Практическое занятие № 1 Why do firms seek to raise productivity? (стр. 1 )

Практическое занятие № 1

Why do firms seek to raise productivity?

1. Прочитайте вслух слова. Используя словарь, объясните их значения, обратите внимание на точность их произношения:

technology, component, analysis, total, machine, automobile, modern, inspection, focus, automation, start, finish, principle, import, export, robotics, traditional, practical, combine, construction, pollution, transformation.

2. Прочитайте и переведите письменно текст «Why do firms seek to raise productivity?» на русский язык.

Why do firms seek to raise productivity?

The performance of a business organization, in terms of the achievement of certain objectives such as: business survival; meeting domestic and international competition; improving profit; expanding market share, will depend critically on the level of added value achieved within a firm.

If the same amount of resources can produce more output at the same total cost, then the cost of each unit of output will have fallen. Increasing productivity can therefore lower production costs and increase value added. As costs fall, profit margins rise. A business may also pass on lower costs to consumers in the form of lower prices in an attempt to build and ensure repeat sales at the expense of its rivals.

A firm that fails to increase productivity at the same rate as, or faster than, its competitors will face higher costs and lower profits. Prices cannot be reduced without either sacrificing profits or sustaining a loss. If a firm is unable to offer quality products at competitive prices, then demand for its products will fall. In the long run the firm will face closure, and workers will be made redundant. Adding value is essential to the survival of a firm.

Business organizations in the UK and other developed countries are facing increasing competition from firms in developing economies, such as China, Malaysia, and Taiwan in South East Asia. Wages in these countries are still very low compared to those received by workers in developed countries.

It is therefore vital that firms in the UK increase productivity, reduce unit production costs, and improve product quality in order to compete with overseas organizations and thereby ensure their survival.

In an increasingly competitive business environment, firms are constantly fighting to raise the productivity of, and add greater value to, their resources. Strategies that aim to improve production and productivity can be grouped into eight main categories. These are:

to secure a reliable source of supplies, and reduce business costs and the need for storage by keeping stocks to a minimum; to introduce total quality control over the whole production process; to research, develop and introduce new products and/or production processes and working practices designed to reduce waste, improve quality and increase the output from existing input levels of natural materials, equipment and labour; to replace old plant and machinery with new, more efficient capital; to increase the amount of new, more productive, capital equipment employed relative to labour; to increase labour productivity through a combination of training for new and improved skills, financial rewards, changes in working methods and management techniques; to improve safety and reduce accident costs; to employ more environmentally friendly materials and processes to limit the amount of pollution.

R&D, new production methods, financial incentives to motivate workers, training, investment in new technology, health, safety and environmental measures - all these imply higher costs and lower profits in the short run. However, if a firm is able to raise productivity and more than offset these higher costs, the long-term reward will be higher profits, and the ability to compete more vigorously on price and market share with rival firms.

3. Ответьте письменно на вопросы по тексту:

1. What does the performance of a business organization depend on?

2. Why is adding value essential to the survival of a firm?

3. What can British firms do to compete with overseas organizations?

4. What strategies can be used to improve production and productivity?

4. Выберите утверждения, соответствующие содержанию прочитанного текста:

1. If the same amount of resources can produce more output at the same total cost, then the cost of each unit of output will have fallen.

2. A firm that fails to increase productivity at the same rate as, or faster than, its competitors will face lower costs and higher profits.

3. To compete with rival firms in the long-term firms should spend on R&D, new production methods, new technology.

5. Передайте устно на английском языке основное содержание текста «Why do firms seek to raise productivity?».

6. Переведите устно термины и терминологические словосочетания с русского языка на английский.

производство, производительность, добавленная стоимость, сырье, вводимый ресурс, готовая продукция, конкуренция, поставщик, оборудование, контроль качества, издержки, трудовые ресурсы, склад, рыночная цена, автоматизация.

