Webhiker's guide to galaxies'

By David Bowen
One of the frustrations of people who run large websites is that their efforts are often
judged on superficial criteria. It is always nice to win an award, but the sad truth is that
judges rarely have time to go into sites in enough depth. So, what is never analysed is
whether the site really functions properly and does what it is meant to do. This is not the
fault of the judges; it is because large online presences are complex beasts. You really
have to get stuck into them to see whether they are coherent.
Few big organisations have just one site - typically they have one at the centre and a
galaxy of others covering countries, subsidiaries, brands and other specialities. This
means we have to look both at the way the central site works, and at the way the galaxy
spins around it (or fails to).
There are always reasons why a web presence has the structure it does, but they are rarely
simple, usually a mix of historical accidents, lack of budget, decentralised organisation,
internal politics, the whimsy of bosses, and any number of other factors.
So here are three questions to ask yourself to see just how coherent your own presence is.
First, is your central site one coherent beast, or is it made up of a group of vaguely
coordinated offerings? The US State Department site, for example, looks neat - with nice
bold links across the top, which are the same wherever you are on the site. But it soon
becomes clear that it is a federation of sites that have little in common. Some areas have
no links back to the main site and are not covered by the same search engine.
Second and third, can visitors easily get to your country, business and other sites, and can
they get back? Many people will find a corporate site by writing in the name of the
company and adding ".com", or by putting its name into Google. Now you need to get
them to the information they need. A well classified directory can do the trick, but check
out ICI ([Link]), with its neat expandable 'pilot' mechanism. Or UBS
([Link]) with its logical service finder. Or look at Thyssen Krupp's Base
([Link]), a highly sophisticated search engine that lets visitors find the
relevant site or information by product, customer sector, location, subsidiary name, or
other criteria. The basic journey back from an outlying site should be more
straightforward - a link to your home page.
But can, say, a visitor to your French site get direct to the central Investor area? ll not,
why not? Can a Jobseeker in Singapore look for positions across your entire
organisation? Is a journalist in Brazil getting the right mix of local and global news?
Thought not. These are the subtleties that may not win you an award - but they will make
your site work better. That is good for your organisation, its customers and other
stakeholders. And of course, for your job.
From the Financial Times
Choose the best heading for each paragraph of the article. (12 points)
Answers Paragraph headings Paragraphs
1 Getting there - and getting back again A Paragraph 1
.
 2 Why websites are the way they are B Paragraph 2
.
3 Features of a site that make users happy C Paragraph 3
.
4 Examining the sites of big organizations D Paragraph 4
.
5 Linking and coordination problems E Paragraph 5
.
6 Criteria for evaluating websites F Paragraph 6
.
Find words or expressions in paragraph 6 to replace the words in italics in the
sentences below: (10 pts)
7. The pages for shareholders and potential investors can be accessed from our home
page.
8. You can find jobs in a range of different countries by looking at our website.
9. As a journalist, I need the right combination of national and international news
when I look at a company website.
10. Our website has many clever features that make it efficient and user-friendly.
11. People who have an interest in an organisation, such as suppliers, employees,
investors and service providers, like to have access to a clearly coordinated
website.

Virtual teams: Global harmony is their dream

If managing diversity in the workplace is a tough task for business leaders, the challenges
of keeping executives from different back-grounds working together efficiently in various
parts of the world is even more difficult, "One of the things you should take into account
is whether your team includes members who don't speak English well,” says Joanne
Yates, a professor of management at MIT Sloan, who has studied the use of
communication and information systems in companies. "Any good virtual team has a
communication plan that includes weekly conference calls or e-mail check-ins, but with a
virtual team where not everyone speaks English well, the regular reports should be in
written mode rather than by phone or conference call."
The other advantage of e-mail communications is that, for those working in different time
zones, group messages can be responded to when it is convenient, reducing the need for
early morning or late-night calls. At the same time, using e-mail can remove much of the
hierarchy of professional communications, since many executives find it far less
intimidating to send an e-mail to someone in a senior position than to telephone them.
However, cultural or behavioural differences that can manifest themselves in face-to-face
working situations can be exacerbated in virtual team working, particularly when the
group has members from different backgrounds. One reason for this is that, when one is
physically immersed in a new culture, it takes less time to adapt to the social norms and
become aware of cultural sensitivities. So those trying to do this al a distance may find it
tougher to fit in, increasing the potential for misunderstandings between team members.
"You don't build the relationships in the same way as you do working face-to-face,” says
Martin Galpin, managing psychologist at Pear Kandola, a UK-based research business
and consultancy of occupational psychologists.
Prof Yates points dut that, when people in, professional groups come from different
backgrounds or cultures, it is often useful to appoint someone in the team who knows
both cultures as the person responsible for selling the norms of working behaviour during
a project that is being carried out from different locations And virtual working certainly
does not eradicate the sort of cultural misunderstandings that can arise in a face-to-face
situation. Prof Yates cites an online miniconference she recently observed that took place
between a group of US and Japanese executives working in the research and development
unit of a Japanese company. "A Japanese executive was putting text into a window for
instant messaging when one of the Americans started asking questions in the middle of
the presentation,” she explains. That was not culturally familiar and required an instant
response, which caused real problems.
From the Financial Times
Here are the answers. Complete the questions. (8 points)
12. What
 A communication plan that includes weekly conference calls or e-mail check-ins.
13. Why
 Because many executives find it far less intimidating to send an e-mail to someone
in a senior position than to telephone them.
14. How
 By being physically immersed in it.
15. Who
 Someone who knows both cultures.

IMPLEMENTING THE CYCLE OF SUCCESS: A CASE STUDY

Within Australia, Australian Hotels Inc (AHI) operates nine hotels and employs over
2000 permanent full-time staff, 300 permanent part-time employees and 100 casual staff.
One of its latest ventures, the Sydney Airport hotel (SAH), opened in March 1995. The
hotel is the closest to Sydney Airport and is designed to provide the best available
accommodation, food and beverage and meeting facilities in Sydney's southern suburbs.
Similar to many international hotel chains, however, AHI has experienced difficulties in
Australia in providing long-term profits for hotel owners, as a result of the country's high
labour-cost structure. In order to develop an economically viable hotel organisation
model, AHI decided to implement some new policies and practices at SAH.
The first of the initiatives was an organisational structure with only three levels of
management - compared to the traditional seven. Partly as a result of this change, there
are 25 percent fewer management positions, enabling a significant saving. This change
also has other implications. Communication, both up and down the organisation, has
greatly improved. Decision-making has been forced down in many cases to front-line
employees. As a result, guest requests are usually met without reference to a supervisor,
improving both customer and employee satisfaction.
The hotel also recognised that it would need a different approach to selecting employees
who would fit in with its new policies. In its advertisements, the hotel stated a preference
for people with some 'service' experience in order to minimize traditional work practices
being introduced into the hotel. Over 7000 applicants filled in application forms for the
120 jobs initially offered at SAH. The balance of the positions at the hotel (30
management and 40 shift leader positions) were predominantly filled by transfers from
other AHI properties.
A series of tests and interviews were conducted with potential employees, which
eventually left 280 applicants competing for the 120 advertised positions. After the final
interview, potential recruits were divided into three categories. Category A was for
applicants exhibiting strong leadership qualities, Category C was for applicants perceived
to be followers, and Category B was for applicants with both leader and follower
qualities. Department heads and shift leaders then composed prospective teams using a
combination of people from all three categories. Once suitable teams were formed, offers
of employment were made to team members.
Another major initiative by SAH was to adopt a totally multi-skilled workforce. Although
there may be some limitations with highly technical jobs such as cooking or maintenance,
wherever possible, employees at SAH are able to work in a wide variety of positions. A
multi-skilled workforce provides far greater management flexibility during peak and
quiet times to transfer employees to needed positions. For example, when office staff are
away on holidays during quiet periods of the year, employees in either food or beverage
or housekeeping departments can temporarily The most crucial way, however, of
improving the labour cost structure at SAH was to find better, more productive ways of
providing customer service. SAH management concluded this would first require a
process of 'benchmarking'. The prime objective of the benchmarking process was to
compare a range of service delivery processes across a range of criteria using teams made
up of employees from different departments within the hotel which interacted with each
other. This process resulted in performance measures that greatly enhanced SAH's ability
to improve productivity and quality.
The front office team discovered through this project that a high proportion of AHI Club
member reservations were incomplete. As a result, the service provided to these guests
was below the standard promised to them as part of their membership agreement.
Reducing the number of incomplete reservations greatly improved guest perceptions of
service.
In addition, a program modeled on an earlier project called 'Take Charge' was
implemented. Essentially, Take Charge provides an effective feedback loop from both
customers and employees. Customer comments, both positive and negative, are recorded
by staff. These are collated regularly to identify opportunities for improvement. Just as
importantly, employees are requested to note down their own suggestions for
improvement. (AHI has set an expectation that employees will submit at least three
suggestions for every one they receive from a customer.) Employee feedback is reviewed
daily and suggestions are implemented within 48 hours, if possible, or a valid reason is
given for non-implementation. If suggestions require analysis or data collection, the Take
Charge team has 30 days in which to address the issue and come up with
recommendations.
Although quantitative evidence of AHI's initiatives at SAH is limited at present, the
anecdotal evidence clearly suggest that these practices are working. Indeed AHI is
progressively rolling out these initiatives in other hotels in Australia, whilst numerous
overseas visitors have come to see how the program works.
Questions 1-5: Choose the appropriate letters A-D and write them in boxes 1-5 on your
answer sheet.
1. The high costs of running AHI's hotels B. firing staff.
are related to their ....... C. hiring staff.
A. management. D. marketing.
B. size. 4. The total number of jobs advertised at
C. staff. the SAH was ........
D. policies. A. 70
2. SAH's new organisational structure B. 120
requires ....... C. 170
A. 75% of the old management positions. D. 280
B. 25% of the old management positions. 5. Categories A, B and C were used to
C. 25% more management positions. select........
D. 5% fewer management positions. A. front office staff.
3. The SAH's approach to organisational B. new teams.
structure required changing practices C. department heads.
in ....... D. new managers.
A. industrial relations.
Questions 6-13: Complete the following summary of the last four paragraphs of Reading
Passage 38 using ONE OR TWO WORDS from the Reading Passage for each answer.
Write your answers in boxes 6-13 on your answer sheet.
WHAT THEY DID AT SAH
Teams of employees were selected from different hotel departments to participate in
a ...... (6) ....... exercise. The information collected was used to compare ...... (7) ......
processes which, in turn, led to the development of ...... (8) ...... that would be used to
increase the hotel's capacity to improve ...... (9) ...... as well as quality. Also, an older
program known as ...... (10) ...... was introduced at SAH. In this program,...... (11) ...... is
sought from customers and staff. Wherever possible ..... (12) ...... .suggestions are
implemented within 48 hours. Other suggestions are investigated for their feasibility for a
period of up to ....... ( 13 ) ......

Green Wave Washes Over Mainstream Shopping

Research in Britain has shown that green consumers' continue to flourish as a significant
group amongst shoppers. This suggests that politicians who claim environmentalism is
yesterday's issue may be seriously misjudging the public mood.
A report from Mintel, the market research organisation, says that despite the recession
and financial pressures, more people than ever want to buy environmentally friendly
products and a 'green wave' has swept through consumerism, taking in people previously
untouched by environmental concerns. The recently published report also predicts that
the process will repeat itself with 'ethical' concerns, involving issues such as fair trade
with the Third World and the social record of businesses. Companies will have to be more
honest and open in response to this mood.
Mintel's survey, based on nearly 1,000 consumers, found that the proportion who look for
green products and are prepared to pay more for them has climbed from 53 percent in
1990 to around 60 per cent in 1994. On average, they will pay 13 percent more for such
products, although this percentage is higher among women, managerial and professional
groups and those aged 35 to 44.
Between 1990 and 1994 the proportion of consumers claiming to be unaware of or
unconcerned about green issues fell from 18 to 10 percent but the number of green
spenders among older people and manual workers has risen substantially. Regions such
as Scotland have also caught up with the south of England in their environmental
concerns. According to Mintel, the image of green consumerism as associated in the past
with the more eccentric members of society has virtually disappeared. The consumer
research manager for Mintel, Angela Hughes, said it had become firmly established as a
mainstream market. She explained that as far as the average person is concerned
environmentalism has not gone off the boil'. In fact, it has spread across a much wider
range of consumer groups, ages and occupations.
Mintel's 1994 survey found that 13 percent of consumers are 'very dark green', nearly
always buying environmentally friendly products, 28 per cent are 'dark green', trying 'as
far as possible' to buy such products, and 21 percent are 'pale green' - tending to buy
green products if they see them. Another 26 per cent are 'armchair greens'; they said they
care about environmental issues but their concern does not affect their spending habits.
Only 10 percent say they do not care about green issues.
Four in ten people are 'ethical spenders', buying goods which do not, for example, involve
dealings with oppressive regimes. This figure is the same as in 1990, although the
number of 'armchair ethicals' has risen from 28 to 35 percent and only 22 percent say
they are unconcerned now, against 30 per cent in 1990. Hughes claims that in the twenty-
first century, consumers will be encouraged to think more about the entire history of the
products and services they buy, including the policies of the companies that provide them
and that this will require a greater degree of honesty with consumers.
Among green consumers, animal testing is the top issue - 48 percent said they would be
deterred from buying a product it if had been tested on animals -followed by concerns
regarding irresponsible selling, the ozone layer, river and sea pollution, forest destruction,
recycling and factory farming. However, concern for specific issues is lower than in
1990, suggesting that many consumers feel that Government and business have taken on
the environmental agenda.
Questions 1-6: Do the following statements agree with the claims of the writer of
Reading Passage 1? In boxes 1-6 on your answer sheet, write: YES/NO/NG
1. The research findings report commercial rather than political trends.
2. Being financially better off has made shoppers more sensitive to buying 'green'.
3. The majority of shoppers are prepared to pay more for the benefit of the environment
according to the research findings.
4. Consumers' green shopping habits are influenced by Mintel's findings.
5. Mintel have limited their investigation to professional and managerial groups.
6. Mintel undertakes market surveys on an annual basis.
Questions 7-9: Choose the appropriate letters A-D and write them in boxes 7-9 on your
answer sheet.
7. Politicians may have 'misjudged the 8. What is Mintel?
public mood' because ... A. an environmentalist group
A. they are pre-occupied with the B. a business survey organisation
recession and financial problems. C. an academic research team
B. there is more widespread interest in D. a political organisation
the environment agenda than they 9. A consumer expressing concern for
anticipated. environmental issues without actively
C. consumer spending has increased supporting such principles is.....
significantly as a result of 'green' A. an 'ethical spender'.
pressure. B. a 'very dark green' spender.
D. shoppers are displeased with C. an 'armchair green'.
government policies on a range of issues. D. a 'pale green' spender.
Questions 10-13: Complete the summary using words from the box below. Write your
answers in boxes 10-13 on your answer sheet.
NB There are more answers than spaces, so you will not use them all.
The Mintel report suggests that in future companies will be forced to practise greater ......
(10) ...... in their dealings because of the increased awareness amongst...... (11)...... of
ethical issues. This prediction is supported by the growth in the number of ...... (12)......
identified in the most recent survey published. As a consequence, it is felt that companies
will have to think more carefully about their ...... (13).......
environmental research ethical spenders social awareness
armchair ethicals consumers financial
honesty and openness politicians constraints
environmentalists political beliefs social record.

Delivering the Goods

The vast expansion in international trade owes much to a revolution in the business of
moving freight.
A. International trade is growing at a startling pace. While the global economy has been
expanding at a bit over 3% a year, the volume of trade has been rising at a compound
annual rate of about twice that. Foreign products, from meat to machinery, play a more
important role in almost every economy in the world, and foreign markets now tempt
businesses that never much worried about sales beyond their nation's borders.
B. What lies behind this explosion in international commerce? The general worldwide
decline in trade barriers, such as customs duties and import quotas, is surely one
explanation. The economic opening of countries that have traditionally been minor
players is another. But one force behind the import-export boom has passed all but
unnoticed: the rapidly falling cost of getting goods to market. Theoretically, in the world
of trade, shipping costs do not matter. Goods, once they have been made, are assumed to
move instantly and at no cost from place to place. The real world, however, is full of
frictions. Cheap labour may make Chinese clothing competitive in America, but if delays
in shipment tie up working capital and cause winter coats to arrive in spring, trade may
lose its advantages.
C. At the turn of the 20th century, agriculture and manufacturing were the two most
important sectors almost everywhere, accounting for about 70% of total output in
Germany, Italy and France, and 40-50% in America, Britain and Japan. International
commerce was therefore dominated by raw materials, such as wheat, wood and iron ore,
or processed commodities, such as meat and steel. But these sorts of products are heavy
and bulky and the cost of transporting them relatively high.
D. Countries still trade disproportionately with their geographic neighbours. Over time,
however, world output has shifted into goods whose worth is unrelated to their size and
weight. Today, it is finished manufactured products that dominate the flow of trade, and,
thanks to technological advances such as lightweight components, manufactured goods
themselves have tended to become lighter and less bulky. As a result, less transportation
is required for every dollar's worth of imports or exports.
E. To see how this influences trade, consider the business of making disk drives for
computers. Most of the world's disk-drive manufacturing is concentrated in South-east
Asia. This is possible only because disk drives, while valuable, are small and light and so
cost little to ship. Computer manufacturers in Japan or Texas will not face hugely bigger
freight bills if they import drives from Singapore rather than purchasing them on the
domestic market. Distance, therefore, poses no obstacle to the globalisation of the disk-
drive industry.
F. This is even more true of the fast-growing information industries. Films and compact
discs cost little to transport, even by aeroplane. Computer software can be 'exported'
without ever loading it onto a ship, simply by transmitting it over telephone lines from
one country to another, so freight rates and cargo-handling schedules become
insignificant factors in deciding where to make the product. Businesses can locate based
on other considerations, such as the availability of labour, while worrying less about the
cost of delivering their output.
G. In many countries deregulation has helped to drive the process along. But, behind the
scenes, a series of technological innovations known broadly as containerisation and inter-
modal transportation has led to swift productivity improvements in cargo-handling. Forty
years ago, the process of exporting or importing involved a great many stages of
handling, which risked portions of the shipment being damaged or stolen along the way.
The invention of the container crane made it possible to load and unload containers
without capsizing the ship and the adoption of standard container sizes allowed almost
any box to be transported on any ship. By 1967, dual-purpose ships, carrying loose cargo
in the hold* and containers on the deck, were giving way to all-container vessels that
moved thousands of boxes at a time.
H. The shipping container transformed ocean shipping into a highly efficient, intensely
competitive business. But getting the cargo to and from the dock was a different story.
National governments, by and large, kept a much firmer hand on truck and railroad tariffs
than on charges for ocean freight. This started changing, however, in the mid-1970s,
when America began to deregulate its transportation industry. First airlines, then road
hauliers and railways, were freed from restrictions on what they could carry, where they
could haul it and se what price they could charge. Big productivity gains resulted.
Between 1985 and 1996, for example, America's freight railways dramatically reduced
their employment, trackage, and their fleets of locomotives - while increasing the amount
of cargo they hauled. Europe's railways have also shown marked, albeit smaller,
productivity improvements.
I. In America the period of huge productivity gains in transportation may be almost over,
but in most countries, the process still has far to go. State ownership of railways and
airlines, regulation of freight rates and toleration of anti-competitive practices, such as
cargo-handling monopolies, all keep the cost of shipping unnecessarily high and deter
international trade. Bringing these barriers down would help the world's economies grow
even closer.
*hold: ship's storage area below deck
Questions 14-17
Reading Passage 2 has nine paragraphs, A-I. Write the correct letter A-I in boxes 14-17
on your answer sheet. Which paragraph contains the following information?
14. a suggestion for improving trade in the future
15. the effects of the introduction of electronic delivery
16. the similar cost involved in transporting a product from abroad or from a local
supplier
17. the weakening relationship between the value of goods and the cost of their delivery
Questions 18-22
Do the following statements agree with the information given in Reading Passage 2? In
boxes 18-22 on your answer sheet, write: TRUE/FALSE/NG
18. International trade is increasing at a greater rate than the world economy.
19. Cheap labour guarantees effective trade conditions.
20. Japan imports more meat and steel than France.
21. Most countries continue to prefer to trade with nearby nations.
22. Small computer components are manufactured in Germany.
Questions 23-26
Complete the summary using the list of words, A-K, below. Write the correct letter, A-K,
in boxes 23-26 on your answer sheet.
THE TRANSPORT REVOLUTION
Modern cargo-handling methods have had a significant effect on 23 ....................... as the
business of moving freight around the world becomes increasingly streamlined.
Manufacturers of computers, for instance, are able to import 24 ....................... from
overseas, rather than having to rely on a local supplier. The introduction of
25 ....................... has meant that bulk cargo can be safely and efficiently moved over
long distances. While international shipping is now efficient, there is still a need for
governments to reduce 26 ....................... in order to free up the domestic cargo sector.
A. tariffs D. output G. trade J. software
B. components E. employees H. freight K. international
C. container F. insurance I. fares standards
ships costs

