When things don't go right in business - Module 10

C2 Proficiency · Multiple Matching · Expert Proficiency, Pearson Education

Answer questions 1–10 by referring to the article about the sort of problems businesspeople have to overcome. For each question, choose the best answer from sections A-D. Some of the choices may be required more than once.

Michaela James: Food industry

I emerged from business school raring to go. My area of expertise was supplying the catering industry with ingredients for use in fast-food outlets. I'd thought of a new idea for how to organise the distribution network and thought I could make a go of it. I immediately set up a company, despite my canny parents urging restraint and patience. I sunk all my savings into the company, took out loans, ran up an overdraft but was still underfunded. So I explained my idea to an expert, a venture capitalist, and asked him if he could help me attract backers. Little did I know that he'd go straight to one of the big players in the industry and sell my idea to them behind my back. In my naivety, and desire to set the ball rolling, I'd omitted to get him to sign a confidentiality agreement – an omission which I paid dearly for in subsequent months, and years. My idea was certainly a money-spinner but sadly not for me. I lost out there but chalked it up to experience. Before long, I'd been taken on by a rival company and found my niche. Luckily, my injured pride soon recovered!

Sam Liddle: Lifestyle management business

Our particular problem was not lack of expansion but rather over-expansion, in the sense that it all happened too fast without our having done the necessary groundwork. In our business, we commit to respond to our clients' requests – whether it's for concert tickets, a hotel booking, a golfing holiday – within a very short timescale. However, when the number of requests suddenly burgeoned into over 10,000 a month, we recruited staff in the heat of the moment, simply to clear the backlog. I guess we thought that level of business would be sustained, but it turned out to be no more than a blip. After that, we faced the prospect of radical cost-cutting, reduction in staffing levels and motivational talks for our reduced workforce. It paid off in the end but I was certainly out of my comfort zone for a while. I thought I'd messed up totally – and that's putting it mildly!

Liz Andrews: Online translation company

Our business successfully provides translation services for business or individuals. Some years ago, a multi-millionaire with more money than sense persuaded us to take on a major project for him. He wanted us to translate his 'philosophy of life' into fifty-seven languages so that he could then create a dedicated website for this purpose. He also requested that we help him with the content. Since his financial input was going to be considerable and he seemed trustworthy, we felt we could hardly refuse, although our gut feeling told us otherwise. Although we recruited additional staff specifically for the project, it still detracted from our core values and the focus on improving our services for the general public. Eventually, we simply couldn't produce the material fast enough and the situation became untenable, so we agreed to call it a day. As a company, the upside is that we got and retained two excellent managers, but the fact remains that the whole situation dragged on for an inexcusable length of time before we faced up to it.

Josh Black: Email security business

A year after our business was established, I insisted on sending a small team over to the USA to start up an office there, assuming that a small-scale operation would be a good way of assessing the market potential for our product. Due to lack of funds and inadequate on-site backup however, the operation floundered. We were getting nowhere fast. Marketing a product in the USA is a different kettle of fish from the UK: the expectations are greater and the market is so huge in comparison. Really, a fully-functioning base was needed out there, so I suggested we set it up in New York as a fairly self-contained enterprise. That was the only way I could see it would work. So we duly went over there and headhunted some key people from a competitor – so far so good. That was the point at which, however, it came to light that our charges to users were quite a bit above the going market rate – and our hands were tied; we'd committed to the new setup. In the end, it all worked out for us and the USA became our biggest market with five million users by the time we sold the company.

When things don't go right in business

initial success being the source of later problems

not paying attention to wise advice

underestimating the effect of cultural differences

being unable to raise sufficient levels of investment

not responding to an instinctive feeling about a proposal

failing to realise that integrity could not be assumed

overreacting to an unrepresentative trend in sales

not tackling fundamental problems soon enough

approaching the staff of rival companies as a form of recruitment

suffering a feeling of personal inadequacy at one stage

Which businessperson mentions

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