Are employees more productive working at their desk or from the comfort of their own home?

Does giving workers more freedom lead to a more successful company? Today on Down to Business English, Skip and Dez talk about Yahoo’s recent policy change regarding employees working from home.

 

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Skip: Hello everyone this is Skip Montreux and welcome back to a new episode of Down to Business English. Back on our regular schedule again.

Dez: And this is Dez Morgan. It’s certainly good to be back. If I don’t talk to you every few weeks, I miss you Skip.

Skip: Well thank you Dez, and of course I miss you too. How are things anyway?

Dez: Busy actually, I’ve been doing IELTS testing every weekend over the last few weekends, which means that I don’t really get a weekend to relax.

Skip: That sounds tough. I too have been really busy at work planning new classes and making materials and tests to use. In fact I have been taking a lot of work home every night as well.

Dez: Yeah, me too. I have been taking work home as well to try and catch up.

Skip: Well welcome to my world Dez, but at least we don’t work for Yahoo.

Dez: Really why do you say that?

Skip: Well. Marissa Mayer, Yahoo’s CEO has just banned working from home saying that the speed and quality of people’s work suffers when they work from home.

Dez: She was talking about people working from home during the working day I think.

Skip: She was, but her comments have opened a whole debate on whether it is better for people to work in an office, or at home at all times.

Dez: And I’m guessing that that’s our story for this week?

Skip: You would be guessing right then Dez.

Dez: So let’s do it. Let’s get D2B…Down to Business with Working from Home: Is it good for employers, good for employees, or perhaps good for both?

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Skip: Let me begin by telling you a bit more about what has been happening over at Yahoo in the United States.

Dez: I wish that you would.

Skip: Well, Kara Swisher, an investigative reporter from the website All Things D, received a leaked memo sent to employees from the HR department at Yahoo.

Dez: All sounds very exciting.

Skip: Well not really but the memo made a lot of workers at Yahoo very angry. In short it said that all employees of Yahoo need to be working at their desks at all times and cannot work from home at least not for any length of time.

Dez: So what you’re saying is if an employee had an emergency and really needed to be at home say for a single morning then that would be okay?

Skip: Well not OK, but it would be tolerated, if it was absolutely and completely unavoidable. I think that was the general message.

Dez: So not really tolerated then?

Skip: Exactly. Also, it was the heavy handedness of the message that angered people as well, I think.

Dez: Okay, can you give us an example?

Skip: Sure. Mayer stated in the memo that, and I quote, “Speed and quality are often sacrificed when we work from home” and “We need to be one Yahoo!, and that starts with physically being together”.

Dez: Both of those messages are pretty heavy. In the first case it says that people are slacking off when they work from home and in the second case it says pretty directly that people need to be at their desks right now.

Skip: It does. And although many listeners may be thinking that they need to be at work everyday, I think we need to remember that some Yahoo personnel were hired under the unwritten assumption that they could work, at least partially, from home or another outside location.

Dez: I can understand that, but, um, is it true that people are less productive when they work from home?

Skip: In a word, no. Research suggests that people are more, rather than less productive when working from home. A report published in February by Stanford University showed that Chinese call centre workers were 13% more efficient when they worked from home.

Dez: Okay, and what about other tech companies in Silicon Valley?

Skip: Well, Yahoo is unique in taking this approach of suddenly removing the option of working at home. Other firms accept that employees often are more productive working at home but put greater emphasis on the innovations that come through collaboration between coworkers on the job, rather than high productivity.

Dez: So that means that Yahoo will be competing for talent with other companies with a more relaxed policy. Hmm. I know which company I would choose.

Skip: And it wouldn’t be Yahoo?

Dez: It wouldn’t. So why did Marissa Mayer, make such a decision?

Skip: She is considered to be something of a workaholic by coworkers and sees nothing wrong with putting in twelve or more hour days.

Dez: And she expects the same of a her workforce I guess.

Skip: Apparently the parking lot emptying quickly at 5 pm annoyed her recently.

Dez: Sounds like a good boss.

Skip: One of the best. So working from home: good for the employees and good for some employers at least.

Dez: Which now leaves us ready to say …

Skip: …Let’s get D2V, Down to Vocabulary.

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Skip: So Dez, what’s the first word in Down to Vocabulary …….. Dez, Down to Vocabulary…:..Dez? …Dez?

Dez: Oh, Sorry, I am just so much less productive when I am working from home.

Skip: That’s funny. Okay, I will start off with the verb to leak and its adjective form leaked, as it is used in the story. Now if a piece of information is leaked it means that it is released indirectly and usually without the approval of the company.

Dez: You mean like the time when I leaked the information that you weren’t really sick the day after that big hockey game.

Skip: Yes exactly like that. Anyway in the story I said that the contents of an internal memo at Yahoo had been leaked to the online press.

Dez: Another example would be all of the leaked reports before the official launch of the iPad Mini earlier this year. Um, next I have the expression in short which means pretty much exactly what it says, when there is a larger story and you just give the important details.

Skip: In short, I am still angry with you about that hockey game leak.

Dez: Good example thanks Skip. Anyway, Skip began the story about Yahoo by saying in short, to indicate he was relaying just the key details.

Skip: This expression is very useful for finishing off business meetings. You can say in short, and then briefly give a summary of what has been discussed.

Dez: Uh, okay. In short Skip, do you have another word for us?

Skip: Sure do. I have another verb to tolerate which means that you will accept something but would rather not if at all possible. In the story I said that Yahoo would tolerate workers staying at home for short periods of time if they absolutely had to.

Dez: You mean like when you tolerate playing cards with me but would rather play with people who are a bit more skilled.

Skip: I certainly tolerate taking your money Dez.

Dez: Thanks for that. Another example would be how catering businesses like restaurants have to tolerate a certain amount of waste of food as a cost of doing business.

Skip: Good example.

Dez: Thanks for that. Next up I have the compound adjective heavy handed or, as a noun, as it’s used in the story heavy handedness, which means when a decision is implemented in a very strong or unsympathetic way.

Skip: I have been on the receiving end of some of those decisions.

Dez: Haven’t we all. In the story Skip said that it was the heavy handedness of the decision that angered many people at Yahoo.

Skip: A further example would be an earlier story we did on debt restructuring in Argentina, where the Argentine government felt that the IMF were being heavy handed with their demands for austerity and that a more gentle approach would be better.

Dez: Yes, please go back and check out that story if you haven’t listened to it already.

Skip: Always good advice. Next I have the two part verb to slack off, which means to take it easy and not do the work you are supposed to do. In the story Dez said that it seems Yahoo feels that its workers are slacking off or taking it easy when they are working from home.

Dez: A statement the workers disagree with of course, another example would be what happens when the boss is away, the staff tend to slack off a bit until he or she comes back.

Skip: While the cat is away the mice will play, I think that is the expression. Finally I have the adjective unique, which means when there is only one of something so it is very special. In the story I say that Yahoo is unique in the technology industry, taking the line that workers should always be at their desks.

Dez: Another company that is unique in its industry is the soft drink maker Red Bull, who spends a huge amount of its revenue on the sponsorship of various sports, to increase the overall profile and image of their product.

Skip: I know that company but I never drink the stuff.

Dez: Yeah, me neither to be honest.

Skip: So much for the effectiveness of sponsorship. And that is all the time we have for vocabulary today.

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Dez: Good talking to you Skip.

Skip: You too Dez, good luck with all your IELTS testing. Try not to take too much work home with you.

Dez: You too Skip, don’t make your bag too heavy on the way home.

Skip: I won’t. See you next time everyone.

Dez: Bye.

Argentina’s President Cristina Fernandez unveils the new 100 Argentine pesos

Are austerity measures the only way for a country to reduce debt? Today on Down to Business English, Dez explains to Skip how Argentina is doing the opposite in an attempt to spend their way back from the brink of economic ruin.

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Dez: Hello everyone, this is Dez Morgan.

Skip: And I’m Skip Montreux. Welcome to an all new episode of Down to Business English.

Dez: Yes, a warm welcome to both new and regular listeners.

Skip: So it seems like it has been a million years since we have gotten together for a show.

Dez: It does seem like it has been an age.

Skip: How are things with you Dez?

Dez: You know, just working and enjoying the lovely weather at the moment.

Skip: Yes, I’m always a little jealous of you in this season, sunshine everyday when all of the rest of us are freezing.

Dez: Well all of you in the Northern Hemisphere anyway.

Skip: True enough.

Dez: Interestingly it’s from the Southern Hemisphere that our story comes from today.

Skip: Oh, Brazil maybe?

Dez: Nope.

Skip: Hmmm. The other soccer powerhouse then; Argentina?

Dez: That is correct. Our story today concerns Argentina, and its rejection of a US ruling that it should repay the debt that it defaulted on in 2001.

Skip: Great. So let’s do it. Let’s get D2B…Down to Business with the ongoing story of Argentina and its debt default.

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Skip: So, Dez didn’t you live in Argentina once?

Dez: I certainly did, I spent about a year there from 2007 to 2008 and I loved the place.

Skip: Really? What did you love about it?

Dez: I loved the nightlife and the food and the people and the architecture and the nightlife….

Skip: OK. I see that you liked it there.

Dez: I sure did. Anyway maybe we should get down to our story. I guess that I should apologize to our listeners that this is yet another story on debt, but that’s a sign of the times.

Skip: I suppose you are right, these are tough times indeed.

Dez: Well they were tougher in Argentina in 2001.

Skip: Is that right? How so?

Dez: Let me give you a bit of background. In 2001 Argentina was in full bore crisis. It had pegged its currency to the US dollar at an artificially high rate, with the result that the economy boomed for a while but eventually came crashing down.

Skip: Another example of how an artificial manipulation of a free flowing currency, or commodity, always ends in disaster.

Dez: How very insightful of you Skip. You must have been listening to Down to Business English over our hiatus to be so knowledgeable.

Skip: I never miss an episode.

Dez: Anyway, at that time, Argentina defaulted on its loans, both to the International Monetary Fund, the IMF, and to the hedge funds that have recently brought this case in the US courts.

Skip: As I understand it, Greece restructured its debt recently as well, with investors accepting something like 60 cents on the dollar for the loans they had made.

Dez: Yeah, that sounds about right. In the case of Argentina it took out fresh loans in 2003 from the IMF and the economy slowly began to recover.

Skip: And how about the hedge funds?

Dez: Well the funds in question are Elliot Associates and Aurelius Capital and they have held out through the courts for a full settlement.

Skip: Were they the only funds that lent money to Argentina?

Dez: No, they weren’t. Argentina has restructured its debt twice since 2003 and offered its creditors new bonds in exchange for the old ones. In effect moving the payment date forward so enabling it to eventually pay it back.

