Economics english summary PDF

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BUSINESS VOCABULARY IN USE 5 – PAY AND BENEFITS Salary is the money a person receives monthly; wage is paid every day or week and it depends on the hours of work; minimum wage is the lowest amount of money allowed by law. Overtime (straordinario) is received when someone works a lot of extra hours. Perks are the advantages received from work, like free meals (pasti). Tip (mancia) is the money that customers leave in addition to the bill. Commission (provvigione) is a percentage calculated on everything is sold. Fringe benefits (benefici accessori): all together they form the benefits package. Compensation or remuneration package is composed by all the pay and benefits of employees. Performance-related bonus is earned by the manager if he reaches particular objectives for the company. Severance package is composed by the money and benefits that someone receives when he is forced to leave the company. 6 – PEOPLE AND WORKPLACE Employees and management All the people who work for a company are its employees or, also called, personnel or staf. They are the payroll (libro paga) of the company. We can divide the payroll into two sites: workforce and management. Workforce is composed by the people who carry out the work of the company, like the white-collar workers, who give their intellectual contribution, or blue-collar workers, who give their manual contribution. Management is composed by the people who lead and organize the company, like the CEO, director of Finance, director of Marketing etc. Management and administration Company’s activities may be divided into diferent sites in diferent places. The most important managers usually work in their headoffice or headquarter (quartier generale). Managers have their own individual offices, but they can also work all together in large areas, called open-plan or open space offices. The work that supports a company’s activities is done by the administration, composed by the administrative staf. Labour It’s important to talk about the labour [UK] or labor [US]. We can divide:      

Labour costs: all the costs the company has to pay for labour. Labour dispute: a disagreement between management and labour. Labour leader: someone responsible for an organization that represents workers. Labour relations: the relationship between management and employees. Labour shortage: a period in which there is a lack (mancanza) of people available to work. Labour unrest: a period of disagreement between management and employees.

Labour unions [US] or trade unions [UK] are organizations that operates in order to defend the interests of workers. In fact, when the workers are unhappy with pay and conditions, they can make some industrial actions:  A strike or stoppage (sciopero) which is when workers stop working for a period of time which can be short or long.  A go-slow which is when workers continue to work, but more slowly than usual.  An overtime ban which is when workers refuse to work more hours than the number normally established by law, so they refuse to do an overtime. 7 – COMPANIES AND CAREERS Career paths Some people can decide to work for the same organization until their retirement (pensionamento) which is the end of their working life, and this happens because they are happy with it. On the other hand, there are

people who want to change; everyone has his career path, which the direction his working life takes, but when someone want to way up his career ladder (levels of the working life), he must get a promotion in order to become senior and to have more responsibilities. It’s difficult that someone is demoted, so moved to a less senior job. Company structure In every moment, the company hierarchy can be reorganized and reduced. In order to reduce costs and cut the payroll, a company can be downsized (ridimensionato) and delayered (snellito). In this way, downsizing become necessary to increase efficiency and profits. This happens to become flatter, with fewer levels of management, and leaner, with more productive employees. In-house staff or freelancers? Today, it’s possible to work with big companies without being in the same country. Companies often outsource many jobs previously done by in-house personnel (personale interno). Downsized companies can use freelancers or freelances (liberi professionisti) who are independent people who work for several business companies. Moreover, companies may ask contractors (appaltatori) who work for short periods on temporary contracts or on co-co-co (contratti a progetto). For certain people, this can an indicator of flexibility, but for other employees, this means job insecurity. Companies can check the work done by employees through performance reviews which are meeting with the manager of the company. Leaving a company People can leave a company for several reasons, so they resign (dimettersi). Someone can lose a job in two ways:  You can do something wrong and you are forced to leave the company, so you are dismissed, fired or sacked.  You can do nothing wrong, but for several reasons, for example economic problems, you are made redundant or ofered early retirement. When employees are made redundant, they may get outplacement, which is an advice about how to find another job. 9 – MANAGER, EXECUTIVES AND DIRECTORS Manager and executives (UK) Company hierarchy in UK is more layered. On the top of the hierarchy, we find the non-executive directors, like chairman or chairwoman. All together, they are the board (consiglio) and they meet in the boardroom; they are outsiders, so directors of other companies with specialist knowledge in the industry. Then, we find the executive directors who are: financial director, marketing director, human resources director, IT director and research director; every director is the head of his own sector and he heads his department. At the end of the hierarchy, we find the middle managers who are: accounts department manager, sales manager, customer services manager. Manager and executives (US) In the USA, in the top position we find the chairman, chairwoman or president. He can also be a chief executive officer (CEO) and, moreover, a chief operating officer (COO) if he takes care of the day-to-day running of the company. Then, we find the executive directors, like the chief financial officer (CFO); it is used to call these directors as vice president, like vice president marketing or vice president finance. 10 – BUSINESSPEOPLE AND BUSINESS LEADERS A businessman, businesswoman or businessperson is someone who works in his own business or as a manager in an organization. A businessperson is not necessarily a business leader, it depends on the time he works in the business. An entrepreneur is someone who founds his own company, so he becomes its