MEASURING ORGANIZATIONAL PERFORMANCE

There is clear-cut evidence that, for a period of at least one year, supervision, which
increases the direct pressure for productivity can achieve significant increases in
production. However, such short-term increases are obtained only at a substantial and
serious cost to the organisation.
To what extent can a manager make an impressive earnings record over a short period of
one to three years by exploiting the company’s investment in the human organisation in
his plant or division? To what extent will the quality of his organisation suffer if he does
so? The following is a description of an important study conducted by the Institute for
Social Research designed to answer these questions.
The study covered 500 clerical employees in four parallel divisions. Each division was
organised in exactly the same way, used the same technology, did exactly the same kind
of work, and had employees of comparable aptitude.
Productivity in all four of the divisions depended on the number of clerks involved. The
work entailed the processing of accounts and generating of invoices. Although the
volume of work was considerable, the nature of the business was such that it could only
be processed as it came along. Consequently, the only way in which productivity could be
increased was to change the size of the workgroup.
The four divisions were assigned to two experimental programmes on a random basis.
Each programme was assigned at random a division that had been historically high in
productivity and a division that had been below average in productivity. No attempt was
made to place a division in the programme that would best fit its habitual methods of
supervision used by the manager, assistant managers, supervisors and assistant
supervisors.
The experiment at the clerical level lasted for one year. Beforehand, several months were
devoted to planning, and there was also a training period of approximately six months.
Productivity was measured continuously and computed weekly throughout the year. The
attitudes of employees and supervisory staff towards their work were measured just
before and after the period.
Turning now to the heart of the study, in two divisions an attempt was made to change the
supervision so that the decision levels were pushed down and detailed supervision of the
workers reduced. More general supervision of the clerks and their supervisors was
introduced. In addition, the managers, assistant managers, supervisors and assistant
supervisors of these two divisions were trained in group methods of leadership, which
they endeavoured to use as much as their skill would permit during the experimental year.
For easy reference, the experimental changes in these two divisions will be labelled the
‘participative programme!
Result of the Experiment
In the other two divisions, by contrast, the programme called for modifying the
supervision so as to increase the closeness of supervision and move the decision levels
upwards. This will be labelled the ‘hierarchically controlled programme’. These changes
were accomplished by a further extension of the scientific management approach. For
example, one of the major changes made was to have the jobs timed and to have standard
times computed. This showed that these divisions were overstaffed by about 30%. The
general manager then ordered the managers of these two divisions to cut staff by 25%.
This was done by transfers without replacing the persons who left; no one was to be
dismissed.
Changes in Productivity
Figure 1 shows the changes in salary costs per unit of work, which reflect the change in
productivity that occurred in the divisions. As will be observed, the hierarchically
controlled programmes increased productivity by about 25%. This was a result of the
direct orders from the general manager to reduce staff by that amount. Direct pressures
produced a substantial increase in production.
A significant increase in productivity of 2O°/o was also achieved in the participative
programme, but this was not as great an increase as in the hierarchically controlled
programme. To bring about this improvement, the clerks themselves participated in the
decision to reduce the size of the work group. (They were aware of course that
productivity increases were sought by management in conducting these experiments.)
Obviously, deciding to reduce the size of a work group by eliminating some of its
members is probably one of the most difficult decisions for a work group to make. Yet the
clerks made it. In fact, one division in the participative programme increased its
productivity by about the same amount as each of the two divisions in the hierarchically
controlled programme. The other participative division, which historically had been the
poorest of all the divisions, did not do so well and increased productivity by only 15%.
Changes in Attitude
Although both programmes had similar effects on productivity, they had significantly
different results in other respects. The productivity increases in the hierarchically
controlled programme were accompanied by shifts in an adverse direction in such factors
as loyalty, attitudes, interest, and involvement in the work. But just the opposite was true
in the participative programme.
For example, Figure 2 shows that when more general supervision and increased
participation were provided, the employees’ feeling of responsibility to see that the work
got done increased. Again, when the supervisor was away, they kept on working. In the
hierarchically controlled programme, however, the feeling of responsibility decreased,
and when the supervisor was absent, work tended to stop.
As Figure 3 shows, the employees in the participative programme at the end of the year
felt that their manager and assistant manager were ‘closer to them’ than at the beginning
of the year. The opposite was true in the hierarchical programme. Moreover, as Figure 4
shows, employees in the participative programme felt that their supervisors were more
likely to ‘pull’ for them, or for the company and them, and not be solely interested in the
company, while in the hierarchically controlled programme, the opposite trend occurred.
Questions 28 – 30: Choose the appropriate letters A-D and write them in boxes 28-30 on
your answer sheet.
28. The experiment was designed to … C. had identical patterns of organisation.
A. establish whether increased D. were randomly chosen for the
productivity should be sought at any experiment.
cost. 30. Before the experiment …
B. show that four divisions could use the A. the four divisions were carefully
same technology. selected to suit a specific programme.
C. perfect a system for processing B. each division was told to reduce its
accounts. level of productivity.
D. exploit the human organisation of a C. the staff involved spent a number of
company in order to increase profits. months preparing for the study.
29. The four divisions … D. the employees were questioned about
A. each employed a staff of 500 clerks. their feelings towards the study.
B. each had equal levels of productivity.
Questions 31-36: Complete the summary below. Choose ONE word from Reading
Passage 3 for each answer. Write your answers in boxes 31-36 on your answer sheet.
This experiment involved an organisation comprising four divisions, which were divided
into two programmes: the hierarchically controlled programme and the participative
programme. For a period of one year a different method of ……. 31 ……. was used in
each programme. Throughout this time …….. 32 …….. was calculated on a weekly
basis. During the course of the experiment, the following changes were made in an
attempt to improve performance.
In the participative programme:
 supervision of all workers was ……. 33 …….
 supervisory staff were given training in …….. 34 …….
In the hierarchically controlled programme:
 supervision of all workers was increased.
 work groups were found to be .…… 35 …… by 30%.
 the workforce was .….. 36 …… by 25%.
Questions 37- 40: Look at Figures 1, 2, 3 and 4 in Reading Passage 3. Choose the most
appropriate label, A—I, for each Figure from the box below. Write your answers in boxes
37- 40 on your answer sheet.
A. Employees’ interest in the company
B. Cost increases for the company
C. Changes in productivity
D. Employees’ feelings of responsibility towards completion of work
E. Changes in productivity when supervisor was absent
F. Employees’ opinion as to extent of personal support from management
G. Employees feel closer to their supervisors
H. Employees’ feelings towards increased supervision
I. Supervisors’ opinion as to closeness of work group
37. Fig 1…………………………
38. Fig 2…………………………
39. Fig 3…………………………
40. Fig 4…………………………

FIRST IMPRESSIONS COUNT

A. Traditionally uniforms were — and for some industries still are — manufactured to
protect the worker. When they were first designed, it is also likely that all uniforms made
symbolic sense - those for the military, for example, were originally intended to impress
and even terrify the enemy; other uniforms denoted a hierarchy - chefs wore white
because they worked with flour, but the main chef wore a black hat to show he
supervised.
B. The last 30 years, however, have seen an increasing emphasis on their role in
projecting the image of an organisation and in uniting the workforce into a homogeneous
unit — particularly in ‘customer facing" industries, and especially in financial services
and retailing. From uniforms and workwear has emerged ‘corporate clothing’. "The
people you employ are your ambassadors," says Peter Griffin, managing director of a
major retailer in the UK. "What they say, how they look, and how they behave is terribly
important." The result is a new way of looking at corporate workwear. From being a
simple means of identifying who is a member of staff, the uniform is emerging as a new
channel of marketing communication.
C. Truly effective marketing through visual cues such as uniforms is a subtle art,
however. Wittingly or unwittingly, how we look sends all sorts of powerful subliminal
messages to other people. Dark colours give an aura of authority while lighter pastel
shades suggest approachability. Certain dress style creates a sense of conservatism, others
a sense of openness to new ideas. Neatness can suggest efficiency but, if it is overdone, it
can spill over and indicate an obsession with power. "If the company is selling quality,
then it must have quality uniforms. If it is selling style, its uniforms must be stylish. If it
wants to appear innovative, everybody can’t look exactly the same. Subliminally we see
all these things," says Lynn Elvy, a director of image consultants House of Colour.
D. But translating corporate philosophies into the right mix of colour, style, degree of
branding and uniformity can be a fraught process. And it is not always successful.
According to Company Clothing magazine, there are 1000 companies supplying the
workwear and corporate clothing market. Of these, 22 account for 85% of total sales -
£380 million in 1994.
E. A successful uniform needs to balance two key sets of needs. On the one hand, no
uniform will work if staff feel uncomfortable or ugly. Giving the wearers a choice has
become a key element in the way corporate clothing is introduced and managed. On the
other, it is pointless if the look doesn’t express the business’s marketing strategy. The
greatest challenge in this respect is time. When it comes to human perceptions, first
impressions count. Customers will size up the way staff look in just a few seconds, and
that few seconds will colour their attitudes from then on. Those few seconds can be so
important that big companies are prepared to invest years, and millions of pounds, getting
them right.
F. In addition, some uniform companies also offer rental services. "There will be an
increasing specialisation in the marketplace," predicts Mr Blyth, Customer Services
Manager of a large UK bank. The past two or three years have seen consolidation.
Increasingly, the big suppliers are becoming ‘managing agents’, which means they offer a
total service to put together the whole complex operation of a company’s corporate
clothing package - which includes reliable sourcing, managing the inventory, budget
control and distribution to either central locations or to each staff member individually.
Huge investments have been made in new systems, information technology and amassing
quality assurance accreditations.
G. Corporate clothing does have potentials for further growth. Some banks have yet to
introduce a full corporate look; police forces are researching a completely new look for
the 21st century. And many employees now welcome a company wardrobe. A recent
survey of staff found that 90 per cent welcomed having clothing which reflected the
corporate identity.
Questions 28-33: The passage First Impressions Count has seven paragraphs A—G.
Which paragraphs discuss the following points? Write the appropriate letters A-G in
boxes 28-33 on your answer sheet.
Example: the number of companies supplying the corporate clothing market. Answer: D
28. different types of purchasing agreement
29. the original purposes of uniforms
30. the popularity rating of staff uniforms
31. involving employees in the selection of a uniform
32. the changing significance of company uniforms
33. perceptions of different types of dress
Questions 34-40: Do the following statements agree with the views of the writer of the
passage? In boxes 34-40 on your answer sheet write YES/NO/NG

34. Uniforms were more carefully made in the past than they are today.
35. Uniforms make employees feel part of a team.
36. Using uniforms as a marketing tool requires great care.
37. Being too smart could have a negative impact on customers.
38. Most businesses that supply company clothing are successful.
39. Uniforms are best selected by marketing consultants.
40. Clothing companies are planning to offer financial services in the future.

Micro-Enterprise Credit for Street Youth

"I am from a large, poor family and for many years we have done without breakfast. Ever
since I joined the Street Kids International program I have been able to buy my family
sugar and buns for breakfast. I have also bought myself decent second-hand clothes and
shoes."
Doreen Soko
"We’ve had business experience. Now I’m confident to expand what we’ve been doing.
I’ve learnt cash management, and the way of keeping money so we save for re-
investment. Now business is a part of our lives. As well, we didn’t know each other before
– now we’ve made new friends."
Fan Kaoma
Participants in the Youth Skills Enterprise Initiative Program, Zambia
Introduction
Although small-scale business training and credit programs have become more common
throughout the world, relatively little attention has been paid to the need to direct such
opportunities to young people. Even less attention has been paid to children living on the
street or in difficult circumstances.
Over the past nine years, Street Kids International (S.K.I.) has been working with partner
organisations in Africa, Latin America and India to support the economic lives of street
children. The purpose of this paper is to share some of the lessons S.K.I. and our partners
have learned.
Background
Typically, children do not end up on the streets due to a single cause, but to a combination
of factors: a dearth of adequately funded schools, the demand for income at home, family
breakdown and violence. The street may be attractive to children as a place to find
adventurous play and money. However, it is also a place where some children are
exposed, with little or no protection, to exploitative employment, urban crime, and abuse.
Children who work on the streets are generally involved in unskilled, labour-intensive
tasks which require long hours, such as shining shoes, carrying goods, guarding or
washing cars, and informal tracing. Some may also earn income through begging, or
through theft and illegal activities. At the same time, there are street children who take
pride in supporting themselves and their families and who often enjoy their work. Many
children may choose entrepreneurship because it allows them a degree of independence,
is less exploitative than many forms of paid employment, and is flexible enough to allow
them to participate in other activities such as education and domestic tasks.
Street Business Partnerships
S.K.I. has worked with partner organisations in Latin America, Africa and India to
develop innovative opportunities for street children to earn income.
 The S.K.I. Bicycle Courler Service first started in the Sudan. Participants in this
enterprise were supplied with bicycles, which they used to deliver parcels and
messages, and which they were required to pay for gradually from their wages. A
similar program was taken up in Bangalore, India.
 Another successful project, The Shoe Shine Collective, was a partnership program
with the Y.W.C.A. in the Dominican Republic. In this project, participants were
 lent money to purchase shoe shine boxes. They were also given a sale place to
store their equipment and facilities for individual savings plans.
 The Youth Skills Enterprise initiative in Zambia is a joint program with the Red
Cross Society and the Y.W.C.A. Street youths are supported to start their own
small business through business training, life skills training and access to credit.
Lessons learned
The following lessons have emerged from the programs that S.K.I. and partner
organisations have created.
 Being an entrepreneur is not for everyone, nor for every street child. Ideally,
potential participants will have been involved in the organisation’s programs for at
least six months, and trust and relationship building will have already been
established.
 The involvement of the participants has been essential to the development of
relevant programs. When children have had a major role in determining
procedures, they are more likely to abide by and enforce them.
 It is critical for all loans to be linked to training programs that include the
development of basic business and life skills.
 There are tremendous advantages to involving parents or guardians in the
program, where such relationships exits. Home visits allow staff the opportunity to
know where the participants live, and to understand more about each individual’s
situation.
 Small loans are provided initially for purchasing fixed assets such as bicycles,
shoe shine kits and basic building materials for a market stall. As the entrepreneurs
gain experience, the enterprises can be gradually expanded and consideration can
be given to increasing loan amounts. The loan amounts in S.K.I. programs have
generally ranged from US$90-$100.
 All S.K.I. programs have charged interest on the loans, primarily to get the
entrepreneurs used to the concept of paying interest on borrowed money.
Generally, the rates have been modest (lower than bank rates)
Conclusion
There is a need to recognise the importance of access to credit for impoverished young
people seeking to fulfill economic needs. The provision of small loans to support the
entrepreneurial dreams and ambitions of youth can be an effective means to help them
change their lives. However, we believe that credit must be extended in association with
other types of support that help participants develop critical skills as well as productive
businesses.
Questions 1-4: Choose the correct letter, A, B, C or D. Write your answers in boxes 1-4
on your answer sheet.
1. The quotations in the box at the children.
beginning of the article D. highlight the benefits to society of
A. exemplify the effects of S.K.I. S.K.I.
B. explain why S.K.I. was set up. 2. The main purpose of S.K.I. is to
C. outline the problems of street A. draw the attention of governments to
the problem of street children. A. unemployment
B. provide schools and social support for B. war
street children. C. poverty
C. encourage the public to give money to D. crime
street children. 4. In order to become more independent,
D. give business training and loans to street children may
street children. A. reject paid employment.
3. Which of the following is mentioned B. leave their families.
by the writer as a reason why children C. set up their own business.
end up living on the streets? D. employ other children.
Questions 5-8: Complete the table below. Choose NO MORE THAN THREE WORDS
from Reading Passage 1 for each answer. Write your answers in boxes 5-8 on your
answer sheet.

Questions 9-12: Do the following statements agree with the claims of the writer in
Reading Passage 1? In boxes 9-12 on your answer sheet, write YES/NO/NG
9. Any street child can set up their own small business if given enough support.
10. In some cases, the families of street children may need financial support from S.K.I.
11. Only one fixed loan should be given to each child.
12. The children have to pay back slightly more money than they borrowed.
Questions 13: Choose the correct letter, A, B, C or D. Write your answer in box 13 on
your answer sheet.
The writers conclude that money should only be lent to street children
A. as part of a wider program of aid.
B. for programs that are not too ambitious.
C. when programs are supported by local businesses.
D. if the projects planned are realistic and useful.
 BAKELITE
The birth of modern plastics
In 1907, Leo Hendrick Baekeland, a Belgian scientist working in New York, discovered
and patented a revolutionary new synthetic material. His invention, which he named
‘Bakelite’, was of enormous technological importance, and effectively launched the
modern plastics industry.
The term ‘plastic’ comes from the Greek plassein, meaning ‘to mould’. Some plastics are
derived from natural sources, some are semi-synthetic (the result of chemical action on a
natural substance), and some are entirely synthetic, that is, chemically engineered from
the constituents of coal or oil. Some are ‘thermoplastic’, which means that, like
candlewax, they melt when heated and can then be reshaped. Others are ‘thermosetting’:
like eggs, they cannot revert to their original viscous state, and their shape is thus fixed
for ever., Bakelite had the distinction of being the first totally synthetic thermosetting
plastic.
The history of today’s plastics begins with the discovery of a series of semi-synthetic
thermoplastic materials in the mid-nineteenth century. The impetus behind the
development of these early plastics was generated by a number of factors – immense
technological progress in the domain of chemistry, coupled with wider cultural changes,
and the pragmatic need to find acceptable substitutes for dwindling supplies of ‘luxury’
materials such as tortoiseshell and ivory.
Baekeland’s interest in plastics began in 1885 when, as a young chemistry student in
Belgium, he embarked on research into phenolic resins, the group of sticky substances
produced when phenol (carbolic acid) combines with an aldehyde (a volatile fluid similar
to alcohol). He soon abandoned the subject, however, only returning to it some years
later. By 1905 he was a wealthy New Yorker, having recently made his fortune with the
invention of a new photographic paper. While Baekeland had been busily amassing
dollars, some advances had been made in the development of plastics. The years 1899
and 1900 had seen the patenting of the first semi-synthetic thermosetting material that
could be manufactured on an industrial scale. In purely scientific terms, Baekeland’s
major contribution to the field is not so much the actual discovery of the material to
which he gave his name, but rather the method by which a reaction between phenol and
formaldehyde could be controlled, thus making possible its preparation on a commercial
basis. On 13 July 1907, Baekeland took out his famous patent describing this preparation,
the essential features of which are still in use today.
The original patent outlined a three-stage process, in which phenol and formaldehyde
(from wood or coal) were initially combined under vacuum inside a large egg-shaped
kettle. The result was a resin known as Novalak, which became soluble and malleable
when heated. The resin was allowed to cool in shallow trays until it hardened, and then
broken up and ground into powder. Other substances were then introduced: including
fillers, such as woodflour, asbestos or cotton, which increase strength and. moisture
resistance, catalysts (substances to speed up the reaction between two chemicals without
joining to either) and hexa, a compound of ammonia and formaldehyde which supplied
the additional formaldehyde necessary to form a thermosetting resin. This resin was then
left to cool and harden, and ground up a second time. The resulting granular powder was
raw Bakelite, ready to be made into a vast range of manufactured objects. In the last
stage, the heated Bakelite was poured into a hollow mould of the required shape and
subjected to extreme heat and pressure; thereby ‘setting’ its form for life.
The design of Bakelite objects, everything from earrings to television sets, was governed
to a large extent by the technical requirements of the moulding process. The object could
not be designed so that it was locked into the mould and therefore difficult to extract. A
common general rule was that objects should taper towards the deepest part of the mould,
and if necessary the product was moulded in separate pieces. Moulds had to be carefully
designed so that the molten Bakelite would flow evenly and completely into the mould.
Sharp corners proved impractical and were thus avoided, giving rise to the smooth,
‘streamlined’ style popular in the 1930s. The thickness of the walls of the mould was also
crucial: thick walls took longer to cool and harden, a factor which had to be considered
by the designer in order to make the most efficient use of machines.
Baekeland’s invention, although treated with disdain in its early years, went on to enjoy
an unparalleled popularity which lasted throughout the first half of the twentieth century.
It became the wonder product of the new world of industrial expansion – ‘the material of
a thousand uses’. Being both non-porous and heat-resistant, Bakelite kitchen goods were
promoted as being germ-free and sterilisable. Electrical manufacturers seized on its
insulating: properties, and consumers everywhere relished its dazzling array of shades,
delighted that they were now, at last, no longer restricted to the wood tones and drab
browns of the prepfastic era. It then fell from favour again during the 1950s, and was
despised and destroyed in vast quantities. Recently, however, it has been experiencing
something of a renaissance, with renewed demand for original Bakelite objects in the
collectors’ marketplace, and museums, societies and dedicated individuals once again
appreciating the style and originality of this innovative material.
Questions 1-3: Complete the summary. Choose ONE WORD ONLY from the passage for
each answer. Write your answers in boxes 1-3 on your answer sheet.
Some plastics behave in a similar way to 1 ……………. in that they melt under heat and
can be moulded into new forms. Bakelite was unique because it was the first material to
be both entirely 2……………… in origin, and thermosetting.
There were several reasons for the research into plastics in the nineteenth century, among
them the great advances that had been made in the field of 3 …………………… and the
search for alternatives to natural resources like ivory.
Questions 4-8: Complete the flow-chart. Choose ONE WORD ONLY from the passage
for each answer. Write your answers in boxes 4-8 on your answer sheet.

Questions 9-10: Choose two letters A-E. Write your answers in boxes 9 and 10 on your
answer sheet.
Which TWO of the following factors influencing the design of Bakelite objects are
mentioned in the text?
A. the function which the object would could be removed from the mould
serve D. the limitations of the materials used to
B. the ease with which the resin could manufacture the mould
fill the mould E. the fashionable styles of the period
C. the facility with which the object
Questions 11-13: Do the following statements agree with the information given in
Reading Passage 1? In boxes 11-13 on your answer sheet, write TRUE/FALSE?NG
11. Modern-day plastic preparation is based on the same principles as that patented in
1907.
12. Bakelite was immediately welcomed as a practical and versatile material.
13. Bakelite was only available in a limited range of colours.