Skip: And these two funds would not accept the new bonds I take it?

Dez: That’s right. Argentina paid back the final installment of the debt 16 months early, on August 3rd, 2012. Immediately after handing over the check for 12 billion Euro, Argentina then lodged a formal complaint with the World Trade Organization, the WTO, against Britain and America saying that those countries tried to illegally influence Argentinian economic policy.

Skip: Wow. Why did Argentina think they had done that?

Dez: Well. The US and the UK wanted Argentina to stop borrowing and accept austerity measures as recommended by the IMF. In fact what Argentina did was continue to borrow and grew its economy out of trouble. The result being that Argentina was able to repay its debt early.

Skip: Interesting. So Argentina thought that the IMF was in reality under the control of the US and UK, and was not the separate, independent body that it claims to be?

Dez: Yeah, that is pretty much it. Moving now to the US hedge funds, Argentina now feels that the US courts are working with the US Government, which is in turn representing the needs of the hedge funds.

Skip: If that were true, then that would be illegal as the courts are supposed to be independent of the government and the needs of big business.

Dez: It would be immoral as well as it goes against the whole idea of law.

Skip: So who is right? The hedge funds or the Argentinian government?

Dez: Well Skip, it would seem immoral for one or two countries to influence the economic policy of another.

Skip: Yes, but on the other hand it would seem fair that the hedge funds get their money back as I guess they did lend it in good faith.

Dez: True, and that was the view of the US District Court last November when it ordered the Argentine Government to repay $1.3 billion to the two funds.

Skip: I see, but why is that such an important ruling?

Dez: Well, Skip. If it’s harder for countries to walk away from its debts then many of the heavily indebted countries in Europe will not be able to restructure any longer.

Skip: Ahh. So they won’t be able to do what Greece has just done and only pay back some of the debt.

Dez: Exactly.

Skip: That means all of these countries were in fact on trial and were very warily watching the outcome.

Dez: Insightful again there Skip. Anyway before I give you any more compliments there is something that we really must do.

Skip: Oh? What is that Dez?

Dez: Get D2V…Down to Vocabulary.

Skip: Very funny.

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Dez: I’ll start off today with the noun powerhouse which means when a team or a company are really strong in a certain sport or market sector. In the story Skip referred to Argentina as being a real powerhouse of soccer.

Skip: I did. Another example would be the real powerhouse in the cosmetics sector; The Body Shop that changed the sector forever when it made animal testing in that industry unacceptable.

Dez: Oh I always use their products.

Skip: Really? I wondered why you always smelled funny. Anyway I would like to open with the economic verb to default which we may have had before on D2B but is worthwhile reviewing. It means when a company or country is unable to repay its debts. In the story Dez mentions that Argentina defaulted on its debts or was unable to repay them in 2001.

Dez: A further example would of course be that Greece will finally default on its debts because it can no longer borrow any more money.

Skip: A very real worry I would imagine.

Dez: I would think so. Next up I have an expression that is a sign of the time which means when something good or bad happens and is typical of the other things that are happening at that time. In the story I apologize for yet another story about debt but say that it is a sign of the times as so many countries are heavily in debt at the moment.

Skip: Dez, do you remember that famous photo of the young Japanese girl in traditional kimono talking on a mobile phone?

Dez: That was a few years ago but yes I do.

Skip: That was considered a real sign of the times as it showed the mix of the modern and traditional in Japan at that time.

Dez: Oh good example.

Skip: Thank you. Now I have another verb, to peg which is when the movement of one currency is directly linked to another one. In the story Dez talked about how Argentina had its currency artificially pegged or linked to the value of the US dollar.

Dez: Our currency here in the UAE is pegged to the US dollar which is bad in times of a weak dollar.

Skip: Like now you mean.

Dez: Exactly like now. My next word is the adjective insightful which means to be able to understand an issue in an especially clear or intelligent way. In the story I complimented Skip on his insightful observations about market manipulation.

Skip: Well, it’s not very often that happens.

Dez: You mean I say something nice about you, or you say something insightful?

Skip: Well, the first one, of course.

Dez: Of course. A further example of being insightful would be when Warren Buffet refused to invest in technology stock in the 1990s. Everyone said he was not keeping up with the times but it turned out he was very smart or insightful. 

Skip: Which brings me to my, and our final word, the verb to restructure. Now this word has two meanings. In economics as it is used here, it is used to mean when a company or a country cannot repay its debt so it has to renegotiate that debt so that it can be repaid.

Dez: The other use is more common and it means when a company needs to fire some of its staff and move the remaining staff into different positions to save money.

Skip: You know Dez, I have been thinking of restructuring you and making this into a solo show.

Dez: Ooooh. That would be no fun.

Skip: No. And I’m sure many of our listener’s wouldn’t be very happy either. Anyway that is the vocabulary for today’s report on Argentinian debt.

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Skip: Well thanks Dez. It is nice to record with you again. I apologize to everyone for our extended hiatus. In addition to getting back to producing regular shows, I’m really going to try my best to start putting out more newsletters.

Dez: That’s great. And everyone, also check us out on the Down to Business English Facebook page and do it quickly before Skip restructures me and it becomes the Down to Business English with Skip Montreux page.

Skip: Hmmm. I kind of like the sound of that ….. but no, now that we are finally back that won’t happen in a hurry. Wait, you’re not trying to quit on me are you? Leave me stranded with D2B?

Dez: No, no. I’m honestly relieved you aren’t trying to restructure me. Anyway, about time for us to wish all of our listeners well and thank them for their patience.

Skip: Yes, thank you everyone. Bye for now.

Dez: Yes, indeed. Bye for Now.

Today on Down to Business English, Skip Montreux and Dez Morgan discuss the trend of increasing taxes on the super wealthy. Is it the right thing to do?

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Dez:     Hello everyone this is Dez Morgan here reporting in, back in Abu Dhabi.

Skip:     And this is Skip Montreux coming to you from Tokyo, Japan.

Dez:     And you’re listening to an all new episode of Down to Business English.

Skip:     I have to begin by sending out a very big sorry to all of our loyal listeners who have been waiting for a new show. Both Dez and I have been really busy throughout the summer and have been unable to get together and record until now.

Dez:     You can say that again Skip.

Skip:     Both Dez and I have been really, really busy throughout the summer and have been unable ...

Dez:     Very funny. As you and many of our listeners know, ‘You can say that again’ means that I agree with you.

Skip:     I know, just a little joke. Anyway Dez what have you been so busy doing over the last few months?

Dez:     Initially I was back in the UK without a stable internet connection for about 6 weeks. I returned here and moved into a new villa, without internet, so as you can see it has been difficult for me to get online and record.

Skip:     Oooh a villa, haven’t we gone up in the world.

Dez:     OK, a house really with a bit of sand outside that we call a garden. Is that better?

Skip:     Yes, much better. I really don’t like it when you start to become so full of yourself, Mr. Morgan.

Dez:     By full of myself, you mean when I start to think that I’m better than I am?

Skip:     Exactly.

Dez:     I could always blame the heat, say that it has gone to my head but the summer is almost over now.

Skip:     Anyway, now that the summer is pretty much over the main event on the horizon seems to be the US election and one of the key issues appears to be taxation.

Dez:     Taxation. You mean one candidate wants more and the other wants less?

Skip:     Yes President Obama wants to tax the rich more while the Republican candidate, Mitt Romney wants to pay less tax himself. Sorry, I meant wants to keep the tax on the rich at the same low rate that was favored by ex-President George Bush.

Dez:     Is the US the only country where the question of who should shoulder the burden of higher taxes an issue?

Skip:     The overwhelming answer to that question is no, it is happening in a lot of other countries as well. But the rates of tax that are being proposed are far, far greater than those in the US.

Dez:     Is that our story today?

Skip:     It certainly is. So, let’s do it, let’s get D2B...Down to Business with one country’s plans to increase taxation on the rich to nosebleed levels.

Skip:     As you didn’t ask me, I should say that I have been spending a lot of time over the summer catching up with the news, and one story that caught my eye was the news that French President Francois Hollande plans to radically increase taxes on the rich.

Dez:     My heart bleeds for them it really does.

Skip:     Hmm. Well anyone that makes more than a million Euros, or $1.3m a year, is to be taxed at 75% of their income.

Dez:     Oh, actually that is a lot, and how do the elite earners in France feel about that?

Skip:     As you can imagine they are not over the moon about this new regulation that came into effect on September 28th. The idea is that the tax will only be temporary, for just 2 years, and it will help France reign in its deficit.

Dez:     Temporary, really? I think they said that about VAT in the UK in the 1970s. VAT, or Value Added Tax, for those that don’t know is the 20% consumption tax charged in the UK on most products.

Skip:     20%, wow. So the VAT didn’t turn out not to be temporary?

Dez:     Umm. We still have it today.

Skip:     Well, that is one worry that the wealthy have in France. That once the French government are taxing them at this high rate it will be almost impossible for them to reform the tax bill later.

Dez:     Is there anything else that France could do?

Skip:     Sure, they could lower public spending as Spain, Italy and Greece have done but that would of course be a lot less popular with the electorate.

Dez:     Won’t the super-rich just leave the country as they did in Britain, again in the 1970s, when tax rates even exceeded the 75% in France?

Skip:     Well, Bernard Arnault, chief executive of the luxury brand conglomerate LVMH, and the richest man in France, has applied for Belgian nationality where the highest tax rate is in the mid 40s, which is in line with the rest of Europe.

Dez:     Didn’t he say that he was still going to pay French taxes though?

Skip:     He did of course, but many people doubt that he will be paying all of the tax on all of his income.

Dez:     So the general feeling is that there could well be an exodus of high net worth individuals from France then?

Skip:     That is the fear, yes. Furthermore in Hollande’s plan, those making over €150,000 a year will be taxed at 45% which is very high indeed. Again skeptics feel that this will either cause them to leave the country or certainly disincentivize them towards working harder or getting ahead.

Dez:     Which will of course have a negative effect on the French economy.

Skip:     That is the danger of increasing taxes on the richer classes, they leave and take their expertise elsewhere.

Dez:     Well, why am I in Abu Dhabi and you’re in Tokyo, Skip?

Skip:     Well, certainly isn’t to escape taxes on the rich anyway Dez.

Dez:     When D2B becomes an International brand in the teaching world then maybe things will change.

Skip:     Sure Dez, and now it is time for us to get D2V..Down to Vocabulary.

Dez:     To start things off I have an expression for you which is quite easy to visualize; shoulder the burden. A burden is something difficult or heavy, and to shoulder the burden means to take it on or to carry it.

