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Film 1
Decision Time

SCENE 1

Voice-over: Brooke & Company is a niche travel
company specialising in up-market travel packages
to major UK and international sporting events. The
company is run by sister and brother, Susie and Tim
Brooke. Susie is an ex-Olympic runner.

Tim: Good morning, this is Tim Brooke. Yes, we’ve
got several …

Claire: I’m sorry, did you say you’d like business
class or first class on those flights?

Voice-over: Brooke & Company has a good brand
image within its market segment. This is partly due
to Susie’s high profile as a sports personality.

Susie: I’ve worked out the itinerary for your trip to
the cricket in Australia. Shall I fax this or e-mail it?

Voice-over: The company is widely recognised as
being reliable and resourceful. Susie and Tim don’t
offer the cheapest prices. But they aim to give
customers good value for money. Brooke &
Company has been very successful but Susie and
Tim, who own the company fifty-fifty between them,
are now faced with a dilemma.

SCENE 2

Tim: We’ve just had an offer from a large company
in the States, Lomax Travel. They’re a general travel
company. And they’d like us to set up Brooke &
Company in the USA. It would be a joint venture
there. And they’d take some equity in our company
here. In my opinion, it’s a good offer. My sister,
however, doesn’t agree.

Susie: I don’t think it’s a bad offer, I’m just not sure
it’s the right thing for us at the moment. There’s still
lots of growth left in our main market. Maybe we
should develop the brand more here before we start
expanding in the States.

Salesperson: Do you have a reference number with
you?

Claire: My name’s Claire Sullivan. I’m the Sales
Director for Brooke & Company. I’m keen on the
idea of moving into the American market. But I don’t
think Lomax is the right partner for us. Their image
is quite different to ours.

SCENE 3

Voice-over: The offer which Susie and Tim are
considering comes from John Lomax. He’s MD and
majority shareholder in Lomax Travel based in New
York. He feels that the Brooke & Company operation
could be very successful in America. It could also
help in his overall attempts to reposition the Lomax
brand by introducing a more upmarket service.

Lomax: Hi, I’d like to speak to Tim Brooke, please.

Tim: Hi John, it’s Tim. How are you?

Lomax: I’m fine, Tim. I was hoping I could fix a time
for that conference call with you and Susie.

Tim: When did you have in mind?

Lomax: Could we make it four thirty your time this
afternoon?

Tim: I’m afraid I’m going to be out of the office. I
have a meeting with one of our major business
clients and I can’t move it.

Lomax: 2:30 tomorrow?

Tim: That’s fine for me but let me check with Susie.
Are we free to speak with John tomorrow at 2:30?
That’s fine for both of us.

Lomax: Good, well, let’s talk then and see if we can
move this forward.

Tim: Speak to you tomorrow. Goodbye.

Lomax: Bye.

SCENE 4

Voice-over: In a sense, Brooke & Company is a
victim of its own success. Its business has grown
quickly but now it needs more resources, more
people and new investment.

Tim: How long can we sustain this level of growth
with the staff that we’ve got?

Claire: Not long. We’re already over-stretched as it
is.

Tim: If we accept the offer from Lomax Travel, we’ll
be able to move into bigger offices and take on
more staff almost immediately.

Susie: It’s more complicated than that.

Tim: I don’t see that myself.

Susie: Tim, we’ve discussed this. Firstly, I don’t
want to lose control of the company.

Tim: That’s not going to happen.

Susie: Secondly, I’m not convinced it’s the best way
forward for the company.

Video script

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Tim: This is a chance for the business to take a
giant leap forward, if we can establish Brooke &
Company in the States.

Claire: That’s a big ‘if’.

Susie: Very. And I’ve got a real concern about the
brand image of Lomax. I’m not sure it’s a good ‘fit’
for us.

Claire: Actually, there’s hardly any similarity
between us and them. They’ve no specialist
expertise. They sell mass-market holidays at very
low prices.

Tim: That’s their market. What’s wrong with that?

Claire: Plus, they don’t have a great reputation for
reliability and customer service.

Tim: They’ve been making huge efforts to improve
that.

Claire: Just proves my point.

Susie: Brooke & Company means a lot in this
country. It doesn’t mean anything in the States.

Tim: We can make it mean something.

Claire: Maybe we won’t get that chance. If people
see that we’re part of Lomax, they may think we’re
just more of the same.

Tim: We’d be a quite separate company, operating
under our own name.

Susie: My name won’t help us in America.