Motivating Employees under Adverse Condition

THE CHALLENGE
It is a great deal easier to motivate employees in a growing organisation than a declining
one. When organisations are expanding and adding personnel, promotional opportunities,
pay rises, and the excitement of being associated with a dynamic organisation create
feelings of optimism. Management is able to use the growth to entice and encourage
employees. When an organisation is shrinking, the best and most mobile workers are
prone to leave voluntarily. Unfortunately, they are the ones the organisation can least
afford to lose - those with the highest skills and experience. The minor employees remain
because their job options are limited.
Morale also suffers during decline. People fear they may be the next to be made
redundant. Productivity often suffers, as employees spend their time sharing rumours and
providing one another with moral support rather than focusing on their jobs. For those
whose jobs are secure, pay increases are rarely possible. Pay cuts, unheard of during
times of growth, may even be imposed. The challenge to management is how to motivate
employees under such retrenchment conditions. The ways of meeting this challenge can
be broadly divided into six Key Points, which are outlined below.
KEY POINT ONE
There is an abundance of evidence to support the motivational benefits that result from
carefully matching people to jobs. For example, if the job is running a small business or
an autonomous unit within a larger business, high achievers should be sought. However,
if the job to be filled is a managerial post in a large bureaucratic organisation, a candidate
who has a high need for power and a low need for affiliation should be selected.
Accordingly, high achievers should not be put into jobs that are inconsistent with their
needs. High achievers will do best when the job provides moderately challenging goals
and where there is independence and feedback. However, it should be remembered that
not everybody is motivated by jobs that are high in independence, variety and
responsibility.
KEY POINT TWO
The literature on goal-setting theory suggests that managers should ensure that all
employees have specific goals and receive comments on how well they are doing in those
goals. For those with high achievement needs, typically a minority in any organisation,
the existence of external goals is less important because high achievers are already
internally motivated. The next factor to be determined is whether the goals should be
assigned by a manager or collectively set in conjunction with the employees. The answer
to that depends on perceptions the culture, however, goals should be assigned. If
participation and the culture are incongruous, employees are likely to perceive the
participation process as manipulative and be negatively affected by it.
KEY POINT THREE
Regardless of whether goals are achievable or well within management's perceptions of
the employee's ability, if employees see them as unachievable they will reduce their
effort. Managers must be sure, therefore, that employees feel confident that their efforts
can lead to performance goals. For managers, this means that employees must have the
capability of doing the job and must regard the appraisal process as valid.
KEY POINT FOUR
Since employees have different needs, what acts as a reinforcement far one may not for
another. Managers could use their knowledge of each employee to personalise the
rewards over which they have control. Some of the more obvious rewards that managers
allocate include pay, promotions, autonomy, job scope and depth, and the opportunity to
participate in goal-setting and decision-making.
KEY POINT FIVE
Managers need to make rewards contingent on performance. To reward factors other than
performance will only reinforce those other factors. Key rewards such as pay increases
and promotions or advancements should be allocated for the attainment of the employee's
specific goals. Consistent with maximising the impact of rewards, managers should look
for ways to increase their visibility. Eliminating the secrecy surrounding pay by openly
communicating everyone's remuneration, publicising performance bonuses and allocating
annual salary increases in a lump sum rather than spreading them out over an entire year
are examples of actions that will make rewards more visible and potentially more
motivating.
KEY POINT SIX
The way rewards ore distributed should be transparent so that employees perceive that
rewards or outcomes are equitable and equal to the inputs given. On a simplistic level,
experience, abilities, effort and other obvious inputs should explain differences in pay,
responsibility and other obvious outcomes. The problem, however, is complicated by the
existence of dozens of inputs and outcomes and by the Fact that employee groups place
different degrees of importance on them. For instance, a study comparing clerical and
production workers identified nearly twenty inputs and outcomes. The clerical workers
considered factors such as quality of work performed and job knowledge near the top of
their list, but these were at the bottom of the production workers' list. Similarly,
production workers thought that the most important inputs were intelligence and personal
involvement with task accomplishment, two factors that were quite low in the importance
ratings of the clerks. There were also important, though less dramatic, differences on the
outcome side. For example, production workers rated advancement very highly, whereas
clerical workers rated advancement in the lower third of their list. Such findings suggest
that one person's equity is another's inequity, so an ideal should probably weigh different
inputs and outcomes according to employee group.
Questions 14-18: Reading Passage 2 contains six Key Points. Choose the correct
heading for Key Points TWO to SIX from the list of headings below. Write the correct
number, i-viii, in boxes 14-18 on your answer sheet.
List of Headings
i. Ensure the reward ii. Match rewards to iii. Ensure targets are
system is fair individuals realistic
iv. Link rewards to responsibility vii. Establish targets and
achievement vi. Recognise changes in give feedback
v. Encourage managers employees' performance viii. Ensure employees
to take more over time are suited to their jobs
Example: Key Point One. Answer: viii
14. Key Point Two 17. Key Point Five
15. Key Point Three 18. Key Point Six
16. Key Point Four

Questions 19-24: Do the following statements agree with the views of the writer in
Reading Passage 2? In boxes 19-24 on your answer sheet, write YES/NO/NG
19. A shrinking organisation tends to lose its less skilled employees rather than its more
skilled employees.
20. It is easier to manage a small business ban a large business.
21. High achievers are well-suited to team work.
22. Some employees can feel manipulated when asked to participate in goal-setting.
23. The staff appraisal process should be designed by employees.
24. Employees' earnings should be disclosed to everyone within the organisation.
Questions 25-27: Look at the follow groups of worker (Question 25-27) and the list of
descriptions below. Match each group with the correct description, A-E. Write the correct
letter, A - E, in boxes 25-27 on your answer sheet.
25. high achievers
26. clerical workers
27. production workers
List of Descriptions
A. They judge promotion to be C. They think that the quality of their
important. work is important.
B. They have less need of external goals. D. They resist goals which are imposed.
E. They have limited job options.

The psychology of innovation

Why are so few companies truly innovative?
Innovation is key to business survival, and companies put substantial resources into
inspiring employees to develop new ideas. There are, nevertheless, people working in
luxurious, state-of-the-art centres designed to stimulate innovation who find that their
environment doesn’t make them feel at all creative. And there are those who don’t have a
budget, or much space, but who innovate successfully.
For Robert B. Cialdini, Professor of Psychology at Arizona State University, one reason
that companies don’t succeed as often as they should is that innovation starts with
recruitment. Research shows that the fit between an employee’s values and a company’s
values makes a difference to what contribution they make and whether, two years after
they join, they’re still at the company. Studies at Harvard Business School show that,
although some individuals may be more creative than others, almost every individual can
be creative in the right circumstances.
One of the most famous photographs in the story of rock’n’roll emphasises Ciaidini’s
views. The 1956 picture of singers Elvis Presley, Carl Perkins, Johnny Cash and Jerry
Lee Lewis jamming at a piano in Sun Studios in Memphis tells a hidden story. Sun’s
‘million-dollar quartet’ could have been a quintet. Missing from the picture is Roy
Orbison’ a greater natural singer than Lewis, Perkins or Cash. Sam Phillips, who owned
Sun, wanted to revolutionise popular music with songs that fused black and white music,
and country and blues. Presley, Cash, Perkins and Lewis instinctively understood
Phillips’s ambition and believed in it. Orbison wasn’t inspired by the goal, and only ever
achieved one hit with the Sun label.
The value fit matters, says Cialdini, because innovation is, in part, a process of change,
and under that pressure we, as a species, behave differently, ‘ When things change, we are
hard-wired to play it safe .’ Managers should, therefore, adopt an approach that appears
counterintuitive -they should explain what stands to be lost if the company fails to seize a
particular opportunity. Studies show that we invariably take more gambles when
threatened with a loss than when offered a reward.
Managing innovation is a delicate art. It’s easy for a company to be pulled in conflicting
directions as the marketing, product development, and finance departments each get
different feedback from different sets of people. And without a system which ensures
collaborative exchanges within the company, it’s also easy for small ‘pockets of
innovation‟ to disappear. Innovation is a contact sport. You can't brief people just by
saying, ‘We’re going in this direction and I’m going to take you with me.’
Cialdini believes that this ‘follow-the-leader syndrome, is dangerous, not least because it
encourages bosses to go it alone. ‘It’s been scientifically proven that three people will be
better than one at solving problems, even if that one person is the smartest person in the
field.’ To prove his point, Cialdini cites an interview with molecular biologist James
Watson. Watson, together with Francis Crick, discovered the structure of DNA, the
genetic information carrier of all living organisms. ‘When asked how they had cracked
the code ahead of an array of highly accomplished rival investigators, he said something
that stunned me. He said ” he and Crick had succeeded because they were aware that they
weren’t the most intelligent of the scientists pursuing the answer. The smartest scientist
was called Rosalind Franklin who, Watson said, “was so intelligent she rarely sought
advice”.’
Teamwork taps into one of the basic drivers of human behaviour. ‘The principle of social
proof is so pervasive that we don’t even recognise it,’ says Cialdini. ‘If your project is
being resisted, for example, by a group of veteran employees, ask another old-timer to
speak up for it.’ Cialdini is not alone in advocating this strategy. Research shows that peer
power, used horizontally not vertically, is much more powerful than any boss’s speech.
Writing, visualising and prototyping can stimulate the flow of new ideas. Cialdini cites
scores of research papers and historical events that prove that even something as simple
as writing deepens every individual’s engagement in the project. It is, he says, the reason
why all those competitions on breakfast cereal packets encouraged us to write in saying,
in no more than 10 words: ‘I like Kellogg’s Com Flakes because… .’ The very act of
writing makes us more likely to believe it.
Authority doesn’t have to inhibit innovation but it often does. The wrong kind of
leadership will lead to what Cialdini calls ”captainitis, the regrettable tendency of team
members to opt out of team responsibilities that are properly their ’. He calls it captainitis
because, he says, ”crew members of multipilot aircraft exhibit a sometimes deadly
passivity when the flight captain makes a clearly wrong-headed decision”. This behaviour
is not, he says, unique to air travel, but can happen in any workplace where the leader is
overbearing.
At the other end of the scale is the 1980s Memphis design collective, a group of young
designers for whom ”the only rule was that there were no rule”. This environment
encouraged a free interchange of ideas, which led to more creativity with form, function,
colour and materials that revolutionised attitudes to furniture design.
Many theorists believe the ideal boss should lead from behind, taking pride in collective
accomplishment and giving credit where it is due. Cialdini says: ”Leaders should
encourage everyone to contribute and simultaneously assure all concerned that every
recommendation is important to making the right decision and will be given full attention
”. The frustrating thing about innovation is that there are many approaches, but no magic
formula. However, a manager who wants to create a truly innovative culture can make
their job a lot easier by recognising these psychological realities.
Questions 27-30: Choose the correct letter, A, B, C or D. Write the correct letter in boxes
27-30 on your answer sheet.
27. The example of the ‘million-dollar 29. The writer mentions competitions on
quartet’ underlines the writer’s point breakfast cereal packets as an example of
about how to
A. recognising talent. A. inspire creative thinking.
B. working as a team. B. generate concise writing.
C. having a shared objective. C. promote loyalty to a group.
D. being an effective leader. D. strengthen commitment to an idea.
28. James Watson suggests that he and 30. In the last paragraph, the writer
Francis Crick won the race to discover suggests that it is important for
the DNA code because they employees to
A. were conscious of their own A. be aware of their company's goals.
limitations. B. feel that their contributions are
B. brought complementary skills to their valued.
partnership. C. have respect for their co-workers‟
C. were determined to outperform their achievements.
brighter rivals. D. understand why certain management
D. encouraged each other to realise their decisions are made.
joint ambition.
Questions 31-35: Complete each sentence with the correct ending, A-G, below. Write the
correct letter, A-G, in boxes 31-35 on your answer sheet.
31. Employees whose values match those of their employers are more likely to
32. At times of change, people tend to
33. If people are aware of what they might lose, they will often
34. People working under a dominant boss are liable to
35. Employees working in organisations with few rules are more likely to

A. take chances. D. get promotion. F. ignore their duties.

B. share their ideas. E. avoid risk. G. remain in their jobs.
C. become competitive.
Questions 36-40: Do the following statements agree with the claims of the writer in
Reading Passage 3? In boxes 36-40 on your answer sheet, write YES/NO/NG
36. The physical surroundings in which a person works play a key role in determining
their creativity.
37. Most people have the potential to be creative.
38. Teams work best when their members are of equally matched intelligence.
39. It is easier for smaller companies to be innovative.
40. A manager’s approval of an idea is more persuasive than that of a colleague.

Tea and the Industrial Revolution

A Cambridge professor says that a change in drinking habits was the reason for the
Industrial Revolution in Britain. Anjana Abuja reports.
A. Alan Macfarlane, professor of anthropological science at King’s College, Cambridge
has, like other historians, spent decades wrestling with the enigma of the Industrial
Revolution. Why did this particular Big Bang – the world-changing birth of industry -
happen in Britain? And why did it strike at the end of the 18th century?
B. Macfarlane compares the puzzle to a combination lock. ‘There are about 20 different
factors and all of them need to be present before the revolution can happen,’ he says. For
industry to take off, there needs to be the technology and power to drive factories, large
urban populations to provide cheap labour, easy transport to move goods around, an
affluent middle-class willing to buy mass-produced objects, a market-driven economy
and a political system that allows this to happen. While this was the case for England,
other nations, such as Japan, the Netherlands and France also met some of these criteria
but were not industrialising. All these factors must have been necessary. But not sufficient
to cause the revolution, says Macfarlane. ‘After all, Holland had everything except coal
while China also had many of these factors. Most historians are convinced there are one
or two missing factors that you need to open the lock.’
C. The missing factors, he proposes, are to be found in almost even kitchen cupboard.
Tea and beer, two of the nation’s favourite drinks, fuelled the revolution. The antiseptic
properties of tannin, the active ingredient in tea, and of hops in beer – plus the fact that
both are made with boiled water – allowed urban communities to flourish at close
quarters without succumbing to water-borne diseases such as dysentery. The theory
sounds eccentric but once he starts to explain the detective work that went into his
deduction, the scepticism gives way to wary admiration. Macfarlanes case has been
strengthened by support from notable quarters – Roy Porter, the distinguished medical
historian, recently wrote a favourable appraisal of his research.
D. Macfarlane had wondered for a long time how the Industrial Revolution came about.
Historians had alighted on one interesting factor around the mid-18th century that
required explanation. Between about 1650 and 1740，the population in Britain was static.
But then there was a burst in population growth. Macfarlane says: ‘The infant mortality
rate halved in the space of 20 years, and this happened in both rural areas and cities, and
across all classes. People suggested four possible causes. Was there a sudden change in
the viruses and bacteria around? Unlikely. Was there a revolution in medical science? But
this was a century before Lister’s revolution*. Was there a change in environmental
conditions? There were improvements in agriculture that wiped out malaria, but these
were small gains. Sanitation did not become widespread until the 19th century. The only
option left is food. But the height and weight statistics show a decline. So the food must
have got worse. Efforts to explain this sudden reduction in child deaths appeared to draw
a blank .’
E. This population burst seemed to happen at just the right time to provide labour for the
Industrial Revolution. ‘When you start moving towards an industrial revolution, it is
economically efficient to have people living close together,’ says Macfarlane. ‘But then
you get disease, particularly from human waste.’ Some digging around in historical
records revealed that there was a change in the incidence of water-borne disease at that
time, especially dysentery. Macfarlane deduced that whatever the British were drinking
must have been important in regulating disease. He says, ‘We drank beer. For a long time,
the English were protected by the strong antibacterial agent in hops, which were added to
help preserve the beer. But in the late 17th century a tax was introduced on malt, the basic
ingredient of beer. The poor turned to water and gin and in the 1720s the mortality rate
began to rise again. Then it suddenly dropped again. What caused this?’
F. Macfarlane looked to Japan, which was also developing large cities about the same
time, and also had no sanitation. Water-borne diseases had a much looser grip on the
Japanese population than those in Britain. Could it be the prevalence of tea in their
culture? Macfarlane then noted that the history of tea in Britain provided an extraordinary
coincidence of dates. Tea was relatively expensive until Britain started a direct clipper
trade with China in the early 18th century. By the 1740s, about the time that infant
mortality was dipping, the drink was common. Macfarlane guessed that the fact that
water had to be boiled, together with the stomach-purifying properties of tea meant that
the breast milk provided by mothers was healthier than it had ever been. No other
European nation sipped tea like the British, which, by Macfarlanes logic, pushed these
other countries out of contention for the revolution.
G. But, if tea is a factor in the combination lock, why didn’t Japan forge ahead in a tea-
soaked industrial revolution of its own? Macfarlane notes that even though 17th-century
Japan had large cities, high literacy rates, even a futures market, it had turned its back on
the essence of any work-based revolution by giving up labour-saving devices such as
animals, afraid that they would put people out of work. So, the nation that we now think
of as one of the most technologically advanced entered the 19th century having
‘abandoned the wheel’.
Questions 1-7: Reading Passage 1 has seven paragraphs, A-G. Choose the correct
heading for each paragraph from the list of headings below. Write the correct number, i-
ix, in boxes 1-7 on your answer sheet.
List of Headings
i. The search for the reasons for an v. The cases of Holland, France and
increase in population China
ii. Industrialisation and the fear of vi. Changes in drinking habits in Britain
unemployment vii. Two keys to Britain’s industrial
iii. The development of cities in Japan 4 revolution
The time and place of the Industrial viii. Conditions required for
Revolution industrialisation
iv. The time and place of the Industrial ix. Comparisons with Japan lead to the
Revolution answer
1. Paragraph A 4. Paragraph D 7. Paragraph G
2. Paragraph B 5. Paragraph E
3. Paragraph C 6. Paragraph F
Questions 8-13: Do the following statements agree with the information given in
Reading Passage 1? In boxes 8-13 on your answer sheet, write TRUE/FALSE/NG
8. China’s transport system was not suitable for industry in the 18th century.
9. Tea and beer both helped to prevent dysentery in Britain.
10. Roy Porter disagrees with Professor Macfarlane’s findings.
11. After 1740, there was a reduction in population in Britain.
12. People in Britain used to make beer at home.
13. The tax on malt indirectly caused a rise in the death rate.

You represent an organisation called South-East Asian Business Associates, which will
hold a conference next year. Write a letter to Dr Vladimir Sarkowski inviting him to be a
keynote speaker. Dr Sarkowski is the author of the book The New Way - Business in the
21" Century, so you think he will have an important message for your members.
Offer to pay all expenses - airfare and accommodation (five-star hotel in Singapore,
three nights). Inform Dr Sarkowski about the conference and your organisation. (You can
refer to an enclosed brochure giving further details.) Write an email of about 150-200
words.
• Conference title: New Trends in Business
• Dates: 3-4 February
• Place: to be held in Singapore
• Number of delegates expected to attend: 1,500-2,000
• SE Asian Business Associates: 5,000 members, owners and managers of businesses in
South-East Asia.

