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MODULE 2: FUTURE UNCERTAINTY

PART 1: VOCABULARY PRACTICE

WORDS & DEFINITIONS
1.1 Choose the best definition for each term. There are some extra words.
A. socio-cultural B. macro-environment C. manufacturer
D. external forces E. purchase F. birth rate
G. segment H. decline I. emerging
J. e-marketing K. converge L. deforestation
M. legislation N. agenda O. buying power

1. a company that produces goods in large numbers

2. to gradually become less, worse, or lower
3. related to the different groups of people in society and their habits, traditions, and
beliefs
4. forces applied to the structure from the outside
5. the process of advertising and selling products and services on the internet, for
example, on a company website or by email
6. one of the smaller groups or amounts that a larger group or amount can be divided
into
7. the social, political, economic, etc. conditions that affect a particular industry or
business
8. the number of births that happen during a period of time in a particular place
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9. to buy something
10. starting to exist

1.2 Write the word(s) based on the given definitions (1-10) and the initial letter(s).
1. the cutting down of trees in a large area, or the destruction of forests by people
(1 word: 13 letters: D.....)
2. a period when the economy of a country is not successful and conditions for business
are bad
(1 word:9 letters: R.....)
3. a list of matters to be discussed at a meeting
(1 word: 6 letters: A....)
4. relating to trade, industry, and money
(1 word: 8 letters: E....)
5. laws enacted by Congress and/ or by a state to ensure a free and competitive economy
(2 words: 5 letters- 10 letters: T.... R.....)
6. the exposure a company or organization has to factor that will lower its profits or lead
it to fail
(2 words: 7 letters- 4 letters: B..... R.....)
7. a law or set of laws suggested by a government and made official by a parliament (1
word: 11 letters: L.....)
8. the amount of money that a person or group has available to spend
(2 words: 6 letters, 5 letters: B.... P....)
9. to move toward the same point and come closer together or meet
(1 word: 8 letters: C.....)
10. someone you work with – used especially by professional people (1
word: 9 letters: C....)

SENTENCE COMPLETION
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1.3 Choose the best word/phrase to complete the sentences.

1. Sales of the product have been seriously hurt by the _____.
A. adverse opinion
B. adverse publicity
C. adversity
D. advisability
2. A rapidly _____ makes pensions a particular worry.
A. adolescence
B. ageing population
C. grown-ups
D. middle age
3. By 1989 the _____ for full-time male workers had increased to 44.1 hours.
A. average earnings index
B. average working week
C. reduced time
D. working hours
4. In most Asian countries, _____ are increasing significantly; especially among urban
households.
A. average household incomes
B. family incomes
C. median incomes
D. per capita incomes
5. The recent rise in _____ makes it hard for small business owners to borrow the money
they need.
A. bank interest rate
B. negative interest rate
C. nominal interest rate
D. prime lending rate
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6. If you ask me why I love working here, then I cannot give you a _____.
A. black and white answer
B. red tape
C. gray area
D. white lie
7. Commercial broadband Internet commonly has 256 kilobit per second, which is about
the slowest _____ for connections advertised worldwide.
A. broadband speed
B. broad base
C. broadcaster
D. ground speed
8. Scientists are warning that unless _____ are cut, we could be heading for an
environmental catastrophe.
A. acid rain
B. carbon emissions
C. dumping
D. insolation
9. Before buying the baby's car seat, make sure that it _____ to the official safety
standards.
A. confers
B. confides
C. conforms
D. conquers
10. The price of many big-ticket _____, such as automobiles or refrigerators,
remained stable or fell last month.
A. consumer demand
B. consumer durables
C. consumer goods
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D. consumer non-durables
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7 A. save B. purchase C. get D. lend

8 A. market B. economy C. demand D. dull
9 A. demand B. market segment C. consumption D. supply
10 A. external B. internal C. purchasing D. buying

