John T. Chambers, Chief Executive of Cisco Systems, talks about the merger of Cisco with a larger company:
A merger of equals had a lot of appeal. If you combine the Number 1 and Number 2 players in an industry, by definition you’re Number 1 in terms of size. By combining two companies with good management teams, you automatically build up the strength of your management. You can also widen your customer base and have more distribution channels.
In addition, the merger automatically makes your remaining competition second level. As a result, your competition must rethink its strategy. In the end, you force a period of mergers and acquisitions on your competition.
When we looked more closely, our concerns were raised. For example, 50 percent of large-scale mergers fail. Mergers can fail on a number of levels. They can fail in terms of their benefit to the shareholders, customers, employees and business partners. A decision has to be right with each of those groups, or we would not go forward with it.
If you merge two companies that are growing at 80 percent rates, you stand a very good chance of stopping both of them. That’s a fact. For a period of time, no matter how smoothly they operate, you lose momentum.
Our industry is not like the banking industry, where you are acquiring branch banks and customers. In our industry, you are acquiring people. And if you don’t keep those people, you have made a terrible, terrible investment. We pay between $500,000 and $2 million per person in an acqusition. So you can understand that if you don’t keep the people, you’ve done a tremendous disservice to your shareholders. So we focus first on the people and how we incorporate them into our company, and then we focus on how to drive the business.
42. The passage talks about the benefits and problems after a merger of companies. ( )
43. The word “competition” in this passage means “rivals”. ( )
44. In order to compete with other companies, Cisco is forced to go into the next round of mergers. ( )
45. The reason why 50 percent of large-scale mergers fail is just that the companies do not let their shareholders, customers, employees and business partners make decisions. ( )
46. When Cisco Systems buys another company, its primary focus is on its customers. ( )
www.59wj.com Passage 2
In the eyes of economists, economic growth is a phenomenon about population. First, the accumulation of capital needed to support growth comes from citizens’ saving tendencies. A labor-intensive economy has more deposit capacity than an ageing society. Secondly, economic growth relies on the growth of labor forces, especially young laborers. Sustained growth also depends on education standards.
In China, labor forces are mainly outsourced from rural areas. In the past 25 years, some 160 million rural laborers have quit traditional farming and found employment in cities or non-farming sectors.
Although agriculture still employs more than 60 per cent of China’s population, its share in the country’s financial revenue has declined to less than 15 per cent, dropping from 40 per cent or so in late 1970s. This also shows that China’s growth is mainly based on an industrialization course featuring expansion of the manufacturing sector.
Continuous supply of labor forces has improved China’s private saving capability substantially, which means surplus income that can be reinvested to fuel economic growth.
The importance of labor supply in China’s growth dynamics means it is necessary to review the way China’s population increases.
After years of decline, China’s birth rate is now equivalent to that of other emerging East Asian economies. The low birth rate in the country is mainly a result of the family planning policy initiated in the late 1970s.
Some scholars have estimated China will see zero growth in young laborers in 2015. Some have also projected that by 2030, 20 per cent of China’s population will be over 60-years-old, compared to 8 per cent now, and the number of pensioners will be more than 40 per cent of the number of working people.
47. This passage mainly talks about the importance of labor supply in China’s economic growth.
48. The two factors that will limit China’s future growth are the industrialization process and the slowdown in labor supply. ( )
49. China’s productivity mainly resulted from the transfer of labor forces to farming sectors.
50. One major characteristic of China’s industrialization is the development of manufacturing business. ( )
51. The contribution of agriculture to China’s financial revenue has remained quite stable over the past three decades. ( )
52. Interest in imports from China is high. The Chinese consulate’s commercial section in Dubai reported a continual stream of visitors in the run-up to the exhibition from companies wanting to do business for the first time with China. More than 4,000 Chinese traders visited the emirates on government and private missions last year. As a result of this activity, China’s exports to the UAE have almost doubled from $279.5 million in 1990 to $522.7 million in 1992, according to Chinese government statistics. Dubai’s statistics show that China was the fifth largest supplier in 1990..