Skip:     The difficulty of carrying something heavy is quite easy to picture I think. Like me carrying all the textbooks and CDs from my classes home everyday.

Dez:     I wouldn’t know about that as we only use iPads at my college.

Skip:     Hmm...remember what I said about getting too full of yourself Mr. Morgan?

Dez:     Sorry about that. Now in the story I ask the question; who should shoulder the burden or take on the higher taxes?

Skip:     A further example would be an employee that wanted to take some extra qualifications that would be helpful in the workplace. Now, that employee might ask the company to shoulder some of the burden of the costs involved in that training.

Dez:     Ahh. Good example

Skip:     Thank you. Now moving on to my first word and that is nosebleed which again is pretty easy to visualize.

Dez:     Doesn’t it simply mean when your nose starts bleeding usually because it’s been hit in some way?

Skip:     That is the literal meaning, yes. But here in the story, it is used to indicate when something becomes uncomfortably high as many people get nosebleeds at high altitudes.

Dez:     You mean like interest rates in the 1980s, they got to nosebleed levels and many people lost their homes.

Skip:     That’s right.

Dez:     Do you have another word for us Skip?

Skip:     Next up I have the adjective elite, which means when something or someone is at the top of the pile, or extremely good in some way. In the story Dez wonders how the super-rich or elite of France feel about these very high taxes.

Dez:     A further example would be the story of Lance Armstrong, once seen as a member of the most elite cyclists who has been stripped of his titles because he took performance enhancing drugs.

Skip:     I am sure that he was not over the moon about that discovery.

Dez:     I am sure that he wasn’t. And that’s my next vocabulary item; the expression to be over the moon which means to be extremely happy with something although of course I just used it in the negative here.

Skip:     In the story Dez also used over the moon negatively when he questioned rich people’s reactions to the taxes. He said that he was sure they would not be over the moon with the new taxes.

Dez:     I did. Let me give you another example. Skip was over the moon when the rumors about the iPad Mini turned out to be correct. He really wants to give Apple some more of his hard earned money.

Skip:     Now that’s not exactly true, although I did just buy an iPhone 5.

Dez:     Yeah, right. Quickly moving on however, next I have the business term conglomerate, which means a very large company that’s involved in a number of core businesses.

Skip:     There are a lot of those in Japan.

Dez:     There certainly are. In the story Skip talked about the luxury brand conglomerate LVMH, which features such brands as Louis Vuitton and Moet Chandon Champagne.

Skip:     Returning to Japan, Yamaha is a famous conglomerate that makes products as wide reaching as motorcycles and musical instruments.

Dez:     Yeah, it’s hard to see how those two ever got together.

Skip:     True enough. Now I have the noun exodus which means when everyone is trying to leave somewhere, or leave something, usually for negative reasons. In the story Dez talks about the possible exodus of the rich in France to avoid higher taxes. Got another example Dez?

Dez:     Do you remember what happened on January 30th, 2007?

Skip:     I don’t know, you finally paid for dinner?

Dez:     No that was February 3rd.

Skip:     Ah, right.

Dez:     January 30th was the worldwide release of Windows Vista. An operating system that was so unpopular that there was an exodus of users to Apple or to XP, some of whom never returned.

Skip:     Great example.

Dez:     Thanks.

Skip:     I know many people who stopped using Windows in favor of Apple at that time.

Dez:     For my final word I have the verb to disincentivize, which can be broken down into the prefix dis, meaning to take away and the noun root incentive, which is a reason to do something. Therefore, to disincentivize someone is to take away their motivation to achieve.

Skip:     Got it. In the story Dez discusses the possibility that the higher taxes will disincentivize people away from working harder.

Dez:     Well, I would. A final example would be when conferences are held in uninteresting places people are disincentivized towards attending.

Skip:     That is so true. If you put an all expenses educational technology conference in the Caribbean I would be far more likely to attend than if it was in somewhere like Pittsburgh or Detroit. Beautiful beaches and sunny weather are much more of an incentive than an industrial city.

Dez:     Having spent some time in Newcastle, I would agree. And that is all the time we have for vocabulary today.

Skip:     That brings us to the end of today’s episode of Down to Business English. Everyone, be sure to subscribe to the show in iTunes and it would be especially great if you could leave a comment if you are so inclined.

Dez:     Also don’t forget to visit the website to download a free pdf of the audio script to today’s episode. Our address is www.downtobusinessenglish.com . That’s www.downtobusinessenglish.com .

Skip:     And while you are there, sign up for the D2B newsletter. It is another great resource for your Business English studies. Well Dez, it certainly is good to be back producing shows with you. I look forward to the next one.

Dez:     Oh, me too Skip.

Skip:     Thanks for listening everyone. See you next time.

Dez:     Yes, thanks everyone. Bye for now.

Today on Down to Business English, Skip Montreux and Dez Morgan talk through the LIBOR Scandal.What is the LIBOR? How did this scandal work? What penalties will the banks involved in this receive?

Free Audio Script PDF

Skip: Hello everyone this is Skip Montreux signing in from Tokyo, Japan.

Dez: And this is Dez Morgan still in the sweltering city of Abu Dhabi, at least for a couple of days longer.

Skip: Welcome Dez and a great big warm welcome to all of our listeners to an all new episode of Down to Business English.

Skip:  So Dez, you say that you only have a couple of more days left in the heat of the UAE?

Dez: That’s right, I’m off to London in a few days.

Skip:  Oh great, will you be taking in some of the Olympics?

Dez:  I’m not planning on it as my main focus will be looking for a house.

Skip: Aren’t houses in London incredibly expensive, Dez?

Dez: They are, which is why I will be looking for something very small on the outskirts somewhere. I have the mortgage agreement in place although the interest rates that I’m being charged is a bit higher as I am an expat.

Skip: I guess you are more risky than someone living in their home country. Your mortgage isn’t with Barclays I hope, as they have been involved in quite the financial scandal recently.

Dez: No it’s with another bank so seems to be safe enough. I heard about that scandal too and thought that we must do a show on that as in parts it’s quite hard to understand.

Skip: Don’t worry Dez I am up on all of the details. So let’s do it let’s get D2B…Down to Business with the Libor rate manipulation scandal: What does LIBOR actually mean and how and why was it manipulated?

Dez: I will get things started by explaining what the LIBOR rate is and then will pass you over to Skip for the story.

Skip: Sounds like a good plan.

Dez: LIBOR stands for London Interbank Offered Rate and is the rate that banks in London charge each other to borrow money.

Skip: Okay.

Dez: Now, because these banks trade in different currencies and over different periods of time, there are rates for 10 different currencies and 15 periods of time.

Skip: And who decides what the rates are?

Dez: Well the LIBOR rate is decided by Thompson Reuters in association with the biggest banks in the UK. And another important acronym is the Euribor which is the ………..

Skip: I know, the same type of rate but for the Euro, I would imagine, and I guess it’s decided by the major European banks?

Dez: Well deduced there Skip. Going back to the Libor for a bit, the libor rate decides interests rates not only in pounds but also to a great extent the US dollar market as well.

Skip:    It really is an important number then.

Dez: It is and importantly it is the 350 trillion dollars in derivatives that base their rates on the Libor rate.

Skip: Now that is a term we hear a lot these days, but can you explain what exactly a derivative is?

Dez: Good, but difficult question. Basically it’s anything that gets or derives its price based on something else. Options and futures are good examples because their price is derived on the time of the contract and the value of the underlying stock or commodity.

Skip: You mean like when farmers sell their crops or animals six months or a year before they are ready for sale to take the uncertainty out?

Dez: Exactly and even my mortgage rate is partially based on the Libor rate plus some other calculations such as the risk to the lender.

Skip: Okay,thanks for all of that background Dez. Now let’s look at the recent scandal involving Barclays Bank. The main question is how could one bank alter the rate when all of the banks are involved together in setting the rate?

Dez: I wondered that.

Skip: What happens is all of the major banks estimate what they think the rate should be. Then Thompson Reuters takes out the top and bottom numbers and averages the ones in the middle. If one bank always goes for the top or the bottom number, even though it is removed, they are able to move the rate fractionally higher or lower.

Dez: You mean that because the second lowest number gets to stay in the calculation because the rate that, in this case Barclays put in, was taken as the lowest and so then removed.

Skip: Now that would only make the rate very slightly lower, but a trader who had enough money on the line could make millions on the trade because he would be able to predict the direction that the rate was moving in.

Dez: I see. So who lost out?

Skip: Pension funds, and basically anyone that needed to make a return from the interest figures that were based on the Libor rate but interestingly anyone with a variable rate mortgage probably actually made money.

Dez: So why did you warn me against getting a mortgage through Barclays then?

Skip: Influencing the Libor rate intentionally is, as you can imagine, illegal and as it has been going on since at least 2008, the fines that Barclays will face are going to be quite substantial.

Dez: For four years! Why did no one stop it then?

Skip: Sir Mervyn Kin, the head of the bank of England, said in 2008 that he couldn’t find any evidence of wrongdoing even though the then head of the New York Fed, Timothy Geitner, advised him otherwise.

Dez: So in 2008 Barclays was underreporting figures and then trading on that?

Skip: Not exactly. In 2008 the banking system was in crisis. If a bank was seen to be demanding a particularly high rate then it would look like it was in trouble whereas a lower rate implied the bankers were confident.

Dez: And of course someone else at Barclays later figured out how to make money from the trade.

Skip: That seems to be how it worked. Now to get back to the fines, Barclays has been fined $200 million by the Commodity Futures Trading Commission, $160 million by the US Department of Justice and almost £60 million by the Financial Services Authority in the UK.

Dez: That certainly seems like a lot.

Skip: Well, that is before anyone comes after them for compensation though.

Dez: The pension funds that lost money for example.

Skip: Among others yes.

Dez: Thanks for that Skip and just before we go, was Barclays doing this alone?

Skip: Certainly not. Over a dozen of the world’s biggest banks are under investigation for the same crime. Names that we all know like; Citi, HSBC, RBS, UBS, Deutsche ….

Dez: Thanks Skip I think we certainly get the picture. Now would be a good time for us to get D2V…Down to Vocabulary.

Skip: Let’s start today’s vocabulary with a word that Dez used in the opening of the show. He told us that he was looking to buy a house on the outskirts of London because prices are too expensive in the center of the city. As you can probably imagine from the context, outskirts means on the edge of a city.

Dez: It can apply to holding an opinion as well, that is away from the center or majority. For example, in today’s meeting, I found myself on the outskirts of a discussion. I just do not agree with everyone else.

