Bpp Exam kit

q G H ACCA Approved Practice & Foundations in Accountancy/ACCA Business For and exams Free access Technology from to 31 August Revision 1 September Kit (FBT/BT) 2021 2022 to eBook & additional digital content Page 1 of 327 q Foundations in Foundations in Accountancy/ ACCA Accountancy/ ACCA Business and G H technology (FBT/BT) Practice & Revision For exams 31 August Kit from 1 September 2021 2022 Page 2 of 327 to G q FirsteditionMay2011 TentheditionFebruary2021 ISBN 9781509737116 Previous ISBN 9781509729890 eISBN 9781509739097 BritishLibraryCataloguing-in-PublicationData Acataloguerecordforthisbook isavailablefromtheBritishLibrary Published by BPPLearningMediaLtd BPPHouse,Aldine Place LondonW128AA www.bpp.com/learningmedia PrintedintheUnitedKingdom Yourlearningmaterials,publishedbyBPPLearning MediaLtd,areprintedonpaperobtainedfrom traceablesustainablesources. Allourrightsreserved.Nopartofthispublication may bereproduced,storedina retrievalsystemor transmitted,inanyformorbyanymeans,electronic, mechanical, photocopying, recordingorotherwise, withoutthepriorwrittenpermission ofBPPLearning Media. Containspublicsectorinformation licensedunderthe OpenGovernment licencev3.0. WearegratefultotheAssociation ofChartered CertifiedAccountants forpermission toreproducepast examination questions.Thesuggestedsolutionsinthe examanswerbankhavebeenpreparedbyBPP LearningMediaLtd,exceptwhereotherwise stated. © BPPLearningMediaLtd 2021 Page 3 of 327 Anote about copyright DearCustomer Whatdoesthelittle©meanandwhydoesitmatter? Yourmarket-leading BPPbooks, coursematerials ande-learning materials donotwriteandupdate themselves. People writethem:ontheirownbehalf orasemployees ofanorganisation thatinvests in thisactivity. Copyright lawprotects theirlivelihoods. Itdoessobycreating rightsovertheuseofthe content. Breach ofcopyright isa formoftheft– aswellbeing a criminal offence insomejurisdictions, itis potentially a serious breachofprofessional ethics. Withcurrent technology, thingsmightseema bit hazybut,basically, without theexpress permission ofBPPLearning Media:  Photocopying ourmaterials isa breachof copyright  Scanning, ripcasting orconversion ofourdigital materials intodifferent fileformats, uploading themtoFacebook oremailing themtoyour friends isa breachofcopyright Youcan,ofcourse, sellyourbooks, intheformin which youhaveboughtthem–onceyouhave finished withthem.(Isthisfairtoyourfellow students? Weupdatefora reason.) Pleasenotethe e-products aresoldona single userlicence basis: wedonotsupply 'unlock' codestopeople whohave boughtthemsecondhand. Andwhataboutoutside theUK? BPPLearning Media strives tomakeourmaterials available atprices students canaffordbylocalprinting arrangements, pricing policies andpartnerships which areclearly listedonourwebsite. Atinyminority ignore thisand indulge incriminal activity byillegally photocopying ourmaterial orsupporting organisations thatdo.If theyactillegally andunethically inonearea,can youreallytrustthem? H G q Contents Finding questions Questionand Answerindex iv Helping you with your revision vii UsingyourBPPPractice&RevisionKit viii Passingthe FBT/BT exam ix Approachto examiningthe syllabus x Thecomputer-basedexamination xi TacklingObjectivetest and multi-taskquestions xii Questions and answers Questions 3 Answers 153 Exam practice Mockexam1– SpecimenExam H Questions  Answers  Mockexam2 225 243 Questions  Answers  Mockexam3 253 271 Questions Answers 281 299   Reviewform Tableof contents iii Page 4 of 327 G q Question and Answer index Marks Part A: The business organisation, stakeholders and the external environment Time allocation Mins Page number Question Answer its Businessorganisationsand theirstakeholders Questions1.1to 1.8 13 16 5 153 30 36 7 154 23 28 11 156 42 50 14 158 24 29 19 160 Thebusinessenvironment Questions2.1to 2.18 Themacro-economicenvironment Questions3.1to 3.14 Micro-economicfactors Questions4.1to 4.25 Section AMulti-taskquestions (MTQs) Questions5.1to 5.6 Part B: Business organisation functions and governance H structure, Businessorganisation, structure and strategy Questions6.1to 6.10 16 19 25 162 36 43 27 163 19 23 32 166 24 29 35 167 Organisational culture and committees Questions7.1to 7.22 Corporate governance and social responsibility Questions8.1to 8.12 Section BMTQs Questions9.1to 9.6 iv Businessand technology(FBT/BT) Page 5 of 327 q Marks Time allocation Mins Page number Question Answer Part C: Accounting and reporting systems, technology, compliance and controls Therole of accounting Questions10.1to 10.27 45 54 43 169 23 28 49 172 27 32 52 174 15 18 55 176 24 29 57 177 Control, security and audit Questions11.1to 11.14 Identifyingand preventing fraud Questions12.1to 12.16 Financialtechnology (Fintech) Questions13.1to 13.9 Section C MTQs Questions14.1to 14.6 Part D: Leading and managing individuals and teams G H Leading and managing people Questions15.1to 15.21 35 42 63 178 30 36 67 181 16 19 71 184 27 32 73 185 30 36 77 187 28 34 81 190 22 26 85 192 24 29 88 194 Recruitmentand selection Questions16.1to 16.18 Diversityand equal opportunities Questions17.1to 17.10 Individuals,groups and teams Questions18.1to 18.16 Motivatingindividualsand groups Questions19.1to 19.18 Trainingand development Questions20.1to 20.17 Performance appraisal Questions21.1to 21.13 Section D MTQs Questions22.1to 22.6 Questionand Answerindex v Page 6 of 327 q Marks Part E: Personal effectiveness communication in business Time allocation Mins Page number Question Answer and Personal effectiveness and communication Questions23.1to 23.19 31 37 95 195 24 29 99 198 34 41 105 199 24 29 110 201 Section E MTQs Questions24.1to 24.6 Part F: Professional ethics in accounting and business Ethicalconsiderations Questions25.1to 25.21 Section F MTQs Questions26.1to 26.6 Mixed Banks G H MixedBank1:Questions27.1to 27.23 38 46 114 204 MixedBank2: Questions28.1to 28.24 40 48 119 206 MixedBank3: Questions29.1to 29.24 40 48 126 209 MixedBank4: Questions30.1to 30.24 40 48 130 210 MixedBank5: Questions31.1to 31.24 40 48 135 212 MixedBank6: Questions32.1to 32.23 38 46 140 214 MixedBank7:Questions33.1to 33.25 42 50 145 217 Mockexam1(SpecimenExam) 100 120 225 243 Mockexam2 100 120 253 271 Mockexam3 100 120 281 299 Mock exams vi Businessand technology(FBT/BT) Page 7 of 327 G q Helping you BPP Learning with your revision Media – ACCA Approved Content Provider Asan ACCAApprovedContent Provider,BPPLearningMediagivesyou the opportunity to use revisionmaterialsreviewedby the ACCAexaminingteam. Byincorporatingthe ACCAexamining team's commentsand suggestionsregardingthe depth and breadth of syllabuscoverage,the BPPLearningMediaPractice&RevisionKitprovidesexcellent,ACCA-approvedsupportforyour revision. Thesematerialsare reviewedby the ACCAexaminingteam. Theobjectiveof the reviewis to ensurethat the materialproperlycoversthe syllabusand study guideoutcomes,used by the examiningteam insettingthe exams,inthe appropriatebreadth and depth. Thereviewdoes not ensurethat everyeventuality,combinationor applicationof examinabletopicsis addressed by the ACCAApprovedContent.Nordoes the reviewcomprisea detailedtechnicalcheckof the contentas the ApprovedContentProviderhas its ownqualityassurance processesinplace inthis respect. BPPLearningMediado everythingpossibleto ensurethe materialis accurate and up to date whensendingto print.Inthe eventthat any errorsare foundafter the printdate, they are uploadedto the followingwebsite:www.bpp.com/learningmedia/Errata. Selectingquestions We providesignpoststo helpyou plan yourrevision.  Afullquestion index Attempting mock exams Thereare three mockexamsthat providepracticeat copingwiththe pressuresof the examday. We stronglyrecommendthat you attempt themunderexamconditions.Mockexam 1is the SpecimenExam.Mockexams 2 and 3 reflectthe questionstylesand syllabuscoverageof the exam. Helpingyou withyourrevision vii Page 8 of 327 H q Using your BPP Aim of this Practice Practice & Revision Kit & Revision Kit Toprovidethe practiceto helpyou succeedinthe examinationforFBT/BT Businessand Technology. Topass the examinationyou need a thoroughunderstandinginallareas coveredby the syllabus and teachingguide. Recommended approach  Makesure you are able to answerquestionson everything specifiedby the syllabusand teachingguide.Youcannot makeany assumptionsabout what questionsmay comeup in yourexam.Theexaminingteam aimsto discourage'questionspotting'.  Learningis an active process.Usethe DOYOUKNOW?Checkliststo test yourknowledge and understandingof the topicscoveredinFBT/BT Businessand Technologyby fillingin the blankspaces. Thencheckyouranswersagainst the DIDYOUKNOW?Checklists.Do not attempt any questionsifyou are unableto fillinany of the blanks– go back to your BPPInteractive Textand revisefirst.  Whenyou are revisinga topic,thinkabout the mistakesthat you knowthat you should avoidby writingdownPOSSIBLE PITFALLS at the end of each DOYOUKNOW?Checklist.  Onceyou have completedthe checklistssuccessfully,you shouldattempt the questionson that topic.Eachquestionis worth1,2 or 4 marksand carrieswithit a timeallocationof 1.2 minutesper mark.  Youshouldattempt each bank of objectivetest questions(OTQs)and multi-taskquestions (MTQs)to ensurethat you are familiarwiththeirstylesand to practiseyourtechnique. Ensurethat you read TacklingObjectivetest and multi-task questions on page xiito get adviceon howbest to approach them. G  Onceyou have completedallof the questionsinthe body of thisPractice&RevisionKit, you shouldattempt the MOCKEXAMS underexaminationconditions.Checkyouranswers against our answersto findout howwellyou did. viii Businessand technology(FBT/BT) Page 9 of 327 H G q Passing the FBT/BT exam FBT/BT Businessand Technologyintroducesstudents (whomay not have a businessbackground) to the businessentitymade up of peopleand systemswhichinteractwitheach other. Thereis a lotto learn,but noneof it is particularlydifficultand a good grasp of these topicswillhelpyou in higher-levelbusinessexams. Toaccess FIAand ACCAsyllabuses,visitthe ACCAwebsite. www.accaglobal.com/students/fia The exam Allquestionsinthe examare compulsory.Thismeans you cannot avoidany topic,but also means that you do not need to waste timeinthe examdecidingwhichquestionsto attempt. Thereare 46 objectivetest questionsinSectionAof the exam,wortheither1or 2 marks.InSectionBof the examthere are 6 multipletask questions(onedrawnfromeach of the sixmainareas of the syllabus)worth4 markseach and are a mixtureof multiplechoicequestionsand othertypes of objectivetest (numberentry, multipleresponseand multipleresponsematching)inthe CBE.This means that the examiningteam is able to test mostof the syllabusat each sitting.Soyou need to have revisedrightacross the syllabusforthisexam. Topics to revise Forthisexamit is importantto revisethe wholesyllabusthoroughly.Questionscan be drawn fromany syllabusarea. Revision ThisPractice&RevisionKithas been reviewedby the ACCA'sexaminingteam and contains questionsfromthe SpecimenExamas mockexam1,so ifyou justworkedthroughit to the end you wouldbe verywellprepared forthe exam.Itis importantto tacklequestionsunderexam conditions.Allowyourselfjustthe numberof minutesshownnextto the questionsinthe indexand don't lookat the answersuntilyou have finished.Thencorrectyouranswerand go back to the InteractiveTextforany topicyou are reallyhavingtroublewith.Trythe same questionagain a weeklater – you willbe surprisedhowmuchbetter you are getting.Doingthe questionslikethis willreallyshowyou what you know,and willmakethe examexperiencelessworrying. Passing the exam Thefollowingpointswillhelpyou pass the exam.  Readthe questioncarefully.  Don'tspend morethan the allottedtimeon each question.Don'tbecomebogged down.If you are havingtroublewitha question,stop, think,decideon yourbest optionand answer the question.Moveon! Passingthe FBT/BT exam ix Page 10 of 327 H q Approach to examining the syllabus FBT/BT is a two-hourexamstructuredas follows: No of marks SectionA: 30 compulsoryobjectivetest questionsof 2 markseach 16compulsoryobjectivequestionsof 1markeach SectionB: 6 compulsorymultipletask questionsof 4 markseach 60 16 24 100 Note.Thedifferencebetweenthe 2 markand 1markobjectivetest questionsis that the 1mark questionswillbe easier- forexample,multiplechoicequestionswillhave onlythree possible choicesinstead of four. G H x Businessand technology(FBT/BT) Page 11 of 327 G q The computer-based examination Computer-basedexaminations(CBEs)are used forallof the FoundationsInAccountancyexams. TheCBEexamsforthe firstsevenmodulesincludingFBTcan be taken at any time,these are referredto as 'examson demand'. TheOptionexamscan be sat inJune and Decemberof each year, these are referredto as 'examson sitting'. Computer-basedexaminationsmustbe taken at an ACCACBELicensedCentre. How do CBEs work?  Questionsare displayedon a monitor  Candidates enter theiranswerdirectlyonto the computer  Candidates have twohoursto completethe examination  Candidates sittingexamson demand are providedwitha ProvisionalResultNotification showingtheirresultsbeforeleavingthe examinationroom.  TheCBELicensedCentre uploadsthe resultsto the ACCA(as proofof the candidate's performance)within72hours.  Candidates sittingthe Optionexamswillreceivetheirresultsapproximatelyfiveweeks after the examsittingonce they have been expertmarked  Candidates can checktheirexamstatus on the ACCAwebsiteby loggingintomyACCA Benefits  Flexibility – the firstsevenmodules,examson demand, can be sat at any time  Resitsforthe firstsevenmodulescan also be taken at any timeand there is no restriction on the numberof timesa candidate can sit a CBE  Instantfeedbackforthe examson demand as the computerdisplaysthe resultsat the end of the CBE Formoreinformationon computer-basedexams,visitthe ACCAwebsite. www.accaglobal.com/gb/en/student/exam-entry-and-administration/computer-basedexams.html Thecomputer-basedexamination xi Page 12 of 327 H q Tackling objective test and multi-task questions KnowledgeContent Theexamcontainstwosections.SectionAconsistsof 16objectivetest (OT)questionsworthone markeach and 30 objectivetest (OT)questionsworthtwomarkseach. SectionBcontainssix multi-taskquestionsworthfourmarkseach. Themulti-taskquestionsare made up of OT questionsand thereforebeingable to answerOTquestionseffectively,is extremelyimportant. OTquestions OTquestionsinSectionAare single,shortquestionsthat are auto-markedand worthone or two markseach. Youmustanswerthe wholequestioncorrectlyto earn the marks.Thereare no partial marks. TheOTquestionsinSectionAaimfora broad coverageof the syllabus,and so allareas of the syllabusneed to be carefullystudied.Youneed to workthroughas many practiceobjectivetest questionsas possible,reviewingcarefullyto see howcorrectanswersare derived. Thefollowingtypes of OTquestionscommonlyappear inSectionAof the BT/FBT exam: Question type Explanation Multiplechoice(MCQ) Youneed to chooseone correctanswerfromtwoor three options inthe case of 1markquestions, or one correctanswerfromfour optionsinthe case of 2 markquestions. EgQ1of the specimenexam Multipleresponse(MR) Theseare a type of multiple-choicequestionwhereyou need to selectmorethan one answerfroma numberof givenoptions.The questionwillspecifyhowmany answersneed to be selected.It is importantto read the requirementcarefully. EgQ8 of the specimenexam G Multipleresponsematching (MRM) Thisquestiontype requiresyou identifywhichof twoor more categorieseach itemina listbelongsto. Forexample,a question mightprovidea listof controls,and ask you to identifyforeach controlwhetherit is an generalcontrolor an applicationcontrol. SectionBquestionswillincludesixmulti-taskquestions.Thesewillalso use OTquestions,but a widerrange of questiontypes willbe used inthe SectionBquestions.Youmay see someor allof the followingtypes of questioninyourexam: Multipleresponse questions withmorethan fouroptions- forexample,choosetwoitems  fromsixor fourfromeight. Gap fillquestions - whereyou need to completea paragraph by fillinggaps that appear  inthe text.Responsesare selectedby clickingon the gap and selectingthe correct responsefroma drop downmenu. Multiresponse matching - wherecandidates selectresponsesaccordingto a gridof  choices.Task1of the skillsactivitybelowis an exampleof multiresponsematching. Hotspot questions - whereyou have to clockon the relevantpart of a symbolor diagram.  Forexample,there may be a numberof boxeswhereyou are requiredto selectthe boxes that apply. Numberentry question - whereyou willneed to calculatea valueand enter it intoa box. Suchquestionswillnot be commoninBT/FBT as muchof the syllabuscoversqualitative topicsrather than quantitative. InSectionBquestions,there willbe partialmarking.Ina multipleresponsequestionforexample, whichrequiresyou to selecttwoitemsfromsix,fortwomarks,you wouldget one markifonlyone of youranswerswas correct.  xii Businessand technology(FBT/BT) Page 13 of 327 H q Youmay wishto followthe approach outlinedbelowforSectionAof the exam,or you may prefer to adapt it. Step 1 Skimread allthe MCQsand identifywhat appear to be the easierquestions. Step 2 Attempteach question– starting withthe easier questions identifiedinStep 1.Readthe questionthoroughly. Youmay preferto workout the answerbeforelookingat the options,or you may preferto lookat the optionsat the beginning.Adopt the methodthat worksbest foryou. Step 3 Readthe optionsand see ifone matches yourownanswer.Be carefulwithnumericalquestionsas the distractorsare designedto match answersthat incorporatecommonerrors. Checkthat yourcalculationis correct.Haveyou followedthe requirementexactly?Haveyou includedeverystage of the calculation? Step 4 Youmay findthat noneof the optionsmatch youranswer.  Re-readthe questionto ensurethat you understandit and are answeringthe requirement  Eliminateany obviouslywronganswers  Considerwhichof the remaininganswersis the mostlikely to be correctand selectthe option Step 5 Ifyou are stillunsuremakea note and continueto the next question Step 6 Revisitunansweredquestions.Whenyou comeback to a questionafter a break you oftenfindyou are able to answerit correctlystraightaway. Ifyou are stillunsurehave a guess. Youare not penalisedforincorrectanswers,so never leave a question unanswered! G H Afterextensivepracticeand revisionof MCQs,you may findthat you recognisea questionwhen you sit the exam.Beaware that the detail and/or requirement may be different. Ifthe questionseemsfamiliarread the requirementand optionscarefully– do not assumethat it is identical. Therecommendedapproach to the multi-taskquestionsinSectionBis as follows: (1) Read the requirementof each task. Thereis usuallya scenarioassociated witheach MTQ whichrunsto around 300 words.Itcan feeldaunting.Itis importantthereforeto know what you are lookingforwhenyou read the scenarioand thismeans readingthe requirementof the task first,beforeyou read the scenario. (2) Ensureyou understandthe requirementsof the task. Itis easy to misinterpretthe requirementsof a question.Forexample,givingthe highestvaluewhenthe lowestis asked for. Alsothe orderof the informationgiveninthe scenariomay be differentto the orderof the informationgiveninthe part of the questionwhereyou giveyouranswer (3) Afterreadingthe task, thinkabout the technicalknowledgeyou willneed to answerthe question.Whenyou do read the scenario,you willbe muchmorefocussedon what you need to lookforinthe scenario (4) Manageyourtime. Youshouldbe guidedby the markallocationinMTQsas the sub questionscan have differentrequirements,there is no set formatforthese questionsso you need to react to what is presented,howeverthe ruleof 1.2minutesper markstillapplies. Youmay have completedsectionAof the examinlesstime,whichis good newsforSection Bas the scenarioscan be quitetimeconsumingto read and digest.Thequestionsin UsingyourBPPproducts Page 14 of 327 xiii q Section B withshorter scenarios areusually quicker toattempt andmaygiveyoumore timeforthecalculations. Youdonothavetoanswer thesubquestions inorder, youshould playtoyourexamstrengths, whichmeans attempting thequestions youaremost confident aboutfirst. G H xiv Business andtechnology (FBT/BT) Page 15 of 327 q Questions G H Page 16 of 327 q G H 2 Business andtechnology (FBT/BT) Page 17 of 327 G q Do you know? – The business organisation, its stakeholders and the external environment Checkthatyoucanfillintheblanksinthestatements belowbeforeyouattempt any questions. Ifindoubt,youshouldgobacktoyourBPPInteractive Textandrevisefirst.  Organisations canachieve results whichi………cannot achieve bythemselves.  A……………….. organisation (NGO)isanindependent voluntary association ofpeople acting together forsomecommon purpose (other thanachieving government officeormaking money).  