PART 3: READING COMPREHENSION

3.1 Reading passage 1
A. Read the passage carefully and then briefly answer the following questions.
EARLY WARNINGS IN THE SUPPLY CHAIN
When Edscha, a German manufacturer of the sun roofs and other car parts, filed
for insolvency early in 2009, it presented BMW with a crisis. The luxury carmaker was
about to introduce a new model – and Edscha supplied its roof. ‘We had no option of
going to another supplier, as that would have taken six months and we don’t have that
time. We had to help Edscha survive,’ BMW says.
Today, Edscha is still in business, because of the support offered by its leading
clients, including BMW. However, BMW is still so worried about disruption to its supply
chain that it has increased the number of staff in its risk-monitoring department with
responsibility for component makers.
Such concerns are felt not just in the German automotive industry. Failures among
important suppliers affect many sectors, from manufacturing to retail. So how should
companies monitor whether their suppliers are getting into difficulty? And what should
they do if they get into trouble?
It is essential to maintain good relationships with suppliers. Stephan Wagner, a
professor in logistics management in Germany, says one of the simplest solutions is to
communicate: “talk to them. That will give you a very good feel for what is going on.”
The Swiss Federal Institute of Technology (ETH) in Zurich proposes four steps,
some already widely used but others followed by only a few.
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The first step recommended by ETH is to establish a rating system for a

company’s primary suppliers. The ratings should be based on financial information, with
cashflow more important in many cases than profitability. BMW looks at a variety of
issues, including the ownership structure. It also maintains close contact with Audi and
Mercedes, its main competitors, to swap information on suppliers.
The second, related, proposal is to set up an early warning system that monitors
what is happening in the present. Such a system looks at operational issues such as
whether quality problems are increasing at a particular supplier, as well as financial
issues, such as any attempt to change payment terms.
The third recommendation is to extend the ratings and communication with
suppliers further down the chain. Professor Wagner says: ‘Many companies don’t even
know who their second-tier suppliers are’. He points to the example of a German
carmakers where production nearly stopped after the sub-supplier of material for its seats
went bankrupt.
The final proposal is to examine the interdependencies in a company’s supply
base. According to Professor Wagner, many companies with dual or multiple sourcing are
confident that they would be able to switch supplier if one got into trouble. But research
by ETH suggests this confidence may be misplaced. If one supplier in a particular area
goes bankrupt, the probability increases that other suppliers in that sector will become
insolvent.
(https://www.researchgate.net/publication/265067652_Early_Warnings_in_the_Supply_
Chain)

Questions:
1. Why did BMW decide to support Edscha when it got into financial difficulty?
2. Do failures among important suppliers affect only the German automotive industry?
3. What action has BMW taken in response to the crisis with Edscha to protect its supply
chain from disruption?
4. What two steps has it taken to check the financial health of critical suppliers?
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5. What example does Stephen Wagner give to illustrate the importance of extending
ratings to its supplier’s suppliers?

B. Complete the summary, using ONE word from the above reading passage.
The ___(1)___ of Edscha, a car parts supplier to BMW, highlighted the critical
need for companies to monitor their supply chains for potential ___(2)___.
BMW addressed this concern by increasing its ___(3)___ dedicated to monitoring
component makers. Disruptions caused by supplier failures are a concern across various
industries, prompting the question of how companies can effectively ___(4)___ their
suppliers' health.
Professor Wagner emphasizes the importance of maintaining strong ___(5)___
with suppliers through open communication.
The Swiss Federal Institute of Technology (ETH) proposes a four-step approach:
- Establish a supplier ___(6)___ system based on financial information prioritizing
___(7)___ over pure profitability.
- Implement an ___(8)___ warning system to monitor current operational and
financial issues.
- Extend supplier ratings and communication beyond primary suppliers, as many
companies are unaware of their ___(9)___ suppliers.
- Analyze ___(10)___ within the supply network, as supplier insolvency in one area
can increase the risk of insolvency in others.

