The Independent Institute of Education
2013
MODULE NAME:
MODULE CODE:
BUSINESS MANAGEMENT 1
BMNG5111
ASSESSMENT TYPE:
EXAMINATION
TOTAL MARK ALLOCATION:
TOTAL HOURS:
120 MARKS
(PAPER ONLY)
2 HOURS (+10 minutes reading time)
STUDENT NAME:
STUDENT NUMBER:
INSTRUCTIONS:
1.
Please adhere to all instructions in the examination booklet.
2.
Independent work is required.
3.
Five minutes per hour of the assessment to a maximum of 15 minutes is dedicated to
reading time before the start of the examination. You may make notes on your question
paper, but not in your answer sheet. Calculators may not be used during reading time.
4.
You may not leave the examination venue during reading time, or during the first hour or
during the last 15 minutes of the examination.
5.
Ensure that your name is on all pieces of paper or books which you will be handing in. Hand in
all the pages of this examination question paper as well as your answer script.
6.
Answer all the questions on the answer sheets or in answer booklets provided. The phrase
“END OF PAPER” will appear after the final set question of this assessment.
7.
Remember to work at a steady pace so that you are able to complete the examination within
the allocated time. Use the mark allocation as a guideline as to how much time to spend on
each section.
Additional instructions:
1.
This is a closed-book examination.
2.
Calculators are not allowed.
3.
For multiple choice questions, give only one response per question. The marker will ignore any
question with more than one answer, unless otherwise stated. You should, therefore, be sure
of your answer before committing it to paper.
4.
Answer all questions.
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Section A
(Marks: 30)
Question 1
(Marks: 5)
Match the description in Column A with the correct term from Column B. In your answer booklet, write down
only the question number and, next to it, the letter of the correct answer.
Column A
Q.1.1
Informal groups can be ___________ groups or friendship
Column B
A.
Group
B.
Task
C.
Work team
groups.
Q.1.2
A _________ comprises a small number of employees with
complementary competencies who work together on a project.
Q.1.3
__________ leaders motivate followers by appealing to their
self-interest, for example exchanging pay and status for work
effort.
Q.1.4
Formal groups can be command groups or _______ groups.
D.
Transactional
Q.1.5
__________ leaders often have traits such as vision and self-
E.
Interest
F.
Transformational
G.
Charismatic
confidence. They appear most often in politics and religion
where the follower’s task has an ideological component.
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Question 2
(Marks: 5)
Match the description in Column A with the correct term from Column B. In your answer booklet, write down
only the question number and, next to it, the letter of the correct answer.
Column A
Q.1.1
____________ is the process used by managers to transfer
Column B
A.
Line Authority
B.
Staff Authority
C.
Span of Management
D.
Chain of Command
E.
Responsibility
F.
Accountability
G.
Delegation
authority and responsibility to positions below them.
Q.1.2
A narrow ___________ may mean that managers are underutilised as they have few subordinates each.
Q.1.3
The __________ can be defined as a clear and distinct line of
authority among the positions in an organisation.
Q.1.4
_____________ is the duty to perform the task or activity as
assigned.
Q.1.5
_____________ is an indirect and supplementary authority,
usually based on special knowledge of a particular field.
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Question 3
(Marks: 20)
Select one (1) correct answer for each of the following. In your answer booklet, write down only the number of
the question and, next to it, the letter of the correct answer.
Q.3.1
Which of the following statements about socialism as an economic system is true?
(a)
(2)
Profit and reward are achieved according to individual ability;
(b) The state owns and controls the principal industries such as communication, health
services and transportation;
(c)
There is minimum state interference in the market;
(d) The state assumes complete responsibility for the production and distribution of
products.
Q.3.2
Stakeholder engagement occurs at various levels for different stakeholder groups. Which of
(2)
the following is not a level of engagement
(a)
Monitor;
(b) Remain passive;
(c)
Empower;
(d) Direct.
Q.3.3
Control focusses on the effective management of key resources. Most organisations define
areas of control in terms of four (4) basic types of resources. Select the correct four (4)
resources.