Stakeholders arethoseindividuals orgroups that,potentially, haveaninterest inwhatthe organisation does.These stakeholders canbew…….theorganisation, c…..tothe organisation orexternal totheorganisation.  G………….p……influences theeconomic environment, theframework oflaws,industry structure andcertain operational issues. Political i……..isa causeofrisk.  P…….istherightoftheindividual nottosuffer unauthorised disclosure ofinformation.  Acontract isa l……b…….agreement.  O…….isthecontracting outofspecified operations orservices toanexternal vendor.  Thev….c…..describes thoseactivities oftheorganisation thataddvaluetopurchased inputs.  Thec……e……..isstructured byfiveforces: barriers toentry;substitute products; the bargaining power ofc………;thebargaining power ofsuppliers; c………rivalry.  Equilibrium n……..i……isdetermined usingaggregate supplyandaggregate demand analysis.  Demand pulli…….arisesfromanexcess ofaggregate demand overtheproductive capacityoftheeconomy.  C….p….inflation arisesfromincreases inthecostsofproduction.  Economic ……..maybemeasured byincreases intherealgrossnational product (GNP) perheadofthepopulation.  Macroeconomic policyobjectives relate toeconomic growth, i………,unemployment and theb……ofp……..  Ifa government decides tousefiscalpolicytoinfluence demand intheeconomy, itcan choose either e……….changes ort..changes asitspolicyinstrument.  M……p…..usesmoney supply, interest ratesorcreditcontrols toinfluence aggregate demand.  Asurplus ordeficit onthebalance ofpayments usually means a surplus ordeficitonthe c…….a…….  Them…..e………….. refers totheimmediate operational environment including suppliers, competitors, customers, stakeholders andintermediaries.  Elasticity, ingeneral, refers totherelationship between twovariables. Priceelasticity of demand explains therelationship between changeinq…..demanded andchangesinp…...  I……e……..ofdemand measures theresponsiveness ofdemand tochanges inhousehold income. C…..elasticity ofdemand isdetermined bytheavailability ofsubstitute (competitors') products.  Theeffects ofdemand andsupplyconditions onmarkets canbeanalysed bystudying the behaviour ofbothdemand andsupplyc…….. Thesolutions tothistestareonthenextpage Questions3 Page 18 of 327 H G q Did you know? – The business external environment organisation, its stakeholders and the Could you fillin the blanks? Theanswers are in bold. Usethis page for revisionpurposes as you approach the exam.  Organisationscan achieveresultswhichindividualscannot achieveby themselves.  Anon-governmentalorganisation(NGO)is an independentvoluntaryassociationof peopleacting togetherforsomecommonpurpose(otherthan achievinggovernmentoffice or makingmoney).  Stakeholdersare those individualsor groupsthat, potentially,have an interest inwhat the organisationdoes. Thesestakeholderscan be withinthe organisation,connected to the organisationor externalto the organisation.  Governmentpolicyinfluencesthe economicenvironment,the frameworkof laws,industry structureand certainoperationalissues.Politicalinstabilityis a cause of risk.  Privacyis the rightof the individualnot to sufferunauthoriseddisclosureof information.  Acontract is a legally bindingagreement.  Outsourcingis the contractingout of specifiedoperationsor servicesto an externalvendor.      Thevaluechain describesthose activitiesof the organisationthat add valueto purchased inputs. Thecompetitiveenvironmentis structuredby fiveforces:barriersto entry; substitute products; the bargainingpowerof customers;the bargainingpowerof suppliers; competitiverivalry. Equilibriumnational incomeis determinedusingaggregate supplyand aggregate demand analysis. Demandpullinflationarisesfroman excessof aggregate demand overthe productive capacity of the economy. Cost push inflationarisesfromincreasesinthe costs of production.  Economicgrowth may be measuredby increasesinthe real grossnationalproduct(GNP) per head of the population.  Macroeconomicpolicyobjectivesrelate to economicgrowth,inflation,unemployment and the balance of payments. Ifa governmentdecidesto use fiscalpolicyto influencedemand inthe economy,it can chooseeitherexpenditure changes or tax changes as its policyinstrument. Monetary policyuses moneysupply,interestrates or creditcontrolsto influence aggregate demand. Asurplusor deficiton the balance of paymentsusuallymeans a surplus or deficit on the currentaccount. Themicroenvironmentrefersto the immediateoperationalenvironmentincludingsuppliers, competitors,customers,stakeholdersand intermediaries. Elasticity,ingeneral,refersto the relationshipbetweentwovariables.Priceelasticityof demand explainsthe relationshipbetweenchange in quantitydemanded and changes in price. Incomeelasticityof demand measuresthe responsivenessof demand to changes in householdincome.Cross elasticity of demand is determinedby the availabilityof substitute(competitors')products.        4 Theeffectsof demand and supply conditionson marketscan be analysed by studyingthe behaviourof both demand and supplycurves. Businessand technology(FBT/BT) Page 19 of 327 H q 1 Business organisations and their stakeholders 16 mins 1.1 'Anorganisationis a socialarrangementwhichpursuescollective........................................, whichcontrolsits ownperformanceand whichhas a boundaryseparating it fromits environment.' Whichof the followingwordscompletesthissentenceappropriately?  Picklist: Profits Stakeholders Goals Tactics 1.2 Whatis the termgivento the idea that the combinedoutput of a numberof individuals workingtogetherwillexceedthat of the same individualsworkingseparately?     1.3 G Sympathy Specialisation Synergy Systemsthinking (2 marks) Whichof the followingstatements is true?   1.4 (2 marks) Limitedcompanystatus means that a companyis onlyallowedto trade up to a predeterminedturnoverlevelinany one year. Fororganisationsthat have limitedcompanystatus, ownershipand controlare legallyseparate.  Thebenefitof beinga soletrader is that you have no personalliabilityforthe debts of yourbusiness.  Ordinarypartnershipsofferthe same benefitsas limitedcompaniesbut are usually formedby professionalssuch as doctorsand solicitors. (2 marks) Anorganisationis ownedand run by centralgovernmentagencies.Theorganisationshould be describedas whichof the followingstatements?  Avoluntarysectororganisation  Aprivatesectororganisation  Apublicsectororganisation (1mark) Questions 5 Page 20 of 327 H q 1.5 Whichof the followinggroupsmay be consideredto be stakeholdersinthe activitiesof a nuclearpowerstation? (1) (2) (3) (4)     1.6   G 1.8 (1),(3)and (4) (1),(2),(3)and (4) (3)only (1)and (3)only (2 marks) Thetermsecondarystakeholdersdescribeswhichgroupof stakeholders?  1.7 Thegovernment Environmentalpressuregroups Employees Localresidents Stakeholderswhoconducttransactionswiththe organisation Stakeholderswhohave a contractualrelationshipwiththe organisation Stakeholderswhodo not have a contractualrelationshipwiththe organisation (1mark) Whichof the followingorganisationswouldrelymostheavilyon valueformoneyindicators and efficiencyrather than informationon performanceand profitability?   Aprivateaccountancy college Alocalauthority  Asmallretailer (1mark) ADBis a businesswhichis ownedby its workers.Theworkersshare the profitsand they each have a voteon howthe businessis run. Whichof the followingshouldbe used to describeADB?  Publicsector  Privatesector  Not-for-profit  Co-operative (2 marks) (Total = 13marks) 6 Businessand technology(FBT/BT) Page 21 of 327 H q 2 2.1 The business Whatis an acronymused to describethe keyelementsof an organisation'sexternal environment?    2.2 2.3 36 mins environment SWOT SMART PEST (1mark) Whichof the followingis NOTa legitimatemethodof influencinggovernmentpolicyinthe interestsof a business?    Employinglobbyiststo put the organisation'scase to ministersor civilservants Givinglawmakersnon-executivedirectorships  Attemptingto influencepublicopinion,to put pressureon the legislativeagenda (2 marks) Offeringfinancialincentivesto publicofficialsto use theirinfluenceon the organisation'sbehalf ........................................is an analysisof statisticson birthand death rates, age structuresof peopleand ethnicgroupswithina community. Whichwordcorrectlycompletesthe sentence?  G H Picklist: Ergonomics Economics Psychographics Demographics 2.4 Arecent trend inorganisationand managementis the risein'virtualorganisation'and 'virtualteamworking'.Towhichof the followingenvironmental(PEST)factors is thismost directlyattributed?     2.5 (2 marks) Economic Socio-cultural Technological Political (2 marks) Whichof the followingrightsof data subjectsis also knownas the right'to be forgotten'?    Rectification Portability Erasure (1mark) Questions 7 Page 22 of 327 q 2.6 Inthe contextof 'best practice' employmentprotectionlaw, inwhichof the following circumstancesis dismissalof an employeeautomaticallyconsideredunfair?     2.7     2.9 (2 marks) (1),(2),(3)and (4) Substituteproductsor services H Newentrants to the industry Bargainingpowerof customers Governmentregulationof the industry (2 marks) HumanResources Marketing Purchasing (1mark) Whichof the followingis a supportactivityinPorter'svaluechainmodel?     8 (3)only (1)and (3)only (1),(2)and (3)only Forwhat functioninan organisationwoulddemographicinformationabout socialclass be mostrelevant?    2.10 Increasingethnicand religiousdiversityinpopulations Fallingbirthrates Focuson 'green' issues Increaseinsingle-memberhouseholds Porter'sfiveforcesmodelidentifiesfactors whichdeterminethe nature and strengthof competitioninan industry.Whichof the followingis NOTone of the fiveforcesidentifiedin Porter'smodel?   G (2 marks) Whichof the followingsocio-culturaltrends willhave a directimpacton mostbusiness organisations? (1) (2) (3) (4)   2.8 Selectionforredundancyon the basis of age Misconduct Marriageto an employeeof a keycompetitor Incompetence Procurement Operations Marketingand sales Inboundlogistics (2 marks) Businessand technology(FBT/BT) Page 23 of 327 q 2.11 Whichof the followingstatements about the impactof technologicaldevelopmentson the roleof accountants is NOTtrue?     2.12 Automationand artificialintelligenceallowthe accountant to focustheirtimeon verifying low-leveltransactions. Distributedledgertechnologyreducesthe need forauditorsto audit alltransactions. Cloudaccountingallowsaccountants to workcollaborativelytogetherand withtheir clients. Bigdata and data analyticsassist auditorsto target keybusinessrisks (2 marks) BCDCo is a large tradingcompany.Steveis the administrationmanager and is also responsibleforlegaland compliancefunctions.Sheilais responsibleforafter sales service and has responsibilityforensuringthat customerswhohave purchasedgoodsfromBCD Co are fullysatisfied.Sunnydeals withsuppliersand negotiateson the priceand qualityof inventory.Heis also responsibleforidentifyingthe mostappropriatesuppliersof plant and machineryforthe factory. Samis the informationtechnologymanager and isresponsible forallinformationsystemswithinthe company. Accordingto Porter'svaluechain,whichof the managers is involvedina primaryactivity as opposedto a supportactivity?  Steve    G 2.13 Sunny Sam (2 marks) Whatis the latest stage at whicha newrecruitto a companyshouldfirstbe issuedwitha copy of the company'shealth and safety policystatement?  Whena positionwiththe companyis offered  Asearlyas possibleafter employment Afterthe firstfewweeksof employment Duringthe finalselectioninterview   2.14 Sheila (2 marks) InPorter'sfiveforcesmodel,whichof the followingwouldNOTconstitutea 'barrierto entry'?    Scaleeconomiesavailableto existingcompetitors Highcapital investmentrequirements Lowswitchingcosts inthe market (1mark) Questions 9 Page 24 of 327 H q 2.15 Threeof the followingstrategiesare closelyrelated.Whichis the exception?     2.16 Downsizing Delegating Delayering Outsourcing (2 marks) Whichof the followingwouldbe identifiedas a culturaltrend?    Healthand safety legislation Concernwithhealth and diet Increasingage of the population (1mark) 2.17 Fordemographicpurposes,whichof the followingis NOTa variableinthe identificationof socialclass?     2.18 G Incomelevel Lifestyle Occupation (2 marks) Education Technologicaldevelopmentssuch as automationand artificialintelligencemean that the roleof the accountant and auditorto recordand verifyday-to-day transactionshas becomemoreimportant.   True (1marks) False (Total = 30 marks) 10 Businessand technology(FBT/BT) Page 25 of 327 H q 3 3.1 The macro-economic    Governmentspending Governmentborrowing Taxation Exchangerates (2 marks) Whichof the followingis associated witha negativePublicSectorNetCash Requirement?     3.3 28 mins Whichof the followingis NOTan elementof fiscalpolicy?  3.2 environment Thegovernmentis runninga budget deficit. Thegovernment'sexpenditureexceedsits income. Thegovernmentis runninga budget surplus. PublicSectorDebtRepayment(PSDR)is high. (2 marks) ........................................taxes are collectedby the Revenueauthorityfroma business, whichattempts to pass on the tax to consumersinthe priceof goods. Whichwordcorrectlycompletesthisstatement?  Picklist: Progressive Direct Indirect G H (1mark) 3.4 Ifa governmenthas a macro-economicpolicyobjectiveof expandingthe overalllevelof economicactivity,whichof the followingmeasureswouldNOTbe consistentwithsuch an objective?  Increasingpublicexpenditure  Loweringinterestrates  Increasingtaxation (1mark) 3.5 ThecurrencyincountryXis the KronewhilecountryYuses the Euro.CountryYhas recentlyexperiencedan increaseinits exchangerate withCountryX.Whichof the followingeffectswouldresultinCountryY?     Astimulusto exportsinCountryY Anincreaseinthe costs of importsfromCountryX Reducingdemand forimportsfromCountryX Areductioninthe rate of cost push inflation (2 marks) Questions 11 Page 26 of 327 q 3.6 Allof the followingexceptone are 'protectionistmeasures'ininternationaltrade. Whichis the exception?     3.7 Importquotas Subsidiesforexporters Customsprocedures Tariffs (2 marks) Arethe followingstatements true or false? TRUE FALSE Frictionalunemploymentwillbe shortterm   Governmentscan encouragelabourmobilityifthey want to reduce unemployment   (2 marks) 3.8 WhichTWOof the followingdoes governmenteconomicmonetarypolicyrelate to?   Interestrates Taxation   Publicborrowingand spending Exchangerates (2 marks) G H 3.9 Whichof the followingorganisationswouldbenefitfroma periodof highpriceinflation?    3.10 Anorganisationwhichhas a large numberof long-termpayables Anexporterof goodsto a countrywithrelativelylowinflation Alarge retailerwitha highlevelof inventoryon displayand lowrate of inventory (1mark) turnover WhichTHREE of the followingare the goalsof macroeconomicpolicy?      Encouragingeconomicgrowth Lowunemployment Achievementof a balance betweenexportsand imports Achievingzeroinflation Maximisinga currency'sforeignexchangevalue (2 marks) 3.11 Whichof the followingis an exampleof cyclicalunemployment?     Theentry of schoolleaversintothe labourpooleach year Lay-offsamongagriculturallabourersinwinter Automationof ticketingservicesintourism Recessioninthe buildingindustry 12 Businessand technology(FBT/BT) Page 27 of 327 (2 marks) q 3.12 Asurpluson the balance of paymentsusuallyrefersto a surplusor deficiton the ........................................account. Whichwordcorrectlycompletethisstatement?  Picklist: Current Capital Financial 3.13 (1mark) Northland,Southland,Eastlandand Westlandare fourcountriesof Asia.Thefollowing economicstatisticshave been producedforthe year 20X7. Country Change inGDP(%) Northland –0.30 Southland +2.51 Eastland –0.55 Westland +2.12 +5550.83 –350.47 –150.90 +220.39 Change inconsumerprices(%) +27.50 +15.37 +2.25 +2.15 Change inworkingpopulation employed(%) –4.76 +3.78 +1.76 –8.76 Balanceof paymentscurrent account ($m) Whichcountryexperiencedstagflationinthe relevantperiod?  Northland G 3.14   Southland Eastland  Westland H (2 marks) ........................................economicgrowthis determinedby supply-siderather than by demand sidefactors. Whichwordcorrectlycompletesthisstatement?  Picklist: Actual Potential National (1mark) (Total = 23 marks) Questions 13 Page 28 of 327 G q 4 50 mins Micro-economic factors 4.1 Ina freemarket economy, thepricemechanism:    4.2    4.6 Excessofdemand oversupply Excessofsupplyoverdemand Nothing (1mark) Whichofthefollowing would causethesupplycurvefora goodtoshifttotheright (outwards fromtheorigin)?   Afallinthepriceofthegood Anincrease inthedemand forthegood  Afallinproduction costsofthegood Theimposition ofa minimum price  4.5 Marginal costcurveabovetheaverage variable costcurve Marginal costcurveabovetheaverage totalcostcurve Average totalcostcurvebeyond thepointwhere themarginal costcurvecutsitfrom below Average variable costcurvebelow theaverage revenue curve (2 marks) Alegalminimum priceissetwhichisbelow theequilibrium price.Whatwillbetheimpact of this?  4.4 (1mark) Thesupplycurveofa firmoperating ina competitive market isits    4.3 Aidsgovernment control Allocates resources Measures national wealth Whenthepriceofa goodisheldabovetheequilibrium price,theresult willbe  Excess demand  Ashortage ofthegood  Asurplus ofthegood (2 marks) (1mark) Whichofthefollowing would NOTleaddirectly toa shiftinthedemand curveforoverseas holidays?  Anadvertising campaign byholiday touroperators  Afallinthedisposable incomes ofconsumers  Ariseinthepriceofdomestic holidays  Ariseinthepriceofoverseas holidays (2 marks) 14 Business andtechnology (FBT/BT) Page 29 of 327 H G q 4.7 Whichof the followingwouldlead to a fallinthe priceof good Q whichis a normalgood?     4.8   Thereare no barriersto entry intoor exitfromthe market Thereis onlyone producerinthe market Thereare fourproducersexertingconsiderableinfluenceinthe market Thereare many producersbut they each use productdifferentiationto distinguish themselvesfromeach other (2 marks) Whichof the followingis NOTa substituteforcarpets?    4.10 (2 marks) Accordingto the theoryof the firm,whichof the followingstatements describesan oligopoly?   4.9 Ariseinthe priceof good P, a substituteforgood Q Afallinthe levelof householdincomesgenerally Afallinthe priceof good T,a complementto good Q Abeliefthat the priceof good Q is likelyto doubleinthe nextthree months Ceramicfloortiles Woodenfloorboard (1mark) Carpet underlay H Whichof the followingis NOTa complementto cars?    Petrol Tyres Holidays (1mark) 4.11 Thedemand forfashiongoodsis NOTinfluencedby:     4.12 Price Allocativeinefficiencyamongproducers Thedistributionof incomeamonghouseholds Expectationof futurepricechanges (2 marks) Ifthe priceof coffeefalls,whichthe followingoutcomesshouldbe expectedto occur?  Afallinthe quantityof coffeedemanded  Ariseinthe priceof tea  Afallinthe demand fordrinkingcups  Afallinthe demand fortea (2 marks) Questions 15 Page 30 of 327 G q 4.13 Whatisaninferior good?    Agoodofsuchpoorquality thatdemand foritisveryweak Agoodforwhichthecrosselasticity ofdemand witha substitute product isgreater than1 Agoodforwhichdemand willfallashousehold income rises (1mark) 4.14 Consider thepriceanddemand forflower vases.Thepriceofcutflowers goesupsharply. Whichofthefollowing should happen?     Thedemand curveforflower vaseswillshifttotheleftandtheirpricewillrise Thedemand curveforflower vaseswillshifttotherightandtheirpricewillrise There willbea movement alongthedemand curveforflower vasesandtheirprice willgodown Thedemand curveforflower vaseswillshifttotheleftandtheirpricewillgodown (2 marks) 4.15 Consider thepriceanddemand fortickets totravelbyseaferry.Thepriceoftravelling by hovercraft (asubstitute formoftravel) goesup.Whichofthefollowing should happen?     Thedemand curveforseaferrytickets willshifttotheleft,andtheirpricewillgo down.Moreseaferrytickets willbesold. Thedemand curveforseaferrytickets willshifttotheright,andtheirpricewillgo up.Moreferrytickets willbesold. Thedemand curveforseaferrytickets willshifttotherightandtheirpricewillgo down.Moreseaferrytickets willbesold. Thedemand curveforseaferrytickets willshifttotherightandtheirpricewillgoup. (2 marks) Fewer seaferrytickets willbesold. 4.16 Thesummer demand forhotelaccommodation inLondon comes mainly fromforeign tourists. Demand forhotelrooms inLondon insummer couldbereduced bya fallinthe priceorvalueofwhichofthefollowing? (1) (2) (3)     USdollars Aeroplane tickets Sterling Item1only Items 1and2 only Items 2 and3 only Item3 only (2 marks) 16 Business andtechnology (FBT/BT) Page 31 of 327 H G q 4.17 ABCproduces a variety ofsoftdrink. Ithastwocompetitors butallthreeproducers use product differentiation todistinguish themselves fromeachother. Whattypeofmarket is this?     Perfect competition Monopoly Monopolistic competition Oligopoly (2 marks) 4.18 Ina certain advanced industrialised country, thegovernment hasapplied pricecontrols overrentsofbothpublicandprivate rented accommodation fora number ofyears,anda serious problem ofwidespread homelessness hasbuiltup.Justrecently, therentprice controls havebeeneased. WhichTWOofthefollowing consequences should nowoccur?  