founder. Entrepreneurial is an adjective used to describe the risk-taking people. Entrepreneurs can decide to leave the companies they found or to stay in order to grow their businesses. A business empire is a large group of companies owned by one person or family. Business leaders or also called, captains of industry, are the businesspeople at the head of the large organizations. Today, there is a discussion if these people are born with leadership skills or if these skills can be taught. Business leaders are often called, by journalists, as magnates, moguls or tycoons. 11 – ORGANIZATION 1 Business and businesses Business is an activity with the goals of producing, buying and selling goods and services. An organization that sells goods or services is called business, company or firm, and, in the formal way, concern. Large companies considered together form a big business. Businesses vary in size: we can find the self-employed person who works on their own through the small or medium enterprise, or the large multinational with activities in several countries. In the USA, a large company is a corporation. The adjective corporate can be used in diferent combinations:      

Corporate culture: the way of thinking and acting of the employees. Corporate ladder: the diferent levels of management. Corporate headquarter: the main office of a company. Corporate logo: a symbol used by the company on its products. Corporate image: all the ideas that people have about a company. Corporate profits: money made by companies.

Enterprise In 1970s Britain, there were many diferent companies ruled and managed by the State, so they were stateowned or government-owned. Some companies, such as coal and electricity companies, were entirely stateowned, so they had been nationalized. In 1980s, the Thatcher government believed that nationalized companies were inefficient, so many of them were privatized and sold to private investitors. Before the privatization, companies were bureaucratic; the bureaucracy is a state system for running government departments made up of strict rules; it was not good for business. Enterprise is used in a positive way to talk about businesses that use the money to invest in new activities with an amount of risk.  Private enterprise or free enterprise: business activities owned by individuals.  Enterprise culture: when people are encouraged to make money through their own activities, without government intervention.  Enterprise economy: an economy with enterprise culture.  Enterprise zone: part of a country where business is encouraged, because there are less strict rules, lower taxes etc. 12 – ORGANIZATION 2 Self-employed people and partnership A freelance or freelancer is someone who likes the freedom of working for his own, providing consultancy. He works from home and visits clients in their offices. He is a sole trader or sole owner [UK] or sole proprietor [US]; instead, builders (costruttori) or plumbers (idraulici) are self-employed. A partnership is a group of two or more partners who work together providing consultancy and designing services; they are no outsider shareholders.

Limited liability

A limited liability partnership (LLP) is composed by partners who have limited liability; if the partnership goes bankrupt, so runs out of money (esaurire i soldi), and there are people who have credit with the partnership, they can take the company’s assets to pay the debts, but they can’t take personal assets of the partners. Ltd means limited company with limited liability and 20 employees. It was founded by three engineers who are shareholders and directors and there are other five shareholders who don’t work for the company. Inc. stands for Incorporated; this means that it is a corporation and it is used in the US for the companies with limited liability and in the UK, in order to indicate big companies with outside shareholders. A public limited company (PLC) is a company with shares which are bought and sold on the stock exchange, because they are extremely big companies for being in the market. Mutuals Some companies are mutuals, like certain life insurance companies. People buy insurance with the company, they become its members, but they are no shareholders. In Britain, there are mutuals called building societies (società edilizie) which lend (prestare) money to people who want to buy a house. A lot of them are changing into PLC with shareholders, so they have demutualized in a process of demutualization. Non-profit organization Non-profit organizations [UK] or not-for-profit organizations [US] are organizations with social aims, such as helping sick or poor. They are also called charities and form the voluntary sector. They need volunteers who are unpaid people who organize diferent activities for the organization, like fundraising activities (raccolte fondi). These activities encourage people to donate money, clothes or food for the organization. Donations are essential. 14 – THE DEVELOPMENT PROCESS Market research In designing products and services, it is very important the market research to understand what people want. There are five ways to carry out the market research and it depends on the money that someone want to invest:  Surveys (sondaggi): there are 4 types of them >  In-person surveys in order to show a sample of a new product to potential customers; they are expensive.  Telephone surveys which are less expensive, but also less appreciated by customers who don’t like to be called up.  Mail surveys which are inexpensive, but with low response rates, because few people send the surveys back in order to leave a feedback.  Online surveys which are simple and inexpensive, but also unpredictable, because there is no control over the pool of people that take part in this survey.  Focus groups: they usually last 1-2 hours. There is a moderator who asks prepared questions to a group. It takes at least three groups of customers divided by age, gender etc.  Personal interviews: they usually last about an hour; they are normally recorded and more expensive. Like focus groups, good results depend on the number of interviews done.  Observations that consist in observing customers behaviour, for example their reaction after seeing a product in the store or by observing how they use the product at home.  Field trials (sul campo) that consist in placing a new product in selected stores to test customer response. Development and launch When the beta version, which is the first version of a program, is finished by the software developers, it is released on the internet and users are asked to try it out and to identify bugs or problems.

