Boardroom decision making


Standard Can is a multinational corporation based in Dallas, Texas. Its latest acquisition is J.F. Hiltmann und Söhne AG of Dusseldorf, the makers of Maxy sauce. Standard Can's President, Jerome Fantam, intends to close Hiltmann and sell off its valuable property assets to improve his corporation's cash flow, but in the boardroom there is serious opposition to his plan.


Leo Schooler is a senior executive at Standard Can. He is German.
Patricia Hart is responsible for Wholesale Distribution at Standard Can. She is American.
Stephen Sablon is European Marketing Director at Standard Can. He is British.
Jerome Fantam is President of Standard Can. He is American.
Anton Hiltmann is a senior executive at J.F. Hiltmann. He is German.


Vocabulary Group dynamics: rivalry, alliance, challenge; corporate planning; takeovers and finance; marketing.
Skills Intervening in a discussion; taking sides; defending a position.
Structures Conceding a point.
Documents Business journal article; a company annual report; a newspaper article; a business report and market survey.

Beginning a power struggle

22.1 Document study

This is an article from a business journal about an attempt by Standard Can to take over Hiltmann. Read through it carefully. What does the writer think may happen to Hiltmann if the takeover goes ahead?



J.F. Hiltmann, makers for the past century and a half of the popular Maxy brand savoury food flavouring, are themselves rumoured to be flavour of the month for US-based conglomerate Standard Can. see the meaning Hiltmann directors are said to have recommended acceptance of StanCan's offer of one SC ordinary share plus DM 4.78 for each Hiltmann share, even though this values their company at a puny $37m. see the meaning Whether the brand name, or indeed any trace of Hiltmann, will survive is problematical, given Standard Can's appetite for prime industrial locations which it can sell off for redevelopment. Hiltmann's factory was built in 1849 on what was then a greenfield site see the meaning but is now a very expensive piece of real estate in downtown Dusseldorf. see the meaning


22.2 Reading for key words

Find the words and phrases in 22.1 that tell you the following:

1 The current favourite.
2 Very uncertain.
3 In view of.
4 First-class places to build factories.
5 Journalists like to play with words. What words or phrases can you find in this article that were probably suggested by the nature of Hiltmann's product?

22.3 Listen and read

Leo, Patricia and Stephen are senior executives of Standard Can. They are about to go into a meeting at their European head office in Vienna. What are Leo and Patricia trying to do? Does Stephen agree with them?

LEO Er - Patricia! Could we have a quick word before we go in? By the way, I'd like you to meet Stephen ...
PATRICIA Oh - you must be Stephen Sablon, the new European Marketing Director.
STEPHEN That's right.
PATRICIA I'm Patricia Hart, Wholesale Distribution. How do you do? see the meaning
STEPHEN I'm pleased to meet you, Patricia, I've heard ...
STEPHEN Yes, I'm sure you have, but could we concentrate for the moment on the business in hand? see the meaning Item five on the agenda for this meeting is the Hiltmann takeover. I've just heard from a very reliable source that we now have at least fifty-five per cent of the shares, so it looks as though it's in the bag! see the meaning
PATRICIA What Leo is saying is that we want to make certain the right decisions are taken at this meeting about the future of Hiltmann. Pressure is going to be brought to bear on the directors to close down the company and dispose of its assets.
LEO Whereas I see Hiltmann becoming a nice little profit centre - under the right management, if you follow me. Now, Stephen, I assume that I can count on your support?
STEPHEN Well, I think I'd like to hear the arguments on both sides before I make any decision.
LEO You can't sit on the fence, Stephen. see the meaning
STEPHEN Shall we go in?

22.4 Speaking practice: looking for support

Listen to this conversation. Then listen again, and speak the part of the man.

WOMAN Could we have a quick word before the meeting begins?
MAN If it's about the takeover, I haven't made up my mind yet.
WOMAN We're going to be under a lot of pressure to sell off the company, and frankly I think that's rather short-sighted.
MAN Sell it off! We don't know the outcome of the takeover bid yet.
WOMAN I've just heard from a reliable source that we've got fifty-five per cent of the shares.
MAN Well, I just hope we can afford this takeover - considering our pressing cash-flow problems.
WOMAN Can we concentrate for a moment on the business in hand? I'm counting on you to back me up.
MAN I'm not so sure. What about that new man?
WOMAN I had a word with him yesterday. He says he's with me, but you can't keep sitting on the fence for much longer. The new company could do great things - with the right management!
MAN Hm. Oh! It's time to go in.

22.5 Listen and read

Two hours later, the meeting ends. What decision has been made about the future of Hiltmann? Why is Jerome Fantam, the President of Standard Can, so angry? Why does he mention motorcycles?

