Company StructuresUNIT 1BUSINESS ORGANISATIONS

• 
  Focus: Types and Objectives of Business Organizations; key vocabulary
  
• 
  Grammar Focus: Clauses of Purpose; Defining Relative Clauses
  
• 
  Skills Focus: Reading for specific informationto know about types and goals of business organizations; learning basic vocabulary and developing speaking and writing skills
  

Key vocabularyOrganizations exist for one reason: they can accomplish things that individuals cannot. Organizations are characterized by their goal-directed behavior. They have goals and objectives that can be achieved more effectively by the actions taken by individuals and groups. Organizations depend on the way the society operates.TEXT AVocabulary

1. 
   society- общество
   
2. 
   goals and objectives – цели и задачи
   
3. 
   to achieve aims – достигать цели
   
4. 
   to set short-term aims – устанавливать краткосрочные цели
   
5. 
   target - цель
   
6. 
   to meet/satisfy needs and wants – удовлетворять потребности
   
7. 
   individual – индивид, частное лицо, физическое лицо
   
8. 
   private – частный
   
9. 
   nationalized industry – национализированный промышленный сектор
   
10. 
    public – общественный, государственный
    
11. 
    to establish/set up –создавать
    
12. 
    survival – выживание, жизнеспособность
    
13. 
    to fire - увольнять
    
14. 
    growth and development – рост и развитие
    
15. 
    image – образ, изображение; имидж, престиж, репутация
    
16. 
    to improve image – улучшить имидж/мнение/репутацию
    
17. 
    PR (Public Relations) – связи с общественностью
    
18. 
    obligations/responsibilities – обязанности, сферы ответственности
    
19. 
    provide services – предоставлять услуги
    
20. 
    insurance – страхование
    
21. 
    manufacture/ produce – производить
    
22. 
    to make a profit – получать прибыль
    
23. 
    competitive – конкурентный, конкурентоспособный
    
24. 
    target rate of return on capital – дисконтированная норма прибыли на вложенный капитал
    

1. 
   Before reading the text work in pairs and make the list of government organizations operating in Russia and identify what needs these organizations satisfy.
   
2. 
   Complete the table. Compare your notes with other students.
   

Government Organization	Goods Produced/Services Provided
NSTU	Trains students

3. Read the text and find the answer to the following questions:1. What are the objectives of private organizations?2. How successful are private organizations at achieving the goals?3. List the ways in which the companies can improve their public image.The Organization of BusinessThe Objectives of Business OrganizationsBusiness organizations are established to meet wants in society. Private businesses are formed to provide for material wants (i.e. goods and services) and commercial wants (i.e. banking, insurance) in society. Government organizations are set up to satisfy society’s needs for defense and order, law and education. In meeting these wants, organizations will set definite and clear aims, e. g. manufacturing firms will want to stay in business and make a profit.

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Aims of Private OrganizationsProfitability is the main aim of private organizations but it’s important to know that a business will have other aims. These include:

1. 
   Survival: in times of economic difficulty – such as recession – surviving will become an important short-term aim for the firm. In order to survive, the firm may fire workers and close some of its factories.
   
2. 
   Growth: not all firms want to grow continually but growth is closely associated with survival. Particularly for firms in highly competitive situations, e.g. computing and electronics, growth and development are the only way to ensure survival.
   
3. 
   Image: a number of firms have public relation departments that have specific responsibility to improve the image of the company. The company can lose business if it has bad reputation.
   

Aims of Public Corporation The aims of public corporations are set by the government. Basically nationalized industries have 2 broad obligations:

1. 
   Economic obligations: each nationalized industry has to manage its resources and adopt pricing policies such that it meets its target rate of return on capital. This target is reviewed annually and differs from industry to industry e. g. a target return of 1.6% was set by the water authorities in 1999, while for the electricity industry it was 2.75%.
   
2. 
   Social obligations: the economic obligations of public organizations are regulated by their social obligations, e.g. British Rails may continue to provide a rail service in a rural area even though that service may be unprofitable. Similarly, the Post Office may provide unprofitable postal services in isolated communities.
   