Anincrease inhomelessness   Inthelonger term,anincrease innewbuilding work Theprovision ofmorerented accommodation  Fewer owner-occupied dwellings (2 marks) 4.19 Thedemand curvefora resource mayshiftbecause of:     Achangeinthedemand fora goodwhose production isdependent ontheresource Concerns aboutpotential harmful pollution fromtheresource Achangeinthepriceofa substitute resource Alloftheabove (2 marks) 4.20 Theincome elasticity ofdemand fora product ishigh.Thismeans that:    Saleswillfallonlyslightly whenincomes ofhouseholds fall Saleswillrisesharply whenincomes ofhouseholds rise Thegoodisaninferior good (1mark) 4.21 Usingthepointmethod, whatisthepriceelasticity ofdemand ofproduct Xaspricefalls fromitscurrent priceof$20to$15? Old 20 10 Price Quantity New 15 15 (2 marks) Questions17 Page 32 of 327 H q 4.22 Consumersurplusis:     4.23 Whichcombinationof demand and supplycurveswouldbe appropriatefora firm attemptingto increaseits profitsby increasingits marketshare?     4.24 Inelasticdemand, inelasticsupply Elasticdemand, elasticsupply Inelasticdemand, elasticsupply Elasticdemand, inelasticsupply (2 marks) Ifthe absolutevalueof the priceelasticityof demand fordry whitewineis greater than one, a decrease inthe priceof allwinewouldresultin:   Amorethan proportionaldecrease inthe quantityof dry whitewinepurchased   Alessthan proportionalincreaseinthe quantityof dry whitewinepurchased Amorethan proportionalincreaseinthe quantityof dry whitewinepurchased (2 marks) G 4.25 Theexcessbetweenwhat consumersare prepared to pay fora good or service,and the prevailingmarketprice Theindirecttax producerspay on a good or service Themarginalutilitygained by consumingone moreunitof a good or service Theindirecttax consumerspay on a good or service (2 marks) Alessthan proportionaldecrease inthe quantityof dry whitewinepurchased MrSmithhas a limitedincomewhichrestrictsthe numberof differentgoodshe can buy. Whichof the followingdescribesthe positionat whichMrSmith'sutilityfrompurchasing differentgoodsis maximised?    Marginalutilityfromeach good is equal Marginalutilityfromeach good is 0 Ratioof marginalutilityto priceis equal foreach good (1mark) (Total = 42 marks) 18 Businessand technology(FBT/BT) Page 33 of 327 H q 5 5.1 Section A Multi-task (a) questions 29 mins (MTQs) Arethe followingstatements about elasticitiestrue or false? TRUE (b) 5.2 (a) FALSE Ifincomeelasticityis positive,the commodityis calledan inferiorgood   Iftwogoodsare complements,the crosselasticitywillbe negative   Ifpriceelasticityis greater than 1,demand is said to be inelastic   Unrelatedproductswouldhave a crosselasticityof infinity   (2 marks) WhichTHREE of the followingreasonswouldresultina shiftof the demand curveto the rightfora normalgood?  Afallinthe priceof substitutes  Achange intaste towardsa competitorgood  Anincreaseinhouseholdincomes  Anexpectedfutureriseinthe priceof the good  Ariseinthe priceof complements  (2 marks) Anincreaseinpopulation Acompanyhas recentlydismissedemployeesinthe followingcircumstances: Sarah was dismissedfollowingdisciplinaryproceedings,althoughshe was not guilty of negligence,and was not givenher contractualperiodof noticeby the company. Trevorwas dismissedfromthe companyimmediatelyafter committingan act that was foundto be grosslynegligent. G Umberto,a relativelynewemployeewhowas showinga lotof promise,was dismissedafter tellingmanagementthat he had joineda trade union. Vanessa,havingpreviouslybeingrated as one of the best performingemployeesin the company, was dismissedafter managementdiscoveredshe was pregnant. Matchthe followingtypes of dismissalto the employeesabove.  Unfair  Wrongful  Neither (b) (1) Sarah (2) Trevor (3) Umberto (4) Vanessa Arethe followingstatements about redundancytrue or false? (2 marks) TRUE FALSE Inthe eventof redundancy, an employeewithone year's continuousemploymentis entitledto compensation   Redundancycan occurwherean employerceases to carry on businessina particularlocation   (2 marks) Questions 19 Page 34 of 327 H q 5.3 (a) (b) Thefollowingare steps that governmentscan take to influencecertainareas.  Taxincentivesforinvestment  Equalopportunitieslegislation  Forbidtakeovers  Productsafety standards Matchthe steps above to the areas of governmentconcernbelow. (1) Output capacity (2) Competition (3) Employment (4) Consumerprotection (2 marks) Matchthe followinggovernmentpolicytoolsto the policiesthey relate to.  Fiscalpolicy  Monetarypolicy (1) (2) (3) (4) 5.4 (a) Borrowing Taxation Interestrates Moneysupply (2 marks) GHJCo is a manufacturingcompanythat makesone product.Theproduction processis labourintensiveand as a resultthe productis highlyspecialised.GHJCo also providesits customerswithmaintenanceand after sales service. DepartmentWuses materialsand labourto producethe finalproduct. DepartmentXstoresthe finalproductand deliversit to customers. DepartmentYis incharge of advertisingand promotionof the finalproduct. G DepartmentZis responsibleforprovidingspare parts to customers. Thefollowingare allprimaryactivitiesfromPorter'svaluechain  Operations  Aftersales service  Outboundlogistics  Marketingand sales (b) 20 Matchthe primaryactivitiesaboveto the departmentsof GHJCo. (1) DepartmentW (2) DepartmentX (3) DepartmentY (4) DepartmentZ (2 marks) WhichTWOofthe following factorsindicatethat suppliershavehighbargainingpower inan industry?  Thereare a large numberof suppliers  Thereis a lackof substituteproductsavailable  Switchingcosts forcustomersare low  Theproductsuppliedis highlydifferentiated  Productqualityis not importantto customers (2 marks) Businessand technology(FBT/BT) Page 35 of 327 H q 5.5 (a) ProductBB15has recentlyreducedits priceby 5%whichincreasedthe sales volume by 12.5%.Thispricechange also caused a fallinthe sales volumeof productCC25 by 2.5%.Therewas no change inthe priceof productCC25. (1) Whatis the priceelasticityof demand forproductBB15? (2) Whatis the crosselasticityof demand? (3) ProductsBB15and CC25 are Whichwordcorrectlyfillsthe blankabove?  Picklist: Complements Substitutes Unrelated (b) (3 marks) Fora normal,but inferiorgood, the demand curveslopes Whichwordfromthe listbelowcorrectlyfillsinthe blank? to the right.  Picklist: Downwards Upwards Horizontally (1mark) G H 5.6 (a) (b) WhichTHREE of the followingstatements reflectthe activitiesof an NGO?   Theyhave targets forcustomersatisfaction Theyare almostalwayscharities   Theyare aimedat promotingsocial,politicalor environmentalchange Theyoftenraisefundsthroughdonations  Theyare legallyconstitutedorganisationswithcommercialaims  Theyare measuredintermsof effectivenessand efficiency (3 marks) Whatacronymis generallyused forperformancemeasurementof an NGO?  VFM  ROCE  PBIT  SWOT (1mark) (Total = 24 marks) Questions 21 Page 36 of 327 q G H 22 Business andtechnology (FBT/BT) Page 37 of 327 q Do you know? – Business organisation structure, functions and governance Checkthatyoucanfillintheblanksinthestatements belowbeforeyouattempt any questions. Ifindoubt,youshouldgobacktoyourBPPInteractive Textandrevisefirst.  An…….organisation alwaysexists alongside theformal one.  Organisations canbed………..ona functional basis,a geographical basis,a product basis,a brandbasis,ora matrixbasis.Organisation structures oftenfeature a variety of thesetypes,ash……structures.  Ina d…….structure someactivities aredecentralised tobusiness unitsorregions.  Thestrategic apexexerts a pulltocentralise, leading tothes…….structure.  Spanofcontrol or'spanofmanagement' refers tothenumber ofs………. responsible toa s…….  Recent trends havebeentowards d………organisations oflevels ofmanagement.  R……….. maybepure,appliedordevelopment. Itmaybeintended toimprove products or processes.  The………..function plans,organises, directs andcontrols thenecessary activities to provide products andservices, creating outputs whichhaveaddedvalueoverthevalueof inputs.  The………….function manages anorganisation's relationships withitscustomers.  …….…………….. ………….. (HRM)isconcerned withthemosteffective useofhuman resources. Itdealswithorganisation, staffing levels, motivation, employee relations and employee services. G  Organisation c……is'thewaywedothingsround here'.  Harrison classified fourtypesofculture, towhichHandygavethenames ofGreekdeities. – Powerculture (….)isshaped byoneindividual – Roleculture (……)isa bureaucratic culture shaped byrationality, rulesand procedures – – Taskculture (…….)isshaped bya focusonoutputs andresults Existential orperson culture (Dionysus) isshaped bytheinterests ofindividuals  Within anorganisation, c………….. canconsist entirely ofexecutives ormaybeinstruments forjointconsultation between employers andemployees.  Goodc……..g………..involves riskmanagement andinternal control,accountability to stakeholders andothershareholders andconducting business inanethicalandeffective way.  Theb…..should beresponsible fortakingmajor policyandstrategic decisions.  Division ofresponsibilities attheheadofanorganisation ismostsimply achieved by separating therolesofC….andc…..e……….  Auditcommittees ofindependent n…-………..directors should liaisewithexternal audit, supervise internal audit,andreview theannualaccounts andinternal controls.  Annual reports mustconveya f…andb…….viewoftheorganisation. Theyshould state whether theorganisation hascomplied withgovernance regulations andcodes,andgive specific disclosures abouttheboard,internal control reviews, goingconcern statusand relations withstakeholders. Questions23 Page 38 of 327 H q Did you know? – Business governance organisation structure, functions and Could you fillin the blanks? Theanswers are in bold. Usethis page for revisionpurposes as you approach the exam.  Aninformalorganisation alwaysexistsalongsidethe formalone.  Organisationscan be departmentalised on a functional basis, a geographical basis, a product basis, a brand basis, or a matrixbasis. Organisationstructuresoftenfeature a varietyof these types, as hybrid structures.  Ina divisionalstructure someactivitiesare decentralised to businessunitsor regions.  Thestrategicapex exertsa pullto centralise,leadingto the simplestructure.  Span of control or 'span of management' refersto the numberof subordinates responsibleto a superior.  Recenttrends have been towardsdelayering organisationsof levelsof management.  Researchmay be pure, applied or development.Itmay be intendedto improveproducts or processes.  Theproduction function plans, organises,directsand controlsthe necessaryactivitiesto provideproductsand services,creatingoutputs whichhave added valueoverthe valueof inputs.  Themarketing function manages an organisation'srelationshipswithits customers.  Humanresource management (HRM)is concernedwiththe mosteffectiveuse of human resources.Itdeals withorganisation,staffinglevels,motivation,employeerelationsand employeeservices.  Organisationcultureis'the way wedo thingsroundhere'.  Harrisonclassifiedfourtypes of culture,to whichHandy gave the names of Greekdeities. Powerculture(Zeus)is shaped by one individual – – Roleculture(Apollo)is a bureaucraticcultureshaped by rationality,rulesand procedures – Task culture(Athena)is shaped by a focuson outputsand results – Existentialor personculture(Dionysus)is shaped by the interestsof individuals Withinan organisation,committeescan consistentirelyof executivesor may be instrumentsforjointconsultationbetweenemployersand employees. Goodcorporategovernanceinvolvesriskmanagement and internal control, accountability to stakeholdersand othershareholdersand conductingbusinessinan ethical and effective way. Theboard shouldbe responsiblefortakingmajorpolicyand strategic decisions. Divisionof responsibilitiesat the head of an organisationis mostsimplyachievedby separating the rolesof Chairand chiefexecutive. Independent non-executivedirectors have a keyroleingovernance.Theirnumberand status shouldmean that theirviewscarry significantweight. Auditcommitteesof independent non-executivedirectors shouldliaisewithexternal audit, superviseinternal audit, and reviewthe annual accounts and internal controls. Annualreportsmustconvey a fair and balanced viewof the organisation.Theyshould state whetherthe organisationhas compliedwithgovernanceregulationsand codes, and givespecificdisclosuresabout the board, internalcontrolreviews,goingconcernstatus and relationswithstakeholders. G H        24 Businessand technology(FBT/BT) Page 39 of 327 q 6 6.1 Business    6.3 G 6.4 structure 19 mins and strategy Whichof the followingstatements about an organisationchart isNOTtrue?  6.2 organisation, Anorganisationchart providesa summaryof the structureof a business. Anorganisationchart can improveinternalcommunicationswithina business. Anorganisationchart can improveemployees'understandingof theirroleina business. Anorganisationchart can indicatefunctionalauthoritybut not lineauthoritywithin a business. (2 marks) Whichof the followingis a correctdefinitionof 'span of control'?   Thenumberof employeessubordinateinthe hierarchyto a givenmanager Thenumberof levelsinthe hierarchy'below'a givenmanager's  Thenumberof employeesdirectlyresponsibleto a manager (1mark) Whichof the followingtermsis NOTused by Mintzberginhisdescriptionof organisational structure?   Strategicapex  Technostructure  Operatingcore Supportbase (2 marks) Yplcis a growingorganisationwhichhas recentlydiversifiedintoa numberof significant newproductmarkets.Ithas also recentlyacquiredanother companyinone of its overseas markets. Whatwouldbe the mostappropriateformof organisationforYplc?    6.5 Geographicaldepartmentation Divisionalisation Functionaldepartmentation (1mark) Whichof the followingprinciplesof classicalmanagementis challengedby matrix management?     Structuringthe organisationon functionallines Structuringthe organisationon geographicallines Unityof command Decentralisationof decision-making (2 marks) Questions 25 Page 40 of 327 H q 6.6 Whichof the followingstatements about the informalorganisationis NOTtrue?     6.7 6.8 G 6.9 Whichof the followingis an advantage of centralisation?   Ithelpsto developthe skillsof juniormanagers Itavoidsoverburdeningtop managers intermsof workloadand stress  Seniormanagers can take a widerviewof problemsand consequences (1mark) Whichof the followingstatements is/are true? (1) Aninformalorganisationexistswithineveryformalorganisation (2) Theobjectivesof the informalorganisationare broadlythe same as those of the formalorganisation (3) Astrong,close-knitinformalorganisationis desirablewithinthe formalorganisation    Statement(1)only  Statement(3)only Statements(1)and (3)only Statements(2)and (3)only H (2 marks) Whatis an organisationwhichhas removedthe internalbarrierswhichseparate hierarchy levelsand functionsand also betweenthe organisationand its suppliers,customersand competitorsknownas?     6.10 Theinfluenceof the informalorganisationwas highlightedby the Hawthorne Studies,inthe way groupnormsand dynamicsaffected productivity. Informalorganisationcan pose a threat to employeehealth and safety. Informalorganisationcan stimulateinnovation. Managersinpositionsof authoritygenerallycannot be part of the informal organisation. (2 marks) Modularorganisation Holloworganisation Joblessstructure Boundarylessorganisation (2 marks) Whichof the followingstatements are true? (1) (2) (3)    Witha shared servicecentre servicesare likelyto be lesstailored TheITfunctionis commonlyprovidedusingshared serviceapproach Ashared servicecentre isnot part of the organisation Statement(1)and (3)only Statements(1)and (2)only Statements(2)and (3)only (1mark) (Total = 16marks) 26 Businessand technology(FBT/BT) Page 41 of 327 q 7 7.1 Organisational culture and committees 43 mins BZNessLtdis an organisationwitha stronglytraditionaloutlook.Itis structuredand managed accordingto classicalprinciples:specialisation,the scalar chainof command, unityof commandand direction.Personneltend to focuson theirowndistincttasks, which are strictlydefinedand directed.Communicationis vertical,rather than lateral.Discipline is muchprizedand enshrinedinthe rulebookof the company. Fromthe scenario,what sort of culturedoes BZNessLtdhave, usingHarrison's classifications?  Roleculture  Taskculture  Existentialculture  7.2 Powerculture (2 marks) Whichof the followingstatements is true?     Strongvaluesimprovecorporateperformance Strongvaluescan replacerulesand controlsinan organisation Strongvaluesminimiseconflictwithinan organisation Strongvaluesare dangerousifthey filterout 'uncomfortable'environmental information (2 marks) G H 7.3 Cultureis the collectiveprogrammingof the mindwhichdistinguishesthe membersof one ........................................fromanother. Whichwordor phrase mostaccuratelycompletesthe definition?  Picklist: Nation Category of people Socialclass 7.4 (1mark) Whichof the followingis NOTone of the termsused by Hofstedeto describea key dimensionof culture?     Power-distance Acquisitive/giving Individualism/collectivism Uncertaintyavoidance (2 marks) Questions 27 Page 42 of 327 q 7.5 Whichisthe'deepest' setofunderlying factors whichdetermine culture, andthehardest to manage?    7.6 Values Rituals Assumptions (1mark) Whodefined organisational culture as'thesetofshared, taken-for-granted implicit assumptions thata groupholdsandthatdetermines howitperceives, thinks aboutand reactstoitsenvironment'?   Maslow Schein   Porter Mintzberg (2 marks) 7.7 Research hasindicated thatworkers incountry Adisplay characteristics suchastoughness andthedesire formaterial wealth andpossessions, whileworkers incountry Bvalue personal relationships, belonging andthequality oflife. According toHofstede's theory, thesedistinctions relate towhichofthefollowing cultural dimensions?  Masculinity – femininity  Power – distance  Individualism – collectivism G  7.8 Uncertainty avoidance (2 marks) Theresearch anddevelopment (R&D)function ofa business: (1) Isprimarily concerned withmarket research (2) (3) Canimprove existing products aswellasdeveloping completely newproducts Hasbeenlessimportant forfirmsmanufacturing computers tomeetanindustry standard thanforthosefirmsdeveloping thenextgeneration ofcomputers (4) Isalwaysundertaken under contract byspecialist external consultancies Whichoftheabovestatements arecorrect?  (1)and(2)only  (2)and(3)only  (1),(3)and(4)only  (2)and(4)only (2 marks) 28 Business andtechnology (FBT/BT) Page 43 of 327 H q 7.9 Serviceshave certainqualitieswhichdistinguishthemfromproducts.Becauseof their ........................................, physicalelementssuch as vouchers,tickets,confirmationsand merchandiseare an importantpart of serviceprovision. Whichof the followingwordsmostaccuratelycompletesthe sentence?  Picklist: Intangibility Inseparability Variability Perishability 7.10 (2 marks) ULtdproducesa portfolioof productsand focusesits effortsand resourceson persuading customersto buy them. Thisis an exampleof whichtype of 'orientation'?  Production  Sales  Marketing (1mark) 7.11 Whichof the followingis/are objectivesof humanresourcemanagement? (1) G (2) (3)     Tomeet the organisation'ssocialand legalresponsibilitiesrelatingto the human resource Tomanage an organisation'srelationshipwithits customers Todevelophumanresourcesthat willrespondeffectivelyto change (1)and (2) (1)and (3) (1) (2 marks) (1),(2)and (3) 7.12 Jeff, Jane and Jaitinderworkindifferentdepartmentsinthe firmXYZCo. Theyare membersof the permanent'staff committee'whichmeetson a monthlybasis to discuss staff issuessuch as pensionsand benefits.Theirpurposeis to listento communicationfrom staff withintheirdepartmentand raiseissueson behalfof theirdepartmentat committee meetings.Whatis the name givento thistype of committee?    Joint committee Taskforce Standingcommittee (1mark) Questions 29 Page 44 of 327 H G q 7.13 Josh, Joanne, Ed,and SueallworkforDCo. Josh worksinthe financedepartment. Joanne worksinthe humanresourcesdepartment.Edis Sue'slinemanager inthe purchasingdepartment.Whichof the staff memberswouldbe involvedwithpayroll administration?     Josh Joanne Ed Sue (2 marks) 7.14 ManagersJilland Paulare talkingabout howto resolvea businessproblem.Jillsuggests that a committeeshouldbe formedto discussthe issues.Paulargues that committeesare: (1) (2) Time-consumingand expensive Theyinvitea compromiseinstead of a clear-cut decision Whichof these statements is true?  Both(1)and (2)    (1)only (2)only Neitherstatement is true (2 marks) 7.15 Dianecarriesout routineprocessingof invoicesinthe purchasingdepartmentof LCo. Joanne is Diane'ssupervisor.Lesleyis tryingto decidehowmany staff willbe needed if someproposednewtechnologyis implemented.Traceyis consideringthe newworkthat L Co willbe able to offerand the newmarketsit couldenter, once the newtechnologyis well established. Whichmemberof LCo carriesout tactical activities?  