Claire: All our market research shows that’s been
crucial to our growth here.

Tim: Doesn’t matter. We don’t need it now.

Susie: We’ll have to rely on their people – at first,
anyway. And that worries me.

Tim: That would only be until we have our own staff
in place.

Susie: That’s not how we’ve built the business so
far. We’ve always been hands-on. And, there’s still
the issue of control.

Tim: So, are you saying you don’t even want to
consider this offer?

Susie: No, I’m not saying that. I just don’t think we
should rush into it.

Tim: Fine, this is just a waste of time.

SCENE 5
THE NEXT DAY

Tim: I know I overreacted yesterday. But I feel
strongly about this. I’m convinced this is the way
forward for the company.

Susie: No, I’m not angry at Tim. We spoke last night.
We never fall out seriously, not for long. I’m not
against the Lomax offer – just cautious. I sometimes
wonder if it bothers Tim that I’m well-known. Often,
when people think of Brooke & Company, they think
of me. But there wouldn’t be any company if it
wasn’t for Tim. My reputation won’t count in the
States. Maybe that’s why it’s so important to him. In
business terms, he’s made good decisions in the
past. Maybe he’s right about this too.

SCENE 6

Lomax: I get the feeling that Tim is on-side with this
offer but you’re not sure, Susie. Is that right?

Susie: I’m not convinced it’s the best thing for the
company. Though I must say – in some ways – it’s a
very attractive proposition.

Lomax: But, at the moment, not attractive enough?

Susie: Perhaps not.

Lomax: Well, why don’t we see what we can do to
make our offer more attractive?

Tim: What exactly do you have in mind, John?

Lomax: We’ll increase our investment in Brooke &
Company by, say, 50% and we’ll give you a bigger
share of Lomax Travel equity; the exact amount of
that to be discussed later. Also, we’ll give both of
you seats on the board.

Tim: Could we have some time to discuss this,
John?

Lomax: I was hoping to come over in the next
couple of days to finalise the details of the deal. But
I need to know whether I’m doing that now so that I
can make my arrangements. Also, I need to talk to
the board. So, what do you say?

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Film 2
Changing tack

SCENE 1

Marie: Hello, Mike.

Mike: Morning, Marie. It’s nice to see you again.

Marie: How are you?

Mike: I’m well.

SCENE 2

Mike: OK, I’d like you to meet Marie Chretiene.
Marie is Production Director of Marine Inter and
she’ll be working closely with me on merging our
operations with those of Marine Inter. So, can we
start by going round the room and letting everyone
introduce themselves to Marie. Gail?

Gail: I’m Gail Leaker. I’m Project Manager, which
basically means if anyone in the yard has a
problem, I have a problem!

Ron: Ron Shelling. Head of Carpentry.

Simon: Hi. My name is Simon Woods. I’m in charge
of Accounts and Finance.

Marie: It’s a pleasure to meet you all. First of all, let
me say I’m a huge fan of Condor. My second boat
was a Condor. So, it’s a real privilege for me to be
involved with the company…

Mike: Shall we?

SCENE 3

Marie: The return on investment in the luxury
market is much higher than in our normal market.
So, it makes good business sense for us to take
over Condor. I’ve owned a Condor for years. I’ve
sailed round most of the Mediterranean in it. They
make great boats here. But they can’t go on in the
same way. This is a difficult market. And it’s getting
tougher and more demanding every year. We’re
starting to see some real competition from the Far
East. Condor won’t survive without serious
investment. So, yes, Condor will have to change. I
just hope – not too much.

Ron: I’ve spent years learning my trade. Years. I’m
responsible for the cabins in all the boats that come
out of this yard. And every single cabin is different.
This French company, what they do is make a whole
run of cabins, all exactly the same, on a production
line. And then they drop the cabins into the hulls
with a huge crane. They could be making anything –
cars, washing machines. They don’t care. They just
want to buy the Condor name. That’s all they’re
interested in.

SCENE 4

Marie: I think it would be useful to give you an idea
of exactly who we are. Marine Inter is currently the
world’s largest boat builder. We were founded in
1934. But the company really began to grow in the
1970s and 80s with the dramatic expansion of the
leisure sailing market.

Gail: Can I ask something?

Marie: Of course.

Gail: How many people work at Marine Inter?

Marie: We have over 3,000 employees, most of
them based at our HQ in Nantes. One of our major
products is a 12-metre – or should I say 38-foot –
sailing boat. We produce around 1,000 of these per
year. In the last three years, we’ve increased
production by around 20%.