Skip:              Another related phrase is to skirt the issue. This means to not directly answer the question at hand, but rather try to avoid the issue. Maybe we can demonstrate this. Dez, how much will your upcoming vacation cost you?

Dez: That’s a good question Skip. I’ll be spending time in the South of England with relatives and then I’ll be off to London to go house hunting for a few days. If I have a chance and things work out, I might take a train up north to visit some friends.

Skip: Come on Dez, you are skirting the issue…exactly how much is this trip going to cost?

Dez:  Okay, I think everyone gets the picture. Moving on…

Skip: You’re still skirting the issue.

Dez:  Moving on! Now let’s look at the word deduce, which simply means to reach a conclusion based on the information you have around you. In the report, I complimented Skip for deducing what the Euribor was, which he did simply from what I had told him about the Libor.

Skip:              So it is basically like taking a guess?

Dez: Actually no the opposite. A guess is based on a lack of information. When you take a guess it is based more on your experience or intuition. When you deduce something, it means you are basing your answer on known facts and reaching a logical conclusion.

Skip: I see. Well, can you give us a business example of deduce?

Dez:  Certainly. The entire reason for a company to use a focus group when testing a new product, is to gather enough marketing information to deduce what consumers will spend money on. It looks like Apple has deduced that there is room in the market place for a smaller sized iPad. I just read that they will be releasing a 7 inch iPad mini later this year.

Skip: Well, I will believe that when I see it. Anyway, moving on today, I’d like to explain the phrase to have something on the line.

Dez:  A very useful phrase.

Skip: Yes. To put or to have something on the line means that something is at risk. In the story, I mentioned that a trader who had millions of dollars of investments on the line, stood to make a lot of money. In other words, with millions of dollars at risk, the smallest movement in the Libor meant very large gains. Dez, can you give us another example?

Dez: Certainly, Research in Motion has a lot on the line at the moment. With their market share completely taken over by Android & Apple, they really have to come out with a super product in order to survive. At least in North America and Europe.

Skip: Good example. Unfortunately, it doesn’t look very good for RIM does it?

Dez:  No, it doesn’t I’m afraid. Next up today is the verb to underreport. This is a common business term that means that the full amount of something; a sales figure, a loss, a revenue stream, anything really, has not been fully reported. The entire Libor scandal revolves around Barclays underreporting their estimated lending rate. Another example Skip?

Skip: Sure. Even though the US unemployment rate stands at just over 8%, most economists believe that it is being underreported because so many people have simply given up looking for work. They think the actual figure is closer to 15%.

Dez:  Good luck in November Mr. Obama. What’s our final word today Skip?

Skip:              Last up today is the noun compensation. Compensation refers to monies paid by a company or organization to parties they have harmed in some way. In the story, I mentioned that so far Barclays has only been penalized by regulators, that no one has yet come forward asking for compensation. In other words, none of the investors who have lost money due to Barclays illegal actions has asked for money to cover their losses.

Dez: I’m sure it is only a matter a time. Another example comes from where you are Skip. I was just reading the other day how the Japanese government has given TEPCO billions of dollars in aid to recover from the disaster they created at Fukushima, but the people who lived in that area have only been compensated a very small amount.

Skip: That is true Dez. It really is a very sickening issue that is not getting much attention. In fact, while you are away from the microphones this summer, I will be releasing a D2B report on the compensation issue surrounding TEPCO and the Japanese nuclear disaster.

Dez:  I look forward to hearing that. But for today, that is all the time we have for vocabulary.

Skip: Well Dez, thanks so much for all the information and for squeezing in the time to record one last episode before you hit the road for your summer vacation.

Dez:  My pleasure Skip. I hope you, as well as everyone listening, has a great summer.

Skip:  Thanks Dez. While you’re away, I know you will be spending some time researching topics for future shows, and may even be able to put a Newsletter together?

Dez:  Yes, that’s right. Everyone, please be sure to drop by the D2B website and sign up for the newsletter.

Skip:  And while you are there, feel free to download a copy of the audio script for today’s show. Our address is www.downtobusinessenglish.com . That’s www.downtobusinessenglish.com

Dez:    I would also like to encourage everyone to stop by the Down to Business English Facebook page. It’s another great way to follow the show.

Skip:    And finally, if you haven’t already, please be sure to subscribe to Down to Business English in iTunes. The more people who are subscribed, the more visible we become in iTunes, and the more people become aware of the show.

Dez:    Thanks for listening everyone. Bye for now.

Skip:    Yes, thanks everyone, see you next time.

Dez Morgan explains the concept of deflation. What exactly is meant by this term. Is it good or bad for an economy? Why has it been an economic reality for the Japanese economy for the past 20 years?

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Hello everyone Dez Morgan here reporting in as ever, from Abu Dhabi in the UAE. And you’re listening to Down to Business English.

I’m bringing you a solo episode today as both Skip and myself have become increasingly busy and our schedules have made it next to impossible for us to get together at the same time. The report that I would like to share with you today is a follow on from the two part special on inflation that was released on February 9th and April 2nd of last year. A few of our Japanese listeners wrote in shortly after those episodes and asked if we could put together a story on deflation. So, better late than never, here it is; Deflation. What is it? What causes it? And why is it such a persistent problem in Japan? And what can be done to fight it?

Let us begin with the question what is deflation? Most people see deflation as falling prices and that is indeed one definition of deflation but to really understand it we need to look beyond falling prices and ask “Why are they falling?”. Similar to inflation there are several reasons why prices might be falling.

The first of these is a lack of demand for a product or a service which means that manufacturers or producers have to reduce the price until there is someone willing to pay for the product or service. There may be several reasons for this but the most common is when banks are unwilling to lend or conversely, borrowers are unwilling to increase borrowing and so there is less money available to consumers to buy things.

Another form of deflation is when products become cheaper because of improvements in the efficiency of the manufacturing process. As new products become increasingly popular so economies of scale come in, which in simple terms means as more of something is produced the cost of each individual unit comes down.

For a country that imports lots of its goods and services the exchange rate will have an effect on inflation and deflation. Americans have been complaining recently about rising fuel prices and have been blaming the oil companies for price gouging. A lot of this rise in prices can be attributed to a fall in the value of the US dollar. Conversely if a currency is rising in value then it’ll be able to buy more so will prove deflationary.

“Where do governments come into the equation?” and “why are they so afraid of deflation?” I hear some of you ask.

Let’s answer the first part of that question.

Central Banks control the exchange rate and the reserve requirements of the amounts that banks need to hold against how much they are permitted to lend. Commonly to curb inflation, Central Banks will raise interest rates to make it more difficult for consumers to borrow and raise the reserve requirements to make it more difficult for banks to lend. Now this policy works in reverse for deflation, with banks commonly lowering interest rates to encourage borrowing and lowering reserve requirements to make it easier for banks to lend. Central banks can also make additional funds available to banks to lend which again has the effect of increasing borrowing and so raising inflation.

Now for the second part of that question. Why are the Central Banks so afraid of deflation?

Mainly because in an inflationary environment the currency is in fact losing value so the banks get to pay back the debts with currency that is worth steadily less and less as they inflate. Put into context if inflation is running at 4-5% a

year then the debt that needs to be repaid has dropped by a quarter or so 5 years later. In a deflationary environment the opposite is true and Central Banks are unable to inflate away the debt by creating new money to devalue the money already in existence.

Moving to Japan: Why didn’t the Bank of Japan, or BOJ for short, just reduce interest rates to zero, create new money and get the Japanese to borrow it and so create inflation. Well simply put they did but they were unable to get the Japanese consumers to borrow any money and so create inflation. The effect where money is borrowed and spent and then borrowed again is called money velocity and the BOJ had the problem that they could not create any velocity in the monetary system. Even with rates at virtually zero and the banks awash with cash no one would borrow and spend.

Well why not?

Well the Japanese have always been somewhat conservative in their borrowing habits and as the economy had not been looking strong for so long the Japanese consumer retrenched even more and so was even less likely to spend. The BOJ tried circumventing the banks and basically just gave the people money to try and encourage consumption but this only boosted spending till the free money was gone.

Unfortunately for the BOJ interest rates at zero for so many years had another effect. Looking for some sort of yield Japanese investors started to invest in foreign currencies which had the effect of forcing the Japanese Yen lower and the currency invested in higher. At first this seemed to be beneficial as the Japanese companies wanted a weak Yen to encourage exports. The BOJ had been intervening in the currency market for years to keep the Yen low for exactly this reason. However what no one at the BOJ seemed to anticipate is what would happen when the tide turned and Japanese investors wanted to sell their foreign currency and buy Yen to bring their savings home. Well that is exactly what happened and the Japanese Yen soared against the Euro and the US dollars in 2008 and has never looked back. Now of course a high currency reduces the price of imports and so of course is deflationary.

All of which basically brings us up to date with the BOJ still trying to curb their deflationary climate by creating money and trying to get the people to borrow and spend it. As recently as April 27th this year the BOJ announced it would spend 10 trillion yen, or $127 billion US dollars on a further round of stimulus to try and boost prices which had fallen 0.5% since this time last year. The Bank said that they are targeting an inflation growth of 1% this year but few analysts think they can attain this.

So there we have the story of deflation and why it’s such an ongoing problem for the Japanese economy but now it is time for us to get D2V…Down to Vocabulary.

First off I have the business expression price gouging which is a compound of the price people charge for things and gouging which means to cut or dig a hole. So when used to together means to charge too much for something. In the story I talked about how people and the government in the US have accused oil companies of price gouging or charging too much for oil and gas. A further example from Britain is some people believe that train companies charge too much or price gouge because they’re the only provider on the line that they manage.

Next I have the verb to curb which means to halt or stop in some way. In the story I talk about how Central Banks raise interest rates to curb or halt inflation. Another example would be

if a company introduced a new policy to curb or halt people spending too much on their company expenses.

Now I have an expression using the noun context which is to put something in context meaning simply to give the background surrounding something so that it is easier to understand. In my report I gave the context of an inflation figure as an illustration of how governments inflate away their debts. Another example would be if a friend said to you that he hadn’t got a pay raise, you might feel sorry for him or her until he or she put it into the context that everyone else in the office had to accept a pay cut.

My next word is the verb to retrench which means when a person or a company has stopped spending money when they previously spent quite a lot. In the story I mention that the Japanese consumer has retrenched over the last few years and is no longer buying very much. If a technology or pharmaceutical company retrenched on its R&D costs it would be seen as a very bad sign as that company would not be investing in future products or medicines.

Our final word for today is another verb to circumvent which means to work or to go around an obstacle that is real or imagined. In the story I discussed how the BOJ tried to go around or circumvent the banks and give money directly to the people. If you had a manager at work who always blocked every suggestion that you made, you might try and go above or circumvent that person. That can of course be a very dangerous idea.