(a)
Human resources, Entrepreneurship, Capital and Land;
(b) Physical resources, Financial resources, Human resources, Information resources;
(c)
Natural resources, Human resources, Entrepreneurship and Capital;
(d) Financial resources, Human resources, Operating resources and Physical resources.
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(2)
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Q.3.4
2013
If performance does not meet what was intended, corrective action needs to be taken. Which
(2)
of the following is not an appropriate corrective action?
(a)
Improving performance to reach the standards in future;
(b) The standards can be lowered or raised to make them more realistic;
(c)
The organisation can completely remove the control system;
(d) The strategies can be revised to accomplish the standards.
Q.3.5
Which statement is false?
(a)
(2)
Control helps organisations cope with increasing size and complexity;
(b) Control helps limit the accumulation of error;
(c)
Control helps organisations cope with environmental change;
(d) Control systems increase costs in an organisation.
Q.3.6
Which of the following is not a component of leadership?
(a)
(2)
Authority;
(b) Power;
(c)
Management;
(d) Responsibility.
Q.3.7
In what order are the elements of a simple communication model found?
(a)
(2)
Sender, Channel, Message, Receiver;
(b) Sender, Message, Channel, Receiver;
(c)
Sender, Message, Receiver, Channel;
(d) Message, Sender, Channel, Receiver.
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Page 5 of 11
The Independent Institute of Education
Q.3.8
2013
Which of the following statements regarding organisational structure is false?
(a)
(2)
The competence and role of the staff influence the choice of structure;
(b) A different structure may be appropriate if the business is a stable, turbulent or
technologically dominated market;
(c)
The size of the organisation has an influence on structure;
(d) Strategy should always follow structure.
Q.3.9
The final step in the planning process is:
(a)
(2)
Implement the plan;
(b) Develop alternative plans;
(c)
Establish goals;
(d) Do reactive planning.
Q.3.10
Which statement regarding the importance of planning is incorrect?
(a)
(2)
Planning is more important for large businesses;
(b) Planning provides direction;
(c)
Planning reduces the impact of change;
(d) Planning promotes co-ordination within the organisation.
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Section B
(Marks: 60)
Question 1
(Marks: 30)
Q.1.1
Humans have multiple and unlimited needs but societies only have limited resources that can
(6)
be used to satisfy these needs. There are four (4) types of limited resources, also known as the
factors of production. List and describe three (3) of the limited resources.
Q.1.2
Creating a business plan is an important part of the entrepreneurial process. Discuss six (6)
(5)
reasons why developing a business plan is important.
Q.1.3
Environmental scanning is the process of measuring, projecting and evaluating change in the
(3)
business environment.
Provide three (3) reasons as to why environmental scanning is important.
Q.1.4
The business environment is made up of the micro, market and macro environments. Provide
(8)
an overview of the micro environment.
Q.1.5
Evaluate the validity of the following statement:
(8)
“Companies only implement Corporate Social Responsibility programmes due to legal
requirements and Government pressure.”
Question 2
Q.2.1
(Marks: 30)
Planning is a vital management activity. Organisations set strategic, tactical (also called
(4)
functional) and operational goals and plans. Describe the characteristics of tactical goals and
tactical plans.
Q.2.2
Mpho runs a small business employing 55 people. The business imports and sells two different
products in the construction industry. ‘CeilingClean’ is a chemical for cleaning ceiling boards
once installed and ‘Celingfix’ is a type of glue for repairing damage ceilings.
Departmentalisation involves grouping specialist tasks together. Mpho currently runs the
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business using a functional departmentalisation. A friend has told him that a product
departmentalisation will be better for his business.
2.2.1 Graphically illustrate both the functional and product departmentalisation
(4)
2.2.2 Advise Mpho on whether the product departmentalisation is appropriate for his business
Q.2.3
mentioning the advantages and disadvantages of the product departmentalisation.
(6)
Managers should encourage the informal organisation. Explain what the informal organisation
(4)
is and why it should be developed.
Q.2.4
Researchers have studied, developed and tested a variety of leadership theories to determine
(4)
the key characteristics and behaviour patterns of a good leader. There are three (3) major
leadership theories, including Trait theory, which assumes that strong leaders have certain
basic traits which distinguish them from others. Identify and briefly discuss the other two (2)
major leadership theories.