3.2 Reading passage 2

FUTURE PROOFING YOUR BUSINESS IN AN UNCERTAIN FUTURE
With the recent snap election, Brexit and Donald Trump winning the US
presidential election. The economic future in the UK could be said to be uncertain. In
order to prepare our businesses to survive whatever the future may throw at us, it is
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important to invest time and effort now to get the business in the best shape to allow it to
flex easily to the needs of the future.
At all levels of the business review the key processes to check they are fit for
purpose today and for where you as a business want to be in the future. If not, start to
identify the areas of weakness and start to take steps to strengthen them for the future.

PART 2: PASSAGE COMPLETION 2.1 Passage 1. Complete the passage with the
words in the box. There are some extra words. electric perch generated pop up
distribution center different suppliers dropping off product conveyor streams advertising
agencies supply chain recover I had never seen what a (1) looked like in action until I
visited Wal-Mart headquarters in Bentonville, Arkansas. My Wal-Mart hosts took me over
to the 1.2 million- square-foot (2) where we climbed up to a viewing (3) and watched the
show. On one side of the building, scores of white Wal-Mart trailer trucks were (4) boxes
of merchandise from thousands of (5) Boxes large and small were fed up a conveyor belt
at each loading dock. These little conveyer belts fed into a bigger belt, like streams
feeding into a power river. Twenty-four hours a day, seven days a week, the suppliers'
trucks feed the twelve miles of (6) , and they feed into a huge Wal-Mart river of boxed
products. But that is just half the show. As the Wal-Mart flows along, an electric eye reads
the bar codes on each box on its way to the other side of the building. There, the river
parts again into a hundred streams. (7) arms from each stream reach out and guide the
boxes - ordered by particular Wal-Mart stores off the main river and down its stream,
where another conveyor belt arms from each stream reach out and guide the boxes -
ordered by particular Wal-Mart stores off the main river and down its stream, where
another conveyor belt sweeps them into a waiting Wal-Mart truck, which will rush these
particular products onto the shelves of a particular Wal-Mart store somewhere in the
country. There, a consumer 22 will lift one of these products off the shelf, and the cashier
will scan it in, and the moment that happens, a signal will be (8) That signal will go out
across the Wal-Mart network to the supplier of that product - whether that supplier is in
coastal China or coastal Maine. That signal will (9) on the supplier's computer screen and
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prompt him to make another of that item and ship it via the Wal-Mart supply chain, and
the whole cycle will start anew. So no sooner does your arm lift a (10) off the local Wal-
Mart's shelf and onto the checkout counter than another mechanical arm starts making
another one somewhere in the world. Call it 'the Wal-Mart Symphony' in multiple
movements with no finale. It just plays over and over 24/7/365: delivery, manufacturing,
reordering, delivery, sorting, packing.

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2.2 Passage 2. Complete the passage with the words in the box. There are some
extra words. lobbying inflation rate positioning environmental analysis competitiveness
policies patents regulation predict factoring income categories STEEP analysis is a
business tool that analyses the social, technological, economic, environmental and
political legal aspects of the general business environment that can affect the (1) of
industries and companies. It is also known as PEST analysis, where PEST stands for
political/legal, economic, social and technical factors. STEEP sectors are not mutually
exclusive and the analysis is often considered difficult to do effectively over time because
of the range of (2) factors, which are considered to go beyond the direct influence of an
individual company.