4. Read the text again andmatch the beginning in the left column with the ending of the sentence in the right column.

1.Private businesses are set up	a. to make a profit.
2.All public corporations have	b. to cut the personnel.
3. The main goal of a private organization is	c. to provide goods and services for society.
4. One of the ways of survival during crisis is	d. public organizations have to provide them.
5. Although the services are unprofitable,	e. in order to beat the competitors.
6. Electronics companies have to develop	f. economic and social obligations.

5. Choose the most precise translation into Russian of the following statements.

1. 
   The economic obligationsof public organizationsare regulated by their social obligations.
   

1. 
   Выпуск облигаций публичных организаций регулируется за счёт выпуска облигаций организаций социального администрирования.
   
2. 
   Выполнение экономических обязательств общественными организациями регулируется в соответствии с принятыми ими социальными обязательствами.
   
3. 
   Как известно, выполнение обязанностей государственными организациями регулируется экономикой.
   

2. 
   Private businesses are formed to provide for material and commercial wants in society.
   

а) Частные предприятия создают с целью поддержания материального обеспечения общества и предоставления коммерческих услуг.b) Частные бизнесы сформированы для удовлетворения материальных и коммерческих потребностей общества.

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с) Индивидуальные предприятия образуют для предоставления необходимых материалов и коммерческих услуг обществу.3. Government organizations are set up to satisfy society’s needs for defense and order, law and education.а) Государственные организации образуют для удовлетворения нужд общества в порядке, законе и образовании.b) Правительственные организации создаются с целью удовлетворения общественных потребностей в наведении порядка и обороне страны, а также в разработке законодательных актов и предоставлении образовательных услуг.c) Публичные организации созданы для соблюдения законов, обороны и наведения порядка в стране, а так же предоставления услуг в сфере образования.6. Find the odd word out.1. crisis, economic difficulty, slump, growth, recession2. goals, objections, targets, aims, objectives3. earnings, income, profit, losses, revenue, personal returns4. to employ, to fire, to make redundant, to give somebody the sack, to dismiss7. Replace the underlined words with the words used in the text1. Public corporations meet society’s demands (s------y society’s n-----) for medical services.2. Highly competitive companies are able to survive in time of crisis (r- - - - - - -n).3. Railway and postal services are unprofitable in (r- - -l) areas located away from big towns. 4. Organizations are founded (e - - - - - - - - -d) to achieve the government’s goals. Grammar Focus: Clauses of Purpose

Clauses of purpose answer the questions: why? or what for? Tomake a profit, private corporations have to manage their resources. Companies need to reduce costs in order tokeep within the budget. Government organizations have to manage their resources so that they can meet their target rate of return on capital.

FORM To introduce a clause of purpose we use: to + infinitive in order (not) to + infinitive so that + subject + verb in order that + subject + verb

8. Discuss the answers to the questions below in pairs. Write the best answers and use a clause of purpose for each. 1. Why are business organizations established?2. What are Public Relations departments for? 3. Why are public corporations involved in unprofitable businesses? Whose aims do they have to achieve?4. Why do some persons prefer to own business privately and to become sole traders?TEXT BVocabulary1. sole proprietorship – индивидуальное частное предприятие2. business earnings – прибыль с бизнеса3. to tax – облагать налогом4. disadvantages - недостатки5. to be responsible for – отвечать, нести ответственность6. liabilities – задолженность, долговые/денежные обязательства7. to be reluctant – делать неохотно, сомневаться, отказываться

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8. loan - ссуда9.general partnership – генеральное партнёрство, товарищество с неограниченной ответственностью10. limited partnership – партнёрство с ограниченной ответственностью11. independent legal entity – самостоятельное юридическое лицо, правовой субъект12. personal assets – личные активы/фонды/движимое имущество13. shareholders –акционеры14 personal tax returns – поступления от личного подоходного налога15. private company – частная компания, закрытая акционерная компания16. public company – открытая акционерная компания, продающая свои акции на бирже17. Stock Exchange - биржа

1. 
   There are four main types of business ownership in the private sector of the economy: public limited company (PLC), partnership, sole trader and private limited company (Ltd.). Put each one into the correct box to complete the table.
   