Simon: I’m sorry – can I ask how much that involved
in terms of staff costs and capital investment?

Marie: We didn’t increase our staff costs by any
significant amount. But we did make a substantial
capital investment in new plant and machinery.

SCENE 5

Mike: I’ll do well out of this take-over. No doubt
about that. But this isn’t about the money. I always
hoped one of my children would come into the
business. No such luck. I want to retire soon and do
some serious sailing of my own while I still can. I
looked at various options. But this offer from
Marine Inter was by far the best. I just hope I’ve
done the right thing by the people who work here.

SCENE 6

Marie: It’s far too early to be specific about how we
might reorganise things.

Ron: Look. You must have some ideas about what
you’re planning to do here.

Mike: Ron, let Marie finish, please.

Ron: I just want to know what this will mean.

Mike: Ron …

Marie: Let me try and answer Ron’s question. Yes, I
do have some ideas on how we can make changes.

Gail: What do you mean? In the way we actually
build our boats?

Marie: I think there are ways we can upgrade
operations here by using some – and I emphasise
‘some’ – of our production techniques.

Ron: Does that mean part-assembly? Building
certain parts of our boats somewhere else?

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Marie: Not necessarily. Though we will look at that
option. But then you already subcontract out
certain parts of the production process. Almost
every boat builder does that.

Simon: I suppose the concern here is that we might
be talking about downsizing.

Marie: We don’t intend to lose any of the staff from
this company. Everyone here is very valuable to us.
You have skills that we want to keep and develop.

SCENE 7

Gail: I’m sad in some ways but I know we have to
change if we want to survive. I’ve always wanted
Mike to bring in new machinery. He says he can’t
afford it. Well, maybe now we can. I think this
company needs some new people and fresh ideas. I
know not everyone’s in favour of this take-over. But
it will be good for us. Very good.

Simon: I only joined Condor about a year ago. I
thought it would be a great move for myself and the
family. Down to the coast. Able to sail on the
weekends. A great job with a well-established
company. And I’ve been happy here until this
bombshell. I can understand why Mike’s done it.

But what about me? If it comes to redundancies, I’ll
be one of the first to go. Last in, first out. That’s how
it works.

SCENE 8

Marie: OK. That’s really all I have to say for the
moment. I’d just like to reiterate that anything I’ve
suggested is exactly that – a suggestion. What I
need to do now is to spend some time really getting
to understand how Condor works.

Mike: And I’m sure everyone will be glad to help
Marie do that.

Ron: Sure, of course.

Marie: In two or three weeks, we can look at some
detailed recommendations. I propose that we
discuss them in exactly the same way as we have
today. Any more questions? I look forward to
working with you all.

Thank you.

SCENE 9

Simon: I’m still worried. I haven’t heard anything to
make me change my mind. I just don’t know what
this’ll mean for me.

Gail: This could be the best thing that’s ever
happened to this yard. I’m all for it.

Ron: Alright. She knows about boats, I’ll give her
that. But I know what her company wants. They
want a production-line business. And there’s no
place for me in an operation like that. No place at
all.

Marie: Condor make good boats. I just think they
can make them even better. The simple fact is –
they have to.

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Film 3
The Media presentation

Voice over: This film shows a real advertising media
presentation. The campaign was for the

Financial

Times, the world leading business newspaper. The
main aim of the campaign was to stem a year on
year decrease in sales.

Jo Coomber: I’m Product Marketing Manager for the
Financial Times across Europe, the Middle East and
Africa. I’m responsible for advertising our brand, the
FT, but also our newspaper products.

Lucy Begg: My job title is Account Director and
basically what I do is I’m the main point of contact,
day-to-day contact with the client and an
advertising agency is made up of many different
departments, for example the creative department,
strategic planning, TV production, print production
and my job is to coordinate with all those
departments so that the client doesn’t have to talk
separately to all those people. They just talk to me.
And ultimately I work with the client from the
beginning to the end of a project and make sure
that the project’s done sort of on time with the right
creative solution and on budget as well.

Angus Bannerman: My job title is Senior
Planner/Buyer which means I plan and buy the
media schedules for my clients so I plan the shape
of the media schedules, which magazines, which
posters, then I go and buy the actual media space
where the adverts appear.

Caption: Why do companies advertise?

Jo Coomber: There are many reasons why
companies might like to advertise. Some of the
most common are to change perceptions of a
product, to launch a new product, to build an
awareness amongst a target audience or indeed
just to retain market share, so by reinforcing
perceptions.