Q.2.5
Control is important in ensuring that plans are achieved. Name four (4) characteristics of an
(4)
effective control system.
Q.2.6
List the four (4) steps of the control process in the correct sequence.
(4)
Section C
(Marks: 30)
Question 1
(Marks: 15)
Read the case study below and answer the following questions.
Q.1.1
Entrepreneurs have certain common traits. Using examples from the Famous Brands case
(4)
study, identify and describe two (2) common traits that Halamandaris demonstrates.
Q.1.2
Explain the concept of franchising.
(2)
Q.1.3
Some business people argue that people who buy franchises are not entrepreneurs. Discuss
(4)
whether you think people who buy franchises are entrepreneurs.
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Q.1.4
2013
Using specific details from the Famous Brands case study identify the macro-environment subenvironments and specific variables which were influencing Steers in the 1960s.
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Famous Brands
Every day, millions of South Africans grab a bite to eat at one (1) of their favourite quick service restaurants.
Chances are it belongs to Famous Brands who owns Steers, Debonairs, Fishaways and other leading brands.
Founder George Halamandaris and his family came to South Africa from Greece in the late 1950s with
practically nothing. Gross Domestic Product (GDP) growth figures of between 4% and 9% were recorded
throughout the 1960s in South Africa. This translated to more disposable income for the increasingly urban
population and opportunities for entrepreneurs. George figured that Johannesburg needed an American style
steakhouse and so he opened the first Steers restaurant in the 60s, which was a huge success. More women
were entering the workplace and had less time for cooking, which made fast food more popular.
Not content with only one restaurant, Halamandaris opened several in Johannesburg before deciding that
franchising Steers restaurants would bring more growth. Halamandaris reflects that franchising was a new
concept to South Africa and quite risky as franchisees did not know what was expected of them and it had
never been done before.
Steers expanded rapidly and listed on the Johannesburg Stock Exchange in March 1994. Halamndaris was
disappointed that what his family had worked hard for, for so many years was worth only R35–R40million! He
believed that they could achieve more and employed a marketer and franchising expert who since guided the
business to even more growth.
(Compiled from: Entrepreneur South Africa. 2013. Famous brands:Kevin Hedderwick. [online]. Available at:
http://www.entrepreneurmag.co.za/advice/success-stories/entrepreneur-profiles/famous-brands-kevinhedderwick-2/ [Accessed 14 may 2013]. and World Bank GDP data.)
Question 2
(Marks: 15)
Read the case study below and answer the following questions.
Q.2.1
Strong leaders influence their employees because they possess power. There is a power
continuum from position power to personal power where five (5) types of power can be placed.
Identify and provide examples of two (2) types of power which John Smith displays.
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Q.2.2
2013
Strategic goals include the Vision, Mission statement and long-term strategic goals. A mission
(4)
statement answers three (3) important questions.
Evaluate whether the mission statement proposed in the case study answers these questions.
Q.2.3
Smith wants ABC publishers to focus on increasing revenue, propose an effective strategic goal
(3)
for ABC publishers in this regard.
Q.2.4
The management team have discussed product-development and horizontal-integration as
(4)
two (2) corporate or grand strategies which may be appropriate for ABC publishers. Describe
what each of these strategies entails and demonstrate how ABC publishers would implement
each one.
ABC Publishers – John Smith
ABC publishers is a magazine publisher. They have been publishing various magazines on topics from cars to
fishing for over fifty years. John Smith had recently taken over as chief executive officer (CEO) after having been
with the company for nearly twenty years. Smith started as a writer before being promoted to editor and then
management. He was regarded as a fine writer and one (1) of the best editors in the industry. He seemed to
know just how to write articles so that people would read them. Few of the employees liked Smith, but he
earned their respect as he was fair when rewarding them with bonuses. Now Smith had gathered his
management team together to come up with a new strategy for the business. They had already agreed on a
mission statement as follows:
“To provide innovative communication solutions through the delivery of world-class content that entertains,
informs and inspires.”
The debate had now turned towards long-term strategic goals which Smith wanted to reflect his desire for
increasing revenue. They still had to discuss what corporate strategies should be implemented.
END OF PAPER
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