates to complete application form
HR department selects most suitable applications and prepares short list of candidates
invites applicants to attend an interview
Alternative: services of a recruitment agency (US search firm) – provides company with a list of suitable candidates;
may act as a consultant or organize testing and simulations to evaluate the candidates’ skills.
A number of companies are not satisfied with traditional job interviews. When the candidate could gain the post only with a good prepared answers and representative look. Now employers want to evaluate candidates on intangible qualities:
creativeness or entrepreneurial spirit
leading or coaching skills
flexibility and capability of learning
functioning under the pressure
fitting to corporate culture
They are requiring applicants to submit to a series of:
paper-and-pencil tests (general intelligence)
simulated decision-making exercises
Others put candidates through a series of interviews by psychologist or trained interviewers.
“Who is the best manager you ever worked for and why?”
“What is your best friend like?” – can understand your behavior pattern and managerial style
The mistake can cost for the company a huge sum of money (lead to corporate downsizing)
Aims of comprehensive testing – to measure skills in:
analysis and organization
attention to detail
personality traits and motivations
This can predict applicant’s performance.
Letter of application:
As important as CV, it’s first direct contact btw candidate and employer. U make impression. Must be well written, without mistakes. Contain 4 paragraphs:
Confirm that u wish to apply and say where u learned about the job
Why u interested in the position and relate ur interests to those of the company
How that u can contribute to the job by highlighting ur most relevant skills an experience.
Indicate ur willingness to attend an interview
10 years ago candidate could win the job with the right look and right answers to the question why do u want this job.
Now: have to describe in great detail not one career accomplishment but many-so that patterns of behavior emerge. Questions: who is the bet manager u ever worked, why, what is ur best friend like—this reveal much about the candidate’s management style and personality. Now candidates are submitted to a series of paper-and-pencil tests, role-playing exercises, simulated decision-making exercises, brainteasers, long series of interviews by psychologists or trained interviewers. Aim – to evaluate candidates on intangible qualities: is he creative or entrepreneur, can he lead or coach, is he flexible, is he capable of learning, does he have passion and sense of urgency, how will he function under pressure, will the potential recruit fit the corporate culture. Also measure skills in communication, analysis, organization, attention and management style.
The reason for interrogations is clear: many hires work out badly. 35% of recently hired senior executives – judged failures. Companies are getting more careful about hiring: the cost of bringing the wrong person on board is huge. Searching and training can cost from $5000 for a low-level manager to $250 000 for top executive. Years of Corporate downsizing, a trend that slashed layers of management has also increased the potential damage that one bad executive can do.
Employer wants to know how an executive will perform, not just how he did it before.
But still many companies didn’t shift to this practice. Companies haven’t started the extensive testing, but toughened their hiring practices: do background checks, looking for sights of drug use, violence or sexual harassment.
Usually: so little information on which to base a decision, most people hire the person they like, rather than the most competent one. Scientist say that personality traits an motivation predict performance.
How to select the best candidate
Remember: people don’t change. Intelligence level decline modestly, but changes little over their working life. Personality can change but not much: extroverts become slightly less extroverted. Skills can be improved and new ones introduce. BETTER to select for what u see, rather than attempt to change.
Etiquette-priority number one. Good manners can make life easier, not just code of behavior- methodology be which people an get along with each other.
Preparing to the interview: don’t be nervous, find information about the company, prepare answers to possible questions, smile, be confident, don’t panic (u can try again in other companies)
Thatcher’s Enterprise Babes
When Thatcher swept to power in 1979 she started the enterprise revolution. She helped young people to set up their business. To some extent it was a successful program, because a lot of people became tycoons. For example a second largest mail-order supplier of computer games can afford him self to spent his holidays in Austria and California at the age of 23. Other examples may include a self-made millionaire, who sells Porches. Yong entrepreneur doesn’t have preconceived ideas, there are free to choose field of business they like, self-employment is also very important. Special organizations was set up in order to help young entrepreneurs, they offer loans and advice. It could a daunting hurdle to raise finance according to absence of financial records of young person. Young entrepreneurs also experience prejudice from customers and suppliers (not only from financial institutions).