Caption: How do you create an advertising
campaign?

Jo Coomber: There are a number of phases to
creating an advertising campaign. The first phase is
very much data gathering internally within the
organisation so that may be getting information
from editorial on a new product supplement for
example. The second stage is then to put together a
brief where we would consider the audience, the
communication need that would reflect the
business need and then we would pull that together
for both the advertising agency and the media
agency who would then develop their own briefs
from there. The next phase is very much the
agencies working together to come back with a
solution and a recommendation.

Lucy Begg: The sort of process of creating an
advertising campaign for a client is basically that we
would get a brief from the client, a written brief,
which we would then turn into what we call a
creative brief and I would work with a planner to do
that. And a creative brief is worded differently from
the client brief because it’s designed to stimulate
the creative team. Once we’ve done the creative
brief and we’d agreed it with the client we would
then brief a creative team and give them some time
to think up some ideas. We would then see those
ideas and make sure that they tallied with the
creative brief and if we were happy that they did
then we would go and present the creative work to
the client. And then there’s a process of agreeing
the creative work with the client, making any
changes they want, going sort of back and forward
till we’re all happy and then we basically go into the
production phase. So, you know, if it’s a poster for
example you might have a photography shoot, if it’s
TV you’d be working out who you wanted your
director to be and setting up the TV shoot and it
sort of goes from there.

Caption: What is a typical advertising budget?

Lucy Begg: A typical rule of thumb is that clients
tend to like to spend around ten percent of their
media budget on production because obviously you
don’t want to spend millions of pounds on
production if your media budget is tiny. But it can
really range from, you know, the thousands on a
press ad up to the millions if you’re doing a really
big TV ad which might have celebrities in it or
special effects and things like that so it can really
vary depending on what you’re trying to do.

Caption: What is the aim of this campaign?

Jo Coomber: For this particular campaign we
analysed our sales figures and patterns over a
number of years and identified a need to stem the
decline in circulation by defending our readership.

Caption: The media buyer’s presentation

Angus Bannerman: Jo, Lucy, thanks for coming
today. I’d like to take you through our proposals for
the media plans for the forthcoming campaign. As
you know there are some editorial changes
happening at the

Financial Times. This means two

things for us, firstly the paper will be able to, and
will reach a new reading audience and secondly
we’ll be able to strengthen our existing readership
through the expansion of the existing product. So,
the core readership is 2.7 million people, those are
the current active readers of the

FT, and then the

broader readership we hope to reach with this
expanded editorial encompasses 4.1 million people.
That’s all the broadsheet readers who have an
interest in business and company news.

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The next element of the campaign will be taxis.
These are a great way to reach both of the
audiences; especially in areas such as London
where we can really penetrate key areas such as the
City and then the broader West End and Central
London to reach the broader broadsheet audience.
We’ll kick off from May with these, with a good
weight of 200 or so taxis.

This is the second part of the taxi campaign; we’re
using the adverts on the backs of the seats in taxis
to really explain what’s happened to the product, to
explain how the changes are relevant to these
people.

So, that’s a summary of how we’d like to approach
the campaign on outdoor, on posters, taxis. I’ll now
go on to how we’ll approach the campaign in
magazines.

Caption: How successful was this campaign?

Jo Coomber: We measure the success of the
campaign by looking at the audited figures for
newspaper circulation. We will compare this month
on month and year on year.

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Film 4
The short list

SCENE 1

Voice-over: Tai hoi is a director of Hoi Construction,
a major Chinese company which specialises in
building hydroelectric plants. Hoi Construction has
asked Steven Masters, a leading Hong Kong head-
hunter, to help them to find two highly specialised
mechanical engineers. Four candidates with
excellent qualifications and highly relevant
experience have been pre-selected by Steven
Masters. These candidates, from all over Europe,
have been invited to a session of interviews and
psychometric testing at a leading London hotel.

SCENE 2

Steven: Katy. OK, well, we’re very glad to welcome
you to this interview, Katy. I wonder if we could
start by asking you to tell us a little about yourself
and why you’ve applied for this job.

Katy: I qualified as a mechanical engineer 8 years
ago. Since then I’ve worked on a series of contracts,
most of them involving Hydroelectric plants in
South America and the Middle East.

Gunter: I worked for a large German construction
company for about 10 years. While I was there I
worked on many different projects – chemical
plants, oil refineries and a number of energy-
producing plants.