Практическое занятие № 2

Choosing a method of finance

1. Прочитайте вслух слова. Используя словарь, объясните их значения, обратите внимание на точность их произношения:

corporate finances, public finances, financial arrangements, borrowing, financial commitment, financial account, borrowing costs, financial resources, dividend, net earnings, financial intermediary, funding, debt, commercial bank, banker, bankruptcy, equity capital, ploughed-back profits, ordinary shares, preference shares, at face value, lessee, lessor, lease contract, authorized share capital, rate of interest, financial assistance, share issue, government loan, personal savings, fixed return, cumulative preference share, participating preference shares, redeemable preference shares, capital gain, floatation, securities, investment trust, unit trust, pension fund, and insurance company, bearer, maturity, issuing company, secured debenture, unsecured debenture, equity stakes, business expansion, takeover of another company, management buyouts, installment, factor, debt factoring, capital outlay, statement of transactions, commercial bank, clearing bank, security for a loan, return on assets, return on bonds, return on capital, return on equities, return on equity, return on investment, return on land.

2. Прочитайте и переведите письменно текст «Choosing a method of finance» на русский язык.

Choosing a method of finance

When selecting methods of finance, a firm will use the following criteria: Amount. The larger the amount of capital required, the less likely it is to be raised from internal sources. If large amounts of capital are required for long periods, then it may be worth the expense of raising finance through a share issue. Cost. Any business will want to raise capital in the cheapest way possible, both in terms of administration costs and interest charges. Selling shares can be expensive in terms of administration, advertising, etc., whereas borrowing for a short period of time on credit cards or by trade credit can be interest-free. However, share sales can raise large amounts of permanent capital for a firm. In general, the longer the period of a loan, and the more risk that the borrower will fail to repay, the higher the rate of interest charged. Purpose. Firms will tend to seek long-term sources of finance in order to spread the cost of fixed asset purchases, such as premises and new machinery, over a number of years. For example, mortgages can spread the cost of buying or building a new factory over 25 years. In contrast, working capital requirements will tend to be funded from short-term sources, such as trade credit and overdrafts. Status and size of the borrower. Small sole traders tend to be limited in their choices of finance, and will often lack assets to offer as security against a large long-term loan. The high failure rate of small businesses also tends to scare off potential lenders, who will only be willing to lend in return for a high rate of interest. In contrast, banks and other lenders regard lending to large, profitable companies such as Unilever and ICI, as being as safe as lending to the government. This means that these firms can raise finance more easily and at lower cost. The economic environment. Economic factors can influence a firm’s choice of finance. For example, in times of rising inflation, firms may find it of benefit to borrow at fixed rates of interest. If the general level of prices rises, then the real value of the sum paid back is reduced. During a recession, when sales and profits are likely to be failing, it would be unwise for a firm to take on hefty loan repayments, unless it can be sure of a future economic recovery. Gearing. The proportion of total finance raised in a firm from borrowing is called the gearing ratio, and has an important impact on how a company can raise further finance. A high gearing ratio means that a firm has, in the past, raised a large proportion of its total capital through borrowing, and so has a large amount of fixed interest payments to make from future profits. This interest must still be paid on debt, even when profits are low or non-existent. This tends to make further borrowing a riskier form of raising finance than selling shares. With equities, no set amount must be paid to shareholders out of profits.

3. Ответьте письменно на вопросы по тексту:

1. What criteria do firms use when selecting methods of finance?

2. Why do firms tend to seek long-term sources of finance?

3. What factors can influence a firm’s choice of finance?

4. Выберите утверждения, соответствующие содержанию прочитанного текста:

1. The larger the amount of capital required, the more likely it is to be raised from internal sources.

2. Selling shares can be expensive in terms of administration, advertising, etc.

3. Small sole traders tend to be limited in their choices of finance, and often lack assets to offer as security against a large long-term loan.

4. A high gearing ratio means that a firm has raised a large proportion of its total capital through borrowing, and so has a large amount of fixed interest payments to make from future profits.