Well that is about all for my solo edition on Deflation. I hope that you enjoyed it and found it useful.

Thanks for listening and do check out the audio script available on our website at downtobusinessenglish.com. And while you are there don’t forget to sign up for the D2B newsletter link.

You can also find us on the Down to Business English Facebook page. And our email address is downtobusinessenglish@gmail.com.

Goodbye for now and hope to be back soon recording with Skip.

Today on Down to Business English, Skip and Dez talk about what RFID chips are and the applications they have in both the public and private sectors.

Skip:  Hello everyone, this is Skip Montreux in Tokyo, Japan. Welcome to the podcast that keeps you up to date with business news from around the world, helps improve your English listening skills and expands your range of business related vocabulary.

Dez:     You certainly can’t ask for more than that. Im Dez Morgan in Abu Dhabi UAE, and you’re listening to Down to Business English.

Skip:     So Dez, it is also time for me to welcome you into the Apple community. I understand that you are the proud new owner of the New iPad.

Dez:     Thanks Skip.

Skip:     For the record, I am very jealous.

Dez:    But I only have one because the college that I work at is going paperless, so all of the textbooks and all other materials will be only available on the iPad.

Skip:     Wow, now I am even more jealous. That sounds great! You will never have to worry about your students forgetting their books at home again.

Dez:     True. They might forget their iPads though, as might I.

Skip:     Be careful. It is so lightweight that forgetting it behind is not hard to do. Fortunately, I haven’t forgotten mine yet and have it with me when ever I go out. It is so useful for taking notes, preparing D2B shows, looking at maps, looking at  ……..

Dez:     Okay, okay I get the picture, you love your iPad.

Skip:     I do, I really,really do.

Dez:     So is that our story for today, another Skip loves Apple love fest?

Skip:   No actually it isn’t, but our story today is connected to technology and that technology is RFID chips and one unusual way that they are being used in Asia.

Dez:     I have no idea what an RFID chip is, but let’s do it, let’s get D2B…Down to Business with…. those chips, what are they, what are they used for and what is the unusual use for them in Asia?

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When was the last time you attended a live concert or sporting event? How much did you pay for the ticket? As it becomes more and more common to purchase event tickets online, the service fees  and extra charges added to those tickets have become more and more expensive.Today on Down to Business English Skip & Dez talk about concert ticket pricing and the controversy surrounding one of the giants in the industry –Ticketmaster.

Skip:     This is Skip Montreux in Tokyo Japan.

Dez:     And I’m Dez Morgan in Abu Dhabi the UAE.

Skip:     And you are listening to an all new episode of Down to Business English.

Skip:     Mr. Dez Morgan. It has been a long time.

Dez:     It certainly has Skip. I have really been putting my all into my work recently.

Skip:     Good to hear.

Dez:     How have you been?

Skip:     Very well as a matter of fact. Here in Japan the new fiscal year started back at the beginning of April and the last 6 weeks have been very busy with many corporate clients starting new courses.

Dez:     Right. For those of you who don’t know, Skip works closely with many Japanese companies, helping employees improve their English skills in order to do business overseas.

Skip:     That’s right. A lot of the focus is on teleconference skills, negotiating, giving presentations, those types of scenarios.

Dez:     I was just reading about Japan over breakfast this morning as matter of fact. I see that Lady Gaga was recently performing in Tokyo.

Skip:     Yes, that’s right. Although she has been running into protests over her act in other Asian countries such as South Korea and Indonesia, she sold out 3 consecutive concerts at the Saitama Super Arena.

Dez:     Wow. If I remember correctly, doesn’t the Super Arena have a capacity of something like 30,000 seats?

Skip:     37,000 to be exact. And with ticket prices ranging between ¥8000 and ¥40,000…well the thought of it makes me a little gaga.

Dez:     That is certainly a lot of revenue but you have to keep in mind that artists only get a portion of the ticket price.

Skip:     That is true Dez. But currently there is a battle brewing in the US over this very topic.

Dez:     Is that right. Are artists demanding a higher cut of ticket revenue?

Skip:     Not the artists, but fans are raising concerns with the increasing fees being applied to tickets. And the issue doesn’t only pertain to music events, but to any organization that sells stadium tickets, such as professional and amateur sports teams.

Dez:     Sounds very interesting.

Skip:     Well let’s do it. Let’s get D2B…Down to Business with Front Row Seats: a behind the scenes look at ticket pricing.

Dez:     Just to make sure I understand you correctly, this issue is not a battle between the performers and the venues where they hold the events.

Skip:     That’s right Dez. This battle over ticket pricing is more between the consumer and the ticket agents who are selling the tickets.

Dez:     Alright, can you give us some background?

Skip:     Sure. Back in the day, when I actually went to concerts, getting a ticket involved going to the theater or stadium where the event was being held, waiting in line – sometimes overnight, and then purchasing a ticket face to face with a cashier in the box office.

Dez:     That’s the way we used to do it, yes. I remember queuing up all night for Santana, that must have been back in the mid-80s.

Skip:     Oh Santana! Now, that would have been worth it.

Dez:     It was.

Skip:     Over the years however, with advances in technology and greater and more secure Internet access, ticket selling has really gone completely online. Now when you want to attend a concert, you simply go to a ticket sellers website and at the precise moment that tickets go on sale, start clicking the buy button.

Dez:     A very convenient, not to mention civilized way to do things if you ask me.

Skip:     Well yes, it certainly looks good on paper. But in reality, many consumer groups are outraged at the monopolistic tendencies the ticket sellers are exhibiting.

Dez:     Monopolistic tendencies. Now you have my attention. Tell me, who are the big players in this market.

Skip:     The big name by far is the American company Ticketmaster.

Dez:     Of course, they are well known in the UK. I’d hazard a guess that they are one of the biggest, if not the biggest ticket agent in the UK.

Skip:     At this point in time, they are very much a global company and sell tickets to concerts and events taking place all around the world.

Dez:     So what were you saying about their monopolistic tendencies?

Skip:     Well, the way it works is like this. Ticketmaster negotiates directly with venues for the exclusive rights to sell tickets for events held at that location. In essence, they let the stadium or theater keep the entire face value of the ticket so that only they can sell those tickets.

Dez:     So if a ticket was priced at $50.00, the venue would get to keep all of that?

Skip:     That’s right. Now, in turn, the venue pays the performer or sports team whatever price they had negotiated with them.

Dez:     Okay, it sounds like a good system for the venue and for the artist. How exactly does Ticketmaster make their cut?

Skip:     This is where things get dicey. Ticketmaster, and outfits similar to them, make their entire revenue from service fees. Typically, fees added to the face value of a ticket are a service charge, a facility charge, a processing charge, and a convenience charge.

Dez:     And how much does that all add up to?

Skip:     Of course it varies, but on average, a person buying a ticket to go see their favorite singer or watch a sports game, can be looking at paying an additional 25-40% over the original price of the ticket.

Dez:     Of course. Now that doesn’t sound great. But Skip, I’m not sure I see the issue here. Ticketmaster is simply charging for providing a service.

Skip:     Yes, but remember, they have an exclusive contract with the venue. If a person wants to buy a ticket, they have no other option but to purchase through Ticketmaster.

Dez:     Ah yes. That is the rub. So it is not a monopoly in the sense that they have no competitors, but rather they have cornered the market on the product.

Skip:     Exactly. This issue has been receiving more and more attention over the last few years as Ticketmaster has been merging with smaller agencies and even buying venues and operating them through subsidiary companies.

Dez:     So now they are selling tickets to their own concert stadiums, playing both ends of the field so to speak.

Skip:     Yes. Most recently they have added more wood to the fire by introducing a paperless ticketing system. Now when you buy a ticket, it is tied to your credit card. When you arrive at the venue, you only have to show your ID and the credit card that matches the ticket number.

Dez:     Sounds very convenient. But what happens if you decide not to go and want to sell your ticket?

Skip:     That’s just it. You can’t. Your only option is to sell it on Ticketmaster’s reseller website, and at the price that they set.

Dez:     Yes, I am slowly being convinced that there are potential problems with this system. Has there been any blowback against Ticketmaster?

Skip:     Lot’s in fact. Over the last decade many artists have complained about the way their fans are treated by Ticketmaster. Some of the bigger names to step into the fray were Pearl Jam and Bruce Springsteen. Most recently however, the Indy band String Cheese Incident has come up with an unusual solution.

Dez:     Oh, what’s that?

Skip:     They took advantage of a loophole that Ticketmaster has with some of their venues. This loophole allows the venue to sell tickets directly from their box offices on site.

Dez:     Okay?

Skip:     So, what String Cheese Incident did was hand out $20,000 in cash to their fans and asked them to go in person and buy up all the available tickets. Now they are now selling those directly to their fans via their website at the original face value price.

Dez:     I guess that is a very unique way to get around service charges. But now it’s time for us to get D2V…Down to Vocabulary.

Skip:     Just before we get started with the vocabulary for today’s report, I’d like to ask a big favor of all of our listeners.

Dez:     And what exactly would that be?

Skip:     Well two favors actually.

Dez:     My, aren’t we being a little cheeky. Go on, what are they?

Skip:     First, if you haven’t already, please subscribe to Down to Business English in iTunes. We are hoping to raise our visibility in the podcast rankings and one of the best ways to do that is by having a large number of subscribers.

Dez:     And by subscribing it also ensures that every new episode of D2B is delivered directly to you.

Skip:     That’s right. And, if you have an iTunes account, please consider writing a review. It is another way we can increase our profile.

Dez:     But please, do be kind. Honest, but kind. Shall we get on with the vocabulary?

Skip:     Lead the way Mr. Morgan.

Dez:     Okay, first up today is the noun venue, which refers to a building that has a specific purpose, usually involving a performance of some kind. At the beginning of the report, I clarified with Skip that this issue was not a fight between performers and the venues. In other words, the disagreement was not between the concert halls and the performers.

Skip:     Another example might be that as we record this, the leaders of NATO countries are meeting in the US. The venue of their first meeting is at Camp David, the US Presidential retreat just outside of Washington DC.

Dez:     That is the same venue where the historic peace treaty was signed between Egypt’s Anwar Sadat and Israel’s Menachem Begin, back in 1977 I believe.

Skip:     Yes, the very same place. Next, let’s talk about the expression to look good on paper. When you say that something looks good on paper, you are saying that in theory it looks like a good idea, it should be successful. However, at the same time you are communicating that it might not work in practice.

