Direction: In this part, there are four passages followed by questions or unfinished statements, each with four suggested answers marked A, B, C and D. Choose the one that you think is the correct answer.
Passage 1
Legitimacy has long been considered essential to an organizations continued existence. Though intangible, like a brand, it amounts to a de facto license to operate conferred on a firm by those it comes into contact with. Legitimacy is earned when there is satisfaction about how companies are governed in terms of inclusivity, transparency and accountability. It is not a static resource, but is built or eroded over time.
Iraq presents firms with unique legitimacy challenges, not least in terms of identifying those who can confer it in a country where civil society has been repressed for decades. The costs to business of the ongoing conflict are both indirect — the breakdown in governance, trust and tolerance, and the undermining of environmental and economic capital and direct — the higher cost of security and other forms of risk management, lost materials, capital, personnel, litigation, opportunity costs, and the damage to reputation. In May 2000, the Economist described the risks companies face in conflict zones: “pipelines can be blown up by crooked partners. Fragile economies can collapse. And in recent years, firms doing business in counties with unpleasant governments have been pilloried by nongovernmental organizations (NGOs), endangering the most priceless of assets, their good name.” An unstable environment is also a disincentive for the substantial investment required over long periods by oil companies, and many gave postponed a decision over Iraq pending the establishment of a legitimate regime. Sir Philip Watts, chairman of Royal Dutch/Shell, exemplified this stance in July: “The safety of our people is paramount. There has to be proper security, legitimate authority and a legitimate process — by which we will be able to negotiate agreement that would be longstanding for decades. We wouldnt go into that situation unless these conditions were satisfied because we are a longterm projects and we need the framework in which we can make this sort of investment decision.”
The challenges are sufficient to ensure that only those companies prepared to take a longterm view should venture in, and such a venture which will be uniquely exposed should instability endure.
Stability will not come while the regime is regarded as illegitimate. That illegitimacy is reflected on businesses entering Iraq under government sponsorship and on those that pay insufficient regard to their local partners. Business can begin to break the cycle and earn its own legitimacy by attending to its internals administration, ensuring it is inclusive, transparent and accountable to Iraqis. In this way, companies can also help to confer legitimacy on the interim authority, creating a virtuous circle building towards the stability that firms need to operate profitably for the long term. Conversely, businesses that fail to engage adequately will merely undermine further the Iraqis sense of involvement in their own future and so contribute to the downward spiral of instability.
1. In the first paragraph, legitimacy is an asset.
A. gained smoothly and swiftly while trading with other firms
B. like a credential for transaction business
C. to retain a companys inclusivity, transparency, and accountability
D. awarded by government or partners when they are satisfied
2. How do you understand the first sentence in second paragraph?
A. Companies in Iraq under dictatorial regime lack legitimacy
B. Companies in Iraq face more security problems since it is a conflicting zone
C. The unstable environment deters investment
D. Stern governance repressed civil society that indirectly harmed commercial development
3. According to Economists description in May 2000, companies in conflict zones faced following risks EXCEPT.
A. incredibility of cooperators B. danger of losing its good name
C. the present political climate in IraqD. uncertainty of economy
4. What Sir Philip Watts said implies that.
A. Sir Philip Watts will by no means invest or launch business in Iraq
B. presently only those companies who plan to take shortterm business dare to set up their business in Iraq
C. legitimate authority is the key point among all risky factors now in Iraq
D. most local firms in Iraq are illegitimate and untrustworthy
5. From the last paragraph, we can conclude .
A. business entering Iraq can expand prosperously with the guidance of government
B. temporary government in Iraq can never be trusted
C. there is still certain leeway for business to establish legitimacy in Iraq
D. without stability foreign business can survive profitably for long time in Iraq