JEROME Stephen! Why didn't you support me over the closure of Hiltmann?
STEPHEN Because frankly, Mr President, I think your policy proposal is short-sighted. OK, get rid of the Hiltmann management - they need a shake-out. see the meaning But they did turn over seventy-three million dollars last year.
JEROME Chicken feed, Stephen. You let me down. see the meaning
STEPHEN You won't be saying that three years from now. The point about Hiltmann is their brand name is a household word in half the countries of Europe. see the meaning Why do you want to throw away eighty-five per cent brand recognition? see the meaning
JEROME We control the company, we can use the brand any damn way we like. We can use it to sell - motorcycles, if we want to.

22.6 Structure practice: conceding a point

In 22.1, the journalist writes:

Hiltmann directors are said to have recommended acceptance of StanCan's offer of one SC ordinary share plus DM 4.78 for each Hiltmann share, even though this values their company at a puny $37m.

In 22.5, Stephen says:

OK, get rid of the Hiltmann management - they need a shake-out. But they did turn over $73 million last year.

In both cases two statements are being made, and one of them is being presented as surprising in view of the other. You can use 'even though' or 'although' as in 22.1, or 'but' as in 22.5 to do this, but you must not use both.
Rewrite the pairs of sentences below, using 'although' or 'even though', and then rewrite them again using 'but'.

1 Hiltmann is in financial difficulties. It owns some valuable real estate.
2 Leo believes Hiltmann could be profitable. It's in financial difficulties.
3 The offer undervalues the company. The board have recommended acceptance.
4 Fantam would like to sell off Hiltmann. It turned over $73 million last year.

A shareholders’ meeting

22.7 Document study

Standard Can's Annual General Meeting is due. This is an extract from the President's address in the annual report. Read through it carefully. The President's statement is intended to inform shareholders but also to reassure them. Which words in the extract are chosen specially to make the shareholders feel good about the company?

The past year has been particularly fruitful see the meaning in new acquisitions; no fewer than six see the meaning new wholly- or part-owned subsidiary companies have been incorporated into the Group. see the meaning
All takeovers and mergers are in line with our corporate strategy see the meaning and every element in our growing family has a vital role to play in our development, guided always of course by the forces of the marketplace.


22.8 Listen and read

At the shareholders' meeting, the President approaches the end of his speech. Listen to what is said. Why is Anton Hiltmann allowed to attend this meeting? Why is he allowed to speak?

JEROME ... a vital role to play in our development, guided always of course by the forces of the marketplace...
ANTON Shame! see the meaning
CHAIRMAN Quiet, please - ladies and gentlemen! Order!
JEROME If the gentleman who spoke just then wishes to raise a point of order, let him stand up and speak up!
ANTON With great pleasure, Mr President!
CHAIRMAN Stay where you are, please, sir, the steward will bring you a microphone... Please identify yourself.
ANTON Anton Hiltmann, ordinary shareholder... In his annual report to us, the owners of Standard Can, Mr Fantam says that the actions of the board of directors are guided by market forces. In my experience, Mr Chairman, these decisions are too often guided by the personal ambition and prejudices of members of the board!

22.9 Listen and read

The shareholders' meeting continues. Listen to what is said. Why do Anton Hiltmann and the chairman argue about orders and rules?

CHAIRMAN Quiet, please! May I remind you, Mr Hiltmann, that under standing orders see the meaning you are entitled to raise points of order see the meaning but not to question the speaker.
ANTON I ask, Mr Chairman, that the speaker should be ruled out of order for wasting the time of the meeting. see the meaning The treatment of the management and employees of J.F. Hiltmann Söhne since the takeover six months ago shows that market forces have nothing to do with this company's decision making!
JEROME I'd like to take you up on that, Mr Hiltmann - after the meeting! see the meaning
STEPHEN [To Patricia] This is what comes of paying for takeover bids with your own equity. see the meaning Why didn't Standard pay cash for Hiltmann?
PATRICIA [To Stephen] Because if you ask me they hadn't got it.

22.10 Writing practice: an eye-witness account

As a Standard Can shareholder, you attended the AGM. You are also a director/shareholder of a small company which Standard Can is interested in; it has already bought 12% of your company's shares. Write a short report for your colleagues, telling them what happened at the AGM, and what might happen to your own company.


22.11 Document study

This article appeared on the city pages of a daily newspaper the next day. Read through it carefully, then do the exercise that follows.




Protestors interrupted the President of Standard Can during his address to shareholders at yesterday’s Annual General Meeting in the Ballroom of the Dorchester Hotel, Park Lane.

Mr Anton Hiltmann, head of J.F. Hiltmann und Söhne AG, the internationally-known sauce manufacturers of Dusseldorf, led hecklers see the meaning who accused Mr Jerome Fantam of putting 'personal ambition' and 'prejudice' before the true interests of the shareholders. Order was restored after Mr Fantam agreed to meet Mr Hiltmann and a group of shareholders in Germany next week. He accused 'interested parties' of stirring up trouble to achieve their own ends, which were not compatible with the Group's goals.

