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UNIT 9. BUSINESS ENVIRONMENT
Pre-reading activities
1.Could you give the definition of business environment?
2.What factors can affect business environment of each country?
Use the following words and word-expressions in your answer: to affect, to influence, to change the trend, labor costs, employment, unemployment, state of the economy, availability of labour, to make cuts, taxes, political stability (instability), foreign investments, rapid growth, slow growth, workforce.
Reading
Read the text and say what business environment is in Russia nowadays. What factors influence the developing of business environment in our country? Give reasons for your answer.
RUSSIAN BUSINESS ENVIRONMENT
Russian market represents potentially one of the greatest business opportunities in Europe today. The country has a huge supply of raw materials and products for markets outside of Russia. Additionally, there is a high demand in the domestic consumer market for imported and domestic goods and Russia’s industrial infrastructure needs significant improvements, for which additional funds should be found.
Russia is a market that should be entered into with long-term business horizons. Russia continues to undergo political economic and social change. Those unfamiliar with Russia should not rely on their business experiences in other countries. It is necessary to consider that some of the legislation and economy is still in the developing process.
Certain universal truths do, however, typify the Russian approach to business and life in general. Firstly, it is always worth bearing in mind that for centuries (long before the advent of the Soviet system), the state has always been seen as an organ of oppression and repression. Laws and statutes are therefore seen as the 'enemy' and to
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be avoided and evaded at all costs. Contracts are valid only if supported by a close personal friendship and taxes are left unpaid on both a corporate and personal level. Secondly, the only things that can be relied upon are close personal relationships within the business environment. Networking and extended interpersonal allegiances are essential to successful business and the importance of resource allocation to ensure the development of good quality relationships should not be underestimated. Thirdly, the legal status of many Russian companies is very dubious, being incorporated under the old laws of the Soviet Union which no longer have validity. Who actually owns the assets of an organisation? The laws are being rewritten constantly and are, in any case, virtually unenforceable. Thus, most agreements have to be made on a trust basis - a strong element of which has to be clearly identifiable self-interest.
It is probably fair to say that the Russian market still shows great inefficiencies in many areas, and that certain sections of the market (sectoral and geographical) are greatly undersupplied or underexploited. Some of the best opportunities lie in these areas.
Stabilization of the ruble made imports far more expensive relative to locallyproduced products. Local manufacturing of, especially, consumer goods is now a relatively healthy sector of the Russian economy. The market for manufacturing equipment develops very rapidly and offers many opportunities.
There are con artists in Russia just like everywhere else. Russian businessmen are no more or less honest than businessmen elsewhere. It is also true that Russian businessmen have had numerous bad experiences at the hands of foreign businessmen as well, partly due to inexperience, and partly due to the fact that the first foreign businessmen in Russia during the process of market liberalization were not always the best representatives of 'western capitalism'.
Most major corporations have concluded that the country’s potential demands a presence in Russia, with its vast natural resources, impressive human capital, and 140 million consumers. A significant number are finding that presence very profitable, and the majority express optimism for continuing profitable business opportunities now and in the future.
Vocabulary notes:
to undergo smth. – to experience smth., especially smth. that is unpleasant but necessary.
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legislation – a law or a set of laws.
networking – 1) the activity of meeting and talking to people to exchange information and advice about work or interests; 2) the activity of connecting computers in a network.
con artist – someone who lies in order to make people give him money.
demand – an amount of a product or service that people want, or the fact that they want it.
infrastructure – a set of systems within a place or organization that affect how well it operates, for example, the telephone and transport systems in the country.
long-term – 1) continuing to exist, be relevant, or have an effect for a long time in the future; 2) having existed for a long time and unlikely to change.
allegiance – strong loyalty to a person, group, idea or country. dubious – not completely good, safe or honest
healthy sector – the sector of economy that works very well and likely to continue to be successful.
Discussion
1.What factors influence the Russian business market?
2.Describe the Russian approach to business.
3.Why is the legal status of many Russian companies dubious?
4.What sectors of the Russian market are still undersupplied or underexploited? What sectors are highly-developed?
5.Are Russian businessmen honest? Give reasons for your answer.
6.Is Russian business environment safe for doing business? Why?
Vocabulary
I. Give English equivalents to the following word-combinations.
Влиять на что-то (кого-то), сырьё, налог, экономический спад, состояние экономики, прибыль, сокращать, безработица, корзина потребительских товаров, политическая нестабильность, иностранные вложения, инфраструктура, сконцентрироваться на чём-то, высокий спрос, потребительский рынок, импортные товары, отечественные товары, подвергнуться чему-то, законодательство, недооценивать, активы (баланса), мошенник, прибыльный,
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доступность сырья, обменный курс, вкладывать во что-то, снижать прибыль, опыт в ведении бизнеса, находиться в стадии развития, подход к ведению бизнеса, быть действительным.
II. Give Russian equivalents to the following word-combinations.
Business environment, availability of labor, labor costs, availability of raw materials, tax, state of the economy, economic recession, to make cuts, unemployment, shopping basket of everyday goods, exchange rate, shipping costs, to invest in, infrastructure, to be demotivated, to reduce profits, multinationals, business opportunities, a high demand, domestic consumer market, to undergo political economic and social change, business experience, to be in the developing process, approach to business, to be valid, networking, resource allocation, to ensure the development, to be underestimated, to be underexploited, locally-produced products, con artists, to demand, to be profitable.
III. Match the words and their definitions. Use them in the sentences below in the correct form.
1) to influence |
a) an amount of a product or service that people want, or the |
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fact that they want it. |
2) tax |
b) a period when trade and industry are not successful and |
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there is a lot of unemployment. |
3) recession |
c) a situation in which some people do not have work and do |
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not have an income. |
4) profit |
d) to think that someone has less power or ability than they |
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really have. |
5) unemployment |
e) an amount of money that you have to pay to the |
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government that it uses to provide public services. |
6) demand |
f) relating to the country being talked about, and not other |
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countries. |
7) imported |
g) to experience smth., especially smth. that is unpleasant but |
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necessary. |
8) domestic |
h) to affect the way that someone thinks or behaves. |
9) to undergo |
i) smth. such as money or property that a person or company |
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owns. |
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10) to underestimate |
j) money that you make by selling smth., especially the |
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money that remains after you have paid all your business |
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costs. |
11) asset |
k) a product from another country. |
1.… for organic food is increasing.
2.The business has … totaling $ 1 million.
3.She … surgery for suspected appendicitis last week.
4.What factors … your decision to take the job?
5.The importance of good diet should not be … .
6.The government has promised to lower … after the election.
7.What goods do you prefer: … or …?
8.The economy of this country was in … after the war.
9.The community here devastated by poverty and … .
10.All the … from the sales of the CD will go to the Multiple Sclerosis Society.
IV. Fill in a preposition where necessary.
1.Many important factors influence … the business environment of the country.
2.There is a high demand … the domestic consumer market … imported and domestic goods.
3.Russia continues to undergo … political economic and social change.
4.The only things that can be relied … are close personal relationships … the business environment.
5.The market … manufacturing equipment develops very rapidly and offers many opportunities.
6.Stabilization … the ruble made imports far more expensive relative … locallyproduced products.
7.A significant number of consumers in Russia are finding that presence … most major corporations is very profitable, and the majority express optimism … continuing profitable business opportunities now and in the future.
8.The country has a huge supply … raw materials and products … markets outside of Russia.
9.Many everyday brands which are used … people in almost every country can have varying prices … the world.