Subject: Invitation to Keynote at the "New Trends in Business" Conference

Dear Dr. Sarkowski,
I hope this email finds you well. My name is [Your Name], and I am writing on behalf of
South-East Asian Business Associates (SEABA), a prominent organization representing
over 5,000 business owners and managers across South-East Asia.
We are delighted to invite you to be the keynote speaker at our upcoming
conference, "New Trends in Business," to be held on 3-4 February in Singapore. The
conference will bring together 1,500-2,000 delegates, providing a platform to explore and
discuss innovative strategies shaping the future of business.
As the esteemed author of The New Way – Business in the 21st Century, we believe your
insights will resonate deeply with our audience and add immense value to the event.
To ensure your comfort, SEABA will cover all expenses, including round-trip airfare and
accommodation for three nights at a five-star hotel in Singapore. For further details,
please find an enclosed brochure about the event.
We would be honored to have your participation and are happy to discuss any
requirements you may have. Please let us know at your earliest convenience if you would
be able to join us.
Warm regards,
Jonathan Tan
Executive Director
South-East Asian Business Associates
Phone: +65 1234 5678
Email: [Link]@[Link]
 UK companies need more effective boards of directors
A. After a number of serious failures of governance (that is, how they are managed at the
highest level), companies in Britain, as well as elsewhere, should consider radical
changes to their directors’ roles. It is clear that the role of a board director today is not an
easy one. Following the 2008 financial meltdown, which resulted in a deeper and more
prolonged period of economic downturn than anyone expected, the search for
explanations in the many post-mortems of the crisis has meant blame has been spread far
and wide. Governments, regulators, central banks and auditors have all been in the frame.
The role of bank directors and management and their widely publicised failures have
been extensively picked over and examined in reports, inquiries and commentaries.
B. The knock-on effect of this scrutiny has been to make the governance of companies in
general an issue of intense public debate and has significantly increased the pressures on,
and the responsibilities of, directors. At the simplest and most practical level, the time
involved in fulfilling the demands of a board directorship has increased significantly,
calling into question the effectiveness of the classic model of corporate governance by
part-time, independent non-executive directors. Where once a board schedule may have
consisted of between eight and ten meetings a year, in many companies the number of
events requiring board input and decisions has dramatically risen. Furthermore, the
amount of reading and preparation required for each meeting is increasing. Agendas can
become overloaded and this can mean the time for constructive debate must necessarily
be restricted in favour of getting through the business.
C. Often, board business is devolved to committees in order to cope with the workload,
which may be more efficient but can mean that the board as a whole is less involved in
fully addressing some of the most important issues. It is not uncommon for the audit
committee meeting to last longer than the main board meeting itself. The process may
take the place of discussion and be at the expense of real collaboration, so that boxes are
ticked rather than issues tackled.
D. A radical solution, which may work for some very large companies whose businesses
are extensive and complex, is the professional board, whose members would work up to
three or four days a week, supported by their own dedicated staff and advisers. There are
obvious risks to this and it would be important to establish clear guidelines for such a
board to ensure that it did not step on the toes of management by becoming too engaged
in the day-to-day running of the company. Problems of recruitment, remuneration and
independence could also arise and this structure would not be appropriate for all
companies. However, more professional and better-informed boards would have been
particularly appropriate for banks where the executives had access to information that
part-time non-executive directors lacked, leaving the latter unable to comprehend or
anticipate the 2008 crash.
E. One of the main criticisms of boards and their directors is that they do not focus
sufficiently on longer-term matters of strategy, sustainability and governance, but instead
concentrate too much on short-term financial metrics. Regulatory requirements and the
structure of the market encourage this behaviour. The tyranny of quarterly reporting can
distort board decision-making, as directors have to ‘make the numbers’ every four months
to meet the insatiable appetite of the market for more data. This serves to encourage the
trading methodology of a certain kind of investor who moves in and out of a stock
without engaging in constructive dialogue with the company about strategy or
performance, and is simply seeking a short¬ term financial gain. This effect has been
made worse by the changing profile of investors due to the globalisation of capital and
the increasing use of automated trading systems. Corporate culture adapts and
management teams are largely incentivised to meet financial goals.
F. Compensation for chief executives has become a combat zone where pitched battles
between investors, management and board members are fought, often behind closed
doors but increasingly frequently in the full glare of press attention. Many would argue
that this is in the interest of transparency and good governance as shareholders use their
muscle in the area of pay to pressure boards to remove underperforming chief executives.
Their powers to vote down executive remuneration policies increased when binding votes
came into force. The chair of the remuneration committee can be an exposed and lonely
role, as Alison Carnwath, chair of Barclays Bank’s remuneration committee, found when
she had to resign, having been roundly criticised for trying to defend the enormous bonus
to be paid to the chief executive; the irony being that she was widely understood to have
spoken out against it in the privacy of the committee.
G. The financial crisis stimulated a debate about the role and purpose of the company and
a heightened awareness of corporate ethics. Trust in the corporation has been eroded and
academics such as Michael Sandel, in his thoughtful and bestselling book What Money
Can’t Buy, are questioning the morality of capitalism and the market economy. Boards of
companies in all sectors will need to widen their perspective to encompass these issues
and this may involve a realignment of corporate goals. We live in challenging times.
Questions 27-33: Reading Passage 3 has seven paragraphs, A-G. Choose the correct
heading for each paragraph from the list of headings below. Write the correct number, i-
viii, in boxes 27-33 on your answer sheet.
List of Headings
i. Disputes over financial arrangements v. The falling number of board members
regarding senior managers with broad enough experience
ii. The impact on companies of being vi. A risk that not all directors take part
subjected to close examination in solving major problems
iii. The possible need for fundamental vii. Boards not looking far enough ahead
change in every area of business viii. A proposal to change the way the
iv. Many external bodies being held board operates
responsible for problems
27. Paragraph A 29. Paragraph C 31. Paragraph E
28. Paragraph B 30. Paragraph D 32. Paragraph F
33. Paragraph G
Question 34-37: Do the following statements agree with the claims of the writer in
Reading Passage 3? In boxes 34-37 on your answer sheet, write YES/NO/NG
34. Close scrutiny of the behaviour of boards has increased since the economic downturn.
35. Banks have been mismanaged to a greater extent than other businesses.
36. Board meetings normally continue for as long as necessary to debate matters in full.
37. Using a committee structure would ensure that board members are fully informed
about significant issues.
Questions 38-40: Complete the sentences below. Choose ONE WORD ONLY from the
passage for each answer. Write your answers in boxes 38-40 on your answer sheet.
38. Before 2008, non-executive directors were at a disadvantage because of their lack
of ...............................
39. Boards tend to place too much emphasis on .............................. considerations that are
only of short-term relevance.
40. On certain matters, such as pay, the board may have to accept the views
of ..............................

Bringing cinnamon to Europe

Cinnamon is a sweet, fragrant spice produced from the inner bark of trees of the genus
Cinnamomum, which is native to the Indian sub-continent. It was known in biblical
times, and is mentioned in several books of the Bible, both as an ingredient that was
mixed with oils for anointing people’s bodies, and also as a token indicating friendship
among lovers and friends. In ancient Rome, mourners attending funerals burnt cinnamon
to create a pleasant scent. Most often, however, the spice found its primary use as an
additive to food and drink. In the Middle Ages, Europeans who could afford the spice
used it to flavor food, particularly meat, and to impress those around them with their
ability to purchase an expensive condiment from the ‘exotic’ East. At a banquet, a host
would offer guests a plate with various spices piled upon it as a sign of the wealth at his
or her disposal. Cinnamon was also reported to have health benefits, and was thought to
cure various ailments, such as indigestion.
Toward the end of the Middle Ages, the European middle classes began to desire the
lifestyle of the elite, including their consumption of spices. This led to a growth in
demand for cinnamon and other spices. At that time, cinnamon was transported by Arab
merchants, who closely guarded the secret of the source of the spice from potential rivals.
They took it from India, where it was grown, on camels via an overland route to the
Mediterranean. Their journey ended when they reached Alexandria. European traders
sailed there to purchase their supply of cinnamon, then brought it back to Venice. The
spice then travelled from that great trading city to markets all around Europe. Because the
overland trade route allowed for only small quantities of the spice to reach Europe, and
because Venice had a virtual monopoly of the trade, the Venetians could set the price of
cinnamon exorbitantly high. These prices, coupled with the increasing demand, spurred
the search for new routes to Asia by Europeans eager to take part in the spice trade.
Seeking the high profits promised by the cinnamon market, Portuguese traders arrived on
the island of Ceylon in the Indian Ocean toward the end of the 15th century. Before
Europeans arrived on the island, the state had organized the cultivation of cinnamon.
People belonging to the ethnic group called the Salagama would peel the bark off young
shoots of the cinnamon plant in the rainy season, when the wet bark was more pliable.
During the peeling process, they curled the bark into the ‘stick’ shape still associated with
the spice today. The Salagama then gave the finished product to the king as a form of
tribute. When the Portuguese arrived, they needed to increase production significantly,
and so enslaved many other members of the Ceylonese native population, forcing them to
work in cinnamon harvesting. In 1518, the Portuguese built a fort on Ceylon, which
enabled them to protect the island, so helping them to develop a monopoly in the
cinnamon trade and generate very high profits. In the late 16th century, for example, they
enjoyed a tenfold profit when shipping cinnamon over a journey of eight days from
Ceylon to India.
When the Dutch arrived off the coast of southern Asia at the very beginning of the 17th
century, the set their sights on displacing the Portuguese as kings of cinnamon. The Dutch
allied themselves with Kandy, an inland kingdom on Ceylon. In return for payments of
elephants and cinnamon, they protected the native king from the Portuguese. By 1649,
the Dutch broke the 150-year Portuguese monopoly when they overran and occupied
their factories. By 1658, they had permanently expelled the Portuguese from the island,
thereby gaining control of the lucrative cinnamon trade.
In order to protect their hold on the market, the Dutch, like the Portuguese before them,
treated the native inhabitants harshly. Because of the need to boost production and satisfy
Europe’s ever-increasing appetite for cinnamon, the Dutch began to alter the harvesting
practices of the Ceylonese. Over time, the supply of cinnamon trees on the island became
nearly exhausted, due to systematic stripping of the bark. Eventually, the Dutch began
cultivating their own cinnamon trees to supplement the diminishing number of wild trees
available for use.
Then, in 1996, the English arrived on Ceylon, thereby displacing the Dutch from their
control of the cinnamon monopoly. By the middle of the 19th century, production of
cinnamon reached 1,000 tons a year, after a lower grade quality of the spice became
acceptable to European tastes. By that time, cinnamon was being grown in other parts of
the Indian Ocean region and in the West Indies, Brazil, and Guyana. Not only was a
monopoly of cinnamon becoming impossible, but the spice trade overall was diminishing
in economic potential, and was eventually superseded by the rise of trade in coffee, tea,
chocolate, and sugar.
Questions 1-9: Complete the notes below. Choose ONE WORD ONLY from the passage
for each answer. Write your answers in boxes 1-9 on your answer sheet.
The Early History of Cinnamon
Biblical times:
 added to 1………………………..
 used to show 2…………………………. Between people
Ancient Rome: used for its sweet smell at 3………………………..
Middle Ages:
 added to food, especially meat
 was an indication of a person’s 4………………………..
 known as a treatment for 5……………………….. and other health problems
  grown in 6……………………….
 merchants used 7……………………… to bring it to the Mediterranean
 arrived in the Mediterranean at 8……………………………
 traders took it to 9……………………………. and sold it to destinations around
Europe.
Questions 10-13
Do the following statements agree with the information given in Reading Passage 1? In
boxes 10-13 on your answer sheet, write TRUE/FALSE/NG
10. The Portuguese had control over the cinnamon trade in Ceylon throughout the 16th
century.
11. The Dutch took over the cinnamon trade from the Portuguese as soon as they arrived
in Ceylon.
12. The trees planted by the Dutch produced larger quantities of cinnamon than the wild
trees.
13. The spice trade maintained its economic importance during the 19th century.

MAKING THE MOST OF TRENDS

Experts from Harvard Business School give advice to managers
Most managers can identify the major trends of the day. But it the course of conducting
research in a number of industries and working directly with companies, we have
discovered that managers often fail to recognize the less obvious but profound ways these
trends are influencing consumers’ aspirations, attitudes, and behaviors. This is especially
true of trends that managers view as peripheral to their core markets.
Many ignore trends in their innovation strategies or adopt a wait-and-see approach and let
competitors take the lead. At a minimum, such responses mean missed profit
opportunities. At the extreme, they can jeopardize a company by ceding to rivals the
opportunity to transform the industry. The purpose of this article is twofold: to spur
managers to think more expansively about how trends could engender new value
propositions in their core markets, and to provide some high-level advice on how to make
market research and product development personnel more adept at analyzing and
exploiting trends.
One strategy, known as ‘infuse and augment’, is to design a product or service that retains
most of the attributes and functions of existing products in the category but adds others
that address the needs and desires unleashed by a major trend. A case in point in the
Poppy range of handbags, which the firm Coach created in response to the economic
downturn of 2008. The Coach brand had been a symbol of opulence and luxury for nearly
70 years, and the most obvious reaction to the downturn would have been to lower prices.
However, that would have risked cheapening the brand’s image. Instead, they initiated a
consumer-research project which revealed that customers were eager to lift themselves
and the country out of tough times. Using these insights, Coach launched the lower-
priced Poppy handbags, which were in vibrant colors, and looked more youthful and
playful than conventional Coach products. Creating the sub-brand allowed Coach to avert
an across-the-board price cut. In contrast to the many companies that responded to the
recession by cutting prices, Coach saw the new consumer mindset as an opportunity for
innovation and renewal.
A further example of this strategy was supermarket Tesco’s response to consumers’
growing concerns about the environment. With that in mind, Tesco, one of the world’s top
five retailers, introduced its Greener Living program, which demonstrates the company’s
commitment to protecting the environment by involving consumers in ways that produce
tangible results. For example, Tesco customers can accumulate points for such activities
as reusing bags, recycling cans and printer cartridges, and buying home-insulation
materials. Like points earned on regular purchases, these green points can be redeemed
for cash. Tesco has not abandoned its traditional retail offering but augmented its business
with these innovations, thereby infusing its value proposition with a green streak.
A more radical strategy is ‘combine and transcend’. This entails combining aspects of the
product’s existing value proposition with attributes addressing changes arising from a
trend, to create a novel experience – one that may land the company in an entirely new
market space. At first glance, spending resources to incorporate elements of a seemingly
irrelevant trend into one’s core offerings sounds like it’s hardly worthwhile. But consider
Nike’s move to integrate the digital revolution into its reputation for high-performance
athletic footwear. In 2006, they teamed up with technology company Apple to launch
Nike+, a digital sports kit comprising a sensor that attaches to the running shoe and a
wireless receiver that connects to the user’s iPod. By combining Nike’s original value
proposition for amateur athletes with one for digital consumers, the Nike+ sports kit and
web interface moved the company from a focus on athletic apparel to a new plane of
engagement with its customers.
A third approach, known as ‘counteract and reaffirm’, involves developing products or
services that stress the values traditionally associated with the category in ways that allow
consumers to oppose – or at least temporarily escape from – the aspects of trends they
view as undesirable. A product that accomplished this is the ME2, a video game created
by Canada’s iToys. By reaffirming the toy category’s association with physical play, the
ME2 counteracted some of the widely perceived negative impacts of digital gaming
devices. Like other handheld games, the device featured a host of exciting interactive
games, a full-color LCD screen, and advanced 3D graphics. What set it apart was that it
incorporated the traditional physical component of children’s play: it contained a
pedometer, which tracked and awarded points for physical activity (walking, running,
biking, skateboarding, climbing stairs). The child could use the points to enhance various
virtual skills needed for the video game. The ME2, introduced in mid-2008, catered to
kids’ huge desire to play video games while countering the negatives, such as
associations with lack of exercise and obesity.
Once you have gained perspective on how trend-related changes in consumer opinions
and behaviors impact on your category, you can determine which of our three innovation
strategies to pursue. When your category’s basic value proposition continues to be
meaningful for consumers influenced by the trend, the infuse-and-augment strategy will
allow you to reinvigorate the category. If analysis reveals an increasing disparity between
your category and consumers’ new focus, your innovations need to transcend the category
to integrate the two worlds. Finally, if aspects of the category clash with undesired
outcomes of a trend, such as associations with unhealthy lifestyles, there is an
opportunity to counteract those changes by reaffirming the core values of your category.
Trends – technological, economic, environmental, social, or political – that affect how
people perceive the world around them and shape what they expect from products and
services present firms with unique opportunities for growth.
Questions 27-31: Choose the correct letter, A, B, C or D. Write the correct letter in boxes
27-31 on your answer sheet.
27. In the first paragraph, the writer says C. Its main aim was to raise consumers’
that most managers awareness of environmental issues.
A. fail to spot the key consumer trends of D. It was not the first time that Tesco had
the moment. implemented such an initiative.
B. make the mistake of focusing only on 30. What does the writer suggest about
the principal consumer trends. Nike’s strategy?
C. misinterpret market research data A. It was an extremely risky strategy at
relating to current consumer trends. the time.
D. are unaware of the significant impact B. It was a strategy that only a major
that trends have on consumers’ lives. company could afford to follow.
28. According to the third paragraph, C. It was the type of strategy that would
Coach was anxious to not have been possible in the past.
A. follow what some of its competitors D. It was the kind of strategy which
were doing. might appear to have few obvious
B. maintain its prices throughout its benefits.
range. 31. What was original about the ME2?
C. safeguard its reputation as a A. It contained technology that had been
manufacturer of luxury goods. developed for the sports industry.
D. modify the entire look of its brand to B. It appealed to young people who were
suit the economic climate. keen to improve their physical fitness.
29. What point is made about Tesco’s C. It took advantage of a current trend
Greener Living programme? for video games with colourful 3D
A. It did not require Tesco to modify its graphic.
core business activities. D. It was a handheld game that addressed
B. It succeeded in attracting a more eco- people’s concerns about unhealthy
conscious slientele. lifestyles.
Questions 32-37: Look at the following statements (Questions 32-37) and the list of
companies below. Match each statement with the correct company, A, B, C or D. Write
the correct letter, A, B, C or D, in boxes 32-37 on your answer sheet.
NB You may use any letter more than once.
32. It turned the notion that its products could have harmful effects to its own advantage.
33. It extended its offering by collaborating with another manufacturer.
34. It implemented an incentive scheme to demonstrate its corporate social responsibility.
35. It discovered that customers had a positive attitude towards dealing with difficult
circumstances.
36. It responded to a growing lifestyle trend in an unrelated product sector.
37. It successfully avoided having to charge its customers less for its core products.
List of companies
A. Coach C. Nike
B. Tesco D. iToys
Questions 38-40: Complete each sentence with the correct ending, A, B, C or D below.
Write the correct letter, A, B, C or D, in boxes 38-40 on your answer sheet.
38. If there are any trend-related changes impacting on your category, you should
39. If a current trend highlights a negative aspect of your category, you should
40. If the consumers’ new focus has an increasing lack of connection with your offering
you should
A. employ a combination of strategies to C. emphasise your brand’s traditional
maintain your consumer base. values with the counteract-and-affirm
B. identify the most appropriate strategy.
innovation strategy to use. D. use the combine-and-transcend
strategy to integrate the two worlds.

Motivational factors and the hospitality industry

A critical ingredient in the success of hotels is developing and maintaining superior
performance from their employees. How is that accomplished? What Human Resource
Management (HRM) practices should organizations invest in to acquire and retain great
employees?
Some hotels aim to provide superior working conditions for their employees. The idea
originated from workplaces – usually in the non-service sector – that emphasized fun and
enjoyment as part of work-life balance. By contrast, the service sector, and more
specifically hotels, has traditionally not extended these practices to address basic
employee needs, such as good working conditions.
Pfeffer (1994) emphasizes that in order to succeed in a global business environment,
organizations must make investment in Human Resource Management (HRM) to allow
them to acquire employees who possess better skills and capabilities than their
competitors. This investment will be to their competitive advantage. Despite this
recognition of the importance of employee development, the hospitality industry has
historically been dominated by underdeveloped HR practices (Lucas, 2002).
Lucas also points out that ‘the substance of HRM practices does not appear to be
designed to foster constructive relations with employees or to represent a managerial
approach that enables developing and drawing out the full potential of people, even
though employees may be broadly satisfied with many aspects of their work’ (Lucas,
2002). In addition, or maybe as a result, high employee turnover has been a recurring
problem throughout the hospitality industry. Among the many cited reasons are low
compensation, inadequate benefits, poor working conditions and compromised employee
morale and attitudes (Maroudas et al., 2008).
Ng and Sorensen (2008) demonstrated that when managers provide recognition to
employees, motivate employees to work together, and remove obstacles preventing
effective performance, employees feel more obligated to stay with the company. This was
succinctly summarized by Michel et al. (2013): ‘[P]roviding support to employees gives
them the confidence to perform their jobs better and the motivation to stay with the
organization.’ Hospitality organizations can therefore enhance employee motivation and
retention through the development and improvement of their working conditions. These
conditions are inherently linked to the working environment.
While it seems likely that employees’ reactions to their job characteristics could be
affected by a predisposition to view their work environment negatively, no evidence
exists to support this hypothesis (Spector et al., 2000). However, given the opportunity,
many people will find something to complain about in relation to their workplace
(Poulston, 2009). There is a strong link between the perceptions of employees and
particular factors of their work environment that are separate from the work itself,
including company policies, salary and vacations.
Such conditions are particularly troubling for the luxury hotel market, where high-quality
service, requiring a sophisticated approach to HRM, is recognized as a critical source of
competitive advantage (Maroudas et al., 2008). In a real sense, the services of hotel
employees represent their industry (Schneider and Bowen, 1993). This representation has
commonly been limited to guest experiences. This suggests that there has been a
dichotomy between the guest environment provided in luxury hotels and the working
conditions of their employees.
It is therefore essential for hotel management to develop HRM practices that enable them
to inspire and retain competent employees. This requires an understanding of what
motivates employees at different levels of management and different stages of their
careers (Enz and Siguaw, 2000). This implies that it is beneficial for hotel managers to
understand what practices are most favorable to increase employee satisfaction and
retention.
Herzberg (1966) proposes that people have two major types of needs, the first being
extrinsic motivation factors relating to the context in which work is performed, rather
than the work itself. These include working conditions and job security. When these
factors are unfavorable, job dissatisfaction may result. Significantly, though, just
fulfilling these needs does not result in satisfaction, but only in the reduction of
dissatisfaction (Maroudas et al., 2008).
Employees also have intrinsic motivation needs or motivators, which include such factors
as achievement and recognition. Unlike extrinsic factors, motivator factors may ideally
result in job satisfaction (Maroudas et al., 2008). Herzberg’s (1966) theory discusses the
need for a ‘balance’ of these two types of needs.
The impact of fun as a motivating factor at work has also been explored. For example,
Tews, Michel and Stafford (2013) conducted a study focusing on staff from a chain of
themed restaurants in the United States. It was found that fun activities had a favorable
impact on performance and manager support for fun had a favorable impact in reducing
turnover. Their findings support the view that fun may indeed have a beneficial effect, but
the framing of that fun must be carefully aligned with both organizational goals and
employee characteristics. ‘Managers must learn how to achieve the delicate balance of
allowing employees the freedom to enjoy themselves at work while simultaneously high
levels of performance’ (Tews et al., 2013).
Deery (2008) has recommended several actions that can be adopted at the organizational
level to retain good staff as well as assist in balancing work and family life. Those
particularly appropriate to the hospitality industry include allowing adequate breaks
during the working day, staff functions that involve families, and providing health and
well-being opportunities.
Questions 27-31: Look at the following statements (Questions 27-31) and the list of
researchers below. Match each statement with the correct researcher, A-F. Write the
correct letter, A-F, in boxes 27-31 on your answer sheet.
NB You may use any letter more than once.
27. Hotel managers need to know what would encourage good staff to remain.
28. The actions of managers may make staff feel they shouldn’t move to a different
employer.
29. Little is done in the hospitality industry to help workers improve their skills.
30. Staff are less likely to change jobs if cooperation is encouraged.
31. Dissatisfaction with pay is not the only reason why hospitality workers change jobs.
List of Researchers
A. Pfeffer C. Maroudas et al. E. Enz and Siguaw
B. Lucas D. Ng and Sorensen F. Deery
Questions 32-35: Do the following statements agree with the claims of the writer in
Reading Passage 3? In boxes 32-35 on your answer sheet, write YES/NO/NG
32. One reason for high staff turnover in the hospitality industry is poor morale.
33. Research has shown that staff have a tendency to dislike their workplace.
34. An improvement in working conditions and job security makes staff satisfied with
their jobs.
35. Staff should be allowed to choose when they take breaks during the working day.
Questions 36-40: Complete the summary below. Choose ONE WORD ONLY from the
passage for each answer. Write your answers in boxes 36-40 on your answer sheet.

