Business in the 21st cenyury
Unit 2 The global company
Reading tasks
A Read the text, write out all the unknown words with transcription from the article
В Understanding main points
1. Read the text on the opposite page about two car companies' global
strategies and say which of these statements apply to Ford and which to Honda.
a) now has a strategy of decentralisation Honda;
b) now works in multi-disciplinary teams for car design and development;
c) has always worked in multi-disciplinary teams;
d) produces more cars abroad than in its home country;
e) used to be very decentralized;
f) used to be very centralized;
g) has divided the world into four regions
h) designs and develops all its small cars in Europe;
i) has always been flexible and able to respond to change.
2. According to the ideas in the text, why do car companies now need to
have a global strategy?
3. How did the two companies change their strategies?
С How the text is organised
These phrases summarise the main idea of each paragraph of the text. Match each phrase with the correct paragraph.
a) one reason for changes in Honda's strategy;
b) Honda's original strategy;
c) Ford's new strategy;
d) conclusion;
e) Honda's new strategy;
f) Ford's original strategy;
g) the advantage of Honda's original strategy;
h) introduction paragraph I;
i) Ford's new strategy in detail;
j) another reason for Honda's new strategy.
Vocabulary tasks
A Synonyms
1. The word 'headquarters' is used to describe the central, controlling part of a large, international company. What other word is used in the same para-graph with a similar meaning?
2. Honda and Ford manufacture cars. What other phrase is used to describe what they do?
3. Honda produces both cars and motorcycles. What is a general word for both of these?
В Word search
Find a word or phrase in the text that has a similar meaning.
1. when a company makes a product in big volumes to reduce costs (paras
1 and 9).
economies... of s..cale...
2. factory in which cars are produced (para 2).
P.............. u...............
3. independence (para 2).
a..............
4. needs or demands (para 2).
r..............
5. head of a company responsible for strategy rather than day-to-day man-
agement (para 5).
с..............
6. consist of or be made up of (paras 6 and 7).
с..............
7. financially independent (para 7).
s.............. -s...............
8. total of a company's production (para 8).
о..............
С Complete the sentence
Use an appropriate word or phrase from Exercise В to complete each sentence.
1. The company .... Comprises .... three divisions -cars, trucks and commercial vehicles.
2. Each division has a lot of.......... to decide its own strategy.
3. Companies seem to change their .......... every few years in response to changing economic and market conditions.
4. Our total .............. of cars from all our factories in Europe went
down last year.
5.We need to develop products that meet the... of the market.
6.Big car makers now produce different models based on the tame platform in order to achieve
7. All the main Japanese carmakers have.......... in I mope
D Expressing degrees of meaning
Complete these sentences with the adverb or phrase used in the text.
1. For many years Ford's products differed ....sharply from region to
region.
2.Individual countries had........ of autonomy.
3. Honda grew.................... from its early days as a motorcycle manufacturer.
4. For many years Honda was run very..... out of Japan.
5.The use of multi-disciplinary teams allowed development work at Honda to take place in different parts of the company.
6.Honda expects its four regions to become... self-sufficient.
7. No other car maker has......... of foreign output as Honda.
Speaking tasks
A Prepare a short summary of the article (7-10 sentences) В Retell the article pointing out as many details as possible
Learning by heart
Learn all unknown words and word combinations for you from the article FINANCIAL TIMES WEDNESDAY OCTOBER 15
Case study: Ford and Honda
Haig Simonian on two cars groups' different routes to the global market Rising costs and the worldwide spread of shared tastes in car styling have prompted the industry's giants to exploit global economies of scale. But rivals such as Ford and Honda have approached the task very differently.
Ford is one of the world's earliest multinationals. Its first foreign production unit was set up in Canada in 1904 -just a year after the creation of the US parent. For years Ford operated on a regional basis. Individual countries or areas had a large degree of autonomy from the US headquarters. That meant products differed sharply, depending on local executives' views of regional requirements. In Europe the company built different cars in the UK and Germany until the late 1960s.
Honda, by contrast, is a much younger company, which grew rapidly from making motorcycles in the 1950s. In contrast to Ford, Honda was run very firmly out of Japan. Until well into the 1980s, its vehicles were designed, engineered and built in Japan for sale around the world.
Significantly, however, Honda tended to be more flexible than Ford in developing new products. Rather than having a structure based on independent functional departments, such as bodywork or engines, all Japan's car makers preferred multi-disciplinary teams. That allowed development work to take place simultaneously, rather than being passed between departments. It also allowed much greater responsiveness to change.
In the 1990s both companies started to amend their organisational structures to exploit the perceived strengths of the other. At Ford, Alex Trotman, the newly appointed chairman, tore up the company's rulebook in 1993 to create a new organisation. The Ford 2000 restructuring programme threw out the old functional departments and replaced them with multi-disciplinary product teams.
The teams were based on five (now three) vehicle centres, responsible for different types of vehicles. Small and medium-sized cars, for example, are handled by a European team split between the UK and Germany. The development teams comprise staff from many backgrounds. Each takes charge of one area of the process, whether technical, financial or marketing-based.
Honda, by contrast, has decentralised in recent years. While its cars have much the same names around the world, they are becoming less, rather than more, standardised. 'Glocalisation' - a global strategy with local management - is the watchword. Eventually the group expects its structure will comprise four regions - Japan, the US, Europe and Asia-Pacific-which will become increasingly self-sufficient.
Two reasons explain Honda's new approach. Shifting to production overseas in the past decade has made the 'company more attuned to regional tastes. About lm of Honda's 2.1m worldwide car sales last year were produced in the US. A further 104,000 were made in the UK. No other manufacturer has such a high proportion of foreign output.
Honda engineers also reckon they can now devise basic engineering structures which are common enough to allow significant economies of scale, but sufficiently flexible to be altered to suit regional variations. The US Accord, for example, is longer and wider than the Japanese version. The European one may have the same dimensions as the Japanese model, but has different styling and suspension settings.
Both Ford and Honda argue their new structures represent a correct response to the demands of the global market. Much of what they have done is similar, but intriguingly, a lot remains different.
FINANCIAL TIMES World business newspaper
Unit 6
Business in the 21st cenyury