When I spoke to Mr Hiltmann after the meeting, he expressed disappointment and disillusion at the way his company had been treated since its takeover by Standard Can last year. He said a successful business and prestigious brand name were being 'sacrificed in return for a fast buck.' see the meaning

Market gossip has it that StanCan is facing problems with over-manning, spiralling costs and falling profitability, particularly in its Food and Entertainment Divisions, and that the real wrangles at the top are about product mixes, brand management and the corporate image - which certainly did not benefit from yesterday’s shenanigans. see the meaning Despite the announcement of a slightly increased dividend of 18.3p (up 1%), SC shares fell 18p in quiet trading to close at 207p. see the meaning

22.12 Writing practice: Stephen’s notes

Stephen has attended all of the meetings and read all of the reports on these pages. He now has to write a report on what Standard Can should do with Hiltmann. Before he does this, he needs to organise his notes. What is Fantam's position? What is Hiltmann's position? What other information and speculation is there? Write these notes for Stephen from all of the things you have heard and read in this lesson so far.


Making the best of a difficult situation

22.13 Listen and read

Stephen has a meeting with Jerome Fantam. Listen to what they say. What decision has been made? What new information does Stephen learn about Standard Can?

JEROME Stephen, thank you for coming in today. I guess you know what I want to discuss with you. I had a long talk yesterday with Anton Hiltmann, who turns out to be a cleverer businessman than I had given him credit for. see the meaning I won't bore you with all the details, but the upshot was see the meaning that he convinced me Hiltmann AG should not only continue trading but it should continue to exploit the Maxy brand name.
STEPHEN Good for him.
JEROME Hm. Yeah. Well, I think I ought to put you a little more fully in the picture. I was counting on the sale of Hiltmann assets see the meaning, particularly in the real-estate department, to ease Standard's cash-flow problems, which I don't mind admitting are a little more pressing than you may realise. see the meaning

22.14 Document study

Stephen's report and market survey is circulated to senior managers. His conclusions are printed below. Read through them carefully. Does the report praise or criticise Standard Can's policies?

see the meaning The recent spate of acquisitions and takeovers has led to group marketing policy becoming somewhat obscured. see the meaning This paper has attempted to outline a diagnostic marketing strategy see the meaning which may, in the medium to long term, lead to restored viability for the Group as a whole. see the meaning

A period of at least two years’ consolidation and rationalisation of Group activities is required, during which capital investment must be restricted to the Group's own members.

A systematic evaluation of all the Group's products and markets, actual and potential, must be carried out, together with an in-depth study of our competitors.

As a first step, a subsidiary company should be selected to mount a pilot scheme aimed at determining marketing goals and optimising the marketing mix in a clearly-defined region of Europe. see the meaning


22.15 Writing practice

The conclusions in Stephen's report are very brief, but they are also phrased in very formal language so that it is sometimes difficult to understand. Rewrite his conclusions in simpler, less formal language so that it is easy to see what he means.


22.16 Listen and read

In another meeting in Jerome Fantam's office, Leo, Patricia, Stephen and Jerome discuss the report. Listen to what they say. Stephen's plan is good because it should succeed, but it's also good if it fails. Why?

LEO I mean, this paper of Stephen's - it's just so much hot air. see the meaning These are platitudes. see the meaning
PATRICIA Except, perhaps, the suggestion for a test-marketing exercise.
STEPHEN Thank you. But if we mean to implement the proposal, we have to move fast.
JEROME I agree the time-scale is short. Did you have any particular company in mind as a test-bed for this scheme of yours? see the meaning
STEPHEN Well, I hardly like to mention the name but, er, Hiltmann?
JEROME Why Hiltmann?
STEPHEN Good location. Good market position. Good product.
PATRICIA And if it came unstuck see the meaning, it would be easier for us to back out. We could say this was something that was already in the pipeline before the takeover. see the meaning

22.17 Listen and read

The meeting continues. Why are Jerome Fantam and Stephen both willing to try the test-marketing exercise?

LEO Hm. You want to run a marketing exercise based on a one-product, one-market company.
STEPHEN No. We must diversify the product range, repackage it and establish a new brand image in a market that up till now Hiltmann has never penetrated. see the meaning I suggest Greece.
LEO Stephen, to launch a new product range takes years.
STEPHEN It does in Standard Can, that's why we're in such deep trouble. There's so much red tape and bureaucracy in this organisation, people are scared to think for themselves... I'll put my job on the line see the meaning, Mr President: see the meaning second me as brand manager to Hiltmann for six months see the meaning, and I'll have every Greek kitchen loaded with Maxy products.
JEROME And if you don't?
STEPHEN If I don't... I'll resign my directorship.
JEROME It's a deal.
LEO Provided you can sell it to Anton Hiltmann.
JEROME Oh, I'll sell it to him. Trust me.

22.18 Writing practice: Jerome Fantam’s notes

Jerome Fantam also keeps notes of what has happened. Write notes about the things that have happened in 22.13-22.17. Remember that you must present what has happened from Jerome Fantam's point of view, and say what he thinks about them. Read the documents again, and listen to the dialogues - they will help you to work out what Jerome's attitude is.


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