Fun at work
Tews, Michel and Stafford carried out research on staff in an American chain of
36…………… . They discovered that activities designed for staff to have fun improved
their 37…………………… , and that management involvement led to lower staff 38
………………….. . They also found that the activities needed to fit with both the
company’s 39 ……………….. and the 40 ………. of the staff. A balance was required
between a degree of freedom and maintaining work standards.
 Why companies should welcome disorder
A. Organisation is big business. Whether it is of our lives – all those inboxes and
calendars – or how companies are structured, a multi-billion dollar industry helps to meet
this need.
We have more strategies for time management, project management and self-organisation
than at any other time in human history. We are told that we ought to organize our
company, our home life, our week, our day and seven our sleep, all as a means to
becoming more productive. Every week, countless seminars and workshops take place
around the world to tell a paying public that they ought to structure their lives in order to
achieve this.
This rhetoric has also crept into the thinking of business leaders and entrepreneurs, much
to the delight of self-proclaimed perfectionists with the need to get everything right. The
number of business schools and graduates has massively increased over the past 50 years,
essentially teaching people how to organise well.
B. Ironically, however, the number of business that fail has also steadily increased. Work-
related stress has increased. A large proportion of workers from all demographics claim to
be dissatisfied with the way their work is structured and the way they are managed.
This begs the question: what has gone wrong? Why is it that on paper the drive for
organisation seems a sure shot for increasing productivity, but in reality falls well short of
what is expected?
C. This has been a problem for a while now. Frederick Taylor was one of the forefathers
of scientific management. Writing in the first half of the 20th century, he designed a
number of principles to improve the efficiency of the work process, which have since
become widespread in modern companies. So the approach has been around for a while.
D. New research suggests that this obsession with efficiency is misguided. The problem
is not necessarily the management theories or strategies we use to organise our work; it’s
the basic assumptions we hold in approaching how we work. Here it’s the assumption
that order is a necessary condition for productivity. This assumption has also fostered the
idea that disorder must be detrimental to organizational productivity. The result is that
businesses and people spend time and money organising themselves for the sake of
organising, rather than actually looking at the end goal and usefulness of such an effort.
E. What’s more, recent studies show that order actually has diminishing returns. Order
does increase productivity to a certain extent, but eventually the usefulness of the process
of organisation, and the benefit it yields, reduce until the point where any further increase
in order reduces productivity. Some argue that in a business, if the cost of formally
structuring something outweighs the benefit of doing it, then that thing ought not to be
formally structured. Instead, the resources involved can be better used elsewhere.
F. In fact, research shows that, when innovating, the best approach is to create an
environment devoid of structure and hierarchy and enable everyone involved to engage as
one organic group. These environments can lead to new solutions that, under
conventionally structured environments (filled with bottlenecks in term of information
flow, power structures, rules, and routines) would never be reached.
G. In recent times companies have slowly started to embrace this disorganisation. Many
of them embrace it in terms of perception (embracing the idea of disorder, as opposed to
fearing it) and in terms of process (putting mechanisms in place to reduce structure).
For example, Oticon, a large Danish manufacturer of hearing aids, used what it called a
‘spaghetti’ structure in order to reduce the organisation’s rigid hierarchies. This involved
scrapping formal job titles and giving staff huge amounts of ownership over their own
time and projects. This approach proved to be highly successful initially, with clear
improvements in worker productivity in all facets of the business.
In similar fashion, the former chairman of General Electric embraced disorganisation,
putting forward the idea of the ‘boundaryless’ organisation. Again, it involves breaking
down the barriers between different parts of a company and encouraging virtual
collaboration and flexible working. Google and a number of other tech companies have
embraced (at least in part) these kinds of flexible structures, facilitated by technology and
strong company values which glue people together.
H. A word of warning to others thinking of jumping on this bandwagon: the evidence so
far suggests disorder, much like order, also seems to have diminishing utility, and can
also have detrimental effects on performance if overused. Like order, disorder should be
embraced only so far as it is useful. But we should not fear it – nor venerate one over the
other. This research also shows that we should continually question whether or not our
existing assumptions work.
Questions 27-34
Reading Passage 3 has eight sections, A-H. Choose the correct heading for each section
from the list of headings below. Write the correct number, i-ix, in boxes 27-34 on your
answer sheet.
List of Headings
i. Complaints about the impact of a certain approach
ii. Fundamental beliefs that are in fact incorrect
iii. Early recommendations concerning business activities
iv. Organisations that put a new approach into practice
v. Companies that have suffered from changing their approach
vi. What people are increasingly expected to do
vii. How to achieve outcomes that are currently impossible
viii. Neither approach guarantees continuous improvement
ix. Evidence that a certain approach can have more disadvantages that advantages
27. Section A 29. Section C 31. Section E 33. Section G
28. Section B 30. Section D 32. Section F 34. Section H

Questions 35-37
Complete the sentences below. Choose ONE WORD ONLY from the passage for each
answer. Write your answers in boxes 35-37 on your answer sheet.
35. Numerous training sessions are aimed at people who feel they are not
………………………. enough.
36. Being organised appeals to people who regard themselves as
……………………………
37. Many people feel ……………………….. with aspects of their work.
Questions 38-40
Do the following statements agree with the information given in Reading Passage 3? In
boxes 38-40 on your answer sheet, write TRUE/FALSE/NG
38. Both businesses and people aim at order without really considering its value.
39. Innovation is most successful if the people involved have distinct roles.
40. Google was inspired to adopt flexibility by the success of General Electric.

Environmental practices of big businesses

The environmental practices of big businesses are shaped by a fundamental fact that for
many of us offend our sense of justice. Depending on the circumstances, a business may
maximize the amount of money it makes, at least in the short term, by damaging the
environment and hurting people. That is still the case today for fishermen in an
unmanaged fishery without quotas, and for international logging companies with short-
term leases on tropical rainforest land in places with corrupt officials and unsophisticated
landowners. When government regulation is effective, and when the public is
environmentally aware, environmentally clean big businesses may out-compete dirty
ones, but the reverse is likely to be true if government regulation is ineffective and if the
public doesn’t care.
It is easy for the rest of us to blame a business for helping itself by hurting other people.
But blaming alone is unlikely to produce change. It ignores the fact that businesses are
not charities but profit-making companies, and that publicly owned companies with
shareholders are under obligation to those shareholders to maximize profits, provided that
they do so by legal means. US laws make a company’s directors legally liable for
something termed ‘breach of fiduciary responsibility’ if they knowingly manage a
company in a way that reduces profits. The car manufacturer Henry Ford was in fact
successfully sued by shareholders in 1919 for raising the minimum wage of his workers
to $5 per day: the courts declared that, while Ford’s humanitarian sentiments about his
employees were nice, his business existed to make profits for its stockholders.
Our blaming of businesses also ignores the ultimate responsibility of the public for
creating the condition that let a business profit through destructive environmental
policies. In the long run, it is the public, either directly or through its politicians, that has
the power to make such destructive policies unprofitable and illegal, and to make
sustainable environmental policies profitable.
The public can do that by suing businesses for harming them, as happened after the
Exxon Valdez disaster, in which over 40,000m3 of oil were spilled off the coast of
Alaska. The public may also make their opinion felt by preferring to buy sustainably
harvested products; by making employees of companies with poor track records feel
ashamed of their company and complain to their own management; by preferring their
governments to award valuable contracts to businesses with a good environmental track
record; and by pressing their governments to pass and enforce laws and regulations
requiring good environmental practices.
In turn, big businesses can expert powerful pressure on any suppliers that might ignore
public or government pressure. For instance, after the US public became concerned about
the spread of a disease known as BSE, which was transmitted to humans through infected
meat, the US government’s Food and Drug Administration introduced rules demanding
that the meat industry abandon practices associated with the risk of the disease spreading.
But for five years the meat packers refused to follow these, claiming that they would be
too expensive to obey. However, when a major fast-food company then made the same
demands after customer purchases of its hamburgers plummeted, the meat industry
complied within weeks. The public’s task is therefore to identify which links in the
supply chain are sensitive to public pressure: for instance, fast-food chains or jewelry
stores, but not meat packers or gold miners.
Some readers may be disappointed or outraged that I place the ultimate responsibility for
business practices harming the public on the public itself. I also believe that the public
must accept the necessity for higher prices for products to cover the added costs, if any,
of sound environmental practices. My views may seem to ignore the belief that
businesses should act in accordance with moral principles even if this leads to a reduction
in their profits. But I think we have to recognize that, throughout human history, in all
politically complex human societies, government regulation has arisen precisely because
it was found that not only did moral principles need to be made explicit, they also needed
to be enforced.
To me, the conclusion that the public has the ultimate responsibility for the behavior of
even the biggest businesses is empowering and hopeful, rather than disappointing. My
conclusion is not a moralistic one about who is right or wrong, admirable or selfish, a
good guy or a bad guy. In the past, businesses have changed when the public came to
expect and require different behavior, to reward businesses for behavior that the public
wanted, and to make things difficult for businesses practicing behaviors that the public
didn’t want. I predict that in the future, just as in the past, changes in public attitudes will
be essential for changes in businesses’ environmental practices.
Questions 27-31
Complete the summary using the list of words, A-J, below. Write the correct letter, A-J, in
boxes 27-31 on your answer sheet.
Big businesses
Many big businesses today are prepared to harm people and the environment in order to
make money, and they appear to have no 27………………. . Lack of 28………………..
by governments and lack of public 29………………. can lead to environmental problems
such as 30……………….. or the destruction of 31……………….
A. funding D. moral standards G. flooding
B. trees E. control H. overfishing
C. rare species F. involvement I. worker support
Question 32-34
Choose the correct letter, A, B, C or D. Write the correct letter in boxes 32-34 on your
answer sheet.
32. The main idea of the third paragraph is that environmental damage
A. requires political action if it is to be stopped.
B. is the result of ignorance on the part of the public.
C. could be prevented by the action of ordinary people.
D. can only be stopped by educating business leaders.
33. In the fourth paragraph, the writer describes ways in which the public can
A. reduce their own individual impact on the environment.
B. learn more about the impact of business of the environment.
C. raise awareness of the effects of specific environmental disasters.
D. influence the environmental policies of businesses and governments.
34. What pressure was exerted by big business in the case of the disease BSE?
A. Meat packers stopped supplying hamburgers to fast-food chains.
B. A fast-food company forced their meat suppliers to follow the law.
C. Meat packers persuaded the government to reduce their expenses.
D. A fast-food company encouraged the government to introduce legislation.
Questions 35-39
Do the following statements agree with the claims of the writer in Reading Passage 3? In
boxes 35-39 on your answer sheet, write YES/NO/NG
35. The public should be prepared to fund good environmental practices.
36. There is a contrast between the moral principles of different businesses.
37. It is important to make a clear distinction between acceptable and unacceptable
behaviour.
38. The public have successfully influenced businesses in the past.
39. In the future, businesses will show more concern for the environment.
Question 40
Choose the correct letter, A, B, C or D. Write the correct letter in box 40 on your answer
sheet.
40. What would be the best subheading for this passage?
A. Will the world survive the threat caused by big businesses?
B. How can big businesses be encouraged to be less driven by profit?
C. What environmental dangers are caused by the greed of businesses?
D. Are big businesses to blame for the damage they cause the environment?

The Penny Black

It might not have looked very impressive, but the Penny Black, now 170 years old, was
the first stamp to be created and it launched the modem postal system in Britain.
Before 1840 and the arrival of the Penny Black, you had to be rich and patient to use the
Royal Mail. Delivery was charged according to the miles travelled and the number of
sheets of paper used; a 2-page letter sent from Edinburgh to London, for example, would
have cost 2 shillings, or more than £7 in today’s money. And when the top-hatted letter
carrier came to deliver it, it was the recipient who had to pay for the postage. Letter
writers employed various ruses to reduce the cost, doing everything possible to cram
more words onto a page. Nobody bothered with heavy envelopes; instead, letters would
be folded and sealed with wax. You then had to find a post office - there were no pillar
boxes - and hope your addressee didn't live in one of the several rural areas which were
not served by the system. If you were lucky, your letter would arrive (it could take days)
without being read or censored.
The state of mail had been causing concern throughout the 1830s, but it was Rowland
Hill, an inventor, teacher and social reformer from Kidderminster, who proposed a
workable plan for change. Worried that a dysfunctional, costly service would stifle
communication just as Britain was in the swing of its second industrial revolution, he
believed reform would ease the distribution of ideas and stimulate trade and business,
delivering the same promise as the new railways.
Hill’s proposal for the penny post, which meant any letter weighing less than half an
ounce (14 grams) could be sent anywhere in Britain for about 30p in today’s money, was
so radical that the Postmaster General, Lord Lichfield, said, 'Of all the wild and visionary
schemes which I ever heard of, it is the most extravagant.’ Lord Lichfield spoke for an
establishment not convinced of the need for poor people to post anything. But merchants
and reformers backed Hill. Soon the government told him to make his scheme work. And
that meant inventing a new type of currency.
Hill quickly settled on 'a bit of paper covered at the back with a glutinous wash which the
user might, by applying a little moisture, attach to the back of a letter’. Stamps would be
printed in sheets of 240 that could be cut using scissors or a knife. Perforations would not
arrive until 1854. The idea stuck, and in August 1839 the Treasury launched a design
competition open to ‘all artists, men of science and the public in general’. The new stamp
would need to be resistant to forgery, and so it was a submission by one Mr Cheverton
that Hill used as the basis for one of the most striking designs in history. Cheverton, who
worked as a sculptor and an engineer, determined that a portrait of Queen Victoria,
engraved for a commemorative coin when she was a 15-year-old princess, was detailed
enough to make copying difficult, and recognisable enough to make fakes easy to spot.
The words ‘Postage’ and ‘One Penny’ were added alongside flourishes and ornamental
stars. Nobody thought to add the word ‘Britain’, as it was assumed that the stamps would
solely be put to domestic use.
With the introduction of the new postal system, the Penny Black was an instant hit, and
printers struggled to meet demand. By the end of 1840, more than 160 million letters had
been sent - more than double the previous year. It created more work for the post office,
whose reform continued with the introduction of red letter boxes, new branches and more
frequent deliveries, even to the remotest address, but its lasting impact on society was
more remarkable.
Hill and his supporters rightly predicted that cheaper post would improve the ‘diffusion
of knowledge’. Suddenly, someone in Scotland could be reached by someone in London
within a day or two. And as literacy improved, sections of society that had been
disenfranchised found a voice.
Tristram Hunt, an historian, values the ‘flourishing of correspondence’ that followed the
arrival of stamps. ‘While I was writing my biography of Friedrich Engels I could read the
letters he and Marx sent between Manchester and London,’ he says. ‘They wrote to each
other three times a day, pinging ideas back and forth so that you can almost follow a real-
time correspondence.’
The penny post also changed the nature of the letter. Weight-saving tricks such as cross-
writing began to die out, while the arrival of envelopes built confidence among
correspondents that mail would not be stolen or read. And so people wrote more private
things - politically or commercially sensitive information or love letters. ‘In the early
days of the penny post, there was still concern about theft,’ Hunt says. ‘Engels would still
send Marx money by ripping up five-pound notes and sending the pieces in different
letters.’ But the probity of the postal system became a great thing and it came to be
expected that your mail would not be tampered with.
For all its brilliance, the Penny Black was technically a failure. At first, post offices used
red ink to cancel stamps so that they could not be used again. But the ink could be
removed. When in 1842, it was determined that black ink would be more robust, the
colour of the Penny Black became a sort of browny red, but Hill’s brainchild had made its
mark.
Questions 28-30
Choose the correct letter, A, B, C or D. Write the correct letter in boxes 28-30 on your
answer sheet.
28. One of the characteristics of the postal service before the 1840s was that
A. postmen were employed by various organisations.
B. letters were restricted to a certain length.
C. distance affected the price of postage.
D. the price of delivery kept going up.
29. Letter writers in the 1830s
A. were not responsible for the cost of delivery.
B. tried to fit more than one letter into an envelope.
C. could only send letters to people living in cities.
D. knew all letters were automatically read by postal staff.
30. What does the text say about Hill in the 1830s?
A. He was the first person to express concern about the postal system.
B. He considered it would be more efficient for mail to be delivered by rail.
C. He felt that postal service reform was necessary for commercial development.
D. His plan received support from all the important figures of the day.
Questions 31-34
Look at the following statements (Questions 31-34) and the list of people below. Match
each statement with the correct person, A, B , C or [Link] the correct letter, A, B, C or
D, in boxes 31-34 on your answer sheet.
NB You may use any letter more than once.
31. His inspiration came from a particular picture.
32. He claimed that the postal system would lead to the spread of information.
33. He organised the creation of the first stamp.
34. He expressed doubts about the plans to change the postal service.
List of People
A. Rowland Hill C. Cheverton
B. Lord Lichfield D. Tristram Hunt
Questions 35-40
Complete the notes below. Choose NO MORE THAN TWO WORDS from the passage for
each answer. Write your answers in boxes 35-40 on your answer sheet.
The Penny Black
 Design came about as a result of a competition organised by the 35 ........................
 Based on an engraving of Queen Victoria featured on a 36 .........................
 Apart from the Queen’s face, the stamp had just three words and pictures of
37......................... as decoration
 No mention of 38......................... as plan was for stamps to be for domestic use
only
 The 39........................., which was applied to indicate that the stamp had been
used, proved to be ineffective
 In 1842, the 40......................... of the stamp was changed.