Dez:     In the story, you commented that the Ticketmaster business model looked good on paper.

Skip:     Yes, I was acknowledging that it looks like a convenient and fair way to sell tickets, but I was also communicating that it had some weaknesses in practice.

Dez:     Do you know what else looks good on paper?

Skip:     No, what?

Dez:     My stock portfolio. I have positions diversified over several industries, I tend to stay away from overly risky investments, I do everything a prudent investor should do. On paper, it looks very good. Unfortunately, my returns are not that stellar.

Skip:     Well I am sorry to hear that.

Dez:     Oh no worries Skip. It was just an example. Moving on, I want to talk about the financial term face value. The face value of something is its base price, before any service charges or commissions are added. In the story we talk about the face value of a concert ticket. What we are referring to is the base price of the ticket, before a ticket agency adds its service fees.

Skip:     Earlier today I was pricing airline flights back to Canada for this summer. The face value of a return ticket is not so bad but once the airline add in their fuel surcharges and the airports tack on their airport fees, and the governments add on their taxes, the final price is unbelievably high.

Dez:     A very painful example.

Skip:     You can say that again.

Dez:     A very painful example.

Skip:     Oh now look who’s being cheeky. Next up today is the adjective dicey. This term actually comes from the world of gambling.

Dez:     Careful Skip. I can hear your heart beating faster from way over here in UAE.

Skip:     Don’t worry Dez, I’m fine. Now from personal experience, many dice games look very simple and fairly harmless. But, in truth, they move very, very fast and before you know it, you have lost a lot of money.

Dez:     That’s quite the play by play.

Skip:     Thank you. So, when you describe something as dicey, you are conveying that it is risky and perhaps not a very honest situation.

Dez:     In the story you referred to Ticketmaster’s service fees as getting dicey. In other words, the situation is potentially risky on the consumer’s pocketbook.

Skip:     Not only that, but the customer is always left with the feeling that they have been cheated.

Dez:     Another example could be how the recent losses at JP Morgan were a result of dicey trading practices.

Skip:     Perfect example. Dez, what’s our final word?

Dez:     Our final word today is actually a phrase, to corner the market. I think this is easy enough to get a mental picture of. Imagine getting all of one product and putting it in a corner so that no one else could get at it except by going through you.

Skip:     So when you say that something has cornered the market, you are saying that it has complete control of that market.

Dez:     Precisely. In the story I commented that Ticketmaster had cornered the market on selling tickets. In other words, by negotiating exclusive rights with concert stadiums, they had achieved the dominant position compared to their competitors.

Skip:     Just like Amazon has cornered the market on selling both print and digital products online.

Dez:     Yes, but even though they have cornered that market, they are facing stiff competition from both other online companies such as Apple as well as physical outlets like Costco.

Skip:     And that is all the time we have for vocabulary today.

Dez:     Thanks for that report Skip. I have never really given much thought to the business of ticket pricing before.

Skip:     My pleasure Dez. I hope all our listeners found it interesting as well. Everyone, don’t forget to download your free PDF audio script of  today’s show. It is available on our website at downtobusinessenglish.com. One more time downtobusinessenglish.com.

Dez:     Yes, and as Skip mentioned before, don’t forget to subscribe to Down to Business English in the iTunes store and, if you are so inclined, please leave a comment as well.

Skip:     Thanks everyone, see you next time.

Dez:     Yes, thank you. Good bye.

With governments around the world looking everywhere and anywhere for places to cut costs, a huge target is often a nation’s healthcare system. Two healthcare areas that excessively drain health budgets budgets are Obesity & Smoking.

Download Free Audio Script PDF

Dez:     Hello everyone, this is Dez Morgan here reporting in from Abu Dhabi in the UAE.

Skip:     And I am Skip Montreux coming to you from Tokyo, Japan.

Dez:     Welcome to an all new episode of Down to Business English.

Skip:     So Dez, tell me, how is the healthy living going now that you have given up smoking?

Dez:     Pretty good actually. I feel a lot better and I’m exercising more now that I don’t get out of breath all of the time. So on the whole life is certainly better.

Skip:     Other people I know who have stopped smoking say that when they gave up, they started to eat more, especially chocolate and sweets.

Dez:     Well yes that’s certainly happened to me too and it’s difficult to keep the weight off.

Skip:     Well being a little overweight is probably better than smoking, isn’t it?

Dez:     Well, surprisingly in overall terms, obesity is a much greater problem than smoking. The campaigns to stop smoking have been pretty successful over the last few years so in overall cost terms, in the UK, obesity costs the health service at least double what smoking does.

Skip:     Wow! And that is our story today, so let’s do it. Let’s get D2B…. Down to Business with the real health costs of obesity and smoking and how they are a major drag on the economies of the developed world.

Dez:     All right Skip let me start out with a question. How much do you think obesity costs the US economy on an annual basis?

Skip:     Sorry to answer a question with a question Dez, but, what exactly do you mean by obesity?

Dez:     Well, body weight is measured by Body Mass Index or BMI for short and this is calculated by dividing a person’s weight in kilograms, by the square of their height in meters. A measure of 25 and below is considered normal, 25-30 is considered overweight and 30 plus, obese.

Skip:     But is BMI accurate? I have heard that in extreme cases, some sports professionals who are in really good shape could be considered obese using the BMI measure. In fact researchers at the University of North Carolina found that 97% of American Football Players had a BMI in excess of 25 or could in fact be considered overweight or obese.

Dez:     I admit that in extreme cases like this where people have a lot of muscle then the BMI measure is fairly meaningless but for most people it’s fairly useful. So if I could return to my initial question before you so rudely interrupted…

Skip:     Sorry.

Dez:     What does obesity cost the US economy?

Skip:     Now are you talking about the total cost in loss of productivity, healthcare costs, and various other costs to employers and the state?

Dez:     That’s right yes.

Skip:     Well, I have no idea but I’ll take a stab in the dark and say…. $300 billion or thereabouts.

Dez:     That’s amazing. Wow, USA Today reported a figure of $270 billion for 2011, so you were pretty close really.

Skip:     $300 billion. I always find figures that large hard to visualize. Can you give me and our listeners something to compare that with?

Dez:     Yeah, sure can. The entire US budget for defense last year, including overseas wars, was $550 billion or about twice the budget for obesity.

Skip:     What about if we add in the cost to the economy of smoking.

Dez:     Okay let’s do that. In the US the costs look like this. Total cost of health care; private and public:$96 billion. Cost to Medicaid insurance:$58 billion. And the cost of loss of productivity: a further $97 billion. Which adds up to $260 billion or roughly the same cost as the overall cost of obesity to the economy.

Skip:     So if my math is correct the costs of smoking and obesity combined are roughly the same as the entire US defense budget and as everyone knows that really is a colossal expense. I wonder, is that the same in other countries?

Dez:     Hmm. Okay, turning to the UK. In 2009 61.3% of the adult population were judged as being overweight or obese, with 23.0% of that number of adults and 14% of children actually being considered obese.

Skip:     So it is a pretty serious problem in the UK as well.

Dez:     The Government’s Foresight Report put the cost of obesity at £45 billion pounds a year from now until 2050 or fully half of the current budget for the National Health Service. However, this figure has been questioned by The Investigation, a Radio 4 Documentary program, which estimates that this figure could be over inflated by up to 50%.

Skip:     Which all goes to show that figures need to be checked, double checked and then checked again, if we are to do proper due diligence.

Dez:     You speak the truth Mr. Montreux, as you usually do.

Skip:     Thank you.

Dez:     But how do the health care costs of obesity compare to that of smoking?

Skip:     I give up, how do they compare?

Dez:     As that was actually a rhetorical question Skip there was no need for you to answer. The cost of smoking related healthcare is a difficult one to calculate as there are issues such as secondhand smoking which is very

difficult to measure. However the BBC estimates the cost to be around £5 billion a year which is still considerably less than the cost of obesity.

Skip:     Do many people still smoke in the UK?

Dez:     Yes, 21% of adults at the last estimate although that has come down considerably in the past few years. I myself gave up smoking with a government sponsored support group when I was living in the UK.

Skip:     Yes, but you started smoking again.

Dez:     And I also gave up again so although it took two goes the government sponsored scheme was a success eventually.

Skip:     Well that about answers the questions of how much obesity and smoking cost governments today.

Dez:     Could I add some local insight?

Skip:     Of course, go ahead.

Dez:     The UAE is the world leader in one obesity related illness.

Skip:     Diabetes maybe?

Dez:     Wow, again you got it in one. Yes, fully 20% of UAE nationals have been diagnosed with diabetes and this figure is growing rapidly. This compares with a much lower figure in the UK for younger people and about 20% of those 65 and over. Figures for the US are similar with diabetes becoming a major problem among the elderly compared to it being diagnosed in children as young as 10 here in the UAE.

Skip:     Diabetes, another problem connected with being overweight. I definitely think I should consider cutting out the smoking and starting some kind of exercise program.

Dez:     Yes you should. But before that , it’s time for us to get D2V….Down to Vocabulary.

Skip:     I will start us off today with the noun productivity, which simply put means the amount of work done per person usually in a year. So a high level of productivity shows that people are working hard and producing goods and services while a low level indicates the opposite.

Dez:     You are of course Mr. Productivity Skip.

Skip:     Thank you very much. In the story I asked whether a loss in productivity was part of the calculation of the costs of smoking and obesity.

Dez:     A further example would be when comparing how many hours staff work in a year, those that work more may not ultimately produce more as their level of productivity may be lower. My first word is the adjective colossal, which means when something or some situation or problem is very big.

Skip:     You mean like the government debts of virtually every country in the developed world.

Dez:     That would be a good example. The one that you gave in the story Skip was when you were talking about the size of the US Defense Budget that you so rightly described as colossal.

Skip:     Next I have two part verb for you that is fairly self explanatory but useful nonetheless and that verb is over inflated. This simply means when a number or the cost of something is too high due to an error or manipulation in some way. In the story Dez says that the figure for the cost of obesity could be too high or over inflated by up to 50%.

Dez:     That was Radio Four’s supposition anyway. A further example would be before the financial crisis the values of some bonds had been over inflated by a huge degree.

Skip:     That is an understatement.

Dez:     True. Now I have the adjective rhetorical which is usually used when describing a question, to state that it’s a question that is just being asked and requires no answer.

Skip:     Common rhetorical questions are when someone asks a question like ‘Now, where did I leave my keys?’ when the only person that knows the answer to that question is the speaker themselves.

Dez:     ‘Why do I lose to you at poker?’ is a rhetorical question I have asked Skip a few times not requiring an answer of course.