Diane  Joanne  Lesley  Tracey (2 marks) 7.16 MrQ is manager of a divisionwhichis undergoinga businessdownturn.Hetriesto shelter the workforcefromthe effectsof downsizing:takingtimeforconsultation,organising counsellingand refusingto institutecompulsoryredundancies. Whichof the followingculturaltypes identifiedinthe Hofstedemodeldoes thismanager represent?  Lowpower-distance  Lowmasculinity  Lowuncertaintyavoidance  Highindividuality (2 marks) 30 Businessand technology(FBT/BT) Page 45 of 327 H q 7.17 Whichof the followingwouldNOTbe an objectiveof stakeholdermanagementinrelation to inrelationto procurement?    Continuityof supply Mutualdependency Informationsharing (1mark) 7.18 Janet worksfora toy companycalledKCo. ShetelephonesMaryat P Co on a dailybasis to orderparts. Janet has no contact withcustomersbut does deal withcomplaintletters fromDGroup,an organisationagainst slavelabour.DGroupbelievethat KCo use slave labourinthe toy manufacturingfactories. Whichof the followingare internalstakeholdersof KCo?  Janet only  Janet and Maryat P Co   Janet and DGroup Janet, Maryand DGroup (2 marks) 7.19 Josina has been appointedChairof a remunerationcommittee.Sheis responsiblefor whichof the followingduties?    G 7.20 Fixingthe date and timeof the nextmeeting Givinga rulingon matters indispute Takingnotes duringthe meeting (1mark) Aliis responsibleforpreparingand issuingdocumentspriorto a meeting,then acting on and communicatingdecisionsfollowingthe meeting.Whatis hisrole?  Committeesecretary   Committeemember CommitteeChair (1mark) 7.21 Whichof the followingis a roleof the Secretaryof a committee?    Agreeingthe minutesof meetingsas a true and accurate record Maintainingorderat meetings,and ensuringthat allmemberscontributefullyto discussions Ascertainingwhetherspecificmatters fallwithinthe termsof referenceof the committee (1mark) Questions 31 Page 46 of 327 H G q 7.22 Theaudit committeeand remunerationcommitteeof a companyare examplesof whichof the following?     Adhoc committees Managementcommittees Executivecommittees Standingcommittees (2 marks) (Total = 36 marks) 8 8.1 8.2 Corporate governance and social responsibility 23 mins Whichof the followingstatements about corporatesocialresponsibilityis/are true? (1) (2) (3) (4)  CSRguarantees increasedprofitlevels CSRadds cost to organisationalactivitiesand reducesprofitlevels Socialresponsibilitymay have commercialbenefits Socialresponsibilityis a concernconfinedto businessorganisations   (1)and (3) (2)and (4)  (3)only (1),(2),(3)and (4) (2 marks) Calum,Heidiand Jonas are managers forZipCo. Theyhave been toldthat theirsalary will be based on companyperformanceand that a bonusschemewillalso be introduced.The bonuswillalso be related to companyperformance. Whichof the followingtheoriesdescribesthe approach to governancethat ZipCo is using?  Stewardshiptheory  Agencytheory  8.3 Michaelhas been asked to prepare a presentationforthe companydirectorson good corporategovernance.Whichof the followingis NOTappropriateforhimto includeinhis presentation?     8.4 Riskmanagement Internalcontrols Maximisingshareholderwealth Accountabilityto stakeholders (2 marks) Corporategovernanceis essentiallyof what significance?    32 (1mark) Stakeholdertheory Controlsystem Strategicimportance Riskmanagement (1mark) Businessand technology(FBT/BT) Page 47 of 327 H q 8.5 Whichof the followingis a feature of poorcorporategovernance?     8.6 G (1) (2) (3) (4) Humanrights Employeewelfare Professionalethics Supportforlocalsuppliers  (2)and (3)only   (1)only (2),(3)and (4)only (1),(2)and (4)only (2 marks) H (2 marks) Whichof the followingis subjectto the least directregulation?    8.9 Theaudit committee ThePublicOversightBoard Theboard of directors Thenominationcommittee Whichof the followingwouldbe includedinthe principlesof CorporateSocial Responsibility?  8.8 (2 marks) Thetasks of whichbody include:monitoringthe chiefexecutiveofficer;formulating strategy; and ensuringthat there is effectivecommunicationof the strategicplan?     8.7 Dominationof the board by a singleindividual Criticalquestioningof seniormanagers by externalauditors Supervisionof staff inkeyroles Lackof focuson short-termprofitability Employmentprotection Corporatesocialresponsibility Corporategovernance (1mark) Inmostcountries,what is the usualpurposeof codes of practiceon corporategovernance?     Toestablishlegallybindingrequirementsto whichallcompaniesmustadhere Toset downdetailedrulesto regulatethe waysinwhichcompaniesmustoperate Toprovideguidanceon the standards of the best practicethat companiesshould adopt Toprovidea comprehensiveframeworkformanagementand administration (2 marks) Questions 33 Page 48 of 327 q 8.10 Whoshouldset directors'rewardand incentivepackages, accordingto corporate governanceprovisions?    Theboard of directors Thenominationcommittee Aremunerationcommitteemade up of independentnon-executivedirectors (1mark) 8.11 Whatis the purposeof an Operatingand FinancialReview(OFR)?    8.12 Whichof the followingare advantages of havingnon-executivedirectorson the company board? (1) (2) Theycan providea widerperspectivethan executivedirectors. Theyprovidereassuranceto shareholders. (3) Theymay have externalexperienceand knowledgewhichexecutivedirectorsdo not possess. Theyhave moretimeto devoteto the role. (4)   G Toprovidethe board of directorswitha narrativestatement by the audit committee of its findingson the efficacyof internaloperationaland financialcontrols. Toset out the directors'analysisof the business,inorderto provideinvestorswitha historicaland prospectiveviewthroughthe eyes of management. Toprovidea statement that the companyis a goingconcern. (1mark)   (1)and (3) (1),(2)and (3) (1),(3)and (4) H (2 marks) (2)and (4) (Total = 19marks) 34 Businessand technology(FBT/BT) Page 49 of 327 q 9 9.1 29 mins Section B MTQs (a) Paul,Mary,Alanand Kateare havinga board meetingof a newlyformedcompany and they are discussingthe orientationof the company. Paulbelievesthat the companywillactivelyneed to persuade customersto buy their products. Marybelievesthey shouldadd additionalfeatures to theirproducts,withoutcarrying out marketresearch,and thiswillincreasedemand fromcustomers. Alanbelievesthe productswillsellas they are and the companyshouldproduceas many itemsas it can. Katebelievesthat they shouldresearchwhat customersneed and valueand adapt the productsto meet the findingsof the research. Foreach board member,selectthe orientationthey are recommending. (i) Paul  Picklist: (ii) Productionorientation Productorientation Salesorientation Marketingorientation Mary  G H Picklist: Productionorientation Productorientation Salesorientation Marketingorientation (iii) Alan  Picklist: Productionorientation Productorientation Salesorientation Marketingorientation (iv) Kate  Picklist: Productionorientation Productorientation Salesorientation Marketingorientation (2 marks) Questions 35 Page 50 of 327 q (b) Breakingup the marketintodifferentgroups,whicheach have commonneeds, wants and preferencesis knownas Whichof the optionsbelowcorrectlyfillsthe blank?  Picklist: Undifferentiatedmarketing Marketingmix Massmarketing Marketsegmentation 9.2 (a) (2 marks) Themainlevelsof strategy inan organisationare as follows:    Corporate Business Operational Matchthe appropriatelevelof strategy aboveto the strategicquestionsbelow. (1) Whichbusinessshouldwebe in? (2) Shouldwespecialiseina profitableproduct? (3) Howbest can wemarketthe products? (4) Shouldwesegmentthe market? (2 marks) (b) G 9.3 (a) WhichTWOof the followingare advantages of centralisation?  Decisionmakershave a greater awarenessof localproblems  Managersare able to take a widerview  Avoidsoverburdeningtop managers  Helpto developjuniormanagers  Proceduresand documentationcan be standardised H (2 marks) CompanyWfocuseson autonomyof its employees.Taskachievementis seen as moreimportantthan workingrelationships.Thecompanyis impersonaland defends its businessinterests. CompanyXhas a stricttask structurewithwrittenrulesand regulationswhichare adhered to by allemployees.Dissentis not tolerated. CompanyYhas a focuson good workingrelationshipsbetweenemployeesand seeksconsensuson allbusinessdecisions. CompanyZhas a flat organisationstructureand a highlevelof employee participationindecision-making. Foreach company, selectwhichof Hofstede'sfourmaindimensionsof cultural differencesis beingdisplayed. (i) CompanyW  Picklist: Powerdistance Uncertaintyavoidance Individualism Masculinity 36 Businessand technology(FBT/BT) Page 51 of 327 G q (ii) CompanyX  Picklist: Powerdistance Uncertaintyavoidance Individualism Masculinity (iii) CompanyY  Picklist: Powerdistance Uncertaintyavoidance Individualism Masculinity (iv) CompanyZ  Picklist: (b) Powerdistance Uncertaintyavoidance Individualism (2 marks) Masculinity Accordingto Scheinthere are three determinantsof culture.Thefirstof these is the observablelevel. (i) Patterns of greetingstylesand businessformalitiesare knownas Whichwordcorrectlyfillsinthe blankabove?  Picklist: (ii) Behaviour Artefacts Attitudes Concreteexpressionssuch as designof officepremisesare known as Whichwordcorrectlyfillsinthe blankabove?  Picklist: Behaviour Artefacts Attitudes (2 marks) Questions 37 Page 52 of 327 H q 9.4 (a) (b) Thefollowingfourcomponentsof an organisationwereidentifiedby Mintzberg  Operatingcore  Supportstaff  Strategicapex  Middleline Matchthe componentsaboveto the followingjobs. (1) Canteen worker (2) Productionworker (3) Productionmanager (4) Director (2 marks) Whichof the followinghas the greatest influenceon a machinebureaucracy?  Strategicapex  Middleline   9.5 (a) Technostructure Operatingcore (2 marks) Foreach of the followingtasks, selectwhichdepartmentis responsible: Financialaccounting Treasurydepartment department G (b) Arrangingan overdraft   Managingforeigncurrencyexposure   Recordingfinancialtransactions   Cash budgeting   Reportingto shareholders   Repayingloans  H  (3 marks) Marketsfortradingshort-termfinancialinstrumentssuch as certificatesof deposit are knownas Whichof the followingcorrectlyfillsthe gap above?  Picklist: Moneymarkets Capital markets Venturecapital 38 (1mark) Businessand technology(FBT/BT) Page 53 of 327 G q 9.6 (a) Fillinthe gaps inthe Kingreport'ssummaryof the roleof the board below. (i) Todefinethe ________of the company  (ii) Picklist: Purpose Strategy Implementation Stakeholders Values Todefinethe ________by whichthe companywillperformits dailyduties  Picklist: Purpose Strategy Implementation Stakeholders Values (iii) Toidentifythe ________relevantto the company  Picklist: Purpose Strategy Implementation Stakeholders Values (iv) Todevelopa ________combining these factors H  (v) Picklist: Purpose Strategy Implementation Stakeholders Values Toensure________of thisstrategy  Picklist: Purpose Strategy Implementation Stakeholders Values (3 marks) Questions 39 Page 54 of 327 q (b) Whichof the followingis NOTpart of the roleof a companysecretary?  Establishmentand maintenanceof a registeredoffice    Filingof annual returns Chairingmanagementcommitteemeetings Maintainingstatutory booksand records (1mark) (Total = 24 marks) G H 40 Businessand technology(FBT/BT) Page 55 of 327 q Do you know? – Accounting compliance and controls and reporting systems, technology, Check that you can fillin the blanks in the statements belowbefore you attempt any questions. Ifin doubt, you should go back to your BPPInteractive Textand revisefirst.  A…….. is a way of recording,analysingand summarisingtransactionsof a business.  Thetwomostimportante………… financialstatements are the statement of financial positionand the incomestatement. Reportsproducedforinternalpurposesinclude budgets and costingschedules.  Thestatement of profit or loss is a recordof i…..generated and e…….. incurredovera givenperiod.  Thestatement of financial positionis a listof allthe ……..owned by a businessand allthe ……. owedby a businessat a particulardate.  Thestatement of ….……showssourcesof cash generated duringa periodand howthese fundshave been spent.  Thep…….and s….systemswillbe the mostimportantcomponentsof mostcompany accountingsystems.  C…… shouldbe regularlycheckedand any problemsreportedto management.  Ad…….may be describedas a 'pool'of data, whichcan be used by any numberof applications.Itsuse is not restrictedto the accounts department.  S…….., too, are oftenused both infinancialaccountingand cost accounting.  Internal controls shouldhelporganisationscounterrisks,maintainthe qualityof reporting and complywithlawsand regulations.Theyprovider…….. a……. that the organisationswill fulfiltheirobjectives. G  Controlscan be classifiedinvariouswaysincludingadministrativeand accounting;p……, detect and correct;discretionaryand non-discretionary;v……. and mandated; manualand automated.  Internal auditors are e……..of the organisationwhoseworkis designedto add value and whoreportto the audit committee.Externalauditors are froma…….f…… and theirroleis to report on the financial statements to shareholders.  Ana…..t……showswhohas accessed a systemand the operationsperformed.  Ina corporatecontextf…..can fallintoone of twomaincategories:removalof funds or assets froma businessor the intentional misrepresentation of the financial positionof a business.  Thereare three broad pre-requisites or 'pre-conditions'that mustexistinorderto make fraud a possibility:d………, m………. and …………...  Itis the responsibilityof the ……… to take such steps as are reasonablyopen to themto prevent and detect fraud.  Thegrowthof globalisationhas created moreopportunitiesform…..l……… which governmentsand internationalbodiesare tryingto combat withlegislation.  Ad…..o…..s..... a…..involvesa cyber-attacker attemptingto disruptan organisation's onlineactivitiesby preventingpeoplefromaccessingthe organisation'swebsite.  D…..l…..t..... is a technologythat allowsorganisationsand individualswhoare unconnectedto share an agreed recordof events,such as ownershipof an asset. Questions 41 Page 56 of 327 H q Did you know? – Accounting and reporting compliance and controls controls systems, technology, Could you fillin the blanks? Theanswers are in bold. Usethis page for revisionpurposes as you approach the exam.  Accountingis a way of recording,analysingand summarisingtransactionsof a business.  Thetwomostimportantexternalfinancialstatements are the statement of financial positionand the incomestatement. Reportsproducedforinternalpurposesinclude budgets and costingschedules.  Thestatement of profit or loss is a recordof incomegenerated and expenditureincurred overa givenperiod.  Thestatement of financial positionis a listof allthe assets ownedby a businessand all the liabilitiesowedby a businessat a particulardate.  Thestatement of cash flowsshowssourcesof cash generated duringa periodand how these fundshave been spent.  Thepurchasesand sales systemswillbe the mostimportantcomponentsof mostcompany accountingsystems.  Controlsshouldbe regularlycheckedand any problemsreportedto management.  Adatabase may be describedas a 'pool'of data, whichcan be used by any numberof applications.Itsuse is not restrictedto the accounts department.  Spreadsheets, too, are oftenused both infinancialaccountingand cost accounting.  Internal controls shouldhelporganisationscounterrisks,maintainthe qualityof reporting and complywithlawsand regulations.Theyprovidereasonableassurance that the organisationswillfulfiltheirobjectives. G  Controlscan be classifiedinvariouswaysincludingadministrativeand accounting; prevent, detect and correct; discretionary and non-discretionary; voluntary and mandated; manual and automated.  Internal auditors are employeesof the organisationwhoseworkis designedto add value and whoreportto the audit committee.Externalauditors are fromaccountancy firms and theirroleisto report on the financial statements to shareholders.  Anaudit trail showswhohas accessed a systemand the operationsperformed.  Ina corporatecontextfraud can fallintoone of twomaincategories:removalof funds or assets froma businessor the intentional misrepresentation of the financial positionof a business.  Thereare three broad pre-requisites or 'pre-conditions'that mustexistinorderto make fraud a possibility:dishonesty,motivationand opportunity.  Itis the responsibilityof the directorsto take such steps as are reasonablyopen to themto prevent and detect fraud.  Thegrowthof globalisationhas created moreopportunitiesformoneylaunderingwhich governmentsand internationalbodiesare tryingto combat withlegislation.  Adenial of serviceattack involvesa cyber-attacker attemptingto disruptan organisation'sonlineactivitiesby preventingpeoplefromaccessingthe organisation's website.  Distributedledger technology is a technologythat allowsorganisationsand individuals whoare unconnectedto share an agreed recordof events,such as ownershipof an asset. 42 Businessand technology(FBT/BT) Page 57 of 327 H G q 10 54 mins The role of accounting 10.1 Josephhasjuststarted hisfirstjobinanaccountancy department. Aqualified senior member ofstaffexplains tohimwhatthemainaimofaccounting is.Whichofthefollowing options isthecorrect aimofaccounting?     Tomaintain ledger accounts foreveryassetandliability Toprovide financial information tousersofsuchinformation Toproduce a trialbalance Torecord everyfinancial transaction individually (2 marks) 10.2 Whichofthefollowing statements aboutaccounting information isNOTcorrect?  Somecompanies voluntarily provide specially-prepared financial information to employees.  Accounting information should berelevant, reliable, complete, objective andtimely. Accountants havea strong obligation toensure thatcompany accounts conform to accounting standards   Charities andprofessional bodies donothavetoproduce financial statements inthe (2 marks) samewayasbusinesses. 10.3 Ina typicalfinance function, preparation ofbudgets andbudgetary control would usually betheresponsibility ofwhichofthefollowing roles?    TheFinancial Controller H TheManagement Accountant TheTreasurer (1mark) 10.4 Three ofthefollowing areoutputs ofa payroll system, andoneisaninputtothesystem. Whichistheinput?     Credittransfer forms Timesheets Payroll analysis Payslips (2 marks) 10.5 Whichofthefollowing isanaimofthecontrol system relating toaccounts payable and purchases?     Toensure thatallcreditnotesreceived arerecorded inthegeneral andpayables ledger Toensure thatgoodsandservices areonlysupplied tocustomers withgoodcredit ratings Toensure thatallcreditnotesthathavebeenissued arerecorded inthegeneral and receivables ledgers (2 marks) Toensure thatpotentially doubtful debtsareidentified Questions43 Page 58 of 327 q 10.6 Whichof the followingdoes companylawrequirea statement of financialpositionto give?    10.7 Allof the following,withone exception,are areas inwhichan integratedaccounting softwarepackage has advantages comparedto a seriesof separate (stand-alone) dedicated programs.Whichis the exception?     10.8 Atrue and fairviewof the profitor lossof the companyforthe financialyear Anunqualified(or'clean')reporton the statement of affairsof the companyas at the end of the financialyear Atrue and fairviewof the statement of affairsof the companyas at the end of the financialyear (1mark) Efficiencyinupdatingdata Flexibility inpreparingreports Data integrity Specialisedcapabilities (2 marks) A........................................is a programwhichdeals withone particularpart of a computerisedbusinessaccountingsystem. Whichof the followingtermscorrectlycompletesthisdefinition?  Picklist: Suite Module Spreadsheet Database G 10.9 H (2 marks) Allthe following,withone exception,are examplesof advantages of a computer-based accountingsystemovera manualsystem.Whichstatement is the exception?     Financialcalculationscan be performedmorequicklyand accurately Financialinformationcan be presentedto otherbusinessdepartmentsina varietyof forms Thereis muchstrongerprovisionfordata security Thesystemis easierto update as newinformationbecomesavailable (2 marks) 10.10 Allof the following,exceptone, are tasks that can be performedby spreadsheet software. Whichis the exception?     44 Thepresentationof numericaldata inthe formof graphs and charts Theapplicationof logicaltests to data Theapplicationof 'Whatif?'scenarios Automaticcorrectionof alldata entered by the operatorintothe spreadsheet (2 marks) Businessand technology(FBT/BT) Page 59 of 327 G q 10.11 Thepreparation andfilingofaccounts bylimited companies eachyearisrequired by whichofthefollowing?     