The Hollywood Film Industry

A. This chapter examines the ‘Golden Age’ of the Hollywood film studio system and
explores how a particular kind of filmmaking developed during this period in US film
history. It also focuses on the two key elements which influenced the emergence of the
classic Hollywood studio system: the advent of sound and the business ideal of vertical
integration. In addition to its historical interest, inspecting the growth of the studio
system may offer clues regarding the kinds of struggles that accompany the growth of
any new medium. It might, in fact, be intriguing to examine which changes occurred
during the growth of the Hollywood studio, and compare those changes to contemporary
struggles in which production companies are trying to define and control emerging
industries, such as online film and interactive television.
B. The shift of the industry away from ‘silent’ films began during the late 1920s. Warner
Bros.’ 1927 film The Jazz Singer was the first to feature synchronized speech, and with it
came a period of turmoil for the industry. Studios now had proof that ‘talkie’ films would
make them money, but the financial investment this kind of filmmaking would require,
from new camera equipment to new projection facilities, made the studios hesitant to
invest at first. In the end, the power of cinematic sound to both move audiences and
enhance the story persuaded studios that talkies were worth investing in. Overall, the use
of sound in film was well-received by audiences, but there were still many technical
factors to consider. Although full integration of sound into movies was complete by 1930,
it would take somewhat longer for them to regain their stylistic elegance and dexterity.
The camera now had to be encased in a big, clumsy, unmoveable soundproof box. In
addition, actors struggled, having to direct their speech to awkwardly-hidden
microphones in huge plants, telephones or even costumes.
C. Vertical integration is the other key component in the rise of the Hollywood studio
system. The major studios realized they could increase their profits by handling each
stage of a film’s life: production (making the film), distribution (getting the film out to
people) and exhibition (owning the theaters in major cities where films were shown first).
Five studios, ‘The Big Five’, worked to achieve vertical integration through the late
1940s, owning vast real estate on which to construct elaborate sets. In addition, these
studios set the exact terms of films’ release dates and patterns. Warner Bros., Paramount,
20th Century Fox, MGM and RKO formed this exclusive club. ‘The Little Three’ studios
– Universal, Columbia and United Artists – also made pictures, but each lacked one of
the crucial elements of vertical integration. Together these eight companies operated as a
mature oligopoly, essentially running the entire market.
D. During the Golden Age, the studios were remarkably consistent and stable enterprises,
due in large part to long-term management heads – the infamous ‘movie moguls’ who
ruled their kingdoms with iron fists. At MGM, Warner Bros, and Columbia, the same men
ran their studios for decades. The rise of the studio system also hinges on the treatment of
stars, who were constructed and exploited to suit a studio’s image and schedule. Actors
were bound up in seven-year contracts to a single studio, and the studio boss generally
held all the options. Stars could be loaned out to other production companies at any time.
Studio bosses could also force bad roles on actors, and manipulate every single detail of
stars’ images with their mammoth in-house publicity departments. Some have compared
the Hollywood studio system to a factory, and it is useful to remember that studios were
out to make money first and art second.
E. On the other hand, studios also had to cultivate flexibility, in addition to consistent
factory output. Studio heads realized that they couldn’t make virtually the same film over
and over again with the same cast of stars and still expect to keep turning a profit. They
also had to create product differentiation. Examining how each production company tried
to differentiate itself has led to loose characterizations of individual studios’ styles. MGM
tended to put out a lot of all-star productions while Paramount excelled in comedy and
Warner Bros, developed a reputation for gritty social realism. 20th Century Fox forged
the musical and a great deal of prestige biographies, while Universal specialized in
classic horror movies.
F. In 1948, struggling independent movie producers and exhibitors finally triumphed in
their battle against the big studios’ monopolistic behavior. In the United States versus
Paramount federal decree of that year, the studios were ordered to give up their theaters in
what is commonly referred to as ‘divestiture’ – opening the market to smaller producers.
This, coupled with the advent of television in the 1950s, seriously compromised the
studio system’s influence and profits. Hence, 1930 and 1948 are generally considered
bookends to Hollywood’s Golden Age.
Questions 14-19
Reading Passage 2 has six paragraphs, A-F. Choose the correct heading for each
paragraph from the list of headings below. write the correct letter, i-viii, in boxes 14-19
on your answer sheet.
List of Headings
i. The power within each studio v. Distinguishing themselves from the
ii. The movie industry adapts to rest of the market
innovation vi. A double attack on film studios’
iii. Contrasts between cinema and other power
media of the time vii. Gaining control of the industry
iv. The value of studying Hollywood’s viii. The top movies of Hollywood’s
Golden Age Golden Age

14. Paragraph A 16. Paragraph C 18. Paragraph E

15. Paragraph B 17. Paragraph D 19. Paragraph F
Questions 20-23
Do the following statements agree with the information given in Reading Passage 2? In
boxes 20-23 on your answer sheet, write TRUE/FALSE/NG
20. After The Jazz Singer came out, other studios immediately began making movies with
synchronized sound.
21. There were some drawbacks to recording movie actors’ voices in the early 1930s.
22. There was intense competition between actors for contracts with the leading studios.
23. Studios had total control over how their actors were perceived by the public.
Questions 24-26
Complete the summary below. Choose NO MORE THAN TWO WORDS from the passage
for each answer. Write your answers in boxes 24-26 on your answer sheet.
THE HOLLYWOOD STUDIOS
Throughout its Golden Age, the Hollywood movie industry was controlled by a handful
of studios. Using a system known as (24)…………… , the biggest studios not only made
movies, but handled their distribution and then finally showed them in their own theaters.
These studios were often run by autocratic bosses – men known as (25)………… , who
often remained at the head of organisations for decades. However, the domination of the
industry by the leading studios came to an end in 1948, when they were forced to open
the market to smaller producers – a process known as (26)…………
Pricing is the second of the four “Ps” of the marketing mix, first described by E. Jerome
McCarthy in his 1960 book, Basic Marketing. Since then, much innovation and energy
has been focused on the other three Ps - product, place or distribution and promotion. Yet
marketers have neglected the innovative potential of pricing at their peril.

Price “captures value” for the company in the most direct way possible - a profitable
return. The case is long proven - in 1992 a McKinsey survey of 2,500 companies
calculated that a 1 per cent increase in price improves operating profit by 11.1 per cent -
greatly exceeding the impact of a1 per cent improvement in volume, variable costs or
fixed costs. The art and science of pricing deserves closer attention.

Those in charge of pricing decisions have three elements to consider: internal tools and
techniques such as price structures or price bundling; competitive value strategies; and
customer insights. The elements should be balanced to create profits for the company and
sustainable value for customers.

Pricing decision-makers first need to get to grips with the techniques for constructing and
presenting prices, known as price structures. Consider a typical price structure. In the face
of strong competition for travel across the English Channel, P&O Ferries charges a range
of prices for different options. Its standard price for a midday return crossing is £244
($409) - but it charges more for the privilege of, say, taking priority when loading and
disembarking.

Alongside this tariff P&O offers promotional fares of £48 for a single crossing, tied to
particular times. The promotional price is structured on the assumption that customers
will generate additional income and benefits. For one thing, the fare acts as an
advertisement for and an opportunity to sample the product, as the cost is low enough for
some customers to treat it as an impulse purchase. Second, if travellers miss the specified
crossing times, the price rises. And it factors in further profit opportunities on board,
where travellers are likely to buy meals, beers, wines, spirits or souvenirs.

Price bundling - when customers are persuaded to buy a package of goods or services
rather than a single item - is another popular technique for increasing value. Today, some
companies are using bundling as a way of keeping their brand at the forefront of the
customer's mind. For instance, children will hold on to the Disney toy long after they
finish the McDonald's Happy Meal.
The car industry has used pricing structures and bundling for many years to raise the
value of its sales. Consider the UK version of Mini One. It is advertised at £10,780, on
top of which three option packs - branded Salt, Pepper or Chilli - tempt buyers to “spice
up” their chosen vehicle. The packs include cosmetic features, as well as those known to
be advantageous when reselling cars - seat height adjustment, for example. For some
customers, the extras become an obligatory part of the purchase.
Managers need to develop a keen sense of the value of their products relative to those of
competitors. Lower-priced competitors can severely damage customers' perceptions of
value in an industry by encouraging customers to make lower prices the priority rather
than any product or service benefits.

The emergence of discount airlines is a prime example of this: Southwest Airlines, the
highly successful low-cost US airline, increased its share of domestic flight revenue from
3.2 per cent in 1990 to 12.9 per cent in 2002. Ryanair and EasyJet have seen similar
success in Europe.

However, competitors can fight back. Jet Blue - launched in February 2000 in New York -
does not offer the lowest fares on the market, yet succeeds via a benefit-led advertising
message to consumers. It trades on such features as its in-flight comforts, 24 channels of
DirecTV and industry-leading punctuality. In July 2004 Jet Blue delivered its 14th
consecutive quarter of profit and a 14.1 per cent operating margin.

Bottled water brands have always faced low-priced competition - namely tap water - yet
have seen remarkable growth in the past decade by differentiation and a focus on
benefits. Own-label brands from supermarkets grew by 19 per cent in the UK market in
2003. Danone Waters launched Volvic Revive, a mineral water based sports drink, and
grew by 29 per cent in 2003. Other big brands focused on different qualities. Evian's
Nomad bottle, aimed at outdoor types, carries a belt loop, while Lakeland Willows'
Spring Water contains salacin, a naturally occurring aspirin, which combats heart disease.
If they offer genuine value to consumers, such benefits allow producers to sustain or raise
prices.

Companies can try to defuse price competition by price and non-price responses. The
former might include a stock-loading promotion to large customers, which tempts them to
bring forward future orders and takes them out of the market until the price war is over. A
non-price response might highlight the performance risks of lower-priced products in
marketing promotions. Insurance companies often point to their speedy claims service as
a reminder to buyers that a lower priced policy may not respond as rapidly.

If it is impossible for a company to escape a price war, it should limit its responses to the
channel, region or segment where competition is most threatening. Tesco, the UK retailer,
focuses price cuts on products that tend to be bought primarily by price-sensitive
shoppers. Instead of discounting bananas, which are bought by all shoppers, it may cut
the price of its “value” brand margarine, bought by price-conscious shoppers and few
others. The third element is the gathering and interpretation of customer knowledge.
Making unfounded assumptions about customer attitudes to price can easily lead to
pricing errors.

Misperceptions are particularly common in product launches, where managers often set
the price of new products too low. A 2003 study by Michael Marn, Eric Roegner and
Craig Zawada found that managers frequently price new products by reference to existing
products, even if they provide considerably greater value to the customer.

Take a historical example. In August 1959, the British Motor Corporation lost its nerve
on the eve of the original launch of the Mini, reducing the planned list price to just below
the £500 level - the level of perceived psychological importance. The car was an instant
sales success and demand outstripped supply. However, profitability was so low over the
early years that it was hard for the company to invest in the car's subsequent
development.

Write T if the following statements are true and F if they are false. (20pts)
31. A lot of work has been done on product, place and promotion.
32. Marketers have thought hard about pricing for a long time.
33. Managers need to follow competing companies' prices.
34. Low-price competition in an industry is always a good thing.
35. Southwest is a traditional airline, which increased its share of domestic flight revenue.
36. Jet Blue is an example of competing on price in the market.
37. Jet Blue is successful in offering only basic in-flight services.
38. Own-label brands from supermarkets increased nearly one-fifths in the UK market in
2003.
39. Manufacturers always bring bank benefits to raise the prices of their products.
40. The launch of the Mini by the British Motor Corporation enabled demand to exceed
supply.

Working out where great ideas come from is one of the big puzzles of modern
management. Corporate research laboratories and in-house product development groups
are only part of the answer. Breakthrough products and processes can come from start-
ups, competitors, university campuses and rank-and-file employees.

Eric von Hippel, a professor of management of innovation at the Massachusetts Institute

of Technology, has spent three decades studying the role played by customers in shaping
new products. The fruits of his labours are nicely summarised in Democratizing
Innovation, a useful primer on what he calls "user-centered innovation".
For example, practitioners of extreme sports, from windsurfing to ice-climbing, play a
significant role in the development of equipment subsequently mass-produced by
manufacturers. Surgical equipment companies are often led towards new products by
surgeons who operate, literally and figuratively, at the cutting edge.

These customers are a breed apart. While most of us are happy to use products off the
shelf, a minority wants customised equipment to push the boundaries of their hobby or
profession. Such "lead users" sometimes go to custom manufacturers to get exactly what
they want. More often they tinker with commercially available products. Smart
manufacturers take notice.

So what, you might think. Are not Prof von Hippel's lead users just a reincarnation of the
"prosumers" - pro-active consumers - identified 20 years ago by Philip Kotler, a
marketing professor at Kellogg School of Management? Is it not common sense for
companies to stay close to their most demanding customers?

Yes, but Democratizing Innovation goes further than Kotler ever did, arguing that "users
are the first to develop many, and perhaps most, new industrial and commercial
products". This being so, competitive advantage might be expected to flow to
manufacturers who systematically harvest this crop of ideas.

For example, 3M, the industrial products group, has had programmes in place since 1996
to harness ideas generated by lead users. After crunching the numbers, von Hippel found
that "lead-user-developed product concepts" at 3M were likely to be more novel, enjoy
higher market share, have greater potential to develop into an entire product line and be
more strategically important.

Mass-producing products developed by lead users is only one possible approach.

Alternatives include selling toolkits with which customers can build their own creations,
or developing products that complement user innovations.

This latter strategy is useful in circumstances where - to the consternation of economists -

lead users give away their innovations. Thus the Linux operating system was developed
by members of the open-source software community, many of whom are lead users of
computing power. Since Linux is freely available, commercial software companies are
unable to sell proprietary versions. Instead, they have responded with software and
services that complement Linux.

The toolkits approach has been used by companies including International Flavors &
Fragrances, which supplies customers with the tools to design their own food flavours.
Product development is left to users who are, of course, in the best position to know
exactly what they want.
These examples turn on its head the traditional division of labour between producer and
consumer. Manufacturers are supposed to develop and produce goods. Customers are
supposed to consume. Democratizing Innovation shows that the flow of ideas and
expertise is more complex.

Look back at the reading. Find the words or expressions which mean (10 pts):
41.__________made on a large scale, usually in a factory or plant (paragraph 3)
42.__________in the appropriate or usual position or order (paragraph 4)
43___________a group of commodities that a company creates under a single brand
(paragraph 4)
44.__________make a lot of people express feelings about something (paragraph 4)
45.__________a thing that is chosen to do or have out of two or more possibilities
(paragraph 5)

Made in Europe. By Jo Johnson, Fred Kapner and Richard McGregor. From the
Financial Times
Almost every fashion label outside the top super-luxury brands is either already
manufacturing in Asia or thinking of it. Coach, the US leather goods maker, is a classis
example. Over the past five years, it has lifted all its gross margins by manufacturing
solely in low-cost markets. In March 2002 it closed its factory in Lares, Puerto Rico, its
last company-owned plant, and outsources all its products.

Burberry has many Asian licensing arrangements. In 2000 it decided to renew Sanyo's
Japanese licence for 20 ten years. This means that almost half of Burberry's sales at retail
value will continue to be produced under licence in Asia. At the same time however,
Japanese consumers prefer the group's European-made products. Sanyo is now creating to
this demand for a snob alternative to the Burberry products made in its factories across
Asia by opening a flagship store in Tokyo's Ginza, where it sells Burberry products
imported from Europe.

In interviews with the FT, many executives says the top luxury brands will continue to be
seen, particularly in Asia, as European. Domenico De Sole of Gucci says “ The Asian
Consumer really does believe – whether it's true or not – that luxury comes from Europe
and must be made there to be the best.' Serge Weinberg, Chief Executive of Pinault
Printemps Redoute, which controls Gucci, says it will not move Gucci's production
offshore. Yet some in the industry recognize that change may be round the corner even
for the superluxury brands. Patrizio Bertelli, Chief Executive of Prada, says:' The “Made
in Italy” label is important but what we are really offering is a style, and style is an
expression of culture.' He therefore recognizes that quality fashion items may not always
need to be produced in Italy.

Amitava Chattopadhyay, professor of marketing at Insead, the business school, says:' A

brand is a set of associations in the mind of the consumer and one of these is the country
of origin. For luxury goods, the role of the brand is crucial. To damage it is a cardinal sin
and no brand manager will want to get the balance between manufacturing location and
the brand image wrong'.

Write T if the following statements are true and F if they are false. (20pts)
21. Coach no longer has a factory in Puerto Rico
22. Coach, like many other companies, is outsourcing its products to reduce costs
23. Some Japanese people choose to buy Burberry products made in Europe rather than
in Japan.
24. Sanyo's store in Tokyo sells Burberry products made only in Asia.
25. According to Domenico De Sole, the best luxury products are made in Japan.
26. Gucci is planning to outsource some of its products
27. Patrizio Bertelli believes that luxury fashion products should always be made in
Europe.

INSIDE THE MUSIC BUSINESS

The world's biggest band
When Mick, Keith, Charlie and Ronnie come on stage at the Giants Stadium in New York
to 40,000 adoring fans, they have the satisfaction of knowing that the Rolling Stones are
easily the world's wealthiest rock band. Having generated more than $1.5 billion in gross
revenues since 1989, two thirds of that earned on tour, they have made more money than
even fellow megastars U2, Bruce Springteen and Sting
Financial acumen
Now firmly established rock legends, the Stones are also a rock-solid business. It was
their chief financial advisor, London banker Prince Rupert Zu Loeweinstein, who was
first to see that, whist concerts make the most money, music rights provide the steadiest
income stream. And though the Stones may never have produced a real blockbuster on
the scale of Fleetwood Mac's Rumours or Pink Floyd's Dark Side of the Moon, Jagger
and Richards have made over 40 .albums and written more than 200 songs. Each time
they get eirplay, they collect 50 percent of the royalties. According to Fortune Magazine,
that amounts to $56 mimion in the past decade. Microsoft alone paid them $4 million to
use Start Me Up in the Windows 95 commercial.
Big business
The music business has come a long way since the Stones started out in the 60s. In those
days record labels like Motown, Island and Elektra all had their own distinctive sound,
and you could have a string of top ten hits but still barely be able to afford the bus fare
home from your latest sell-out gig. These days just five major music companies_UMG,
Sony, Warner, EMI and BMG control 75 to 80 percent of all commercially released
recordings and the sums of money involved are huge.
Bankability
Today's most profitable solo performers are Madonna, Elton John, Celine Dion and Garth
Brooks. The back catalogues of Sinatra and Elvis also bring in millions. In fact, dead
Elvis started out-earning live Elvis in 1988. Unbelievably, the world's bestselling single
of all time remains Bing Crosby's White Christmas, closely followed by the version of
Candie in the Wind Elton John sang at the funeral of Princess Diana, and the most
recorded pop song ever is The Beatles' Yesterday, which exists in over 2,000 different
versions. But the real money has always been in albums, not singles. The two top-sellers
are Michael Jackson's Thriller and Alanis Morissette's Jagged Little Pill. Both have sold
around 30 million units worldwide.
Rights and Rip-offs
With this kind of money at stake, it's not surprising that the relationship between the artist
and the record company can be an uneasy one, with young up-and-coming bands often
too dazzled by the prospect of stardom to look closely at the small print in their contracts.
Even established performers like Prince and George Michael have had well-publicized
clashes with their management. Courtney Love went so far as to file a lawsuit against
Geffen Records to be released from her contract. And Mariah Carey found herself in the
opposite situation, reputedly being paid off to the tune of £19.5 million when Virgin
Records decided it didn't want to record her after all.
The future of music
But soon it may be the record companies themselves who start losing out. Piracy already
costs the industry $4.3 billion a year, and with the arrival of MP3, only sound quality
stands in the way of all music being burned onto CD on personal computers. Some 'Indie'
music labels like Bombco produce albums exclusively on the Internet and artists as high-
profile as David Bowie have experimented with website launches of their latest
recordings. Of course, the major music companies have fought back creating
downloadable music services of their own, but with more direct access to the consumer,
bands may yet be able to fulfill their dream of being immortalized without first having to
sell their soul.

Look back at the reading. Find the words or expressions which mean (10 pts):
31. money earned before tax and costs (paragraph 1)
32. the most regular source of money (paragraph 2)
33. highly successful album or book (paragraph 2)
34. money paid to artists each time their work is sold or performed (paragraph 2)
35. a series of bestselling records (paragraph 3)
36. a musical performance to which all the tickets are sold (paragraph 3)
37. earning more than (paragraph 4)
38. likely to become popular soon (paragraph 5)
39. the details in a contract _ often limiting your rights (paragraph 5)
40. angry disagreements (paragraph 5)
 The Impact of Wilderness Tourism
A. The market for tourism in remote areas is booming as never before. Countries all
across the world are actively promoting their 'wilderness' regions - such as mountains,
Arctic lands, deserts, small islands and wetlands - to high-spending tourists. The
attraction of these areas is obvious: by definition, wilderness tourism requires little or no
initial investment. But that does not mean that there is no cost. As the 1992 United
Nations Conference on Environment and Development recognized, these regions are
fragile (i.e. highly vulnerable to abnormal pressures) not just in terms of their ecology,
but also in terms of the culture of their inhabitants. The three most significant types of
fragile environment in these respects, and also in terms of the proportion of the Earth's
surface they cover, are deserts, mountains and Arctic areas. An important characteristic is
their marked seasonality, with harsh conditions prevailing for many months each year.
Consequently, most human activities, including tourism, are limited to quite clearly
defined parts of the year. Tourists are drawn to these regions by their natural landscape
beauty and the unique cultures of their indigenous people. And poor governments in these
isolated areas have welcomed the new breed of 'adventure tourist', grateful for the hard
currency they bring. For several years now, tourism has been the prime source of foreign
exchange in Nepal and Bhutan. Tourism is also a key element in the economies of Arctic
zones such as Lapland and Alaska and in desert areas such as Ayers Rock in Australia and
Arizona's Monument Valley.
B. Once a location is established as a main tourist destination, the effects on the local
community are profound. When hill-farmers, for example, can make more money in a
few weeks working as porters for foreign trekkers than they can in a year working in their
fields, it is not surprising that many of them give up their farm-work, which is thus left to
other members of the family. In some hill-regions, this has led to a serious decline in farm
output and a change in the local diet, because there is insufficient labour to maintain
terraces and irrigation systems and tend to crops. The result has been that many people in
these regions have turned to outside supplies of rice and other foods.
In Arctic and desert societies, year-round survival has traditionally depended on hunting
animals and fish and collecting fruit over a relatively short season. However, as some
inhabitants become involved in tourism, they no longer have time to collect wild food;
this has led to increasing dependence on bought food and stores. Tourism is not always
the culprit behind such changes. All kinds of wage labour, or government handouts, tend
to undermine traditional survival systems. Whatever the cause, the dilemma is always the
same: what happens if these new, external sources of income dry up? The physical impact
of visitors is another serious problem associated with the growth in adventure tourism.
Much attention has focused on erosion along major trails, but perhaps more important are
the deforestation and impacts on water supplies arising from the need to provide tourists
with cooked food and hot showers. In both mountains and deserts, slow-growing trees are
often the main sources of fuel and water supplies may be limited or vulnerable to
degradation through heavy use.
C. Stories about the problems of tourism have become legion in the last few years. Yet it
does not have to be a problem. Although tourism inevitably affects the region in which it
takes place, the costs to these fragile environments and their local cultures can be
minimized. Indeed, it can even be a vehicle for reinvigorating local cultures, as has
happened with the Sherpas of Nepal's Khumbu Valley and in some Alpine villages. And a
growing number of adventure tourism operators are trying to ensure that their activities
benefit the local population and environment over the long term.
In the Swiss Alps, communities have decided that their future depends on integrating
tourism more effectively with the local economy. Local concern about the rising number
of second home developments in the Swiss Pays d'Enhaut resulted in limits being
imposed on their growth. There has also been a renaissance in communal cheese
production in the area, providing the locals with a reliable source of income that does not
depend on outside visitors.
Many of the Arctic tourist destinations have been exploited by outside companies, who
employ transient workers and repatriate most of the profits to their home base. But some
Arctic communities are now operating tour businesses themselves, thereby ensuring that
the benefits accrue locally. For instance, a native corporation in Alaska, employing local
people, is running an air tour from Anchorage to Kotzebue, where tourists eat Arctic
food, walk on the tundra and watch local musicians and dancers.
Native people in the desert regions of the American Southwest have followed similar
strategies, encouraging tourists to visit their pueblos and reservations to purchase high-
quality handicrafts and artwork. The Acoma and San Ildefonso pueblos have established
highly profitable pottery businesses, while the Navajo and Hopi groups have been
similarly successful with jewellery.
Too many people living in fragile environments have lost control over their economies,
their culture and their environment when tourism has penetrated their homelands. Merely
restricting tourism cannot be the solution to the imbalance, because people's desire to see
new places will not just disappear. Instead, communities in fragile environments must
achieve greater control over tourism ventures in their regions; in order to balance their
needs and aspirations with the demands of tourism. A growing number of communities
are demonstrating that, with firm communal decision-making, this is possible. The
critical question now is whether this can become the norm, rather than the exception.
Questions 1-3: Reading Passage 1 has three sections, A-C. Choose the correct heading
for each section from the list of headings below. Write the correct number i-vi in boxes 1-
3 on your answer sheet.
List of Headings
i. The expansion of international tourism in recent years.
ii. How local communities can balance their own needs with the demands of wilderness
tourism.
iii. Fragile regions and the reasons for the expansion of tourism there.
iv. Traditional methods of food-supply in fragile regions.
v. Some of the disruptive effects of wilderness tourism.
vi. The economic benefits of mass tourism.
1. Section A 2. Section B 3. Section C

Questions 4-9: Do the following statements reflect the claims of the writer in Reading
Passage 1? In boxes 4-9 on your answer sheet, write YES/NO/NG
4. The low financial cost of setting up wilderness tourism makes it attractive to many
countries.
5. Deserts, mountains and Arctic regions are examples of environments that are both
ecologically and culturally fragile.
6. Wilderness tourism operates throughout the year in fragile areas.
7. The spread of tourism in certain hill-regions has resulted in a fall in the amount of food
produced locally.
8. Traditional food-gathering in desert societies was distributed evenly over the year.
9. Government handouts do more damage than tourism does to traditional patterns of
food-gathering.
Questions 10-13: Complete the table below. Choose ONE WORD from Reading Passage
1 for each answer. Write your answers in boxes 10-13 on your answer sheet.