Simone: I spent the early part of my career working
for the French government as an inspector of
energy-producing plants in France and in Africa.
About five years ago, I decided to become a
consultant mechanical engineer.

Ronny: I’ve spent several years on research projects
in universities mainly in Geneva and Cambridge. But
I’ve also got extensive experience of working on
major construction projects in Europe, Russia and
China.

SCENE 3

Katy: I’ve travelled a great deal. I’ve been to China
and Hong Kong several times. I worked briefly in
Hong Kong and I must say I enjoyed my time there
very much.

Gunter: I’ve just finished a three-year contract in
Brazil. It was no problem. I like the challenge of
working in different cultures.

Simone: Most of my work for the last five or six
years has been abroad. I have not worked in China,
though. Not yet.

Ronny: I’ve worked in a number of different
countries and always enjoyed it. I’m quite good at
languages. I speak German, English, Swedish and
some Chinese.

SCENE 4

Voice-over: This round of interviews was followed
by a series of psychometric tests. These tests were
designed to give the interviewers even more insight
into the personalities of the candidates.

SCENE 5

Steven: OK, we’ve finished the formal part of
today’s proceedings. I hope you’ve enjoyed it so far.
Or at least found it stimulating! We’ll finish shortly.
But first, I’d like to spend a few moments talking
about the cultural considerations of working in
China. Unless, of course, there are any other
questions. One of the key things to bear in mind
when you’re working or doing business in China is
that everything is based on personal trust and
respect. This means there are certain very clear
‘dos’ and ‘don’ts’

Punctuality, for instance, is very important in
business. To be late for a meeting indicates a lack of
respect for your colleagues. And, when you offer a
Chinese colleague a gift, they may well refuse it
several times. This doesn’t necessarily mean they
don’t want it. It’s simply a custom, a way of
behaving politely.

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SCENE 6

Voice-over: After a day of interviews there’s time to
relax.

Ronny: I thought I’d have one of those sandwiches,
please.

Katy: Help yourself.

Ronny: Would you like one?

Katy: No, no thanks.

Ronny: I wonder what they’re saying about us.

Katy: It’d be good to be a fly on the wall.

Ronny: Or perhaps not.

Katy: I really hope I get this job. It’s the kind of
huge project I’ve always wanted to work on. I love
the idea of living in China. You’ve worked there,
haven’t you?

Ronny: Once. For about six months.

Katy: Did you enjoy it?

Ronny: Of course, it’s like when you work anywhere
abroad – there are certain things you just have to
get used to.

SCENE 7
LATER IN THE DAY

Katy: Is this your first visit to London?

Simone: No, I come here quite often to visit friends.
Are you staying in the hotel?

Katy: Yes.

Simone: Is it comfortable?

Katy: It’s very good.

Simone: What do think of this job?

Katy: Sounds very interesting to me. I’d love to
spend some time in China.

Simone: Me, too.

Gunter: If we’re all staying in the hotel, perhaps we
could have dinner tonight.

Ronny: Sounds like a good idea to me.

Gunter: We could eat here but it looks expensive.

Ronny: And stuffy. I know a good restaurant not far
from here. It serves wonderful French food.

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Film 5
Running into trouble

SCENE 1

Presenter: In-line skating is one of the fastest-
growing leisure activities in recent years. In Europe,
over nine million people now skate regularly. In-line
skaters are often in their 20s and 30s. And,
crucially, they tend to have a high level of
disposable income. They’ll spend 300 or even 400
euros on a pair of skates which they might change
again in six to nine months. All of which means that
the market for skates is extremely healthy. The
world market is now worth over $200 million. And
it’s growing by around twelve percent year on year.
In this programme, we’ll be looking at one of the
leading companies in this field – Blade Runners. In
the five years since Blade Runners was started by
Ben Mills, it’s won a seventeen percent share of the
European market and has around four percent in
the US. Until recently, it looked as if Blade Runners
would become a major player and take the brand
into clothing and other related areas. In recent
months, though, Blade Runners has run into
trouble. Let’s find out why.

SCENE 2

Presenter: So, Ben, tell me about the problems
you’ve experienced recently.

Ben: We need to get product to the dealers at
certain specific times in the year. And it’s not
happening.

Presenter: Why’s that?

Ben: The way things work in this industry is that we
create the product concept. And then we work out
exactly what this involves – the width of the wheels,
the size of the bearings, the design of the buckles,
everything. And we give these specifications to the
supplier.

Presenter: And where’s your supplier based?

Ben: Taiwan.

Presenter: So, they actually make the skates?