Drawbacks of being an eighties’ entrepreneur. According to statistics two-thirds of start-ups by under 25s end in failure within four years. They face greater barriers than their mature counterparts and run a risk of failure (due to lack of experience of work and real life). These people do not have social life, that could be bad to psychology.
Possibility to become a self-made millionaire in your early years
Lots of organizations to help you (special trusts and helplines) – Prince’s Youth Business Trust
Customers believe you don’t have preconcieved ideas and choose you
Being self-employed means you can keep all your profit (+secrecy of financial records)
The simplest form of busines
Disadvantages: (face great barriers)
Success comes at a price (you have to work very hard, have no free time + throw social life out of the window)
High risk of failure (beacause of shortage of business and real life experience)
Difficult to raise the initial capital (to find money to start your business, many banks turn down for a loan)
Customers and suppliers often percieve you with prejudice (they think you are naive and inexperienced)
Future generations must learn the lessons of Thatcher’s children. Business education would benefit young entrepreneurs. They need to be prepared for periods in jobs and periods of self-employment, periods of ups and downs
Sole trader – earliest form of business, owned and managed by one person (hired staff – not proprietors).
Registration in trade register, license, books reflecting the results of business activities.
easy to set up
sole possession of profits
freedom in decisions
personal service,can adapt to social needs
unlimited liability(responsible for all debts himself, can be made to sell his posessions)
limited capital for new projects
tied to business
2) Partnership (unlimited) – joint property and capital of its members (up to 20 people), profit distributed proportionately to the share of participation, equal and collective responsibility;
(limited or sleeping) –if at least one working partner with unlimited liability,others can invest capital in a firm-they don’t work,but share in profits and losses(but up to the amount they have put in)
Registration: name of 1-2 full members, must not add ‘Ltd.’
more capital available
easy to form-no complex legal problems
sharing of work
specialization in professional partnerships
limited capital for a large scale business
no continuity (part-p breaks up on death, retirement, bankruptcy)
3) Private limited company – number of people (more than 20) invest money by buying shares (cannot be sold through Stock Exchange, only to people of whom the director approve, board of directors appointed, dividends paid on each share if company makes profit.Shares can be partly paid.Shareholder is liable only for invested by him money.
Memorandum of Association (Company and its dealing with outside world/sets out name Ltd., type, total share capital, kind of shares)
Articles of Assocation (rules how the company run internally: powers, duties of directors, staff, salary, issue and transfer of shares)
sent to Registar of Companies
Certificate of Incorporation(permission to start trading)
more capital than partner-p
legal position as company
expensive to set up – heavy legal and accountancy fees+ large government stamp duty
shares cannot be sold to public-may limit capital
expensive to audit accounts carefully
4) Public limited company – more than 2 shareholders (no maximum),minimum capital – 50 000 f., shares can be advertised and sold to the public, operates on large scale (must reveal activity to the public).
Memorandum of Association+ Articles of Assocation +Prospectus (set out for public company’s aims, background)
=> Registar of Companies => Certificate of Incorporation(But cannot start trading yet)
- Company makes public offering – advertising for sale(public issue) or selling shares privately to pension funds,insurans comp(private placing)(for enough capital) =>Can apply for Trading Certificate,get it,start the bussiness
almost limitless capital (shares)
large scale of operation (huge projects undertaken)
limited liability (to the amount of investment)
legal identity of the company
expensive and complex to set up
critics of management by shareholders may hinder the progress of the company
inflexibility, inefficiency of management, overstaffing
much information must be revealed(companies Act 1967-large corporation can work against government wishes)
liable to takeover bids and political pressure
Franchising – business system in which a company (franchisor) sells an individual (franchisee) the right to operate a business using the franchisors established system or format.
franchise fee (or front end fee) – to buy the license
royalty (or management services fee) for continuing advice and assistance (calculated as a percentage of annual turnover)
advertising fee to contribute to franchisors annual advertising and marketing costs
finds necessary capital to open the business
buys products from particular supplier appointed by franchisor
complies with/conforms to standards (quality of the products)
recruits and manages personal
provides annual reports on sales
provides operation manual (information for franchisee to run his business)
promotes the business through national advertising