The Context, Meaning and Scope of Tourism

A. Travel has existed since the beginning of time, when primitive man set out, often
traversing great distances in search of game, which provided the food and clothing
necessary for his survival. Throughout the course of history, people have travelled for
purposes of trade, religious conviction, economic gain, war, migration and other equally
compelling motivations. In the Roman era, wealthy aristocrats and high government
officials also travelled for pleasure. Seaside resorts located at Pompeii and Herculaneum
afforded citizens the opportunity to escape to their vacation villas in order to avoid the
summer heat of Rome. Travel, except during the Dark Ages, has continued to grow and,
throughout recorded history, has played a vital role in the development of civilisations
and their economies.
B. Tourism in the mass form as we know it today is a distinctly twentieth-century
phenomenon. Historians suggest that the advent of mass tourism began in England during
the industrial revolution with the rise of the middle class and the availability of relatively
inexpensive transportation. The creation of the commercial airline industry following the
Second World War and the subsequent development of the jet aircraft in the 1950s
signalled the rapid growth and expansion of international travel. This growth led to the
development of a major new industry: tourism. In turn, international tourism became the
concern of a number of world governments since it not only provided new employment
opportunities but also produced a means of earning foreign exchange.
C. Tourism today has grown significantly in both economic and social importance. In
most industrialised countries over the past few years the fastest growth has been seen in
the area of services. One of the largest segments of the service industry, although largely
unrecognised as an entity in some of these countries, is travel and tourism. According to
the World Travel and Tourism Council (1992), Travel and tourism is the largest industry
in the world on virtually any economic measure including value-added capital
investment, employment and tax contributions. In 1992’ the industry’s gross output was
estimated to be $3.5 trillion, over 12 per cent of all consumer spending. The travel and
tourism industry is the world’s largest employer the almost 130 million jobs, or almost 7
per cent of all employees. This industry is the world’s leading industrial contributor,
producing over 6 per cent of the world’s national product and accounting for capital
investment in excess of $422 billion direct indirect and personal taxes each year. Thus,
tourism has a profound impact both on the world economy and, because of the educative
effect of travel and the effects on employment, on society itself.
D. However, the major problems of the travel and tourism industry that have hidden, or
obscured, its economic impact are the diversity and fragmentation of the industry itself.
The travel industry includes: hotels, motels and other types of accommodation;
restaurants and other food services; transportation services and facilities; amusements,
attractions and other leisure facilities; gift shops and a large number of other enterprises.
Since many of these businesses also serve local residents, the impact of spending by
visitors can easily be overlooked or underestimated. In addition, Meis (1992) points out
that the tourism industry involves concepts that have remained amorphous to both
analysts and decision makers. Moreover, in all nations this problem has made it difficult
for the industry to develop any type of reliable or credible tourism information base in
order to estimate the contribution it makes to regional, national and global economies.
However, the nature of this very diversity makes travel and tourism ideal vehicles for
economic development in a wide variety of countries, regions or communities.
E. Once the exclusive province of the wealthy, travel and tourism have become an
institutionalised way of life for most of the population. In fact, McIntosh and Goeldner
(1990) suggest that tourism has become the largest commodity in international trade for
many nations and, for a significant number of other countries, it ranks second or third.
For example, tourism is the major source of income in Bermuda, Greece, Italy, Spain,
Switzerland and most Caribbean countries. In addition, Hawkins and Ritchie, quoting
from data published by the American Express Company, suggest that the travel and
tourism industry is the number one ranked employer in the Bahamas, Brazil, Canada,
France, (the former) West Germany, Hong Kong, Italy, Jamaica, Japan, Singapore, the
United Kingdom and the United States. However, because of problems of definition,
which directly affect statistical measurement, it is not possible with any degree of
certainty to provide precise, valid or reliable data about the extent of world-wide tourism
participation or its economic impact. In many cases, similar difficulties arise when
attempts are made to measure domestic tourism.
Questions 1-4: Reading Passage 1 has five paragraphs, A-E. Choose the correct heading
for paragraphs B-E from the list of headings below. Write the correct number, i-vii, in
boxes 1-4 on your answer sheet.
List of Headings
i. Economic and social significance of v. Difficulty in recognising the economic
tourism effects of tourism
ii. The development of mass tourism vi. The contribution of air travel to
iii. Travel for the wealthy tourism
iv. Earning foreign exchange through vii. The world impact of tourism
tourism viii. The history of travel
Example: Paragraph A. Answer: viii
1. Paragraph B 3. Paragraph D
2. Paragraph C 4. Paragraph E
Questions 5-10: Do the following statements agree with the information given in
Reading Passage 1? In boxes 5-10 on your answer sheet, write TRUE/FALSE/NG
5. The largest employment figures in the world are found in the travel and tourism
industry.
6. Tourism contributes over six per cent of the Australian gross national product.
7. Tourism has a social impact because it promotes recreation.
8. Two main features of the travel and tourism industry make its economic significance
difficult to ascertain.
9. Visitor spending is always greater than the spending of residents in tourist areas.
10. It is easy to show statistically how tourism affects individual economies.
Questions 11-13: Complete the sentences below. Choose NO MORE THAN THREE
WORDS from the passage for each answer. Write your answers in boxes 11-13 on your
answer sheet.
11. In Greece, tourism the most important....................... .
12. The travel and tourism industry in Jamaica is the major....................... .
13. The problems associated with measuring international tourism are often reflected in
the measurement of........... .

The Lost City

An explorer’s encounter with the ruined city of Machu Picchu, the most famous icon of
the Inca civilisation
A. When the US explorer and academic Hiram Bingham arrived in South America in
1911, he was ready for what was to be the greatest achievement of his life: the
exploration of the remote hinterland to the west of Cusco, the old capital of the Inca
empire in the Andes mountains of Peru. His goal was to locate the remains of a city called
Vitcos, the last capital of the Inca civilisation.
Cusco lies on a high plateau at an elevation of more than 3,000 metres, and Bingham’s
plan was to descend from this plateau along the valley of the Urubamba river, which
takes a circuitous route down to the Amazon and passes through an area of dramatic
canyons and mountain ranges.
B. When Bingham and his team set off down the Urubamba in late July, they had an
advantage over travellers who had preceded them: a track had recently been blasted down
the valley canyon to enable rubber to be brought up by mules from the jungle. Almost all
previous travellers had left the river at Ollantaytambo and taken a high pass across the
mountains to rejoin the river lower down, thereby cutting a substantial corner, but also
therefore never passing through the area around Machu Picchu.
C. On 24 July they were a few days into their descent of the valley. The day began
slowly, with Bingham trying to arrange sufficient mules for the next stage of the trek. His
companions showed no interest in accompanying him up the nearby hill to see some ruins
that a local farmer, Melchor Arteaga, had told them about the night before. The morning
was dull and damp, and Bingham also seems to have been less than keen on the prospect
of climbing the hill. In his book Lost City of the Incas, he relates that he made the ascent
without having the least expectation that he would find anything at the top.
D. Bingham writes about the approach in vivid style in his book. First, as he climbs up
the hill, he describes the ever-present possibility of deadly snakes, ‘capable of making
considerable springs when in pursuit of their prey’; not that he sees any. Then there’s a
sense of mounting discovery as he comes across great sweeps of terraces, then a
mausoleum, followed by monumental staircases and, finally, the grand ceremonial
buildings of Machu Picchu. 'It seemed like an unbelievable dream the sight held me
spellbound ’, he wrote.
E. We should remember, however, that Lost City of the Incas is a work of hindsight, not
written until 1948, many years after his journey. His journal entries of the time reveal a
much more gradual appreciation of his achievement. He spent the afternoon at the ruins
noting down the dimensions of some of the buildings, then descended and rejoined his
companions, to whom he seems to have said little about his discovery. At this stage,
Bingham didn’t realise the extent or the importance of the site, nor did he realise what use
he could make of the discovery.
F. However, soon after returning it occurred to him that he could make a name for
himself from this discovery. When he came to write the National Geographic magazine
article that broke the story to the world in April 1913, he knew he had to produce a big
idea.
He wondered whether it could have been the birthplace of the very first Inca, Manco the
Great, and whether it could also have been what chroniclers described as ‘the last city of
the Incas’. This term refers to Vilcabamba the settlement where the Incas had fled from
Spanish invaders in the 1530s. Bingham made desperate attempts to prove this belief for
nearly 40 years. Sadly, his vision of the site as both the beginning and end of the Inca
civilisation, while a magnificent one, is inaccurate. We now know, that Vilcabamba
actually lies 65 kilometres away in the depths of the jungle.
G. One question that has perplexed visitors, historians and archaeologists alike ever since
Bingham, is why the site seems to have been abandoned before the Spanish Conquest.
There are no references to it by any of the Spanish chroniclers - and if they had known of
its existence so close to Cusco they would certainly have come in search of gold.
An idea which has gained wide acceptance over the past few years is that Machu Picchu
was a moya, a country estate built by an Inca emperor to escape the cold winters of
Cusco, where the elite could enjoy monumental architecture and spectacular views.
Furthermore, the particular architecture of Machu Picchu suggests that it was constructed
at the time of the greatest of all the Incas, the emperor Pachacuti (1438-71). By custom,
Pachacuti’s descendants built other similar estates for their own use, and so Machu
Picchu would have been abandoned after his death, some 50 years before the Spanish
Conquest.
Questions 14-20: Reading Passage 2 has seven paragraphs, A-G. Choose the correct
heading for each paragraph from the list of headings below. Write the correct number, i-
viii, in boxes 14-20 on your answer sheet.
List of Headings
i. Different accounts of the same journey v. A dramatic description
ii. Bingham gains support vi. A new route
iii. A common belief vii. Bingham publishes his theory
iv. The aim of the trip viii. Bingham’s lack of enthusiasm
14. Paragraph A 17. Paragraph D 19. Paragraph F
15. Paragraph B 18. Paragraph E 20. Paragraph G
16. Paragraph C
Questions 21-24 Do the following statements agree with the information given in
Reading Passage 2? In boxes 21-24 on your answer sheet, write TRUE/FALSE/NG
21. Bingham went to South America in search of an Inca city.
22. Bingham chose a particular route down the Urubamba valley because it was the most
common route used by travellers.
23. Bingham understood the significance of Machu Picchu as soon as he saw it.
24. Bingham returned to Machu Picchu in order to find evidence to support his theory.
Questions 25-26: Complete the sentences below. Choose ONE WORD ONLY from the
passage for each answer. Write your answers in boxes 25-26 on your answer sheet.
25. The track that took Bingham down the Urubamba valley had been created for the
transportation of.....................
26. Bingham found out about the ruins of Machu Picchu from a ..................... in the
Urubamba valley.

Case Study: Tourism New Zealand website

New Zealand is a small country of four million inhabitants, a long-haul flight from all the
major tourist-generating markets of the world. Tourism currently makes up 9% of the
country’s gross domestic product, and is the country’s largest export sector. Unlike other
export sectors, which make products and then sell them overseas, tourism brings its
customers to New Zealand. The product is the country itself – the people, the places and
the experiences. In 1999, Tourism New Zealand launched a campaign to communicate a
new brand position to the world. The campaign focused on New Zealand’s scenic beauty,
exhilarating outdoor activities and authentic Maori culture, and it made New Zealand one
of the strongest national brands in the world.
A key feature of the campaign was the website [Link], which provided
potential visitors to New Zealand with a single gateway to everything the destination had
to offer. The heart of the website was a database of tourism services operators, both those
based in New Zealand and those based abroad which offered tourism service to the
country. Any tourism-related business could be listed by filling in a simple form. This
meant that even the smallest bed and breakfast address or specialist activity provider
could gain a web presence with access to an audience of long-haul visitors. In addition,
because participating businesses were able to update the details they gave on a regular
basis, the information provided remained accurate. And to maintain and improve
standards, Tourism New Zealand organised a scheme whereby organisations appearing on
the website underwent an independent evaluation against a set of agreed national
standards of quality. As part of this, the effect of each business on the environment was
considered.
To communicate the New Zealand experience, the site also carried features relating to
famous people and places. One of the most popular was an interview with former New
Zealand All Blacks rugby captain Tana Umaga. Another feature that attracted a lot of
attention was an interactive journey through a number of the locations chosen for
blockbuster films which had made use of New Zealand’s stunning scenery as a backdrop.
As the site developed, additional features were added to help independent travelers devise
their own customised itineraries. To make it easier to plan motoring holidays, the site
catalogued the most popular driving routes in the country, highlighting different routes
according to the season and indicating distances and times.
Later, a Travel Planner feature was added, which allowed visitors to click and ‘bookmark’
places or attractions they were interested in, and then view the results on a map. The
Travel Planner offered suggested routes and public transport options between the chosen
locations. There were also links to accommodation in the area. By registering with the
website, users could save their Travel Plan and return to it later, or print it out to take on
the visit. The website also had a ‘Your Words’ section where anyone could submit a blog
of their New Zealand travels for possible inclusion on the website.
The Tourism New Zealand website won two Webby awards for online achievement and
innovation. More importantly perhaps, the growth of tourism to New Zealand was
impressive. Overall tourism expenditure increased by an average of 6.9% per year
between 1999 and 2004. From Britain, visits to New Zealand grew at an average annual
rate of 13% between 2002 and 2006, compared to a rate of 4% overall for British visits
abroad.
The website was set up to allow both individuals and travel organisations to create
itineraries and travel packages to suit their own needs and interests. On the website,
visitors can search for activities not solely by geographical location, but also by the
particular nature of the activity. This is important as research shows that activities are the
key driver of visitor satisfaction, contributing 74% to visitor satisfaction, while transport
and accommodation account for the remaining 26%. The more activities that visitors
undertake, the more satisfied they will be. It has also been found that visitors enjoy
cultural activities most when they are interactive, such as visiting a marae (meeting
ground) to learn about traditional Maori life. Many long-haul travelers enjoy such
learning experiences, which provide them with stories to take home to their friends and
family. In addition, it appears that visitors to New Zealand don’t want to be ‘one of the
crowd’ and find activities that involve only a few people more special and meaningful.
It could be argued that New Zealand is not a typical destination. New Zealand is a small
country with a visitor economy composed mainly of small businesses. It is generally
perceived as a safe English-speaking country with a reliable transport infrastructure.
Because of the long-haul flight, most visitors stay for longer (average 20 days) and want
to see as much of the country as possible on what is often seen as a once-in-a-lifetime
visit. However, the underlying lessons apply anywhere – the effectiveness of a strong
brand, a strategy based on unique experiences and a comprehensive and user-friendly
website.

Questions 1-7: Complete the table below. Choose ONE WORD ONLY from the passage
for each answer. Write your answers in boxes 1-7 on your answer sheet.
Questions 8-13
Do the following statements agree with the information given in Reading Passage 1? In
boxes 8-13 on your answer sheet, write TRUE/FALSE/NG
8. The website [Link] aimed to provide ready-made itineraries and
packages for travel companies and individual tourists.
9. It was found that most visitors started searching on the website by geographical
location.
10. According to research, 26% of visitor satisfaction is related to their accommodation.
11. Visitors to New Zealand like to become involved in the local culture.
12. Visitors like staying in small hotels in New Zealand rather than in larger ones.
13. Many visitors feel it is unlikely that they will return to New Zealand after their visit.

Alexander Henderson (1831-1913)