Skip:     That’s right. Finally I have the adjective secondhand which is used in the story to indicate when an effect happens indirectly, in this case the effect of another person in the same room smoking.

Dez:     In the UK secondhand also indicates that something is not new, I believe you call that ‘used’ in North America?

Skip:     Yes we do, like your used car that keeps breaking down.

Dez:     Thanks for the reminder. And that about does it for vocabulary today.

Skip:     Well Dez, I don’t know if it is because of today’s topic or not, but I suddenly feel like trying to give up the butts again.

Dez:     Skip, I highly recommend it. The first few days are a little tough but before you know it, it’s smooth sailing.

Skip:     I will give it some thought. Everyone, thanks for listening. I’d like to remind you to visit our website to download your very own free copy of today’s audio script. Our address is downtobusinessenglish.com. Once again, that’s downtobusinessenglish.com .

Dez:     And if you haven’t already, please do sign up for the Down to Business English Newsletter. I believe the next one is coming out very soon. Is that right Skip?

Skip:     Yes Dez, that’s correct. As soon as we finish today, I’m going to start getting it together.

Dez:     And what are you writing about this time?

Skip:     I haven’t completely sketched it out but since Spring is almost here, I thought I would write about the theme of optimism, and how it is important for businesses to remain optimistic in tough times.

Dez:     Interesting.

Skip:     I think so. Okay everyone, bye for now. See you next time.

Dez:     Yes, thanks for listening. Bye.

Since announcing its intention to become a Publicly traded company, Wall Street and the Tech world has been buzzing with speculation. Wall Street investors are focused on how much money is to be made while Tech experts are questioning what changes this will bring to the Social Media giant.

Today on Down to Business English, Skip and Dez take a close look at what an IPO is, how this IPO might change Facebook, and is it a good investment?

Download Free Audio Script PDF

Skip:     This is Skip Montreux in Tokyo Japan

Dez:     And I’m Dez Morgan in Abu Dhabi in the UAE.

Skip:     And you are listening to an all new episode of Down to Business English.

Skip:     Good to hear your voice Dez. I trust that all is well with you.

Dez:     Thanks Skip. As a matter of fact things are going really well at the moment.

Skip:     Oh? Anything in particular happen to put you in such a perky mood?

Dez:     Well it’s a culmination of things I suppose. I’ve been enjoying the weather recently, I’m working with a nice group of students at the moment, and to top it all off, my stock portfolio is starting to see a glimmer of hope.

Skip:     That is good news indeed. I imagine more people in your position are seeing similar results with stock markets in North America and Asia slowly climbing back to the levels before the crash in 2008.

Dez:     Perhaps, but managing your own stock portfolio is still a very tough slog.

Skip:     Best left to the experts I suppose.

Dez:     I wouldn’t recommend going it alone, unless you have a knack for doing research. It takes a lot of time to evaluate companies, look for trends, and take the pulse of world events.

Skip:     Sounds very demanding. So I guess you are all up to date with what is happening with the recently announced Facebook IPO?

Dez:     Well, embarrassingly enough, no I’m not. To tell the truth, I don’t invest that much in tech stocks or Internet companies, so I don’t follow them as closely as other sectors.

Skip:     Oh, you are more into traditional investments?

Dez:     Yes, I tend to stick with commodities for short term trades and large blue chip companies for the longer term. However I did hear their announcement last month about going public, but I’m not quite up to speed on the details.

Skip:     No problem. If you can help by explaining what an IPO is, I will fill everyone in with the nitty gritty details the Facebook IPO.

Dez:     Yeah, sounds fair.

Skip:     So lets do it. Let’s get D2B…Down to Business with Facebook’s IPO: what is it, how will it change Facebook, and most importantly—is it a good investment?

Skip:     So Dez, let’s start off with that acronym. Could you explain to all of us exactly what is meant when we hear the term IPO?

Dez:     IPO stands for Initial Public Offering and it basically refers to the price of a company’s stock when it is listed on a stock exchange for the first time.

Skip:     So when a private company decides to go public they determine the opening price of one share in that company and that price is their Initial Public Offering or IPO.

Dez:     Yes, but when you hear someone talking about a company going public, or its IPO filing, they can be referring to the entire process of determining that price. Officially that process is called a prospectus.

Skip:     So it is more involved than just picking a number?

Dez:     Oh yes. It’s quite a detailed procedure that often involves using a 3rd party auditor to look at the company’s financial status and properly report that information. Unlike a private company which isn’t under any obligation to disclose its financial information, a public company has to report every last detail. From their assets, to employee salaries, to revenue. Even the names of current investors need to be transparent.

Skip:     As one would expect if they were considering investing their money in a company.

Dez:     Absolutely. Once a company goes public they have a fiduciary duty to the investor. And that is one of the pitfalls of being a public company. They tend to be more concerned with the results of the next quarter rather than the long term health of the company.

Skip:     It sounds like a huge negative, almost as if a company has to give up its independence. Let me ask you this; what motivates a company to go public? I mean, what is the benefit to losing all that control just for being listed on a stock exchange?

Dez:     The biggest reason is to raise capital. As a private company, your capital, or in other words the money you have available to invest in new projects and expansion, is limited to your profits, private investors, and borrowing money from banks.

Skip:     Investing its hard earned profits, finding private investors which they will have to pay back someday, and borrowing money from a bank incurring interest charges–not exactly great options.

Dez:     Exactly. Now contrast that to going public. When a company lists on a stock exchange, they suddenly have access to a substantial amount of money to use as capital with the added benefit that they don’t have to repay that money.

Skip:     They don’t?

Dez:     No. Since it is a traded stock, investors can liquidate at any time. If they sell when the price is high, they get a high return. If the price is low….well such are the dangers of investing in the markets.

Skip:     So that is the trade off. A private company gives up its independence and control in order to get access to a large amount of capital that they don’t have to repay.

Dez:     That’s right. So those are the nuts and bolts of an IPO.  What can tell us about Facebook’s IPO?

Skip:     Well, as you mentioned earlier, last month Facebook announced that after being a private company since their inception in 2004 they will be going public this Spring.

Dez:     An announcement that I am sure many tech brokers have long awaited.

Skip:     Well if you look at what happened when Google went public in August of 2004, there certainly is the potential for making a lot of money. Google’s IPO was $85.00 per share and within a few short weeks was trading around $200. They were able to raise $2¾ billion dollars and really haven’t looked back since.

Dez:     How much money is Facebook trying to raise with their IPO?

Skip:     When they filed their prospectus with the Securities and Exchange Commission, they announced that they intended to raise $5 billion dollars.

Dez:     Wow!

Skip:     But most experts agree they will be able to raise even more. Perhaps even as high as $10 billion dollars.

Dez:     I guess the big question would be is Facebook actually worth $10 billion?

Skip:     It is up for debate. But based on what they reported in their IPO filing, Facebook is a very healthy company. Here is what we have learned about them. Facebook has been profitable for the past 3 years. Last year it had revenues totalling $3.7 billion and a profit of $1 billion. Those revenues were up 88% from the year before.

Dez:     For such a young company that’s amazing.

Skip:     Yes, when Google went public its revenues were only about $1 billion.

Dez:     I imagine that most of Facebook’s revenue is coming from advertising?

Skip:     That’s right. Advertising accounted for 85% of their revenue last year, although that was down from 98% the year before. In contrast to revenue, the filing reported that in 2012, Facebook spent $606 million on infrastructure; mainly servers and data centers.

Dez:     That is a significant cost to store all their user’s information.

Skip:     No doubt. Other interesting information that came out in the IPO filing: Mark Zuckerberg owns 28% of the company, and has personal access to the company’s private jet. Currently he takes a base salary of $500,000, but he is expecting his net worth to be around $30 billion after the company goes public. He has announced that as of 2013 he will reduce his CEO salary to just $1 per year.

Dez:     If I had $30 billion with a ‘B’, I don’t think I would worry too much about a salary either.

Skip:     Me, neither. So after hearing all that Dez, what do you think: does buying stock in Facebook sound like a good investment?

Dez:     I’m not convinced. One reason I shy away from the tech sector is that it’s so difficult to price. I mean, do you remember News Corp’s purchase of MySpace?

Skip:     Very good point.

Dez:     Well one thing is for sure, this IPO is going to make a lot of people, not just Zuckerberg, very rich, very quickly. Tell me Skip. Do you think the IPO will change the company?

Skip:     It’s hard to say for certain. Some cynics say that this is a risky move for the company as they will now be more focused on meeting stockholder’s financial expectations instead of focusing on their user’s experience.

Dez:     Well you have to admit that Facebook has never really suffered from upsetting users. They seem to get away with it every time they make changes to their privacy settings.

Skip:     Very true. We will certainly have to follow up on this story after the IPO in April to see what happens.

Dez:     Yes we must. Unless I decide to invest and make enough money to retire. I think in that case I might be on a sunny beach in the South of France.

Skip:     With your favorite co-host I’m sure.

Dez:     Recording D2B live from the beach, but in the meantime, let’s get D2V…Down to Vocabulary.

Skip:     Just before we get going with Vocabulary today, I have an announcement to make. Those of you who have been listening to D2B since the early days may have noticed that we have cut back on the number of words and phrases we deal with in the D2V section of the show.

Dez:     Yeah, I remember those days.

Skip:     We used give examples for 10 or more words but have found that it makes for a very long episode, so we have cut down to only 6 or 7 words. However, if there are any words or phrases in today’s episode that you would like to get an explanation for, I want to invite you to point it out on the wall of our Facebook page. Once you do that, either Dez or myself will reply and everyone can benefit from your question. And, just to give you a little incentive, if you post something on the Facebook wall, we will send you a complimentary copy of the audio script for our recent D2B Unplugged episode.

Dez:     Great idea. Shall I get started?

Skip:     By all means.

Dez:     First up today is the expression a tough slog. This expression communicates that whatever you’re referring to is hard work. It conveys that the process is slow, difficult, and a success at the end of the process is not certain. In the story, I remarked that investing in the stock market without the help of a professional broker can be a tough slog.

Skip:     My day today was a tough slog. A 2 hour class in the morning followed by 5 hours of writing student evaluations, followed by another 2 hour class at night and now I’m online recording with you.

Dez:     Yes, that does sound like a tough slog.

Skip:     The next word pair we are going to look at is very much a financial/legal term; fiduciary duty. I think everyone is familiar with duty which is synonymous with the noun responsibility. The word fiduciary is not as common however. As a noun a fiduciary is a person or party that is legally entrusted to take care of another person’s money or investment.

Dez:     Therefore you mean a fiduciary duty describes the relationship between the fiduciary and the investor?

