LCCI level 4 rok 2002.pdf

English for Business

Level 4

Past Papers 2002

London Chamber of Commerce and Industry Examinations Board

(LCCIEB)

Platanenstr. 5

07549 Gera

Tel: 0365 / 7 38 85 19

Fax: 0365 / 7 38 85 36

Webseiten: www.lccieb-germany.com

Email: info@lccieb-germany.com

Contents

English for Business

Level 4

Past Papers 2002

Series 1 ………………………………………………………………………………………3 - 11

Series 2 ……………………………………………………………………………………..12 - 19

Series 3 ……………………………………………………………………………………..20 - 28

Series 4 …………………………………………………………………………………….29 – 37

The material contained in this booklet may be reproduced and/or photocopied for

examination preparation purposes only.

SERIES 1 EXAMINATION 2002

ENGLISH FOR BUSINESS

LEVEL 4

(Code No: 4041)

THURSDAY 14 MARCH

________

Instructions to Candidates

(a) The time allowed for this examination is 3 hours.

(b) Answer all 4 questions.

(d) All answers must be clearly and correctly numbered but need not be in numerical order.

(e) While formal accuracy is expected, adequate and appropriate communication is essential and

candidates must judge the length of their answers in this light.

(f) When you finish, check your work carefully.

(g) The use of standard English dictionaries and cordless non-programmable calculators is

permitted. Candidates whose first language is not English may use a bilingual dictionary.

________

QUESTION 1(a)

Read the following article and answer the questions that follow it. Credit will be given for answering

the questions in your own words and demonstrating comprehension, rather than quoting directly from

the text.

Let the bad times roll

"It's the worst thing I've ever done in my life," admitted John Chambers, Chief Executive of Cisco

Systems, after announcing big job cuts last month. "We went from over 65 miles an hour to flat or

negative growth in what, 2 months? I don't know many companies in the world that could do that."

Other versions of Mr Chambers' lament can be heard up and down Silicon Valley these days, and

in most other parts of America too. Almost daily, some totem of the new economy admits to a

thoroughly old-fashioned sense of bewilderment. Ed Zander, President of Sun Microsystems,

confesses: "I have never seen an environment where capital spending has fallen off as dramatically

and suddenly as this in all the years I have been in business". The Chief Financial Officer of Ariba,

a big noise in the business-to-business business, announced glum profits and layoffs saying that

"the predictability of our business going forward is very limited”.

Yet not so long ago, companies such as these thought that they had a better feel for the state of

demand than ever before. They had fancy electronic links with their suppliers and boasted of the

new flexibility that came with building to order, not for stock. Even so, managing in a downturn

appears to be tougher than most of them expected. What has gone wrong? Part of the problem is

the sheer ferocity of the downturn, a mirror image of the over-inflation of last year's bubble. For the

past two years, as Allen Delattre of Accenture Consultancy points out, high-tech companies had

become accustomed to sales growth of 40% or so from one quarter to the next. The sheer

momentum created by this would have made even a gentle slowdown difficult. In fact, both profit

warnings and stock-market declines are far more severe than in previous downturns.

Companies may still wonder whether they face a short bounce or a long slump. Shareholders are

less hesitant. Faced with unforgiving investors, companies feel obliged to accompany every

announcement of bad news with plans to cut jobs, but the news of job cuts affects confidence.

And better information may, ironically, compress the corporate response. As Alan Greenspan of

the Federal Reserve recently pointed out, business managers receive similar signals, and so

"appear to be acting in far closer alignment with one another than in decades past". Mike Volpi of

Cisco says that information about economic changes is much more quickly available than in the

past. "Because of that, everything spiralled down much faster."

While better information may be compressing the response, it has not been good enough to predict

the behaviour of buyers. And the supply chain, although leaner than it was in previous recessions

still has lots of inertia. At Flextronics, a giant contract manufacturer that makes hardware for high-

tech firms, an emphasis on curbing costs means that materials may travel half-way round the world

and back before a product is finished. That takes time. Some memory chips take 13 weeks to

make, so build-to-order turns out to "build-till-almost-ready-for-an order".

Nor is it just in high-tech businesses that suppliers have been caught with too much inventory. In

the car industry, for example, demand has dropped faster than companies expected. Worse, the

fall comes after a boom that − unusually − combined soaring sales with falling prices and heavy

discounting. The worst-hit suppliers have, in the words of one analyst, been caught between a rock

and a hard place.

Managing the recession will be difficult for executives who have long since forgotten what the

previous one felt like. In particular, they need to be careful about losing good staff. There may be a

pause in the war for talent, but there is a lesson from continental Europe's recent experience with

slow growth − companies that use the best of their surplus employees creatively are best placed for

recovery.

QUESTION 1(a) CONTINUED

Some American companies have had similar experiences. For example, Dixie-Narco, a subsidiary

of Maytag that makes vending machines, hit a crisis when Coca-Cola, one of its largest customers,

suddenly slashed orders. The company weathered the storm without layoffs, partly by reassigning

redundant production workers to find a way to cut costs, improve quality and streamline production.

As a result, the company drew ahead of competitors that had made swingeing staff cuts.

The moral is that companies that take advantage of the downturn, rather than merely muddling

through, will be best placed to accelerate when the good times roll once more.

(Adapted from The Economist magazine)

1 The companies of Cisco, Sun Microsystems and Ariba give specific examples of tangible effects

of the recession on their results. What are they?

(3 marks)

2 The CFO of Ariba says "the predictability of business going forward is very limited". What does he

mean and why does he choose to express it in this way?

(2 marks)

3 What is the author's attitude to companies' recent statements about their 'feel for the state of

demand'? How do we know he thinks this?

(2 marks)

4 What is contradictory about the shareholders' expectations of their companies' response to the

downturn?

(2 marks)

5 'Last year's bubble' (paragraph 3) and 'better information' (paragraph 5) have contributed to the

severity of the downturn. What was the contribution of each?

(3 marks)

6 What effect has 'better information' (paragraph 6) had on supply and demand management/

inventory control and what is the 'inertia' referred to in relation to supply and demand

management/inventory control?

(2 marks)

7 What is meant by the 'war for talent’ (paragraph 8)?

(1 mark)

(15 marks)

QUESTION 1(b)

Situation

You are the Human Resources Director for a medium-sized high-tech company that is suffering badly

in this current recession. You are hoping to avoid job cuts at the moment, but are not in a position to

guarantee this in the long term.

Task

Write a memo to all the staff (below management level) in the company. Using ideas from the text in

Question 1(a), tell them about the current economic situation − giving some information about why the

situation is so bad. Assure them the company is doing everything to avoid redundancies and is

currently considering the redeployment of staff. Also, announce a company meeting for all the staff to

give further information about the situation.

(10 marks)

(Total 25 marks)

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