Born in Scotland, Henderson emigrated to Canada in 1855 and become a well-known
landscape photographer
Alexander Henderson was born in Scotland in 1831 and was the son of a successful
merchant. His grandfather, also called Alexander, had founded the family business, and
later became the first chairman of the National Bank of Scotland. The family had
extensive landholding in Scotland. Besides its residence in Edinburgh, it owned Press
Estate, 650 acres of farmland about 35 miles southeast of the city. The family often
stayed at Press Castle, the large mansion on the northern edge of the property, and
Alexander spent much of his childhood in the area, playing on the beach near Eyemouth
or fishing in the streams nearby.
Even after he went to school at Murcheston Academy on the outskirts of Edinburgh,
Henderson returned to Press at weekends. In 1849 he began a three-year apprenticeship to
become an accountant. Although he never liked the prospect of a business career, he
stayed with it to please his family. In October 1855, however, he emigrated to Canada
with his wife Agnes Elder Robertson and they settled in Montreal.
Henderson learned photography in Montreal around the year 1857 and quickly took it up
as a serious amateur. He became a personal friend and colleague of the Scottish –
Canadian photographer William Notman. The two men made a photographic excursion to
Niagara Falls in 1860 and they cooperated on experiments with magnesium flares as a
source of artificial light in 1865. They belonged to the same societies and were among the
founding members of the Art Association of Montreal. Henderson acted as chairman of
the association’s first meeting, which was held in Notman’s studio on 11 January 1860.
In spite of their friendship, their styles of photography were quite different. While
Notman’s landscapes were noted for their bold realism, Henderson for the first 20 years
of his career produced romantic images, showing the strong influence of the British
landscape tradition. His artistic and technical progress was rapid and in 1865 he
published his first major collection of landscape photographs. The publication had limited
circulation (only seven copies have ever been found), and was called Canadian Views and
Studies. The contents of each copy vary significantly and have proved a useful source for
evaluating Henderson’s early work.
In 1866, he gave up his business to open a photographic studio, advertising himself as a
portrait and landscape photographer. From about 1870 he dropped portraiture to
specialize in landscape photography and other views. His numerous photographs of city
life revealed in street scenes, houses, and markets are alive with human activity, and
although his favourite subject was landscape he usually composed his scenes around such
human pursuits as farming the land, cutting ice on a river, or sailing down a woodland
stream. There was sufficient demand for these types of scenes and others he took
depicting the lumber trade, steamboats and waterfalls to enable him to make a living.
There was little competing hobby or amateur photography before the late 1880s because
of the time-consuming techniques involved and the weight of equipment. People wanted
to buy photographs as souvenirs of a trip or as gifts, and catering to this market,
Henderson had stock photographs on display at his studio for mounting, framing, or
inclusion in albums.
Henderson frequently exhibited his photographs in Montreal and abroad, in London,
Edinburgh, Dublin, Paris, New York, and Philadelphia. He met with greater success in
1877 and 1878 in New York when he won first prizes in the exhibition held by E and HT
Anthony and Company for landscapes using the Lambertype process. In 1878 his work
won second prize at the world exhibition in Paris.
In the 1890s and 1880s Henderson travelled widely throughout Quebec and Ontario, in
Canada, documenting the major cities of the two provinces and many of the villages in
Quebec. He was especially fond of the wilderness and often travelled by canoe on the
Blanche, du Lièvre, and other noted eastern rivers. He went on several occasions to the
Maritimes and in 1872 he sailed by yacht along the lower north shore of the St Lawrence
River. That same year, while in the lower St Lawrence River region, he took some
photographs of the construction of the Intercolonial Railway. This undertaking led in
1875 to a commission from the railway to record the principal structures along the
almost-completed line connecting Montreal to Halifax. Commissions from other railways
followed. In 1876 he photographed bridges on the Quebec, Montreal, Ottawa and
Occidental Railway between Montreal and Ottawa. In 1885 he went west along the
Canadian Pacific Railway (CPR) as far as Rogers Pass in British Columbia, where he
took photographs of the mountains and the progress of construction.
In 1892 Henderson accepted a full-time position with the CPR as manager of a
photographic department which he was to set up and administer. His duties included
spending four months in the field each year. That summer he made his second trip west,
photographing extensively along the railway line as far as Victoria. He continued in this
post until 1897, when he retired completely from photography.
When Henderson died in 1913, his huge collection of glass negatives was stored in the
basement of his house. Today collections of his work are held at the National Archives of
Canada, Ottawa, and the McCord Museum of Canadian History, Montreal.
Questions 1-8: Do the following statements agree with the information given in Reading
Passage 1? In boxes 1-8 on your answer sheet, write TRUE/FALSE/NG
1. Henderson rarely visited the area around Press estate when he was younger.
2. Henderson pursued a business career because it was what his family wanted.
3. Henderson and Notman were surprised by the results of their 1865 experiment.
4. There were many similarities between Henderson’s early landscapes and those of
Notman.
5. The studio that Henderson opened in 1866 was close to his home.
6. Henderson gave up portraiture so that he could focus on taking photographs of scenery.
7. When Henderson began work for the Intercolonial Railway, the Montreal to Halifax
line had been finished.
8. Henderson’s last work as a photographer was with the Canadian Pacific Railway.
Questions 9-13: Complete the notes below. Choose ONE WORD ONLY from the passage
for each answer. Write your answers in boxes 9-13 on your answer sheet.
Alexander Henderson
Early life
 was born in Scotland in 1831 – father was a 9 …………………………
 trained as an accountant, emigrated to Canada in 1855
Start of a photographic career
 opened up a photographic studio in 1866
 took photos of city life, but preferred landscape photography
 people bought Henderson’s photos because photography took up considerable time
and the 10 ……………………… was heavy
 the photographs Henderson sold were 11 …………………………… or souvenirs
Travelling as a professional photographer
 travelled widely in Quebec and Ontario in 1870s and 1880s
 took many trips along eastern rivers in a 12…………………………..
 worked for Canadian railways between 1875 and 1897
 worked for CPR in 1885 and photographed the 13 …………………………… and
the railway at Rogers Pass
 What is exploration?
We are all explores. Our desire to discover, and then share that new-found knowledge, is
part of what makes us human – indeed, this has played an important part in our success as
a species. Long before the first caveman slumped down beside the fire and grunted news
that there were plenty of wildebeest over yonder, our ancestors had learnt the value of
sending out scouts to investigate the unknown. This questing nature of ours undoubtedly
helped our species spread around the globe, just as it nowadays no doubt helps the last
nomadic Penan maintain their existence in the depleted forests of Borneo, and a visitor
negotiate the subways of New York.
Over the years, we’ve come to think of explorers as a peculiar breed – different from the
rest of us, different from those of us who are merely ‘well travelled’, even; and perhaps
there is a type of person more suited to seeking out the new, a type of caveman more
inclined to risk venturing out. That, however, doesn’t take away from the fact that we all
have this enquiring instinct, even today; and that in all sorts of professions – whether
artist, marine biologist or astronomer – borders of the unknown are being tested each day.
Thomas Hardy set some of his novels in Egdon Heath, a fictional area of uncultivated
land, and used the landscape to suggest the desires and fears of his characters. He is
delving into matters we all recognise because they are common to humanity. This is
surely an act of exploration, and into a world as remote as the author chooses. Explorer
and travel writer Peter Fleming talks of the moment when the explorer returns to the
existence he has left behind with his loved ones. The traveller ‘who has for weeks or
months seen himself only as a puny and irrelevant alien crawling laboriously over a
country in which he has no roots and no background, suddenly encounters his other self,
a relatively solid figure, with a place in the minds of certain people’.
In this book about the exploration of the earth’s surface, I have confined myself to those
whose travels were real and who also aimed at more than personal discovery. But that
still left me with another problem: the word ‘explorer’ has become associated with a past
era. We think back to a golden age, as if exploration peaked somehow in the 19th century
– as if the process of discovery is now on the decline, though the truth is that we have
named only one and a half million of this planet’s species, and there may be more than 10
million – and that’s not including bacteria. We have studied only 5 per cent of the species
we know. We have scarcely mapped the ocean floors, and know even less about
ourselves; we fully understand the workings of only 10 per cent of our brains.
Here is how some of today’s ‘explorers’ define the word. Ran Fiennes, dubbed the
‘greatest living explorer’, said, ‘An explorer is someone who has done something that no
human has done before – and also done something scientifically useful.’ Chris Bonington,
a leading mountaineer, felt exploration was to be found in the act of physically touching
the unknown: ‘You have to have gone somewhere new.’ Then Robin Hanbury-Tenison, a
campaigner on behalf of remote so-called ‘tribal’ peoples, said, ‘A traveller simply
records information about some far-off world, and reports back; but an explorer changes
the world.’ Wilfred Thesiger, who crossed Arabia’s Empty Quarter in 1946, and belongs
to an era of unmechanised travel now lost to the rest of us, told me, ‘If I’d gone across by
camel when I could have gone by car, it would have been a stunt.’ To him, exploration
meant bringing back information from a remote place regardless of any great self-
discovery.
Each definition is slightly different – and tends to reflect the field of endeavour of each
pioneer. It was the same whoever I asked: the prominent historian would say exploration
was a thing of the past, the cutting-edge scientist would say it was of the present. And so
on. They each set their own particular criteria; the common factor in their approach being
that they all had, unlike many of us who simply enjoy travel or discovering new things,
both a very definite objective from the outset and also a desire to record their findings.
I’d best declare my own bias. As a writer, I’m interested in the exploration of ideas. I’ve
done a great many expeditions and each one was unique. I’ve lived for months alone with
isolated groups of people all around the world, even two ‘uncontacted tribes’. But none of
these things is of the slightest interest to anyone unless, through my books, I’ve found a
new slant, explored a new idea. Why? Because the world has moved on. The time has
long passed for the great continental voyages – another walk to the poles, another
crossing of the Empty Quarter. We know how the land surface of our planet lies;
exploration of it is now down to the details – the habits of microbes, say, or the grazing
behaviour of buffalo. Aside from the deep sea and deep underground, it’s the era of
specialists. However, this is to disregard the role the human mind has in conveying
remote places; and this is what interests me: how a fresh interpretation, even of a well-
travelled route, can give its readers new insights.
Questions 27-32: Choose the correct letter, A, B, C or D. Write the correct letter in boxes
27-32 on your answer sheet.
27. The writer refers to visitors to New York to illustrate the point that
A. exploration is an intrinsic element of being human.
B. most people are enthusiastic about exploring.
C. exploration can lead to surprising results.
D. most people find exploration daunting.
28. According to the second paragraph, what is the writer’s view of explorers?
A. Their discoveries have brought both benefits and disadvantages.
B. Their main value is in teaching others.
C. They act on an urge that is common to everyone.
D. They tend to be more attracted to certain professions than to others.
29. The writer refers to a description of Egdon Heath to suggest that
A. Hardy was writing about his own experience of exploration.
B. Hardy was mistaken about the nature of exploration.
C. Hardy’s aim was to investigate people’s emotional states.
D. Hardy’s aim was to show the attraction of isolation.
30. In the fourth paragraph, the writer refers to ‘a golden age’ to suggest that
A. the amount of useful information produced by exploration has decreased.
B. fewer people are interested in exploring than in the 19th century.
C. recent developments have made exploration less exciting.
D. we are wrong to think that exploration is no longer necessary.
31. In the sixth paragraph, when discussing the definition of exploration, the writer
argues that
A. people tend to relate exploration to their own professional interests.
B. certain people are likely to misunderstand the nature of exploration.
C. the generally accepted definition has changed over time.
D. historians and scientists have more valid definitions than the general public.
32. In the last paragraph, the writer explains that he is interested in
A. how someone’s personality is reflected in their choice of places to visit.
B. the human ability to cast new light on places that may be familiar.
C. how travel writing has evolved to meet changing demands.
D. the feelings that writers develop about the places that they explore.
Questions 33-37: Look at the following statements (Questions 33-37) and the list of
explorers below. Match each statement with the correct explorer, A-E. Write the correct
letter, A-E, in boxes 33-37 on your answer sheet.
NB You may use any letter more than once.
33. He referred to the relevance of the form of transport used.
34. He described feelings on coming back home after a long journey.
35. He worked for the benefit of specific groups of people.
36. He did not consider learning about oneself an essential part of exploration.
37. He defined exploration as being both unique and of value to others.
List of Explorers
A. Peter Fleming D. Robin Hanbury-Tenison
B. Ran Fiennes E. Wilfred Thesiger
C. Chris Bonington
Questions 38-40: Complete the summary below. Choose NO MORE THAN TWO
WORDS from the passage for each answer. Write your answers in boxes 38-40 on your
answer sheet.
The writer’s own bias
The writer has experience of a large number of 38………………., and was the first
stranger that certain previously 39………………… people had encountered. He believes
there is no need for further exploration of Earth’s 40…………………., except to answer
specific questions such as how buffalo eat.

The changing role of airports

Airports continue to diversify their role in an effort to generate income. Are business
meeting facilities the next step? Nigel Halpern, Anne Graham and Rob Davidson
investigate.
A. In recent times developing commercial revenues has become more challenging for
airports due to a combination of factors, such as increased competition from Internet
shopping, restrictions on certain sales, such as tobacco, and new security procedures that
have had an impact on the dwell time of passengers. Moreover, the global economic
downturn has caused a reduction in passenger numbers while those that are travelling
generally have less money to spend. This has meant that the share subsequently declined
slightly. Meanwhile, the pressures to control the level of aeronautical revenues are as
strong as ever due to the poor financial health of many airlines and the rapid rise of the
low-cost carrier sector.
B. Some of the more obvious solutions to growing commercial revenues, such as
extending the merchandising space or expanding the variety of shopping opportunities,
have already been tried to their limit at many airports. A more radical solution is to find
new sources of commercial revenue within the terminal, and this has been explored by
many airports over the last decade or so. As a result, many terminals are now much more
than just shopping malls and offer an array of entertainment, leisure, and beauty and
wellness facilities. At this stage of facilities provision, the airport also has the possibility
of talking on the role of the final destination rather than merely a facilitator of access.
C. At the same time, airports have been developing and expanding the range of services
that they provide specifically for the business traveller in the terminal. This includes
offering business centres that supply support services, meeting or conference rooms and
other space for special events. Within this context, Jarach (2001) discusses how dedicated
meetings facilities located within the terminal and managed directly by the airport
operator may be regarded as an expansion of the concept of airline lounges or as a way to
reconvert abandoned or underused areas of terminal and managed directly by the airport
hotels and other facilities offered in the surrounding area of the airport that had the
potential to take on this role and become active as a business space (McNeill, 2009).
D. When an airport location can be promoted as a business venue, this may increase the
overall appeal of the airport and help it become more competitive in both attracting and
retaining airlines and their passengers. In particular, the presence of meeting facilities
could become one of the determining factors taken into consideration when business
people are choosing airlines and where they change their planes. This enhanced
attractiveness itself may help to improve the airport operator’s financial position and
future prospects, but clearly, this will be dependent on the competitive advantage that the
airport is able to achieve in comparison with other venues.
E. In 2011, an online airport survey was conducted and some of the areas investigated
included the provision and use of meeting facilities at airports and the perceived role and
importance of these facilities in generating income and raising passenger numbers. In
total, there were responses from staff at 154 airports and 68% of these answered “yes” to
the question: Does your airport own and have meetings facilities available for hire? The
existence of meeting facilities, therefore, seems high at airports. In addition, 28% of
respondents that did not have meeting facilities stared that they were likely to invest in
them during the next five years. The survey also asked to what extent respondents agreed
or disagreed with a number of statements about asked the meeting facilities at their
airport. 49% of respondents agreed that they would invest more in the immediate future.
These are fairly high proportions considering the recent economic climate.
F. The survey also asked airport with meeting facilities to estimate what proportion of
users are from the local area. i.e. within a 90-minute drive from the airport, or from
abroad. Their findings show that meeting facilities provided by the majority of
respondents tend to serve local versus non-local or foreign needs. 63% of respondents
estimated that over 60% of users are from the local area. Only 3% estimated that over
80% of users are from abroad. It is therefore not surprising that the facilities are of
limited importance when it comes to increasing use of fights at the airports: 16% of
respondents estimated that none of the users of their meeting facilities uses fights when
travelling to or from them, while 56% estimated that 20% or fewer of the users of their
facilities use fights.
G. The survey asked respondents with meeting facilities to estimate how much revenue
their airport earned from its meeting facilities during the last financial year. Average
revenue per airport was just $12,959. Meeting facilities are effectively a non-aeronautical
source of airport revenue. Only 1% of respondents generated more than 20% non-
aeronautical revenue from their meetings facilities; none generated more than 40%.
Given the focus on local demand, it is not surprising that less than a third of respondents
agreed that their meeting facilities support business and tourism development in their
home region or country.
H. The findings of this study suggest that few airports provide meetings facilities as a
serious commercial venture. It may be that, as owners of large property, space is available
for meeting facilities at airports and could play an important role in serving the needs of
the airport, its partners, and stakeholders such as government and the local community.
Thus, while the local orientation means that competition with other airports is likely to be
minimal, competition with local providers of meetings facilities is likely to be much
greater.
Questions 14-18
The text has eight paragraphs, A-H.
Which paragraph contains the following information?
Write the correct letter, A-H, in boxes 14-18 on your answer sheet.
N.B. You may use any letter more than once.
14. evidence that a significant number of airports provide meeting facilities.
15. a statement regarding the fact that no further developments are possible in some areas
of airport trade.
16. reference to the low level of income that meeting facilities produce for airports.
17. mention of the impact of budget airlines on airport income.
18. examples of airport premises that might be used for business purposes.
Questions 19-22: Complete the sentences below. Choose NO MORE THAN TWO
WORDS from the text for each answer. Write your answers in boxes 19-22 on your
answer sheet.
19. The length of time passengers spend shopping at airports has been affected by
updated ..................
20. Airports with a wide range of recreational facilities can become a ........... for people
rather than a means to travel.
21. Both passengers and .................. may feel encouraged to use and develop a sense of
loyalty towards airports that market their business services.
22. Airports that supply meeting facilities may need to develop a .................. over other
venues.
Questions 23-26: Complete the summary below. Choose NO MORE THAN TWO
WORDS from the text for each answer.
Survey Findings
Despite financial constraints due to the 23 .................., a significant percentage of airport
provide and wish to further support business meeting facilities. Also, just under 30% of
the airports surveyed plan to provide these facilities within 24 .................. however, the
main users of the facilities are 25 .................. and as many as 16% of respondents to the
survey stated that their users did not take any 26 .................. at the airport.

South Pole Adventurer

In the race to the South Pole, there was a Japanese team attempting to be first, led by
heroic explorer Nobu Shirase.
For a few weeks in January 1912, Antarctica was full of explorers. Norwegian Roald
Amundsen had reached the South Pole on 14 December and was speeding back to the
coast. On 17 January, Robert Scott and the men of the British Antarctic expedition had
arrived at the pole to find they had been beaten to it. Just then, a third man arrived;
Japanese explorer Nobu Shirase. However, his part in one of the greatest adventure
stories of the 20th century is hardly known outside his own country, even by fellow
explorers. Yet as Scott was nearing the pole and with the rest of the world still unaware of
Amundsen’s triumph, Shirase and his team sailed into Antarctica’s Bay of Whales in the
smallest ship ever to try its luck in these dangerous waters. Since boyhood Shirase had
dreamed of becoming a polar explorer. Like Amundsen, he initially set his sights on the
North Pole. But after the American Robert Peary claimed to have reached it in 1909, both
men hastily altered their plans. Instead they would aim for the last big prize: the South
Pole. In January 1910, Shirase put his plans before Japanese government officials,
promising to raise the flag at the South Pole within three years. For many of them, the
question wasn’t could he do it but why would it be worth doing? 15 years earlier the
International Geographical Congress had said that as the last unknown continent the
Antarctic offered the chance to add to knowledge in almost every branch of science. So,
like the British, Shirase presented his expedition as a search for knowledge: he would
bring back fossils, make meteorological measurements and explore unknown parts of the
continent.
The British team announced their decision to carry out scientific research in Antarctica
before Shirase.
The response from the government was cool, however, and Shirase struggled to raise
funds. Fortunately, a few months later, Japan’s former prime minister Shigenobu kuma
came to Shirase’s rescue. With kuma’s backing, Shirase got together just enough money
to buy and equip a small ship. He eventually acquired a scientist, too, called Terutaro
Takeda. At the end of November 1910, his ship the Kainan Maru finally left Tokyo with
27 men and 28 Siberian dogs on board. Before leaving, Shirase confidently outlined his
plans to the media. He would sail to New Zealand, then reach Antarctica in February,
during the southern summer, and then proceed to the pole the following spring. This was
not to be, however. Bad weather delayed the expedition and they didn’t reach New
Zealand until 8 February; Amundsen and Scott had already been in Antarctica for a
month, preparing for winter.
In New Zealand local reporters were astonished: the ship was half the size of Amundsen’s
ship. True, it was reinforced with iron plate and extra wood, but the ship had only the
feeblest engine to help force its way through ice. Few doubted Shirase’s courage, but
most reckoned the expedition to be ill – prepared as the Japanese had only lightweight
sledges for transport across the ice, made of bamboo and wood.
But Shirase’s biggest challenge was time. Antarctica is only accessible by sea for a few
weeks in summer and expeditions usually aimed to arrive in January or February. ‘Even
with their determination and daring, our Japanese friends are running it rather fine,’ wrote
local reporters.
Nevertheless, on 11 February the Kainan Maru left New Zealand and sailed straight into
the worst weather the captain had ever seen. Then, on 6 March, they approached the
coastline of Antarctica’s Ross Sea, looking for a place to land. The ice began to close in,
threatening to trap them for the winter, an experience no one was likely to survive. With a
remarkable piece of seamanship, the captain steered the ship out of the ice and turned
north. They would have to wait out the winter in a warmer climate.
A year later than planned, Shirase and six men finally reached Antarctica. Catching up
with Scott or Amundsen was out of the question and he had said he would stick to science
this time. Yet Shirase still felt the pull of the pole and eventually decided he would head
southward to experience the thrills and hardships of polar exploration he had always
dreamed of. With provisions for 20 days, he and four men would see how far they could
get.
Shirase set off on 20 January 1912 with Takeda and two dog handlers, leaving two men at
the edge of the ice shelf to make meteorological measurements. For a week they
struggled through one blizzard after another, holing up in their tents during the worst of
the weather. The temperature fell to -25°C, and frostbite claimed some of the dogs. On 26
January, Shirase estimated there were enough provisions to continue for two more days.
Two days later, he announced it was time to turn back. Takeda calculated they had
reached 80°5 south and had travelled 250 kilometres. The men hoisted the Japanese flag.
On 3 February, all the men were heading home. The ship reached Tokyo in June 1912 –
and Shirase was greeted like a hero despite the fact that he never reached the pole. Nor
did he contribute much to science – but then nor did Amundsen, whose only interest was
in being first to the pole. Yet Shirase’s expedition was heroic. They travelled beyond 80°
south, one of only four teams to have gone so far south at the time. Furthermore, they did
it all without the advantages of the other teams and with no previous experience.
Question 1 – 8: Do the following statements agree with the information given in the
Reading Passage? In boxes 1-8 on your answer sheet, write TRUE/FALSE/NG
1. Shirase’s trip to the South Pole is well-known to other explorers.
2. Since Shirase arrived in Antarctica, smaller ships have also made the journey.
3. Shirase’s original ambition was to travel to the North Pole.
4. Some Japanese officials thought Shirase’s intention to travel to the South Pole was
pointless.
5. The British team announced their decision to carry out scientific research in Antarctica
before Shirase.
6. Shirase found it easy to raise the money he needed for his trip to the South Pole.
7. A previous prime minister of Japan persuaded a scientist to go with Shirase.
8. The weather that slowed down Shirase’s progress to New Zealand was unusually bad
for the season.
Question 9 – 13: Choose appropriate options A, B, C or D. Write your answers in boxes
9-13 on your answer sheet.
9. When reporters in New Zealand met Shirase, they were
A. concerned about the quality of his equipment.
B. impressed with the design of his ship.
C. certain he was unaware of the dangers ahead.
D. surprised by the bravery he demonstrated.
10. What are we told about the captain of the Kainan Maru in the fifth paragraph?
A. He had given Shirase some poor advice.
B. His skill at sailing saved the boat and crew.
C. He refused to listen to the warnings of others.
D. He was originally confident they could reach Antarctica.
11. After Shirase finally reached Antarctica he realised that
A. he was unsure of the direction he should follow.
B. he would have to give up on fulfilling scientific tasks.
C. he might not have enough food to get to the South Pole.
D. he still wanted to compete in the race against the other teams.
12. What is the writer doing in the seventh paragraph?
A. Сriticizing a decision concerning scientific research.
B. Explaining why a particular mistake had occurred.
C. Describing the conditions that the expedition faced.
D. Rejecting the idea that Shirase was poorly prepared.
13. What is the writer’s main point in the final paragraph?
A. Considering the problems Shirase had to deal with, his achievement was incredible.
B. In Japan, the reaction to Shirase’s adventure in Antarctica came as a surprise to him.
C. It was obvious that Amundsen would receive more attention as an explorer than Shirase.
D. Shirase had achieved more on the Antarctic expedition than even Amundsen had expected.