Car designers, instead, use CAD (computer-assisted design) or CAM (computer-assisted manufacturing) to develop and test prototypes of the new product. There is the necessity of tests and trials in laboratories in order to show that products realized are efective and safe. It’s possible to realize the products in large numbers on an industrial scale. Rollout (lancio) is the process of making a product available in particular places to test customers reaction. Product launch is the moment when the product is made available for sale. When a design defect is found in a product after its launch, the company may have to recall it, asking those who have bought the product to return it in order to correct the defect. 15 – INNOVATION AND INVENTION Research and technology Research and development is carry out at the research centre of the company. When a company makes an important discovery or change, this is called as breakthrough. The company is at leading edge of its sector when the competitors haven’t better product. If the company use the most advanced technologies, everything it does is state-of-the-art. The hi-tech products of today become the low-tech products of tomorrow. Products made with old technology are obsolete; so, they are no longer up-to-date. Patents and intellectual property Individual knowledge and the knowledge of a company are proprietary. It’s possible to protect in law the products invented, so when an inventor asks the authorities to officially recognize an invention as his/her property, he/she receives a patent application. If other companies want to use the products protected by patents, they can do it under license and upon payment of royalties. A product Is copyright when it cannot be used by others without permission; when someone does it without permission, this is a copyright infringement. For example, illegal downloading of music or films is piracy; or when fake products are sold without the permission of the company that owns the brand name or trademark (marchio di fabbrica). The area of law relating to patents, copyright and trademark is intellectual property. 16 – PRODUCTS AND SERVICES Mass production A craft industry (industria artigianale): when the production of a good is very labour-intensive and each good is individually hand-made in workshops. In 1913, Henry Ford invented the assembly line or production line (catena di montaggio) at the Ford manufacturing plant (stabilimento di produzione) in Detroit. Each part of the manufacturing process was entrusted to a team of workers; in this way, the plant could make goods in very large numbers. Today, we have the same manufacturing system with the addition of industrial robots. These robots are part of the CAD or CAM. The machines are expensive, but also cost-efective, because they produce a lot in relation to what they cost. Capacity and output Output is the number or type of things that a company or country produce. Productivity is a measure of the number of things produced in relation to the number of employees. Productivity is high when there is high output per employee. The capacity is the maximum amount that a company can produce. When it is producing this amount, it is working at full capacity. If there is too much capacity in relation to what is required, there is overcapacity or excess capacity or surplus capacity. There is overproduction if too many things are being produced by an industry in relation to the number of people who want to buy them. There is a surplus or a glut of things, if too many of these things are produced. There is a shortage if not enough goods are being produced.

17 – MATERIALS AND SUPPLIERS Inputs Raw materials, like steel and plastic, are used to make some of the components or parts that are used in the final product. We can have car components, computer components, replacement parts etc. The inputs of a company are materials, parts, labour (both of workers and managers) and capital. An other important input is the knowledge. Goods that are in the course of being made are work-in-progress. We can find goods in warehouse (magazzino). When the product has been made, it is called finished good. Raw materials, components, work-in-progress and finished goods in the warehouse are stocks. Suppliers and outsourcing A company can have its own manufacturing operations, but it can also work with its suppliers (fornitori) which are companies that provide materials and components. These suppliers become partners. When the company use outside suppliers to provide components and services, it uses subcontracting (subappalto). So, it outsources rather than produce in-house. Just-in-time It’s expensive to keep components and goods in stock. Stocks have to be financed, to be stored (kept in warehouse) and handled (moved from one place to another). When a company wants to reduce costs, it can ask its suppliers to provide components just-in-time, in the moment when components are needed. In this way, products are made in the most efficient way, as quickly and cheaply as possible, without waste; this is called lean production (produzione snella). 18 – BUSINESS PHILOSOPHIES Mass production We talk about mass production when a company produces large numbers of similar products; production lines are good for this production. Manufactures try to make standard products with few variations, so this is standardization. Instead, when a product is made to meet requirement or needs of a particular customer, it is called custom-built product and it is more expensive to produce. Mass customization (personalizzazione di massa) is when products are made in large quantities, but each one is made to the specifications of the buyer, which is the person or organization buying it. Wikinomics Wikinomics is a form of mass collaboration where companies have a large number of people working together on the internet to solve problems and develop products. Wikinomics is a form of outsourcing. Customers who contribute to the design and development of products should be called prosumers (producers + consumers), they work together in a process of peer collaboration (collaborazione tra pari) and co-creation. The long teil Mass production model doesn’t apply to many products. In a large catalogue of items, the cost of selling the least popular item is more than selling the most popular. The long teil model has been used by Amazon to sell books. Economies of scale and learning curve where the cost of a product comes down in relation to the amount produced. Benchmarking (analisi comparativa) It’s a form of collaboration where the actors are companies of the same field, they work together and compare their performance in order to see the best practice and copy it. If a company wants to hold on to its industrial secrets, it prevents competitors from obtaining information about its pe...