Codesofcorporate governance National legislation International Accounting Standards LocalAccounting Standards (2 marks) statements, except one,areexamples oftheadvantages thata computer10.12 Allthefollowing basedaccounting system usedbya management accountant hasovera manual system. Whichstatement istheexception?  Acomputer-based accounting system iseasier toupdate asnewinformation becomes available  Acomputer-based accounting system willalwaysrejectinaccurate financial information inputtothesystem's database  Financial calculations canbeperformed morequickly andaccurately  Themanagement accountant canmorereadily present financial information to (2 marks) otherbusiness departments ina variety offorms 10.13 Gordon works intheaccounts department ofa retailbusiness. Heandhiscolleagues are looking atthesalesfigures forvarious typesofclothing. Thedirector asksthemtouse exception reporting tosummarise theirfindings. Whichofthefollowing correctly defines theconcept of'exception reporting' within a business context?     Thereporting ofunusual events, outside thenormal course ofevents Theanalysis ofthoseitems where performance differs significantly fromstandard or budget Thepreparation ofreports onroutine matters onan'adhoc'basis Thescrutiny ofalldataasa matter ofcourse, saveinexceptional circumstances (2 marks) 10.14 Asmallcompany's computer system comprises fivedesktop personal computers located in separate offices linked together inanintranet within thesamebuilding. Thecomputers are notconnected totheInternet andemployees arenotallowed totakestorage media intoor outofthebuilding. Information whichthebusiness' owner wishes tokeepconfidential to herself isstored inoneofthecomputers. Whichofthefollowing statements canbeconcluded fromthisinformation?  Thiscompany's computer system doesnotneeda back-up storage system  Thiscompany's computer system doesnotneeda password accesssystem  Thiscompany's computer system doesnotreceive emailfromcustomers orsuppliers (1mark) Questions45 Page 60 of 327 H q 10.15 ........................................Systemspooldata frominternaland externalsourcesand make informationavailableto seniormanagers, forstrategic,unstructureddecision-making. Whichwordor phrase correctlycompletesthissentence?  Picklist: Expert DecisionSupport ExecutiveSupport ManagementSupport (2 marks) 10.16 Allthe followingstatements,exceptone, describethe relationshipbetweendata and information.Whichis the exception?  Informationis data whichhas been processedinsuch a way as to be meaningfulto the personwhoreceivesit.   Therelationshipbetweendata and informationis one of inputsand outputs. Data is alwaysinnumericalformwhereasinformationis alwaysintext form.(1mark) 10.17 INPUT DATA G H DATABASE APPLICATION PROGRAMS SALES APPLICATIONS STATISTICS ETC BRANCH AND PERSONNEL STATISTICS ETC STAFF PAYROLL ANALYSIS ETC OTHER APPLICATIONS Whatelementof a database systemis representedby the questionmarkinthe above diagram?  Picklist: Database administrator Electronicpointof sale system Data storage Database managementsystem 46 (2 marks) Businessand technology(FBT/BT) Page 61 of 327 q 10.18 Whichof the followingstatements about data securityis NOTtrue?     Lossor corruptionof data is almostalwaysnon-deliberate. Newstaff inparticularpose a threat. Itis impossibleto preventallthreats cost-effectively. Smokedetectorsare a formof data protection. (2 marks) 10.19 OfficeAutomationSystemsare designedmainlyto increasethe ........................................ of data and informationworkers. Whichwordcorrectlycompletesthissentence.  Picklist: Productivity Flexibility Decision-makingcapability 10.20 (1mark) Whichof the followinguser groupsof financialand accountinginformationare likelyto need, and have access to, thisinformationmost?   Managersof the company Shareholdersof the company  Financialanalysisadvisers (1mark) G H 10.21 Towhomshouldthe internalaudit departmentof an organisationreport?  10.22  TheFinanceDirector Theaudit committeeof the board of directors  Theshareholders (1mark) Whichof the followingstatements, inthe contextof computerisedaccountingsystems,is NOTtrue?     Adatabase is a structured,centralisedpoolof data whichcan be accessed by a numberof applications. Aspreadsheet is particularlyusefulforcreatingfinancialmodels. Computerisedsystemsreducethe riskof errorsinfinancialcalculations. Informationand CommunicationTechnology(ICT)systemsare moreefficientthan manualsystemsforany task an accountant may have to perform. (2 marks) Questions 47 Page 62 of 327 q 10.23 Whichfunctioninan organisationis responsibleforensuringthat onlyproperlyauthorised purchaseswhichare necessaryforthe businessare made?     10.24 10.25 Goodsinwards Finance/accounts Purchasing/procurement Production/operations (2 marks) Thereis a need forco-ordinatedinformationflowbetweensectionsand departmentsin accountingmanagement.Towhichof the followingshouldthe receivablesledgersection giveinformationabout overduedebts?   Cost accountingstaff Thecreditcontroldepartment  Thepayables ledgersection (1mark) Whichof the followingis NOTpart of the regulatorysystem?     GAAP Internationalfinancialreportingstandards IFAC TheEuropeanUnion (2 marks) G H 10.26 InternationalFinancialReportingStandards are issuedby whichof the following organisations?  IASB   ASB TheEuropeanUnion (1mark) 10.27 Legallybindingrulesrelatingto the disclosureand presentationof financialstatements are set downinwhichof the following?     Nationallegislation Internationalfinancialreportingstandards Generallyagreed accountingprinciples Rulebooksof professionalaccountancy bodies (2 marks) (Total = 45 marks) 48 Businessand technology(FBT/BT) Page 63 of 327 G q 11 Control, security 28 mins and audit 11.1 Whichof the followingis NOTan aimof internalcontrols?     Toenablethe organisationto respondappropriatelyto business,operationaland financialrisks Toeliminatethe possibilityof impactsfrompoorjudgementand humanerror Tohelpensurethe qualityof internaland externalreporting Tohelpensurecompliancewithapplicablelawsand regulations (2 marks) 11.2 Somecontrolsare providedautomaticallyby the systemand cannot be by-passed, ignoredor overridden:forexample,havingto inputa passwordto enter a computer system.Theseare classifiedas ........................................controls. Whichtermcorrectlycompletesthisstatement?  Picklist: Detect Mandated Non-discretionary Administrative (2 marks) 11.3 ThemnemonicSPAMSOAP is oftenused to rememberthe range of financialcontrol procedures.Whatdoes the 'O' stand forinthismnemonic?    Operations Organisation Oversight (1mark) 11.4 Whichof the followingis NOTan internalcheck?     Separationof dutiesforauthorising,custodyand recording Pre-lists,post-listsand controltotals Bankreconciliations Systemsforauthorisingtransactionswithinspecifiedspendinglimits (2 marks) 11.5 Whichof the followingstatements about internalaudit is true?     Internalaudit is an independentappraisalactivity Internalaudit is separate fromthe organisation'sinternalcontrolsystem Internalaudit is carriedout solelyforthe benefitof the organisation'sstakeholders Theinternalaudit functionreportsto the financedirector (2 marks) Questions 49 Page 64 of 327 H q 11.6 Theuse of uninterruptible(protected)powersuppliesis a methodof protectingdata and IT systemsfromwhat sort of securitythreat?    Accidentaldamage Weather Hacking (1mark) 11.7 Whichof the followingwouldbe classedas a contingencycontrolinan information system?    Password-onlyaccess to the system Systemrecoveryprocedures (1mark) Audittrails 11.8 Allof the following,exceptone, are inherentlimitationsof internalcontrolsystems.Whichis the exception?     Thecosts of control Potentialforhumanerrorand deliberateoverride Thetypes of transactionscontrolsare designedto cope with Theindependenceof controlsfromthe methodof data processing (2 marks) 11.9 Whichof the followingstatements about externalauditorsis NOTcorrect? G H     Externalauditorsare appointedby the shareholdersof a company Theprimaryresponsibilityof externalauditorsis to investigatefinancialirregularities and reportthemto shareholders Externalauditorsmay relyon the workof internalauditors,ifthey firstassess its worth Externalauditorsare concernedwiththe financialrecordsand statements of the organisation (2 marks) 11.10 Inthe contextof audit, what are 'substantivetests' designedto accomplish?     Toestablishwhetherinternalcontrolsare beingappliedas prescribed Toidentifyerrorsand omissionsinfinancialrecords Toestablishthe causes of errorsor omissionsinfinancialrecords Toestablishan audit trail (2 marks) 11.11 Backingup computerfilesand storingcopiesof softwareinseparate locationsto the main systemare examplesof whichtype of controls?    50 Prevent Detect Correct (1mark) Businessand technology(FBT/BT) Page 65 of 327 G q 11.12 Inthe contextof data securitycontrols,........................................are recordsshowingwho has accessed a computersystemand what operationshe or she has performed. Whichwordor phrase correctlycompletesthisdefinition?  Picklist: Passwords Audittrails Archives (1mark) 11.13 Whichtype of audit is concernedwiththe monitoringof management'sperformance, concentratingon the outputsof the systemand the efficiencyof the organisation?     Systemsaudit Operationalaudit Probityaudit (2 marks) Socialaudit 11.14 Whichof the followingcircumstanceswouldcast doubt on the externalauditor'sabilityto relyon the workof internalauditors?  Thereis evidencethat managementand directorsconsistentlyact on internalaudit recommendations  Theinternalaudit functionhas a directlineof communicationto the audit committee Noaudit manualsor workingpapers are availableforinspection   Internalauditorsare recruitedon technicalqualificationsand demonstrated (2 marks) proficiency (Total = 23 marks) Questions 51 Page 66 of 327 H q 12 Identifying and preventing fraud 32 mins 12.1 Whatisthetermgiventoa method offraudintheaccounts receivable area,bywhichcash orcheque receipts arestolen, andthetheftconcealed bysetting subsequent receipts against theoutstanding debt?    Collusion Misrepresentation Teeming andlading (1mark) 12.2 Whichofthefollowing activities createvulnerability tofraud? (1) (2) (3) (4)     Calculating payslips Preparing delivery notes Payingsupplier invoices Meeting budgets andperformance targets (3)only (1)and(3)only (1)and(2)only (2 marks) (1),(2),(3)and(4) 12.3 Xplchasa baddebtpolicywhereby agedreceivables whoareobviously notgoingtopay, arewritten off.Thefinancial accountant doesnotenforce thispolicy. Thismightbefraudulent insofar asitcreates whichofthefollowing effects?  Itremoves fundsfromthebusiness G    H Itresults intheunderstatement ofprofits andnetassets Itresults intheoverstatement ofprofits andnetassets Itresults intheintentional overstatement ofprofits andnetassets (2 marks) 12.4 Dishonesty isa ........................................ toactinwayswhichcontravene accepted ethical, social,organisational orlegalnorms forfairandhonest dealing. Whichwordcorrectly completes thisstatement?  Picklist: Motivation Pre-disposition Stimulus 52 (1mark) Business andtechnology (FBT/BT) Page 67 of 327 q 12.5 Allof the following,withone exception,are internalfactors whichmightincreasethe risk profileof a business.Whichis the exception?     12.6 Increasedcompetition Corporaterestructuring Upgradedmanagementinformationsystem Newpersonnel (2 marks) Whichof the followingwouldmostclearlypresenta personnelriskof fraud?     Segregationof duties Highstaff morale Staff not takingtheirfullholidayentitlements Consultativemanagementstyle (2 marks) 12.7 Allof the following,exceptone, are potentialimpactson a businessof removalof significantfundsor assets. Whichis the exception?   Fallinreturnsto shareholders Reductioninprofits  Increaseinworkingcapital Reputationaldamage  (2 marks) G H 12.8 Whichof the followinginternalcontrolsmightbe least effectiveinpreventingfraud, ifstaff are incollusionwithcustomers?     12.9 Physicalsecurity Requiringsignaturesto confirmreceiptof goodsor services Sequentialnumberingof transactiondocuments Authorisationpolicies (2 marks) Ina limitedcompany, or plc,it is the ultimateresponsibilityof the ........................................ to take reasonablesteps to preventand detect fraud. Whichwordor phrase correctlycompletesthisstatement?  Picklist: Theboard of directors Theexternalauditor Theaudit committee (1mark) Questions 53 Page 68 of 327 G q 12.10 Whichof the followingis NOTa keyriskarea forcomputerfraud?     Hackers Lackof managerialunderstanding Inabilityto secureaccess to data Integrationof data systems (2 marks) 12.11 WhichTWOof the followingstakeholderswillbe mostdirectlyaffected ifa business overstatesits financialposition?     Staff Customers Investors Suppliers (2 marks) 12.12 Whichof the followingwouldNOTformpart of a fraud responseplan?    Suspendingstaff suspectedof fraudulentactivity Investigatingthe activitiesand contacts of a suspectedfraudster Fraudawarenesstrainingand recruitmentcontrols. (1mark) 12.13 Onlyallowingpurchasingstaff to choosesuppliersfroman approvedlistis an exampleof what sort of fraud preventionmeasure?     Segregationof duties Appropriatedocumentation Limitationcontrol Checkcontrol (2 marks) 12.14 Whichof the followingstatements about fraud preventionis NOTtrue?     54 Cash sales are an area of highriskof fraud. Performance-basedrewardsformanagers reducethe riskof fraud. Emphasison the autonomyof operationalmanagementmay weakencontrols. Fraudawarenessand ethicseducationcan reducethe riskof fraud (2 marks) Businessand technology(FBT/BT) Page 69 of 327 H G q 12.15 ......................constitutes anyfinancial transactions whose purpose istoconceal the origins oftheproceeds ofcriminal activity. Whichword(s) completes thesentence?  Picklist: Fraud Money laundering Teeming andlading Misrepresentation ofresults (2 marks) 12.16 Theinitial disposal oftheproceeds ofanillegalactivity intoapparently legitimate business activity isknown aswhat?    Placement Layering Integration (1mark) (Total= 27marks) 13 Financial technology (Fintech) 18 mins 13.1 Landis Cohasa teamofexperts whose roleistoanalyse vastvolumes ofdataconcering manyareasofthebusiness thatcomefrom a widevariety ofsources. Landis Coisseeking competitive advantage from:    Aninternet gateway Bigdata Itsaccounting information system (1mark) 13.2 Whichcharacteristic ofbigdatarelates totheabilitytostream datainreal-time?     Veracity Volume Variety Velocity (2 marks) 13.3 Whichofthefollowing accounting taskscoulddataanalytics helptomakemoreeffective?     Processing routine transactions Assetmanagement Riskmanagement Payroll processing (2 marks) Questions55 Page 70 of 327 H q 13.4 ........................................isa sourceof big data that originatesfrompublicsectordata (forexampletransport,governmentfinancialand publicservicedata). Whichwordcorrectlycompletesthisstatement?  Picklist: Machine-generateddata Open data Processeddata 13.5 Whichof the followingis a disadvantageof usingcloudaccountingsoftware?     13.6 G (1mark) Cloudaccountingsoftwareonlyallowsone user to access the systemat any one time Financialdata heldinthe cloudmustbe manuallytransferredbetweenindividual computers Upgradingcloudaccountingsoftwareis expensiveand time-consuming Usersof cloudaccountingsoftwareare completelyrelianton the providerof the (2 marks) softwareto ensuretheirdata issecureand to take backupsof it Whichof the followingtechnologiesallowsunconnectedorganisationsand individuals peopleto trust a shared recordof events?   Cloudcomputing Data analytics   Distributedledger(Blockchain) Artificalintelligence H (2 marks) 13.7 Whichof the followingis an area of an accountant or auditor'sworkthat is made more effectiveby automation?     13.8 (2 marks) Whichof the followingis an area of an accountant or auditor'sworkthat is made more effectiveby artificialintelligence?     56 Downloadingbank transactionsintothe accountingsystem Reportwriting Formingan audit opinion Postingtransactionsto nominalcodes Reportwriting Formingan audit opinion Downloadingbank transactionsintothe accountingsystem Postingtransactionsto nominalcodes Businessand technology(FBT/BT) Page 71 of 327 (2 marks) q 13.9 Distributedledgersreducethe need forauditorsto …………… because they have a sourceof informationthat they can trust. Whichwordor phrase correctlycompletesthisstatement?  Picklist: Forman audit opinion Verifythe ownershipof assets Checkformaterialmisstatement (1mark) (Total = 15marks) 14 29 mins Section C MTQs 14.1 (a) Thefollowingare reasonswhypeoplemightbe interestedinfinancialinformation about a large publiccompany.     Assessinghoweffectivelymanagementis runningthe company Toadviseclients Toassess tax payable by the company Toassess the abilityof the companyto pay its debts Foreach of the followingusersof financialinformation,match the appropriate reason forwantingthe informationfromthe listabove: G (b) (c) (1) Suppliers (2) Taxauthorities (3) Shareholders (4) Financialanalysts Onlybusinessesneed to prepare financialstatements.  True  False Thestatement of financialpositionmustgive at the end of the financialyear. Whichof the followingcorrectlyfillsthe blank? H (2 marks) (1mark) viewof the company  Picklist: Aninformative Atrue and fair AGAAPcompliant (1mark) Questions 57 Page 72 of 327 q 14.2 (a) QRTCo has justimplementeda newcomputerisedaccountingpackage and also reinforcedsomeof its accountingcontrols.Thenewsystemhas the following features (1) (2) (3) Allaccountingentriesmustbalance or they cannot be entered. Amoduleexistsso that non-currentasset purchasescan be authorisedby the relevantmemberof management. Usersare set up withpasswordsinorderto loginto the system. (4) Anaudit trailis producedso alltransactionscan be traced to the timeof postingand the individualwhoentered them. Foreach of the followingcontrols,identifyifthey are discretionaryor nondiscretionary. Discretionary Non-discretionary (b) Balancingof accountingentries   Authorisationof non-currentasset purchase   Passwordaccess to the system   Reviewof the audit trail   (2 marks) audit is based on testingand evaluatingthe internalcontrolsof an organisation. Whichof the followingcorrectlyfillsthe blank?  G H Picklist: (c) Anoperational Atransactions Asystems Acontrolsystemconsistingof sufficientcontrolswillbe entirelyeffective.  True  14.3 (a) (1mark) (1mark) False Theexternalauditorshoulddesignaudit proceduresto have a reasonable expectationof detectingfraud. Everythingelseis the responsibilityof the directors. WhichTWOof the followingare advantages of computerisedaccountingsystems overmanualsystems?  Theriskof errorsis eradicated  Processingis faster  Correctionscan be made quicker  (2 marks) Informationis lessaccessible 58 Businessand technology(FBT/BT) Page 73 of 327 q (b) A is a programthat deals witha particularpart of the accountingsystem. Whichwordfillsinthe blankabove?  Picklist: (c) 14.4 (a) (b) G (c) Spreadsheet Database Module Adatabase does not need updatingonce it has been set up.  True  False (1mark) (1mark) WhichTWOof the followingare examplesof physicalaccess controls?   Doorlocks Automaticsystemback ups   Intruderalarms Authorisationof purchases  Physicalinspectionof inventory (2 marks) Checkdigits,controltotals and limitchecksare examplesof whichtype of control?  Output control  Processingcontrol  Inputcontrol (1mark) ......................controlshelpan organisationrecoverinthe eventof a disaster. Whichwordfillsinthe blankabove?  Picklist: Integrity Contingency Security 14.5 (a) (1mark) Stellais an externalauditorwhohas observedsomecash transactionsthat don't have any supportingdocumentation.Uponfurtherinvestigationshe discoveredthat these paymentsare made intobank accounts of the FinanceDirector'sfamily.She discussesthiswiththe audit manager and they jointlydecidenot to take any further action. James is also an externalauditorand has discovereda fraud at one of hisclients and has decidedhe willmakea reportto hisnominatedofficer.Atthe same timehe decidesto informthe financialcontrollerof the clientabout makingthe report. (i) Whichof the followingoffenceshas been committedby Stella?  Tippingoff  Failureto report  Nooffencehas been committed Questions 59 Page 74 of 327 H q (ii) Whichof the followingoffenceshas been committedby James?  Tippingoff   (b) Failureto report (2 marks) Nooffencehas been committed Elyseis transferringamountsof moneyfrombusinessto businessto disguisethe fact that the moneywas originallythe proceedsfromcriminalactivity. Laurais inthe processof bankingseveralsmallamountsof illegallyobtainedmoney witha varietyof banks inorderto avoidanti-moneylaunderingrequirements. (i) Whichof the followingphases of moneylaunderingis beingundertakenby Elyse?  Placement  Layering  (ii) Integration Whichof the followingphases of moneylaunderingis beingundertakenby Laura?  Placement   14.6 (a) Integration (2 marks) Whichof these is an exampleof an 'internalcheck'?  