Ben: That’s right. And, in the past, everything’s been
fine. But recently … When a delivery arrives here we
do a one percent sample test on every container. If
we find a fault, we do a hundred percent test. We
look at every pair of skates in the consignment.

Presenter: Does that happen often?

Ben: With recent consignments – yes. We’ve built
our reputation on quality. We can’t send out skates
that aren’t up to standard.

Presenter: So, you’re saying it’s a quality issue?

Ben: Yeah. And we just can’t accept this.

SCENE 3

Presenter: That’s Ben’s side of the story. But, of
course, every story has two sides. So, let’s hear
what his supplier has to say.

SCENE 4

Presenter: Tommy Lee is the owner of a number of
factories in Taiwan producing leisure goods for the
American and European markets. He’s also Ben’s
main supplier for Blade Runner skates. Ben’s
unhappy with the quality of recent deliveries.
What’s your view of this?

Tommy: Look, if we made sub-standard goods, we
wouldn’t be successful. But we are successful. We
work for some of the biggest brand names in the
world. And they’re very happy with our product.

Presenter: So, are you saying there is no problem?

Tommy: No. I accept that there may have been a
slightly higher level of defects in Blade Runner
products than normal.

Presenter: So, what do you feel the problem is?

Tommy: Perhaps Ben should look at some of his
own recent decisions.

SCENE 5

Presenter: It’s clear that there’s more to this issue
than meets the eye. And both Ben and Tommy have
their own view of this problem. They’ve set up a
video-conference call. Let’s see how it goes.

SCENE 6

Ben: Hi, Tommy. How are you?

Tommy: I’m fine, thanks.

Ben: Well, I thought we should talk because I’m not
satisfied with the product you’ve been sending
recently.

Tommy: When you say you’re not satisfied, what do
you mean?

Ben: There seems to be a real problem with the
buckles on these last consignments.

Tommy: Have I got this right? It’s just the buckles
we’re talking about?

Ben: There are other quality issues. But, yeah, the
buckles are our main concern. They keep snapping
open. And then they break. Look. This really isn’t
good enough. I’ve got a whole stack of these
downstairs from the most recent consignment.

Presenter: Ben and Tommy have been talking for
some time now. Ben has always sourced his skates
from Tommy. But there are other possibilities.

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Ben: If you don’t resolve this problem soon, I’ll be
forced to try another supplier. I’ve already been
talking to several companies.

Tommy: I’ve heard that on the grapevine.

Ben: Look. Are you going to do something about
this or not?

Tommy: You know that we work for many of your
competitors. They have no complaints about quality.
Just ask any of them.

Presenter: Eventually, Ben and Tommy get to the
heart of the problem. At their last meeting in
Taiwan, Ben forced Tommy to accept a lower unit
price. Tommy wasn’t happy about this but he had
no choice but to accept it or lose the business.

Tommy: I told you at the time that this would have
implications.

Ben: Not for quality.

Tommy: I hoped not. But I couldn’t be sure. And I
told you that.

Ben: OK. So, if we agreed to an increase in the unit
price of, say, three percent, would that make a
difference?

Tommy: Yes, I think that could.

SCENE 7
SIX MONTHS LATER

Presenter: So, what effect did that conversation
have on the problems at Blade Runners? The
answer is a very positive and beneficial one. Ben
raised the unit price by three percent. But he feels
the extra cost is well worth paying. For a relatively
small additional outlay, he has guaranteed a much
better quality of product. Blade Runners has now
begun to win back its market share. Its products are
in the shops and they’re selling fast. In other words,
Blade Runners is now firmly back on track.

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Film 6
From the city

SCENE 1

Presenter: The international business world is still
in a state of shock after a series of major financial
scandals. Billions of dollars, pounds and euros have
gone missing. Huge companies, which once seemed
part of the corporate landscape, have virtually
vanished overnight. Highly respected business
leaders have found themselves in court. So, what
exactly is going on in the world of business? In this
programme, we’re going to look at some of these
scandals. We’ll also look at the implications of these
for business now and in the future.

SCENE 2

Presenter: Let’s begin by looking at the facts and
some of the most high-profile cases of recent years.
For years, Enron was one of America’s most
respected and successful energy producers.
However, in 2002, it was investigated by the US
financial regulator – the Securities and Exchange
Commission. And it became clear that Enron had
dramatically inflated its profits. In the words of one
commentator, the company’s success was built on
‘an elaborate scam’: a deliberate plan of deception
and fraud.