1	2	3		4
One person provides all the capital	Owned by two or more people who contribute capital	A registered company with restricted share transfer		A registered company whose shares can be bought and sold on the Stock Exchange
unlimited liability (the personal assets of the owner (s) can be taken to pay any business debts			limited liability (liability for business debts is limited to the amount of capital subscribed)

2. 
   Read the text for general understanding.
   

Types of the CompanySole ProprietorshipThe simplest structure is the sole proprietorship, which usually involves just one individual who owns and operates the enterprise. With a sole proprietorship, your business earnings are taxed only once, unlike other business structures. Another big plus is that you will have complete control over your business—you make all the decisions. However, there are a few disadvantages to consider. Selecting the sole proprietorship business structure means that you are personally responsible for your company's liabilities. Raising money for a sole proprietorship can also be difficult. Banks not often make business loans to sole proprietorships. In most cases, you will have to depend on your savings or family loans.PartnershipA group of people who work together as equals (e.g. a firm of lawyers or architects). They share the risks and profits. Partnerships come in two varieties: general partnerships and limited partnerships. In a general partnership, the partners manage the company and assume responsibility for the partnership's debts and other obligations. A limited partnership has both general and limited partners. The general partners own and operate the business and assume liability for the partnership, while the limited partners serve as investors only.CorporationThe corporate structure is more complex and expensive than most other business structures. A corporation is an independent legal entity. A corporation's debt is not considered that of its owners, so if you organize your business as a corporation, you are not putting your personal assets at risk. A corporation also can retain some of its profits without the owner paying tax on them. Another plus is the ability of a corporation to raise money. The main disadvantage of forming a corporation: owners of the corporation pay a double tax on the business earnings.

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Private Company (Private Limited Company)The shares of the company are privately owned, usually by a small number of people. These shareholders typically include the founder of the company, some close family members, and a few business associates who provided money for the company. Earnings and losses are included on the owners’ personal tax returns. The company’s members are not allowed to transfer shares without permission of shareholders. Public Company (Public Limited Company)These are large companies that are listed on stock exchanges. They are called public because anyone can buy their shares. 3. T 1 Listen and answer the questions:1. Why do most UK businesses take the ‘PLC’ form?2. What abbreviations are used for registration of American companies? Which type do these forms refer to PLC or Ltd?4. Read the text again and in pairs decide which of the advantages and disadvantages below you would associate with the following forms of business. In some cases there may be more than one correct answer. a sole proprietor a partnership a corporation a private limited companya public limited company Advantages1 Business earnings are taxed only once.2The financial risks that you are taking are restricted. 3Anyone can be a shareholder.4 You have total control of your business.5This is a good way of sharing the pressure and work of starting a business.6 You can increase your capital by selling shares. Disadvantages1 You may sell your possessions if the company goes in debts.2 It may be difficult to expand and to take a loan.3There is a danger that conflicts of personality could ruin your business.4 Earnings and losses are included on the owners’ personal tax returns.5 Owners pay a double tax on the business earnings.5. Match the words from the text with the corresponding definitions.

1. a shareholder	a. profit and money lost by a company when it spends more than earns
2. a loan	b. money that you have saved in a bank or invested
3. business earnings and losses	c. a person or organization which invests money
4. liabilities	d. borrowed amount of money
5. assets	e. someone who owns shares in a company
6. investor	f. an official tax form; profit from tax
7. savings	g. a place where people buy and sell shares
8. tax returns	h. the amount of money that a company owes
9. stock exchange	i. company’s possessions

6. Complete the sentences with the words from task 5.1To start business a sole trader has to depend on personal ……. or make a …… .2 ………… of public companies can buy shares on stock exchanges.3Information about business ……. and …… should be available to count personal tax returns.4 General partners operate the business and are the subject of the same ………. .5 Limited partners appear to be…….. , consequently, they don’t manage the company. 6 Fixed ……… are long-lasting and used for making/selling the products of the business. They are: land, buildings, machinery, trade investments and etc. Grammar Focus: Defining Relative Clauses

Defining clauses give important information about the noun. A sole proprietorship refers to a business whichis owned by one individual. A stock exchange is a place where people buy and sell shares. Shareholders are people who own company’s shares.
We choose a relative pronoun depending whether the noun is a person or a thing
Person	Thing (s)
who
that	that
	which
	(place) where
	(time) when
whose	whose

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