G Layering Adherenceto internalpolicies   Completenessof the accountingrecords Safeguardingof assets  Useof controltotals (1mark) (b) Categoriseeach of these statements as relatingto the workof eitherinternalor externalaudit: InternalAudit ExternalAudit Workrelatesto the financialstatements,and the financialrecordsthat underliethem   Designedto add valueand improvean organisation'soperations   Enablesan opinionto be expressedon the financial statements   Reportis to those charged withgovernance   Workrelatesto the operationsof the organisation   Independentof the companyand its management   (3 marks) (Total = 24 marks) 60 Businessand technology(FBT/BT) Page 75 of 327 H G q Do you know? – Leading and managing individuals and teams Check that you can fillin the blanks in the statements belowbefore you attempt any questions. Ifin doubt, you should go back to your BPPInteractive Textand revisefirst.  M……… is responsibleforusingthe organisation'sresourcesto meet its goals.Itis accountableto the owners:shareholdersina business,or governmentinthe publicsector.  Thereare three basic schools of leadership theory: …..('qualities')theories,s….theories and ………..(including situationaland functional)theories.  Effectiver……… practicesensurethat a firmhas enoughpeople withthe right skills.  Recruitmentis a systematicprocessof (a) i……… and definingskillneeds and (b)attracting suitablyskilledcandidates.  S……… tests can be used beforeor after interviews.Intelligencetests measuresthe candidate's generalintellectualability,and personalitytests identifycharacter traits and behaviouralpreferences.Othertests are morespecificto the job(eg proficiencytests).  E…..o……… is an approach to the managementof peopleat workbased on equal access to benefitsand fairtreatment.  Recruitmentand s…….are areas of particularsensitivityto claimsof d……….. – as wellas genuine(thoughoftenunintended)inequality.  Theconceptof 'managing diversity'is based on the beliefthat the dimensionsof i……… differenceon whichorganisationscurrentlyfocusare crude and performance-irrelevant classificationsof the mostobviousdifferencesbetweenpeople.  P……..n is the processby whichthe brainselectsand organisesinformationinorderto makesense of it. Peoplebehaveaccordingto what they perceive– not accordingto what reallyis.  A…..is a collectionof individualswhoperceivethemselvesas a group.Itthus has a sense of identity.  Ateam develops in stages: forming,s……., n……., performing(Tuckman)and d…… or mourning/adjourning.  M……… is 'a decision-makingprocessthroughwhichthe individualchoosesdesired outcomesand sets inmotionthe behaviourappropriateto acquiringthem'.(Huczynskiand Buchanan).  McGregorsuggestedthat a manager's approach is based on attitudes somewhereon a scale betweentwoextremesets of assumptions:Theory…(workershave to be coerced) and Theory…(workerswant to be empowered).  Themainpurpose of t…… and developmentis to raisecompetenceand therefore performancestandards. Itis also concernedwithpersonaldevelopment,helpingand motivatingemployeesto fulfiltheirpotential.  I……. is the processwherebya personis formallyintroducedand integratedintoan organisationor system.  A…… is part of the systemof performancemanagement,includinggoal setting, performancemonitoring,feedbackand improvementplanning. Questions 61 Page 76 of 327 H G q Did you know? – Leading and managing individuals and teams Could you fillin the blanks? Theanswers are in bold. Usethis page for revisionpurposes as you approach the exam.  Management is responsibleforusingthe organisation'sresourcesto meet its goals.Itis accountableto the owners:shareholdersina business,or governmentinthe publicsector.  Thereare three basic schools of leadership theory: trait ('qualities')theories,styletheories and contingency(includingsituationaland functional)theories.  Effectiverecruitmentpracticesensurethat a firmhas enoughpeople withthe right skills.  Recruitmentis a systematicprocessof (a) identifyingand definingskillneeds and (b) attracting suitablyskilledcandidates.  Selectiontests can be used beforeor after interviews.Intelligencetests measuresthe candidate's generalintellectualability,and personalitytests identifycharacter traits and behaviouralpreferences.Othertests are morespecificto the job(eg proficiencytests).  Equal opportunities is an approach to the managementof peopleat workbased on equal access to benefitsand fairtreatment.  Recruitmentand selection are areas of particularsensitivityto claimsof discrimination– as wellas genuine(thoughoftenunintended)inequality.  Theconceptof 'managing diversity'is based on the beliefthat the dimensionsof individualdifferenceon whichorganisationscurrentlyfocusare crude and performanceirrelevantclassificationsof the mostobviousdifferencesbetweenpeople.  Perception is the processby whichthe brainselectsand organisesinformationinorderto makesense of it. Peoplebehaveaccordingto what they perceive– not accordingto what reallyis.  Agroup is a collectionof individualswhoperceivethemselvesas a group.Itthus has a sense of identity.  Ateam develops in stages: forming,storming,norming,performing(Tuckman)and dormingor mourning/adjourning.  Motivationis 'a decision-makingprocessthroughwhichthe individualchoosesdesired outcomesand sets inmotionthe behaviourappropriateto acquiringthem'.(Huczynskiand Buchanan).  McGregorsuggestedthat a manager's approach is based on attitudes somewhereon a scale betweentwoextremesets of assumptions:TheoryX(workershave to be coerced)and TheoryY(workerswant to be empowered).  Themainpurpose of trainingand developmentis to raisecompetenceand therefore performancestandards. Itis also concernedwithpersonaldevelopment,helpingand motivatingemployeesto fulfiltheirpotential.  Inductionis the processwherebya personis formallyintroducedand integratedintoan organisationor system.  Appraisalis part of the systemof performancemanagement,includinggoal setting, performancemonitoring,feedbackand improvementplanning. 62 Businessand technology(FBT/BT) Page 77 of 327 H q 15 Leading and managing 42 mins people 15.1 Leadersmay be distinguishedfrommanagers by the fact that they do not depend on........................................inthe organisation. Whichof the followingtypes of powercorrectlycompletesthisstatement?  Picklist: Expertpower Positionpower Physicalpower 15.2 Whichof the followingwritersis NOTa memberof the schoolof managementthoughtto whichthe othersbelong?  FWTaylor   EltonMayo AbrahamMaslow FrederickHerzberg  15.3 G 15.4 (1mark) (2 marks) Monicais a manager inthe financedepartmentof P Co and she has severalstaff working forher. Shehas becomequitefriendlywithmostof her staff and they likeher and appreciate that she does everythingshe can to attend to theirneeds. Whichtype of managerialstyledoes Monicahave?   Impoverished Taskmanagement   Countryclub Dampenedpendulum (2 marks) Accordingto Fielder,whichof the followingare true of psychologicallydistant managers? (1) (2) (3) (4)     Theyjudgetheirstaff on the basis of performance Theyare primarilytask-oriented Theypreferformalconsultationmethodsrather than seekingstaff opinions Theyare closerto theirstaff (1)and (2) (2)and (3) (1),(2)and (3) (1),(2),(3)and (4) (2 marks) Questions 63 Page 78 of 327 H G q 15.5 Whatisdelegated bya superior toa subordinate?    Authority Power Responsibility (1mark) 15.6 Whichofthefollowing isNOTa technique ofscientific management orTaylorism?     Micro-design ofjobs Workstudytechniques toestablish efficient methods Multi-skilled teamworking Financial incentives (2 marks) 15.7 Whatisthekeycontribution ofthehuman relations approach tomanagement?  Awareness oftheimportance ofgroupdynamics andworker attitudes asan influence onproductivity   Concern forproductivity andefficiency Awareness ofthemanydifferent variables thatinfluence andconstrain a manager's behaviour  Proofofa clearlinkbetween jobsatisfaction, worker motivation andbusiness success (2 marks) 15.8 Whichofthefollowing leadership stylesgivesthemostdiscretion ordecision-making power tosubordinates?     Autocratic Consultative Democratic Persuasive (2 marks) 15.9 OfMintzberg's ninemanagerial roles,whichisbeingexercised bya manager whogathers information fromcontacts within andoutside theorganisation?     64 Leader Monitor Spokesperson Disseminator (2 marks) Business andtechnology (FBT/BT) Page 79 of 327 H G q 15.10 ........................................ istheroleattheinterface between theoperational core(nonmanagerial workers) andmanagement. Whichwordorphrase correctly completes thisdefinition?  Picklist: Middle line Juniormanagement Supervision (1mark) 15.11 According toresearch, whichofthefollowing statements istrueofa consultative styleof management, compared tootherstyles?    Itismostpopular among subordinates Itismostpopular among leaders (1mark) Itencourages thehighest productivity 15.12 Whichofthefollowing terms isusedtodescribe the'right'toperform anactioninan organisation?     Responsibility Authority Influence (2 marks) Power 15.13 Whichofthefollowing isan'interpersonal' roleofmanagement, inMintzberg's classification ofninemanagerial roles?     Spokesperson Figurehead Negotiator Resource allocator (2 marks) 15.14 JohnAdair's action-centred leadership model ispartofwhichschool ofthought?    Traittheories Styletheories Contingency theories (1mark) Questions65 Page 80 of 327 H G q 15.15 Arethefollowing statements trueorfalse? True False Adair's leadership model focuses onwhatleaders doandnotwhattheyare   TheAshridge leadership model proposes a democratic approach to leadership   (2 marks) 15.16 Whichleadership approach seestheleadership process ina context madeupofthree interrelated variables: taskneeds, theindividual needsofgroupmembers andtheneedsof thegroupasa whole?     Action-centred leadership Contingency theory Themanagerial grid Dispersed leadership (2 marks) 15.17 ........................................ isthemanagerial function concerned withestablishing a structure oftasks;grouping andassigning themtoappropriate units;andestablishing lines ofinformation andreporting tosupport performance. Whichmanagerial function isreferred tointhisdefinition?  Picklist: Planning Organising Controlling H (1mark) 15.18 Whichofthefollowing isNOToneofFayol'sfivefunctions ofmanagement?     Planning Organising Motivating Commanding (2 marks) 15.19 According toDrucker, whichofthefollowing isa management task?    Informational Developing people Decisional (1mark) 66 Business andtechnology (FBT/BT) Page 81 of 327 q 15.20 Whichof the followingwritersput forwardspecificdifferencesbetweenthe roleof the manager and the roleof the leader?     Bennis Heifetz Fielder Blakeand Mouton (2 marks) 15.21 Whichof the followingtheoristssuggestedthat leaderscan emerge,rather than be formallydesignated?    Kotter  Mintzberg Heifetz Adair (2 marks) (Total = 35 marks) 16 Recruitment 36 mins and selection 16.1 Whichof the followingwouldbe classedas a 'selection'rather than a 'recruitment'activity?    G 16.2 Job description Designingapplicationforms H (1mark) Screeningapplicationforms Arecruitmentmanager has prepared a statement of the keyduties,tasks and reporting responsibilitiesinvolvedina particularjob,as the basis forjobinterviewing. Whatname wouldbe givento such a statement?  Job analysis  Job description  Job advertisement  Personnelspecification 16.3 (2 marks) Inthe contextof personnelspecifications,the SevenPointPlan(Rodger)does NOT explicitlyincludewhichof the followingheadings?     Physicalmake-up Interests Motivation Circumstances (2 marks) Questions 67 Page 82 of 327 q 16.4 Whatis the currenttrend inhumanresourcemanagement?    16.5 (1mark) Selectiontests such as IQtests and personalitytests may not be effectiveingettingthe rightpersonforthe jobforseveralreasons.Whichof the followingcriticismsof the tests is NOTjustified,however?     16.6 Centraliserecruitmentand selectionwithinHR Devolverecruitmentand selectionto linemanagers Devolverecruitmentand selectionto the Board Testresultscan be influencedby practiceand coachingrather than genuineability Subjectsare able to deliberatelyfalsifyresults Testsdo not completelyeliminatebias and subjectivity Testsare generallylessaccurate predictorsof successthan interviews (2 marks) Ina selectioninterview,the interviewerasks:'Surelyyou'd agree that objectivityis a key requirementforan auditor?' Whatsort of questionis this?  Open    Closed Problem-solving (2 marks) Leading G H 16.7 Whichof the followingis a disadvantageof a large panel or selectionboard interview comparedto individualor one-to-oneinterviews?     16.8 Questionstend to be morevariedand morerandom Thereis lessopportunityforpersonalrapport withthe candidate (2 marks) Inthe contextof selectioninterviews,whichof the followingdescribesthe 'halo effect'?     68 Anumberof peoplesee the candidate at one sitting Specialistscan ask a questionsabout technicalareas of the work Atendencyforpeopleto makean initialjudgementbased on firstimpressions,and then lettingthiscolourtheirlater perceptions. Aneffect wherebythe interviewerchanges the behaviourof the applicantby suggestion Atendencyto mentallyassignpeopleto a groupand then attribute to themthe traits assumedto be characteristicof the groupas a whole Aneffect wherebythe interviewerattributesto the applicantbeliefs,attitudes or feelingswhichhe has himself (2 marks) Businessand technology(FBT/BT) Page 83 of 327 G q 16.9 Selectiontests whichfocuson aptitude, intelligenceand personalityfactors are called ........................................tests. Whichwordcorrectlycompletesthissentence?  Picklist: Proficiency Psychometric Standardised Sensitive (2 marks) 16.10 Inthe contextof selection,what is an assessmentcentre?   Aplace wherecandidates are taken to undergogroupassessments Aseriesof tests and interviewsundergoneby an individualcandidate overseveral days  Aseriesof tests, interviewsand activitiesundergoneby a groupof candidates over severaldays  Atechniqueforassessinglarge numbersof candidates, usuallyforjuniorpositions, (2 marks) ina cost-effectivemanner 16.11 Whichof the followingstatements about referencecheckingis true?   Referencesprovideobjectiveinformationabout a jobcandidate Personalreferencesare particularlyvaluableinassessingthe qualitiesof a candidate  Atleast twoemployerreferencesare desirable H (1mark) 16.12 Allof the following,exceptone, are areas of humanresourcemanagementthat benefit fromjobdescriptions.Whichis the exception?     Job evaluation Trainingneeds analysis Recruitment Employeeflexibility (2 marks) 16.13 Afinancialconsultancyfirmhas a jobvacancy fora juniorofficeassistant at one of its offices.Whichof the followingwouldbe the mostsuitableexternalmediumforthe job advertisement?    Accountancyjournal Nationalnewspapers Localnewspapers (1mark) Questions 69 Page 84 of 327 q 16.14 Apolicyof internalpromotion,as opposedto externalrecruitment,can have positiveand negativeeffects.Whichof the followingwouldbe negativelyeffectedby such a policy?    Innovation Successionplanning Inductiontimes (1mark) 16.15 Whichof the followingis NOTa primaryaimof a jobselectioninterview?     Comparingthe applicantagainst jobrequirements Gettingas muchinformationas possibleabout the applicant Givingthe applicantinformationabout the joband organisation Makingthe applicantfeel(s)hehas been treated fairly (2 marks) 16.16 Inwhichof the followingcircumstanceswouldan organisationbe better offcarryingout its ownrecruitment,rather than usingrecruitmentconsultants?  Theorganisationhas a strong,traditionalculture,but is nowlookingto introduce greater innovationand flexibility  Theorganisationdoes not have a specialistrecruitmentfunction,but is lookingto recruiton a large scale forthe firsttime  Theorganisationuses outsideconsultantsinmany areas of its business,and is used to managingtheirserviceseffectively  Theorganisationhas complexcultural,businessand technicalselectioncriteriafor its staff, but is consideringusinga consultancyforthe firsttime,because it requires newpeopleurgentlyinorderto exploitan opportunity (2 marks) G 16.17 ........................................are capacitiesthat lead to behavioursthat meet jobdemands withinthe parameters of the organisationalenvironment. Whichwordcorrectlycompletesthissentence?  Picklist: Attributes Skills Competences (1mark) 16.18 Thefirststage inthe recruitmentprocessis:     Towritea jobdescription Towritea personspecification Toidentifya vacancy Toliaisewithrecruitmentconsultants (2 marks) (Total = 30 marks) 70 Businessand technology(FBT/BT) Page 85 of 327 H G q 17 Diversity and equal opportunities 19 mins 17.1 Soundbusinessargumentscan be made forhavingan equal opportunitiespolicy.Whichof the followingreasonsapply? (1) (2) (3) (4)     Toshowcommondecencyand fairnessinlinewithbusinessethics Towidenthe recruitmentpool Toattract and retainthe best peopleforthe job Toimprovethe organisation'simageas a good employer (1),(2)and (3)only (2)and (3)only (1)and (3)only (1),(2),(3)and (4) (2 marks) 17.2 Whichof the followingcorrectlydescribesthe purposeof currentEqualPay legislation?   Toensurethat there is no elementof sexualor racialdiscriminationindetermining pay rates Toprovidethat jobevaluationmustbe used indeterminingpay rates  Toprovidethat womenhave the rightto equal pay to workof equal valueto that of men  Toensurethat womenhave the rightto equal pay to meninthe same job (2 marks) 17.3 Whichof the followingstatements are true or false? H True False Takingactivesteps to encouragepeoplefromdisadvantagedgroupsto apply forjobsand trainingis classedas positivediscrimination.   Diversityinthe workplacemeans implementingan equal opportunities policy.   (2 marks) 17.4 Membersof a religiousminorityina workplaceare frequentlysubjectedto jokesabout their dress and dietarycustoms,and a bit of name-calling,by non-religiousworkmates.They findthisoffensiveand hurtful– eventhoughtheircolleaguessay it is 'justa bit of fun'. Whattype of discrimination(ifany) wouldthisrepresent?  Victimisation   Indirectdiscrimination Harassment (1mark) Questions 71 Page 86 of 327 q 17.5 Whichof the followingis a potentialbusinessbenefitof a corporatediversitypolicy?     Compliancewithequal opportunitieslegislation Respectforindividuals Betterunderstandingof target marketsegments Efficiencyinmanaginghumanresources (2 marks) 17.6 Whichof the followingstatements about disabilitydiscriminationlawis NOTtrue?     Therequirementsonlyeffect employersof morethan 20 employees Employersmustadjust workingarrangementsor the physicalfeatures of premisesto removeany disadvantageto disabledpeople Foran individualto be definedas a disabledperson,the physicalor mental impairmentmusthave an adverseeffectof morethan 12months'duration Publicbodieshave additionaldutiesto protect and promoteequalityfordisabled people (2 marks) 17.7 Whichof the followingwouldconstitutedirectdiscrimination?  Settingage limitsor ranges inan employmentadvertisement   Offeringlessfavourabletermsto workerson flexiblehourscontracts Usingword-of-mouthrecruitmentina predominantlymaleworkforce (1mark) G H 17.8 Ajobinterviewerasks a womanabout her plans to have a family.Sheeventuallydoes not get the job,because she lacksqualificationswhichare listedas essentialinthe person specification.However,she later findsout that menwhoattended interviewswerenot asked questionsabout theirplans to have a family. Whichof the followingstatements correctlydescribesthe situation?  Thewomanwouldhave a successfulclaimof directsexualdiscrimination  Thewomanwouldhave a successfulclaimof indirectsexualdiscrimination  Theorganisationhas laiditselfopen to a claimof indirectsexualdiscrimination,but such a claimwouldnot be successful  Theorganisationhas not laiditselfopen to any claimof discrimination (2 marks) 72 Businessand technology(FBT/BT) Page 87 of 327 G q 17.9 Theconceptof ........................................is based on the beliefthat the dimensionsof individualdifferenceon whichorganisationscurrentlyfocusare crude and performanceirrelevant,and that an organisationshouldreflectthe range of differenceswithinits customerand labourmarkets. Whichwordscorrectlycompletethissentence?  Picklist: Equalopportunity Culturaldivergence Managingdiversity (1mark) 17.10 Whichof the followingis an exampleof 'positivediscrimination'rather than 'positiveaction' on equal opportunities?    Selectinga certainnumberof peoplefromethnicminoritiesforjobs,regardlessof job-relevantselectioncriteria Usingethniclanguagesinjobadvertisements Settingtargets forthe numberof peoplefromethnicminoritiesthat the organisation (1mark) wouldliketo see inmanagerialpositions (Total = 16marks) 18 Individuals, groups 32 mins and teams 18.1 Whichof the followingis mostclearlya signof an ineffectivegroup?     