Of course, this quickly drew people’s attention to
Enron’s auditors: Arthur Andersen. The obvious
question was why did the auditors, who were
responsible for verifying the true state of the
company’s finances, not know what was going on?
It was soon discovered that Andersen in an
unsuccessful attempt to conceal its actions had
destroyed many thousands of Enron documents.
Arthur Andersen was subsequently found guilty in a
major court case. A finding which effectively
destroyed it as a company. Which brings us on to
one of the biggest accounting frauds in history.
WorldCom.

After investigation, WorldCom confessed that it had
exaggerated its profits by $3.8bn – that’s £2.5bn in
one 14-month period. Just two months later, after
further investigation, the company was forced to
admit that these figures were too low. WorldCom
had actually exaggerated its profits during this
period by almost twice this amount. In other words,
the true figures were closer to $7bn or £4.8bn.

SCENE 3

Presenter: One of the interesting points about all of
these cases is that the fraud and deceit originated
at the very highest levels. People should be able to
look to their business leaders for inspiration and
direction. But, in these cases, the main problem
was a real failure of leadership. The leaders of these
companies were pursuing success in an utterly
ruthless and uncaring way. An approach which
proved, in the end, to be very costly both for them
and the companies concerned.

No company exemplifies this better than Parmalat.
For decades, Parmalat was Italy’s leading producer
of milk, fruit juice, pulped tomatoes and many other
food products. From a single delicatessen in the
early 1960s, the Tanzi family built Parmalat into a
company with an annual turnover of 7.6 billion
euros, employing over 36,000 staff in 30 countries
worldwide. In December 2003, however, auditors
discovered a black hole of approximately four
billion euros in the company’s accounts. However,
the financial situation was, in fact, much worse that
that, which led to a total of twenty-nine of
Parmalat’s former bosses, including the founder
Carlisto Tanzi, facing legal action.

SCENE 4

Presenter: Clearly, this is a vitally important issue
for the international business community. If these
financial scandals continue, they will have serious
consequences for investor confidence. So,
governments here in the UK and in other countries
are in no doubt about the best way forward. They’re
looking at ways to regulate business even more
closely. They’re considering legislation that would
ensure companies had to be absolutely open and
honest with their shareholders and their customers.
But many people in business believe that this is
unnecessary. Besides, they say, business has
already begun to put its own house in order.

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SCENE 5

Presenter: The simple fact is companies that break
the law rarely prosper for long. Behaving as the
leaders of Enron or WorldCom have done, is no way
to run a business. It’s not good for investors, for
employees or for companies. Indeed, nowadays
most companies are acutely aware of the
importance and value of conducting their business
in a highly ethical way.

SCENE 6

Presenter: These companies are adopting a ‘super-
ethical’ approach to business. And they’re finding
that this approach is proving to be highly profitable.
In the UK, for instance, the market for ethical goods
and services is now worth £6.9bn per year. This
includes FairTrade products, which are currently one
of the fastest-growing sectors in the UK retail
market. You can also see the same trend right here
in the City of London where over £7.4bn is invested
every year in ethical financial products. But
whatever approach is taken, regulation, leaving the
problem to be resolved by business itself, or
actively pursuing the ethical option, one thing is
clear. Unethical business is ‘bad business’. And
that’s no good for anyone.

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Film 7
Nature Knows Best

SCENE 1

Voice-over: This is a film about ‘Nature Knows Best’
a joint British–Swedish company which produces
herbal medicines. Currently, the company is in
serious financial trouble largely due to imports of
low-cost herbal products from East Europe. Unless
they can give their bank a viable business plan in
the next week, the bank will call in their loan which
will force the company into bankruptcy. Roy
Berryman is MD of the British division. Ingmar
Hansen is MD of the Swedish division. Both own
fifty percent of ‘Nature Knows Best’.

Roy: I’d no idea that this would work as well as it
does. But we’ve tested and retested it – across the
full range of herbs that we process.

Ingmar: You’re sure these figures are right?

Roy: The results have been amazing. When herbs
are treated and packed in this way, it keeps them
fresh for much longer than any other method I
know.

Voice-over: Roy and his colleagues in the UK have
developed a new process that could radically alter
the fortunes of the whole company. Unfortunately,
they don’t see eye to eye on the way forward.

Roy: This process was specifically designed for
herbs.

Ingmar: I know. But it could be used just as well
with fruit and vegetables.

Roy: I don’t deny that!

Ingmar: So, let’s sell it to one of the big
supermarket chains. They’ll give us an immediate
cash injection. And they’ll help us to develop it.