The social/socio-cultural category includes the cultural background of customers,

percentage of the population in different different social classes, birth and death rates. (3)
value systems for the The technological category includes (4) research and development
budgets, the pace of technological change and bandwidth capacity. The economic
category includes the rate of economic growth, the (5) the exchange rate, the interest rate,
the availability of capital for small businesses and a country's balance of payments. The
environmental category includes air and water quality, the level of environmental (6) and
the source of energy. The political/legal category includes factors such as the (7) of
political parties, activism of government agencies, ability to influence political decisions
through (8) nature of the power and decision-making structures in countries, public
opinion and acts of terrorism. No company or individual is able to fully control their own
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future. However, successful companies and individuals are the ones who are best able to
(9) the future accurately and take steps to respond in the best way possible defending
themselves from possible threats and opportunities. themselves to take advantage of (10)
(Birkin, 2012)

2.3. Passage 3: Choose the best word/phrase for each of the blanks. The business cycle or
trade cycle is a permanent feature of market economies: (1) alternately grows and
contracts. During a(n) (2) parts of the economy expand to the point where they are
working at full capacity, so that production, employment, business investments, profits,
prices, and interest rates all tend to rise. A long period of expansion is called a boom. But
at some point, there will inevitably be a (3) The economy will hit a peak and start to
contract again, the demand for goods and 24 services will decline and the economy will
begin to work at below its potential. Investment, output, employment, profits, commodity
and share prices, and interest rates will generally fall. A downturn that lasts more than six
months is call a recession; one that lasts for a year or two is generally called a depression
or slump. Eventually the economy will bottom out, and there will be a recovery or an
upturn. The most probable cause of the business cycle is people's spending or (4)
Decisions, which in turn are based on (5) A country's output, investment, The most
probable cause of the business cycle is people's spending or (4) Decisions, which in turn
are based on (5) A country's output, investment, unemployment, (6) and so on, all depend
on millions of decisions by consumers and businesses on whether to spend, borrow or (7)
when economic times are good or when people fell confident about the future, they
spend, and run up debts. At a certain point, spending has to slow down and debts have to
be paid. If interest rates unexpectedly rise, a lot of people find themselves paying more
than they anticipated on their mortgage or rent, and so have to consume less which leads
to a fall in (8) and consequently a fall in production and employment. Investment is
closely linked to consumption, and only takes place when demand is growing. As soon as
demand stops growing, investment in new factories, machines, etc. falls, which
contributes to the downtown. But if (9) exceeds supply, prices should fall, and encourage
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people to start buying again. Eventually the economy will reach a trough or bottom out,
and there will be a recovery or an upturn. This is the internal (or endogenous) theory of
the business cycle; there are also (10) (or exogenous) theories, which look for causes
outside economic activity, such as scientific advances, natural disasters, elections or
political shocks, demographic changes, and so on. 1 A. economy B. GDP C. market D.
economics 2 A. downturn B. recession C. upturn D. inflation 3 A. downturn B. upturn C.
budget D. bump up

2 A. downturn B. recession 3 A. downturn B. upturn 4 A. charged B. earned 5 A. tradition

6 A. lose B. expectations C. upturn D. inflation C. budget D. bump up C. rewarded D.
consumed C. origin D. income B. balance of payments C. finance D. balance of trade 25
7 A. save B. purchase 8 A. market 9 A. demand B. economy 10 A. external B. market
segment C. get D. lend C. demand D. dull C. consumption D. supply B. internal C.
purchasing D. buying

27 B. Complete the summary, using ONE word from the above reading passage. The (1)
of Edscha, a car parts supplier to BMW, highlighted the critical need for companies to
monitor their supply chains for potential (2) BMW addressed this concern by increasing
its (3) dedicated to monitoring component makers. Disruptions caused by supplier
failures are a concern across various industries, prompting the question of how
companies can effectively (4) their suppliers' health. Professor Wagner emphasizes the
importance of maintaining strong (5) with suppliers through open communication. The
Swiss Federal Institute of Technology (ETH) proposes a four-step approach: Establish a
supplier (6) system based on financial information prioritizing (7) over pure profitability.
Implement an (8) warning system to monitor current operational and financial issues.
Extend supplier ratings and communication beyond primary suppliers, as many
companies are unaware of their (9) suppliers. Analyze (10) within the supply network, as
supplier insolvency in one area can increase the risk of insolvency in others.
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