18.2 Thereis disagreementand criticismwithinthe group Thereis competitionwithothergroups Memberspassivelyaccept workdecisions Individualsachievetheirowntargets (2 marks) Ateam leaderis havingdifficultieswithconflictinthe team, due to 'clashes'or incompatibilitiesinthe personalitiesof twoof its members.Theleaderdrawsup a listof optionsformanagingthe problem. Whichoption,fromthe followinglist,wouldbe the least practicable?  Educatethe membersabout personalitydifferences  Encouragethe membersto modifytheirpersonalities  Removeone of the membersfromthe team (1mark) Questions 73 Page 88 of 327 H q 18.3 Atthe Soli-DarrettyBrosfactory, a projectteam has been put togetherby management. Theteam are engaged indebating howthey are goingto approach the task, and whois goingto do what. Someof theirfirstideas have not workedout but they are startingto put forwardsomereallyinnovativeideas:they get quiteexcitedinbrainstormingsessions,and are uninhibitedinputtingforwardtheirviewsand suggestions.Factionsare emerging,not onlyaround differentideas, but around twodominatingindividualswhoalwaysseemto disagree. Atwhat stage of Tuckman'sgroupdevelopmentmodelisthisteam?  Forming  Storming  Norming 18.4 (1mark) ........................................are mentalstates (madeup of thoughts,feelingsand intentions) whichinfluencean individual'sresponseto allobjectsand situationswithwhichthey are related. Whichwordcorrectlycompletesthisdefinition?  Picklist: Personalitytraits Perceptions Attitudes Emotionalintelligences (2 marks) G H 18.5 Forwhichof the followingapplicationsis teamworkingNOTbest suited?     18.6 Ideasgenerationforinnovation Co-ordinationof differentfunctions Crisisdecision-making Co-ordinationof geographicallydispersedworkers Ifa team is bogged downinargument,and discussionis turninghostile,whichof the followingtypes of contributionwouldthe team leaderseekto discourage?     Bringing-in Blocking Summarising Testingunderstanding (2 marks) 18.7 Whichof the followingis NOTa keytoolof team building?  Membersidentifywiththe team  Membersare as alikeas possible  Memberscommitto shared objectives 74 (2 marks) Businessand technology(FBT/BT) Page 89 of 327 (1mark) G q 18.8 Grant is a memberof a projectteam. Hiscolleaguesinthe team relyon himto read and checkcomplexprojectdocumentation.Grant has a keeneye fordetailand oftenidentifies minordetailsindocumentsthat othersmissbut may be of significance.Despitethe diligent approach, Grant alwaysmeetshisdeadlines.However,someof Grant's colleaguesfeel frustratedwhenhe refusesto involveothers.Hecan holdup progressas he willnot agree to the team signingoffprojectdocumentsuntilallof hisconcernsare fullydiscussed. Accordingto Belbin'steam rolestheory, Grant is an exampleof whichof the following?  Implementer  Completer– finisher  Monitor– evaluator  Shaper (2 marks) 18.9 Whatis the mostimportantattribute of a 'group', whichdistinguishesit froma random crowdof people?  Purpose  Conformity  Identity (1mark) 18.10 InBelbin'smodelof team roles,whichof the followingis mostimportantfora wellfunctioningteam?  Amixand balance of team roles   Ninemembers,so that allrolesare filled Afocuson functional/taskroles,not processroles Asfewmembersas possible  H (2 marks) 18.11 Ateam is windingup a challengingprojectthat it has been workingon forsometime.Next week,the same team willgo on to a newprojectwithquitedifferentchallenges. Whichstage of the groupdevelopmentmodelisthisteam likelyto be goingthrough?  Norming  Dorming  Adjourning (1mark) 18.12 Whichof the followingwouldbe an effectivetechniqueforencouraginghealthyteam solidarity?     Discouragingcompetitionwithother groups Encouragingcompetitionwithinthe group Encouragingmembersto expressdisagreements Discouragingmembersfromexpressingdisagreements (2 marks) Questions 75 Page 90 of 327 q 18.13 Anorganisationhas set up a team inwhichany memberof the team can performthe full range of its tasks. Themanager is able to share out tasks betweenmembersaccordingto whois availableto do a givenjobwhenit is required. Whatsort of team organisationdoes thisdescribe?  Multi-disciplinary team  Multi-skilled team  Self-managedteam  Virtualteam (2 marks) 18.14 Team-memberTomis one of those peoplewhois dynamicand thriveson pressure.He tends to be the one whochallengesand pushesotherteam members,sometimesannoying or upsettingthem– but also gettingthe team past difficultperiods. Whichof Belbin'steam rolesdoes Tomexercise?  Plant  Co-ordinator(chair)   Implementer Shaper (2 marks) 18.15 Ateam is havinga brainstormingsessionand one membersuggests'Let'smoveon to somethingelseas we'regettingnowhere'.Whattype of contributionis this? G   Proposing Supporting   Blocking Shuttingout H (2 marks) 18.16 Team-leaderArnicahas givena briefingstating the currentsituationand askingfor suggestionsto movethe projecton. Whatstage is the team currentat?     Forming Storming Norming Performing (2 marks) (Total = 27 marks) 76 Businessand technology(FBT/BT) Page 91 of 327 q 19 Motivating individuals and groups 36 mins 19.1 PhilTLuker&Sonoffersits employeesa rewardpackage whichincludessalary and companycar. Itsfactory is safe and clean and rather smart. Theworkis technically challengingand employeesare encouragedto produceinnovativesolutionsto problems. Whichof the rewardsofferedby the firmis a formof intrinsicreward?  Thesalary  Thecar  Thework 19.2 Whichof the followingis NOTa category inMaslow'shierarchyof needs theory?     19.3 (1mark) Physiologicalneeds Freedomof inquiryand expressionneeds Needforaffiliation Safetyneeds (2 marks) Keepham(Hungary)Co offersits employees: (1) Sensiblecompanypolicies (2) Goodsalariesand bonuses (3) Consideratesupervision (4) Trainingprogrammes Accordingto Herzberg'stwo-factortheory, whichof these thingswillsatisfyemployeesin such a way as to motivatethemto superioreffortinthe long-term? G 19.4    (2)only  (1),(2),(3)and (4) (4)only (2)and (4)only (2 marks) Whattermis given,inmotivationtheory, to the thingspeoplevalueand chooseto pursue?    Goals Innateneeds Satisfaction (1mark) Questions 77 Page 92 of 327 H q 19.5 WillyDewitt-OrnottworksinSales.Thereis alwaysa sales competitionat the year end and the winneris likelyto be made team leader. Willy'squitecertainthat he willbe able to win and that he willhave moreresponsibility,whichhe wouldlike.Buthe wouldalso have to workmuchlongerhours,and he is quitereluctantto do thisforfamilyreasons. Ifan expectancyequationwereused to assess Willy'smotivationto workhard at the end of the year, based on the informationgiven,whichof the followingresultswouldyou expect to see?  Valencewouldbe high,expectancyhigh,motivationhigh  Valencewouldbe high,expectancylow,motivationlow  Valencewouldbe around 0, expectancyhigh,motivationlow  Valencewouldbe around 0, expectancyhigh,motivationhigh (2 marks) 19.6 Allof the following,exceptone, are alternativetermsforthe same thing.Whichis the exception?     Motivatorfactor Hygienefactor Environmentalfactor Maintenancefactor (2 marks) 19.7 Thefivecore dimensionswhichcontributeto jobsatisfactionare skillvariety,task identity, task significance,........................................and feedback. Whichof the followingis the dimensionmissingfromthe abovelist? G H  Picklist: Recognition Advancement Autonomy Rewards 19.8 Participationcan motivateemployeesby makingthemtake 'ownership'of the task and increasingtheircommitment.Inwhichof the followingcircumstances,however,wouldthis NOThappen?     78 (2 marks) Participationis genuine Thepurposeof participationis made clear Everyoneis allowedto participateequally Effortsat participationare maintainedfora reasonableperiod Businessand technology(FBT/BT) Page 93 of 327 (2 marks) G q 19.9 Themanagementof GuenguissCans Co runsa 'tight ship',withclocking-ontimekeeping systems,closesupervisionand rulesforeverything.'Well,'says the generalmanager, 'if you allowpeopleto have any freedomat work,they willtake advantage and theirwork rate willdeteriorate'. Whichof DouglasMcGregor's'theories'does thismanagementteam subscribeto?  TheoryX  TheoryY  TheoryZ (1mark) 19.10 Applicationof processtheoriesto motivationinpracticeinvolvesallbut one of the following measures.Whichis the exception?     Clarifyingintendedresults Givingfeedbackon actual results Immediacyof rewardfollowingresults Consistencyof rewardforresults (2 marks) 19.11 Whichof the followingis a potentialproblemwithindividualperformance-relatedpay (PRP)as a motivator?     Itseffect on organisationalcommunication Itsrelevanceto businessobjectives Thefact that it does not relate to individuals'wage or salary grades Itseffecton team motivation H (2 marks) 19.12 Thefollowing,withone exception,are claimedas advantages forjobenrichmentas a form of jobre-design.Whichis the exception?     Itincreasesjobsatisfaction Itenhances qualityof output Itreplacesmonetaryrewards Itreducessupervisorycosts (2 marks) 19.13 Accordingto Maslow'shierarchyof needs, whichof the followingis the final'need' to be satisfied?     Self-realisation Self-actualisation Esteemneeds Physiologicalneeds (2 marks) Questions 79 Page 94 of 327 G q 19.14 Job evaluationputs a relativevalueon jobsprimarilyon the basis of whichof the following factors?    Equity Job content Marketrates of pay (1mark) 19.15 InVroom'sexpectancytheory, what is meant by 'valence'?    Thestrengthof an individual'spreferencefora givenoutcome Thestrengthof an individual'smotivationto act ina certainway Thestrengthof an individual'sbeliefthat acting ina certainway willobtainthe desiredoutcome (1mark) 19.16 EvaMoor-Drudgeryused to pack chocolatebars intoboxesof three dozen.Herjobhas been redesigned,so that she nowpacks them,appliesa 'sell-by'date stamp, cellophanes the boxand appliesa promotionalsticker. Of whichformof jobredesignis thisan example?  Job rotation  Job enlargement  Job enrichment (1mark) 19.17 Whichjobdesigntechniquewas advocated by the scientificmanagementschool?     Empowerment Micro-division of labour Divisionof labour Job enlargement (2 marks) 19.18 Javed manages a team inwhichindividualswithstrongpersonalitiesoftenhave heated disagreements,whichcan lead to open conflictand disruptionof workprocesses.Javed calledthe team togetherand explainedto themthat the outputsof the team shouldtake priorityand that everyindividualteam membershouldtry to put theirpersonalfeelings aside forthe benefitof the company. Hepersuaded themthat they wouldbe better offby modifyingtheirbehaviour,as the team's effortwas moreimportantinmeetingthe objectivesof the organisation,than the personalagendas of each personinit. Whichof the followingis Javed's approach to addressingconflict?  Integration    Compromise Denial Dominance (2 marks) (Total = 30 marks) 80 Businessand technology(FBT/BT) Page 95 of 327 H q 34 mins 20 Training and development 20.1 TraineeSara is unhappy inher currenttrainingprogramme,because it is too 'hands on': she is requiredto attempt techniquesbeforeshe has had a chance to study the underlying principlesfirst.Shespends the eveningstryingto read ahead inthe coursetextbook. Whichof Honeyand Mumford'slearningstylesis Sara's preferredstyle?  Reflector  Pragmatist  Theorist 20.2 Whichof the followingis NOTa characteristicof a 'learningorganisation'?     20.3 G Thegenerationand transferof knowledge Supportforlearningand developmentby allmembers Ascientificapproach to problem-solving,inorderto minimiseriskand error Willingnessto continuouslytransformitselfinresponseto a changingenvironment (2 marks) Whichof the followingstatements about trainingwouldbe the foundationof an effective trainingpolicy?  Trainingis the responsibilityof the HRdepartment   Trainingis allcost and no quantifiablebenefit Theimportantthingis to do lotsof training Trainingcan be an effectivesolutionto someperformanceproblems  20.4 (1mark) H (2 marks) ........................................is 'the plannedand systematicmodificationof behaviourthrough learningevents,programmesand instructionwhichenableindividualsto achievethe level of knowledge,skillsand competenceto carry out theirworkeffectively'. Whichwordcorrectlycompletesthisdefinition?  Picklist: Conditioning Training Education (1mark) Questions 81 Page 96 of 327 q 20.5 Thelearningcycledevelopedby DavidKolbis a processfor........................................ learning. Whichof the followingwordscorrectlycompletesthissentence?  Programmed  Experiential  Action  Reflection 20.6 20.7 G Allthe following,withone exception,are clear benefitsof trainingand developmentforan organisation.Whichis the exception?   Increasedorganisationalflexibility Lessneed fordetailedsupervision   Enhancedemployabilityof staff members Improvedsuccessionplanning (1) (2) (3) (4) Day-release Job rotation Coaching Temporarypromotion   Method(3)only Methods(1)and (3)only Methods(2),(3)and (4)only (2 marks) Methods(1),(2),(3)and (4) Abilityof learnersto concentrateon the learningprocess Riskof errors Relevanceto the informalcustomsand practicesof the department Applicationof learnedskillsto the job (2 marks) Theeffectivenessof a trainingschememay be measuredat differentlevels.Whichof the followinglevelswouldbe mostappropriatefora team leaderseekingto evaluatea training programmedesignedto improvethe productivityof her section?     82 H Youhave been asked to commenton the mosteffectiveapproach fortrainingaccounts staff inthe use of a newpayrollsystem.Whichof the followingargumentswouldyou put forwardforchoosingan on-the-jobapproach?     20.9 (2 marks) Whichof the followingare 'on the job'trainingmethods?   20.8 (2 marks) Level1:traineereactions Level2: traineelearning Level3: jobbehaviour Level5: ultimatevalue (2 marks) Businessand technology(FBT/BT) Page 97 of 327 q 20.10 ........................................developmentis a processwherebyemployeesare offereda wide range of developmentalopportunities,rather than focusingon skillsrequiredinthe current job. Whichwordor phrase correctlycompletesthissentence?  Picklist: Management Career Personal (1mark) 20.11 Peterhas been identified,usingHoney&Mumford'slearningstylesquestionnaire,as a Pragmatistlearner.Heis nowpreparinga personaldevelopmentplan to improvehissales skills. Whichof the followingtrainingmethodswouldPeterpreferand includeinhisplan?  On-the-jobcoachingby hissupervisor    20.12 G (2 marks) TheHRmanager of a firmhas been asked to explainto the financedirectorthe quantifiablebenefitsof trainingprogrammes.Whichof the followingmightshe hesitate to put forward?    20.13 Agroupworkshopin'interpersonalskillspractice' Personaldevelopmentjournaling Acomputer-basedtrainingmoduleon sales (1) Increasedspeed of working Increasedaccuracy of work Increasedemployeesatisfaction (1mark) Thegrowthor realisationof a person'sabilityand potentialthroughthe provisionof learningand educationalexperiences. (2) Theplannedand systematicmodificationof behaviourthroughlearningevents, programmesand instructionwhichenableindividualsto achievethe levelof knowledge,skillsand competencesto carry out theirworkeffectively. Whichof the followingstatements is correct?  1is the definitionof developmentand 2 is the definitionof training  1is the definitionof educationand 2 is the definitionof development  1is the definitionof trainingand 2 is the definitionof development  1is the definitionof educationand 2 is the definitionof training (2 marks) Questions 83 Page 98 of 327 H q 20.14 Whichof the followingdocumentswouldbe part of a formaltrainingneeds analysis exercise?     20.15 Anemailremindingyou that a newpieceof legislationis about to comeintoeffect Ahealth and safety officer'sreportshowingthat a departmentfailedits assessment ina recent fireevacuationdrill Aset of competencestandards foryourjobor department (2 marks) Feedbackfroma colleagueabout the standard of yourwork ........................................is learningthrougha networkof computersor the internet(but not stand-aloneCD-Romor tuitionsoftware),so that learningsupportis availablefrom onlinetutors,moderatorsand discussiongroups. Whattermis used forthislearningtechnology?  Picklist: E-learning Computerbased training Blendedlearning Computerbased assessment 20.16 Thestages of Kolb'sexperientiallearningcycleare as follows. (1) (2) (3) (4) G (2 marks) Drawconclusionsfromthe experience Havean experience Planthe nextsteps Reflecton the experience Whichis the correctorder?  (2),(4),(1),(3)  (2),(3),(4),(1)  (2),(4),(3),(1) H (1mark) 20.17 Whatisa competenceframeworkused for?    Toidentifypresentlevelof competence Toidentifytrainingneeds Toevaluatetrainingsuccessor failure (1mark) (Total = 28 marks) 84 Businessand technology(FBT/BT) Page 99 of 327 q 21 Performance 26 mins appraisal 21.1 Whichof the followingis NOTa purposeof performanceappraisal?    21.2 Job evaluation Identificationof trainingneeds Successionplanning (1mark) Amanager is assessingthe performanceof her team members.Inaccordance withthe appraisal systemof the organisation,she has been givena listof characteristicsand performanceelements,withnotes on howto interpretand apply the terms:'integrity', 'punctuality'and so on. Sheis requiredto commenton howeach appraisee measuresup in termsof each factor. Whichappraisal techniqueisthisorganisationusing?  Overallassessment  Grading   21.3   21.4 (2 marks) Guidedassessment Allof the following,exceptone, are soundprinciplesfordevisingperformancemeasures. Whichis the exception?   G Behaviouralincident Theyshouldbe related to actual keytasks of the job Theyshouldbe easilyachievable Theyshouldbe withinthe controlof the individual H (2 marks) Theyshouldbe observableor measurable Inan appraisalinterview,the manager tellsthe subordinatehowhe has been assessed – good and bad – and then giveshima chance to put questions,suggest improvement targets, explainshortcomingsand identifyproblems. UsingMaier'sclassification,what is the name givento thisapproach to appraisal interviewing?  Telland sell  Telland listen  Problemsolving  21.5 Selland listen (2 marks) Whichof the followingis likelyto be the mostobjectiveapproach to appraisal?     Selfappraisal Peerappraisal Upwardappraisal 360-degreefeedback (2 marks) Questions 85 Page 100 of 327 q 21.6 ........................................ is'aprocess toestablish a shared understanding aboutwhatis tobeachieved, andanapproach tomanaging anddeveloping people inordertoachieve it'. Whichtwowords correctly completes thisdefinition?  Picklist: Performance appraisal Performance management Peerappraisal (1mark) 21.7 Whichofthefollowing aremeaningful criteria formeasuring theeffectiveness ofan appraisal scheme? (1) (2) (3) (4) (5)     Serious intent Fairness Efficiency Co-operation Results (2),(3)and(5)only (3)and(5)only (1),(2),(3)and(4)only (1),(2),(3),(4)and(5) (2 marks) G H 21.8 ........................................ isthenamegiventogathering ofappraisals fromtheindividual, superiors, subordinates, peersandco-workers andcustomers. Whichwordorphrase correctly completes thissentence?  Picklist: Multi-source feedback Management byobjectives Performance management (1mark) 21.9 Appraisal isa complex human relations andpolitical exercise. Whichofthefollowing isNOT necessarily a helpful factorinthedesign ofanappraisal scheme?     86 Thepurpose ofthesystem ispositive andclearlyexpressed There isreasonable standardisation throughout theorganisation Timeisallowed forappraisee preparation andappraiser training There isanimplied linkbetween assessment andreward Business andtechnology (FBT/BT) Page 101 of 327 (2 marks) G q 21.10 Whichof the followingis NOTa barrierto effectiveappraisal?     Appraisalis seen as a way of wrappingup unfinishedbusinessforthe year Appraisalis seen as conformingto HumanResourceprocedures Appraisalis seen as an opportunityto raiseworkplaceproblemsand issues Appraisalis seen as an annual event (2 marks) 21.11 Whichof the followingcriteriawouldNOTbe suitableforevaluatingan appraisal system?    Seriousintent Fairness Bonusesawarded (1mark) 21.12 Whichof the followingis an advantage to allemployeesof havinga formalappraisal system?     Suitablepromotioncandidates are identified Itprovidesa basis formedium-to long-termHRplanning Individualobjectivesare related to the objectivesof the wholeorganisation (2 marks) Itprovidesa basis forreviewingrecruitmentand selectiondecisions 21.13 Asales team is assessed accordingto the numberof sales callsmade, numberof leads generated, and numberand valueof sales made. Whichappraisal techniqueis describedinthisexample?  