Roy: I don’t want to sell this idea. It would be much
better if we developed it ourselves.

Ingmar: So, what do we tell the bank? You think
they’ll give us more time? Because I don’t!

SCENE 2

Voice-over: A meeting has been arranged with
Ingmar, Roy and Anna Kean, a food technology
consultant for a major supermarket chain.

Anna: Well, on the basis of the results I’ve seen
already, we could be interested.

Ingmar: Come on, Anna. You know this is a really
good idea.

Anna: It’s clever and it could be ground-breaking for
us. As long as it does everything you claim.

Roy: Of course it does.

Anna: The process simply isn’t marketable as it
stands at the moment. It needs more testing to
comply with government food safety regulations.

Roy: Look, this wasn’t my idea. I’m only having this
conversation because Ingmar asked me.

Anna: You don’t have the resources to develop this
properly. You need a partner.

Roy: I don’t agree.

Ingmar: I think Anna could be right, Roy.

Anna: I am a specialist in this area of food
technology. I know that turning this concept into a
full-scale process could be very expensive.

Roy: Up till now, we’ve done everything by
ourselves. And I think we’ve done a pretty good job.

Anna: All I’m saying is that by working with a large
organisation like us, you could handle the
development phase of this economically, efficiently
and quickly!

Ingmar: Personally, I feel a partnership could
benefit both sides here.

Roy: I’m sorry. But I just don’t see it!

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SCENE 3
TWO DAYS LATER

Anna: I’m still interested in Roy’s idea. But I can’t
understand why he was so hostile.

Ingmar: That was just Roy being Roy.

Anna: I don’t think he wants to work with us.

Ingmar: He knows that it would be difficult for us to
develop the process fully by ourselves.

Anna: I’m not against another meeting.

Ingmar: Good!

Anna: But I think you should know something first.
We’ve been approached by another company.

Ingmar: Approached about what exactly?

Anna: We need to get more information but it
seems that they’ve come up with a similar process
to yours.

Ingmar: Really?

SCENE 4

Voice-over: Anna agreed to another meeting. Now
Ingmar has to persuade Roy to meet Anna again. If
he can.

Ingmar: If we sell this process, it solves all our
financial problems at a stroke.

Roy: We’ll do much better if we keep this in-house.

Ingmar: But what if the bank closes us down this
week?

Roy: I’ve spoken to the bank. I’m hoping that they’ll
see that this process could be really profitable. If
they do, that’ll buy us the time we need.

Ingmar: If they don’t …

Roy: I think they will.

Ingmar: What about this other company? What if
Anna decides to go with them?

Roy: I think she’s bluffing. She’s just playing games.
There is no other company.

Ingmar: I’ve checked, Roy. She’s telling the truth.

SCENE 5

Voice-over: Faced with the news of a rival process,
Roy had no option but to agree to meet Anna one
more time.

Anna: Good morning, Ingmar. Roy.

Ingmar: It’s good to see you again. Coffee?

Anna: I’m fine, thanks.

Ingmar: OK, let’s start by looking at where we are.
First, I’ll go through the advantages of Roy’s
process. After that, I’d like to consider how this
process can be developed fully. Finally, I’ll offer
some suggestions on ways we can work together.

Ingmar: We’re aware that you have another offer on
the table. So, that’s something we need to take into
consideration.

Roy: We can cope with the competition. In fact we
welcome it. Because we know that this is a really
good idea.

Anna: That may well be. But it still needs a great
deal of expensive development.

Ingmar: Let’s put that to one side for the moment.

Roy: I’d like to address the issue of price. What
you’re offering for the rights to this is too low. We’d
be looking for more cash up-front and a higher
percentage of the profits over a longer period of
time.

Anna: Unfortunately, I can’t increase my offer.
Impossible.

Roy: I should perhaps have mentioned this earlier
but we also have another offer on the table. I’ve
been talking to some other potential partners.

Ingmar: And?

Roy: I’ve just heard from one of them.

Ingmar: Excuse me, Anna. I wonder if I could have a
word with Roy?

Ingmar: It’s a good offer.

Roy: This way we retain more control over the
process. And, as long as everything goes through
smoothly, we’ll have an immediate injection of cash.

Ingmar: If we don’t get that, we have a real
problem. The bank isn’t going to give us any more
time.

Roy: I know. What do you think Anna will do?

Ingmar: I think there’s a good chance she’ll come
back with a better offer. Let’s see.

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