Skip:     That’s right. In the story Dez says that once a company goes public they have a fiduciary duty to the investor. In other words, they have a responsibility to take care of their investors money. Can you give an example Dez?

Dez:     I’ll try. Michael Jackson’s lawyers have a fiduciary duty to manage his children’s inheritance until they are old enough to manage it themselves.

Skip:     Good example. Okay, what’s next?

Dez:     I would now like to explain the noun pitfall. A pitfall is a hidden problem that you encounter in your attempt to achieve something. It’s synonymous with the words danger or drawback. In the story I said that one pitfall of becoming a public company is you are forced to focus too much on the short term rather than on the distant future.

Skip:     I don’t know about you Dez, but I find that one of the pitfalls of living overseas is that you quickly lose touch with the culture of your home country.

Dez:     Yeah, that’s certainly a drawback. Although it’s not as bad today with the Internet as it used to be before.

Skip:     Moving on, my next word is the verb to liquidate. This too is a financial term. When you liquidate something, you are selling it for its cash value. In the story, Dez explains that Facebook investors can liquidate at any time to get their money back. Simply put, they are free to sell their stock to someone else.

Dez:     Before moving to the UAE from England, I liquidated all my assets; car and furniture basically anything I couldn’t bring with me. I sold everything on an online auction site and used the money to have a really big goodbye party for myself.

Skip:     Exactly, how much furniture did you have?

Dez:     Not so much, but enough to have a good time. Now let’s look at the noun trade off. A trade off is similar to a compromise in that you are giving something of value away in exchange for something of a larger benefit. In the story, Skip observed that when a private company goes public, they trade off their independence in return for a large amount of capital. Can you give us another example Skip?

Skip:     Sure, for years here in Japan, I worked for many different schools and agencies as a freelance corporate language trainer. A few years ago I gave that up to take a full time position. Although my annual salary is now slightly lower, the trade off is that I have more free time and a better quality of life.

Dez:     Really? You seem busier than ever now.

Skip:     Yeah, well welcome to the wonderful world of podcasting. Dez, do you have another word?

Dez:     Yes I do. Our final word for today is the expression to not look back. When you use this idiom, you are communicating that you have been constantly getting better at something and have no regrets for a decision you’ve made in the past. In the story Skip reported that Google has not looked back since becoming a publicly traded company. What he means is that since that point in time, Google’s share price has constantly improved and they have no regrets about going public.

Skip:     For example, ever since deciding to adopt a more open approach to capitalism in the 1990s, there has been no looking back for the Chinese economy. It has gone from having a very modest, even small GDP, to being the second largest economy in just a little over 30 years.

Dez:     And that is our vocabulary for today.

Dez:     Thanks for that report Skip. I’m going to have to take a closer look at Facebook as a possible investment.

Skip:     Well please let me know what you decide. Thanks for listening everyone, we hope you enjoyed today’s episode.

Dez:     Don’t forget to visit our Facebook page to post questions you may have about other phrases or vocabulary we didn’t discuss in the show.

Skip:     See you next time everyone.

Dez:     See you. Bye.

 

We live in an age where Technology and the Internet is changing our lives at an ever quickening pace. How have these changes impacted the way we work? What changes are in store in the future? Today on Down to Business we look at the Future of Work: 10 Ways Work is Changing.

Download FREE Audio Script PDF

Dez:     Hello everyone, this is Dez Morgan in Abu Dhabi, the UAE.

Skip:     And I’m Skip Montreux in Tokyo, Japan.

Dez:    Welcome to an all new episode of Down to Business English.

Dez:     So Skip, how’s life treating you at the moment?

Skip:     Nothing particularly special. I’ve been very busy at work as usual but then that is hardly news is it?

Dez:     No I guess not. You always seem to have some project on the go.

Skip:     Yes, it’s never ending. The real problem though, is that with a computer and an Internet connection I can always finish off things from home. These days I really can’t escape the office.

Dez:    Interesting you should say that as the BBC has a special series of interviews running through February on how people’s working lives have changed and how these changes will accelerate into the future.

Skip:     Sounds like an interesting topic for a show. So let’s do it, let’s get D2B…Down to Business with 10 key ways that the world of work is changing and will continue to change in the future.

Dez:     As I just mentioned the BBC have highlighted what they believe to be the 10 greatest changes that will take place in the world of work over the next decade.

Skip:     And what are they are?

Dez:     First off is what they call the *de-routinisation of work.

Skip:     De-routinization?

Dez:     Yes, which means that as the more routine tasks become automated, humans will be able to concentrate on non-routine, uniquely human tasks.

Skip:     Sounds as though it will make work more interesting. I can’t tell you how much I hate doing repetitive tasks.

Dez:     Yeah me too, can you imagine working in an office 30 years ago with no computers or other labour saving devices that we now have around the office.

Skip:     Absolutely not. But what is next on your list?

Dez:     The next prediction is that individual work will become more and more a thing of the past and that we will work in swarms. Swarming will work like larger and more varied teams with multiple members being members of multiple swarms simultaneously.

Skip:     With Twitter networks and social networking we can perhaps see the beginning of how this swarming will function.

Dez:     Indeed, and connected to swarming will be the concept of strong and weak links with some individuals in swarms hardly knowing each other at all, with those connections being known as weak links.

Skip:     Again I think we can see the beginnings of this trend among social media with users having contacts and friends that they seldom if ever meet offline.

Dez:     The Gartner Institute for Technological Research terms groups that exist beyond the direct control of  organisations as collectives. They go on to say that smart business leaders will realize that these collectives cannot be directly controlled but can only really be influenced.

Skip:     So they think that those businesses that exert the greater control over collectives will be more successful?

Dez:     That is what they say yes.

Skip:     So that’s 3 Keys: De routanisation, Swarming, and Collectives. What else is on that list?

Dez:     The next two concepts discussed are ‘sketch ups’ and ‘spontaneous work’; with the former describing the simple ad hoc nature of most meetings and processes and the latter describing the way that businesses will need to be proactive to seek out new opportunities.

Skip:     All of this sounds fairly predictable really.

Dez:     Well yes I guess so and the next one has been on the drawing board for some time and hasn’t really happened yet.

Skip:     Okay and what would that be?

Dez:     The idea that representations of data will be navigable at human scale in virtual environments.

Skip:     So a person would be filing data files not using a mouse or a keyboard but rather actually picking up a simulated package by hand?

Dez:     Something like that, indeed. The next area The Gartner Institute discusses is what they term Pattern Sensitivity. This will mean groups that are charged with detecting emerging divergent trends and then developing strategies to combat any disruption that may be caused.

Skip:     You mean groups that will be able to predict what we now believe to be essentially random and unpredictable?

Dez:     As I understand it yes. Hyper-connectedness is the next category which means when networks exist within networks with a great many people connected at greater and greater speeds.

Skip:     And how is that different to what we have today?

Dez:     There will be a blurring between social and work related networks with the boundaries between professional and private communication becoming less clear.

Skip:     Okay, I see.

Dez:     Finally Gartner believe the work place will become more virtual with in many cases coworkers never actually meeting. The idea of a set desk at work will they believe also be a thing of the past with work completed in a variety of locations and and across time zones.

Skip:     So you mean the working day will also become more blurred too.

Dez:     Yes and I am not sure that I like the sound of that.

Skip:     No, me neither. So those are the 10 areas that experts believe work will change in the future. But for now it is time to get D2V…Down to Vocabulary.

Dez:     I’ll start things off with with the verb to highlight which means to make something stand out or to be more noticeable. In the story I say that the BBC have written a selection of articles highlighting what they believe will be the greatest changes we will face in the workplace into the future.

Skip:     A further example would be if a colleague is reporting to you what he or she had hear in a really, really long meeting. You might say just tell me the highlights or most important points.

Dez:     I guess on this show we try to highlight important stories from the news each week.

Skip:     That we certainly do. My opening word is the adjective unique, which means to be totally original or to be one of a kind. In the story Dez uses the adverbial form when he says that some tasks are uniquely human meaning that only humans can do them.

Dez:     A further example of the adjective would be how no company is exactly the same so has to develop different procedures and policies to answer it’s unique set of problems and challenges.

Skip:     We certainly have some unique issues at my place of work.

Dez:     Oh, me too. Next l’d like discuss the noun and verb swarm which basically means a large number of people working together. Initially swarm was used to describe a large group of insects working together but is used for people in the story.

Skip:     Back in Canada we get big swarms of mosquitoes in the summer.

Dez:     Really? Sounds awful. In the story I talk about large groups of people swarming together as an organizational strategy using the best talents of each person.

Skip:     That idea of swarming seems to make a lot of sense. It would be a good idea if we could get a swarm of people together to work on D2B sometimes.

Dez:     Yes, with editing skills no doubt.

Skip:     You mean as you don’t have any.

Dez:     Yes.

Skip:     Well, I’ll just keep plugging away till that happens. Now I have the adverbial phrase ad hoc, which means when groups are set up as needed for specific tasks and are then disbanded after those tasks have been successfully completed.

Dez:     The advantages of ad hoc groups are that they can be set up generally fairly quickly and with great flexibility.

Skip:     With one disadvantage being that these people might not have the experience of working together and so find relating to each other difficult.

Dez:     Next I have the adjective proactive which means to make changes to prepare for a future event so that it doesn’t come as a surprise. In the story I say that companies will have to be increasingly prepared or proactive as the world of work continues to change so quickly.

Skip:     Another example, related to unemployment, would be how it is important for individuals to be proactive and look for jobs before they have even been advertised.

Dez:     Good advice.

Skip:     Moving on we have a further adjective predictable which means when future actions can be guessed in advance. In the story I say that a lot of the changes that will take place can be guessed so are highly predictable.

Dez:     I can tell you some event that certainly isn’t predictable.

Skip:     The US elections?

Dez::    Well I guess I am just predictable then as that was certainly the topic I was thinking of.

Skip:     And that’s why I always love to play poker with you.

Dez:     Great. A final example then would be when a company has had a great quarter and everyone knows that they will be reporting great earnings figures. Predictably when they do announce the number it is as big everyone expected.

Skip:     And that about rounds off vocabulary for today.

Skip:     Thanks for that report Dez. I hope everyone enjoyed the topic and doesn’t feel too concerned by all of the changes that are coming soon.

Dez:     I see most of them as opportunities or at least I am trying to.

Skip:     That is so predictable of you Dez. Everyone, don’t forget to check us out at downtobusinessenglish.com . One more time, that’s downtobusinessenglish.com.

Dez:     And we can also be found on Facebook at the Down to Business English Facebook page.

Skip:     Thanks for listening everyone and see you soon.

Dez:     Bye everyone.