Behaviouralincident  Ratingscale  Guidedassessment  (2 marks) Results-oriented (Total = 22 marks) Questions 87 Page 102 of 327 H q 22 Section D MTQs 22.1 (a) 29 mins Peter, Gloria,Shirleyand Mattheware part of a newlyformedteam. Peteris a reliableemployeewholikesto take ideas fromotherpeopleand turn them intoactions.Heis not veryflexibleand tends to be resistantto change or new possibilities. Gloriais a dynamicindividualwhorespondsbest whenunderpressure.Sheis driven to overcomeany obstacles,but has a tendencyto hurt other people'sfeelings. Shirleyis single-mindedand dedicated to her work.Shehas a lotof specific knowledge,but onlycontributesto discussionson these areas and lacksthe ability to see the biggerpicture. Matthewis strategicallyminded.Helikesto see allthe availableoptionsbefore judgingthem.Hehas a proventrack recordof good judgements,but can be overly criticaland does not inspireothersthat he workswith. Foreach team memberlistedbelow,selectthe appropriateBelbinteam rolefromthe listbelow: (i) Peter  Picklist: (ii) G Shaper Monitor-Evaluator Implementer Specialist Gloria H  Picklist: Shaper Monitor-Evaluator Implementer Specialist (iii) Shirley  Picklist: Shaper Monitor-Evaluator Implementer Specialist (iv) Matthew  Picklist: Shaper Monitor-Evaluator Implementer Specialist 88 (2 marks) Businessand technology(FBT/BT) Page 103 of 327 q (b) occurswhenan individualis penalisedforgivinginformationina discriminationclaimagainst an employer. Whichwordcorrectlyfillsinthe blank?  22.2 (c) Picklist: Indirectdiscrimination Harassment (1mark) Victimisation Encouragingindividualsfromdisadvantagedgroupsto apply forjobsand trainingis knownas positiveaction.  True  False (1mark) (a) Indicatewhetherthe followingare extrinsicrewards,intrinsicrewardsor incentives. Extrinsic Intrinsic reward reward Incentive G (b) Afeelingof achievement    Apromiseof additionaltimeoffformeetinga target    Workingconditions    Salary    (2 marks) WhichTWOof the followingsteps wouldbe classifiedas jobenrichment?  Givingan employeefreedomto decidehowthe jobshouldbe done     22.3 (a) Increasingthe numberof tasks an employeeparticipatesin Transferringan employeefromone jobto another Encouragingemployeeparticipationinplanningdecisionsof superiors Dividinga jobup intoa smallnumberof sequentialtasks (2 marks) Shaunlikesto understandbasic principlesand take a hands-offapproach based on logicalargument.Hewants to participateina structuredtrainingprogrammewhich is run by teachers. Louiseneeds to workat her ownpace and tends to be fairlyslowand cautiousinher learning.Shelikesto observethings,take timeto thinkabout themand then producesa carefullythought-outconclusion. Susanonlylikesto study ifshe can see a linkto a real practicalproblem.Shelikesto learnnewtechniquesthroughon-the-jobtraining,but tends to discardgood ideas whichrequiresomedevelopmentto workproperly. Tonyis flexibleand optimistic,but does not have any patiencewiththeories.He wants to receivehands-on trainingand enjoyspracticalproblems. Questions 89 Page 104 of 327 H q Honeyand Mumfordclassifiedthe fourfollowinglearningstyles:  Theorists    (b) Reflectors Activists Pragmatists Matchthe learningstylesaboveto the followingindividualsbelow. (1) Shaun (2) Louise (3) Susan (4) Tony WhichTWOof the followingare off-the-jobtrainingmethods?  Job rotation     22.4 (a) (2 marks) Computer-basedtraining Temporarypromotion Demonstration Collegecourses (2 marks) George,Helen,Josh and Leighare allon developmentprogrammes. Georgeis learningskillsthat are not directlyrequiredinhiscurrentrole,but should allowhimto contributemoreflexiblyand innovativelyto the organisationinthe futurewhicheverrolehe is in. Helenis gainingexperienceof each of the differentfunctionsinher companyas well as a varietyof positionand worksettingsas preparationforincreasedresponsibility inthe future. Josh is receivingtrainingto ensurehisprofessionalstandards inhisaccountancy workare maintainedand enhanced througheducation,developmentand training. G Leighis partway througha seriesof plannedsecondmentswithinher department and has recentlybeen workingintwoprojectgroupforimplementingnewsystems. Thefollowingare alldifferentapproaches to development:  Managementdevelopment  Personaldevelopment  Professionaldevelopment  Career development Matchthe developmentapproaches aboveto the followingindividualsbelow. (1) George (2) Helen (3) Josh (4) Leigh (2 marks) 90 Businessand technology(FBT/BT) Page 105 of 327 H q (b) WhichTWOof the followingare necessaryfora trainingprogrammeto be effective?  Trainingshouldbe expensive     22.5 (a) Thereshouldbe clear objectives Trainingshouldbe off-the-job Thereshouldbe timelyfeedback Trainingshouldbe on-the-job (2 marks) CompanyWassess the performanceof its sales staff by the numberof clientsvisited and the numberof productsthey each sell. CompanyXrates its managerialstaff. Eachmanager is awarded a scorefrom1 (excellent)to 4 (poor),based on feedbackfromsubordinatesand superiors. CompanyYappraises the performanceof its staff throughassessorscommentingon a numberof desiredcharacteristicsand performanceelements. CompanyZcomparesattributesdisplayedby its staff to a seriesof attributesthat indicateeitherunsatisfactoryor unsatisfactoryperformanceintheirjobrole. Thefollowingare differenttypes of appraisaltechniques  Guidedassessment    Grading (1) CompanyW (2) (3) CompanyX CompanyY Behavioural-incident method Results-orientedscheme Matchthe appraisaltechniquesaboveto the followingcompaniesbelow. G H (b) (c) (2 marks) (4) CompanyZ Themanager does not criticise,but insteaddiscussesissueswiththe employee.The employeeis encouragedto thinkthingsthroughand commitsto personal improvement. Whichof Maier'sthree approaches to appraisalinterviewsis thisan exampleof?  Telland sell  Telland listen  (1mark) Problem-solving Performanceappraisal can be used to identifypotentialcandidates forpromotion.  True  (1mark) False Questions 91 Page 106 of 327 q 22.6 (a) Whattype of powerdescribesthe behaviourof a manager whois refusinga request forone of histeam membersto helpwiththe workloadof another department?     (b) Expertpower Negativepower Coercivepower 1mark) Physicalpower Fiedler,Heifetzand Bennisare theoristswhowroteabout managementand leadership.Matcheach of the statements belowwitheach theorist'sfindings. Fiedler Heifetz Bennis Individualsat alllevelscan exerta leadership influence    Thereare 'psychologicallyclose'and 'psychologicallydistant' managers    Themanager 'does thingsright'whilethe leader 'does the rightthing'    (3 marks) (Total = 24 marks) G H 92 Businessand technology(FBT/BT) Page 107 of 327 q Do you know? – Personal effectiveness and communication in business Check that you can fillin the blanks in the statements belowbefore you attempt any questions. Ifin doubt, you should go back to your BPPInteractive Textand revisefirst.  T…is a scarce resourceand managers' timemustbe used to the best effect.  Thec…..of c……..nwillimpacton the effectivenessof the communicationprocess.The characteristicsof the messagewilldeterminewhat communicationtoolis best fora given situation.  C………. is an interpersonalinterview,the aimof whichis to facilitateanother personin identifyingand workingthrougha problem.  Counsellingis facilitatingothersthroughthe processof d……and e…….gtheir own problems:it is primarilya non-directiverole.  Communicationis a two-wayprocessinvolvingthe t…… or e……. of informationand the provisionof feedback.Itis necessaryto directand co-ordinateactivities.  Communicationinan organisationflowsd……, u……, s……. and d……….  Data and informationcomefroms…….both inside and outside an organisation.An organisation'sinformationsystemsshouldbe designedso as to obtain– or capture – all the relevantdata and informationrequired.  I…….. communicationsupplementsthe f……. system.  B……… to communicationinclude'noise'fromthe environments,poorlyconstructedor coded/decodedmessages(distortion)and failuresinunderstandingcaused by the relative positionof the sendersand receivers. G H Questions 93 Page 108 of 327 q Did you know? – Personal effectiveness and communication in business Could you fillin the blanks? Theanswers are in bold. Usethis page for revisionpurposes as you approach the exam.  Timeis a scarce resourceand managers' timemustbe used to the best effect.  Thechannel of communicationwillimpacton the effectivenessof the communication process.Thecharacteristicsof the messagewilldeterminewhat communicationtoolis best fora givensituation.  Counsellingis an interpersonalinterview,the aimof whichis to facilitateanother personin identifyingand workingthrougha problem.  Counsellingis facilitatingothersthroughthe processof definingand exploringtheir own problems:it is primarilya non-directiverole.  Communicationis a two-wayprocessinvolvingthe transmissionor exchangeof informationand the provisionof feedback.Itis necessaryto directand co-ordinate activities.  Communicationinan organisationflowsdownwards,upwards,sidewaysand diagonally.  Data and informationcomefromsources both inside and outside an organisation.An organisation'sinformationsystemsshouldbe designedso as to obtain– or capture – all the relevantdata and informationrequired.  Informalcommunicationsupplementsthe formalsystem.  Barriersto communicationinclude'noise'fromthe environments,poorlyconstructedor coded/decodedmessages(distortion)and failuresinunderstandingcaused by the relative positionof the sendersand receivers. G H 94 Businessand technology(FBT/BT) Page 109 of 327 q Personal 23.1 Ifa supervisorinthe Salesdepartmentrequeststhe helpof the HRDirectorina complex disciplinarymatter, what directionis the communicationflow?    23.2 and communication Vertical Horizontal Diagonal (1mark) Whatname is givento the processwherebyan individualdefinesobjectivesand formulates actionplans forlearningwitha viewto improvinghisor her owneffectiveness?     23.3 effectiveness 37 mins 23 Coaching Mentoring Counselling (2 marks) Personaldevelopmentplanning Thefollowing,withone exception,are potentialproblemsfortimemanagement.Whichis the exception?    Anopen doorpolicyof management Asociableworkgroup Anassertivestyleof communication (1mark) G H 23.4 Jared is the leaderof a virtualteam whichstays incontact viaemail.Teammemberssend allmessagesto Jared, whoforwardsthemto the rest of the network. Whichcommunicationpattern is reflectedinthissituation?  Thecircle    23.5 The'Y' Thewheel Theall-channel (2 marks) Youare a sales representativewhoroutinelyvisitscustomersintheirhomesand places of businessto presentthe latest productsand take orders(whereinventoryis available). Whichof the followingtechnologytoolswillmostdirectlyenhance youreffectiveness?  Computertelephonyintegration  ElectronicData Interchange(EDI)  (1mark) Mobilecommunications Questions 95 Page 110 of 327 G q 23.6 Whichofthefollowing areasisNOTanadvantage ofusingemailasa communication tool?     Security Speed Multiple recipients Versatility (2 marks) 23.7 Counselling isessentially a/an........................................ role. Whichofthefollowing words correctly completes thisstatement.  Picklist: Advisory Non-directive Task-related (1mark) 23.8 Whichofthefollowing isNOTanattribute ofcommunication through aninformal organisational network or'grapevine'?     Fast Selective Accurate Up-to-date (2 marks) 23.9 Allofthefollowing, except one,aremeasures forencouraging upward communication in anorganisation. Whichistheexception?    Suggestion schemes Management byWalking Around Exception reporting (1mark) 23.10 Intheradiosignalmodel, whichofthefollowing shows thecorrect orderinwhicha message istransmitted?     Feedback, Sender, Decoded message, Codedmessage, Receiver Sender, Decoded message, Codedmessage, Feedback, Receiver Codedmessage, Sender, Decoded message, Receiver, Feedback Sender, Codedmessage, Decoded message, Receiver, Feedback 96 Business andtechnology (FBT/BT) Page 111 of 327 (2 marks) H G q 23.11 Whichof the followingcommunicationmechanismsis designedto improveupward communication?     Noticeboards Organisationmanual Teammeetings Teambriefings (2 marks) 23.12 Whatis the technicaltermgivento a fault inthe communicationprocesswherethe meaningof the messageis lost'in translation'fromintentionto language, or from language to understanding?   Noise Redundancy   Distortion Feedback (2 marks) 23.13 Accordingto Leavitt,whichof the followingcommunicationpatterns is the fastest interms of problemsolving?  Y  Circle Chain Wheel   (2 marks) 23.14 Whichof the followingdefinescoaching?   Developingthe individualby helpingto buildon skillsand overcomeweaknesses Provisionof one-wayinstructionon formaltasks requiredto carry out the immediate job   Offeringcareer guidanceinorderto maximisethe individual'spotential Provisionof objectiveadviceto overcomethe individual'spersonalproblems (2 marks) 23.15 Whichof the followingstatements about non-verbalcommunicationis NOTtrue?     Non-verbalcues can be used to reinforceor underminespokenmessages Peoplepay lessattentionto non-verbalcues than to what is beingsaid Non-verbalcues includetone of voiceand silences Non-verbalcues are a keysourceof feedback (2 marks) Questions 97 Page 112 of 327 H q 23.16 Inthe contextof workplanningand personaldevelopmentplanning,a SMART frameworkis oftenused as a checklistof the characteristicsof effectivegoals. Whatdoes the 'M'inSMART stand for?  Manageable  Measurable  Motivational (1mark) 23.17 ABChas promisedcustomerDEFthat a productwillbe deliveredon a certaindate. The productis infact deliverednearlya monthlate. Asa directresultDEFmissesan important deadlineand has to pay penalties. Inwhat way has ABCfailedDEF?  Failedto communicate   Failedto meet deadlines Failedto complywithjobspecifications  Failedto deliverthe exact productneeded (2 marks) 23.18 Whenconsideringa personaldevelopmentprogrammeforan employee,what shouldbe the firststage?     G Planninga learningand developmentprogramme Establishinglearningtargets Broadeningthe employee'sknowledgeand experience Settingup a competenceframework H (2 marks) 23.19 Whichof the followingsituationsmay giveriseto a sourceof positiveor constructive conflict?    Hostilitybetweenemployees Thetask is lostsightof due to individualarguments Adisputefocusesattentionon individualcontributions (1mark) (Total = 31marks) 98 Businessand technology(FBT/BT) Page 113 of 327 q 24 Section E MTQs 24.1 (a) 29 mins WhichTWOof the followingconditionswouldshowthat a task is importantto an organisation?     (b) Thetask willsatisfya keycustomer Thetask comesinan emailmarkedurgent Thetask willadd valueto the organisation Thetask has already been delegated by twosuperiors Arethe followingstatements true or false? 2 marks) True False Ameetingwithouta clear objectivewillalwaysgivevalueto everyone   attendingforthe timetaken. Timemanagementcan be improvedby settingaside timeswhenan   individualis not contactable by others. (2 marks) 24.2 (a) Trevor,Joss, Michaeland Leonaare allmanagers inHGFCo experiencingconflictin theirteams. Trevorrespondsto conflictby encouragingthe individualsto bargain and negotiate. Joss puts emphasison the task inhand and stressesthat the groupeffortmustbe superiorto individualeffort. Michaellikesto use hispoweras mangerto forcea settlementon histeam. This causes someresentmentamongsthisteam members. G H Leonaignoresthe conflictinthe hope that the issueis trivialand the team willthen continueto operate as normal. Thefollowingare managementresponsesto conflict:  Denial    (b) Compromise Dominance Integration/Collaboration Matchthe managementresponsesaboveto the managers below. (1) Trevor (2) Joss (3) Michael (4) Leona Arethe followingstatements about conflictresolutiontrue or false? (2 marks) True False   Compromisesresultinallpartiesbeingsatisfied Awin-winsituationis rare, but is the best solutionto conflictresolution   Alose-losesituationis not possible Win-losesituationscan resultindamaged relationshipswithinthe team     (2 marks) Questions 99 Page 114 of 327 q 24.3 (a) Indicatewhethereach of the followingare data or information. Data   Information   Calculationsshowingwhetheran investmentis profitable   Anindividualemployee'stest score   Variancereportsfora departmentmanager   Theaverage employeeassessmentgrade fora company   (3 marks) Completedquestionnairesformarketresearch Companywebsitepage (b) Afive-yearcash forecastwouldbe classifiedas whichof the followinglevelsof information?  Operational   24.4 (a) Management (1mark) Strategic On 1August,the financialcontrollerof XYZCo is toldit is her responsibilityto let everyoneinthe financedepartmentknowabout a compulsorymeetingto be heldon 15September. Thefinancialcontrollersends an emailto allmembersof the financedepartment, informingthemabout the time,date, place and purposeof the meeting.Theemailis sent on 13September. Whichof the followingdesirablequalitiesof formalcommunicationis lackinginthis scenario?  Clarity  Recipient  Medium G (b) 100  Timing (2 marks) WhichTHREE of the followingstatements about informalcommunicationare true?  Thegrapevineoperates outsidethe place of work  Informationis not divulgedrandomly  Itcan bypass secretivemanagement  Thegrapevinefillsa gap created by an ineffectiveformalcommunication system  Itis lesscurrentthan formalcommunication  Itrelatesto internalpolitics (2 marks) Businessand technology(FBT/BT) Page 115 of 327 H G q 24.5 (a) WhichTWOof the followingare examplesof misunderstandinginthe communicationprocess?      (b) (c) Slangis used intask instructions Ameetinggoes on fortoo longforparticipantsto pay attentionto everything Anemailsent to allemployeesusingITjargon Thesenderof an emailhas not includeddetailsof the locationof the meeting Amanager is constantlydealingwithqueriesfromsubordinatesand missesa (2 marks) meeting occurswhenan individualthinksthat they have been wronglytreated by a colleagueor supervisor. Whichof the followingcorrectlyfillsthe blank?  Indirectdiscrimination  Directdiscrimination  (1mark) Agrievance Themeaningof a messageis lostat the codingand decodingstage. Whichof the followingis the correcttermforthislossof meaning?  Feedback  Distortion  24.6 (a) Noise (1mark) Peggy, OperationsDirectorat XLtd,has delegated the task of identifyingreasons forrecent bottlenecksinmanufacturingprocessesto Susan.ThiswillinvolveSusanin interviewingrelevantoperators,foremenand supervisors,and also liaisingwithother departments,to establishwhythe bottlenecksare occurring.Peggywouldlikea reporton her deskintwoweeks'timeas she is due to reportto the board. Susanis worriedabout the project,as she is verybusy withher routineworkload. Placethe suggestedsteps belowinthe correctorder, so that Susancan plan her timeeffectively. Identificationof informationsourceswithinthe business Collationof information EstablishingprioritieswithPeggy Sequencingof interviewswithrelevantstaff Delegationof routinetasks Reportwriting (3 marks) (b) Jimhas been asked to coach John incertaintechnicallydemandingaspects of his accountingroleinorderto improveJohn's performance.Whichof the followingis NOTpart of thisrole?  ShowingJohn whereto findcompanyinformationon relevantaccounting standards  Demonstratingthe company'snewaccountingsoftware  InvitingJohn to the annual audit planningmeeting  HelpingJohn to prepare forhisupcomingappraisal (1mark) (Total = 24 marks) Questions 101 Page 116 of 327 H q G H 102 Business andtechnology (FBT/BT) Page 117 of 327 q Do you know? – Professional ethics in accounting and business Check that you can fillin the blanks in the statements belowbefore you attempt any questions. Ifin doubt, you should go back to your BPPInteractive Textand revisefirst.  Organisationsare not autonomous;they existto servesomee……p……, usuallymanifested ina groupsuch as shareholdersina companyor trusteesof a charity. Inparticular,the strategic apex must not lose sight of this accountability.  Allmanagers have a duty of f….s……to the externalpurposeof the organisationand this liesmostheavilyon the shouldersof those at the strategicapex.  E….and …….. are about rightand wrongbehaviour.Westernthinkingtends to be based on ideas about duty and consequences. Unfortunately,such thinkingoftenfailsto indicatea singleclear courseof action.  E…..thinking is also influencedby the conceptsof virtueand rights.  Ethicalc……. by allmembersshouldbe a majorconcernformanagement.Insidethe organisation,a c……… based approach highlightsconformitywiththe law.  Ani…….based approach suggestsa widerremit,incorporatingethicsinthe organisation'svalues and culture.  Organisationssometimesissuecodes of conductto ……..  Asan accountant, yourvaluesand attitudes flowthrough everythingyou do professionally.Theycontributeto the trust the widerc……… puts inthe professionand the perception it has of it.  The……….. ………… ………… ……… (IFAC)is an internationalbody representingallthe major accountancy bodiesacross the world.Itsmissionis to developthe high standards of professionalaccountants and enhance the qualityof servicesthey provide. G H Questions 103 Page 118 of 327 q Did you know? – Professional ethics in accounting and business Could you fillin the blanks? Theanswers are in bold. Usethis page for revisionpurposes as you approach the exam.  Organisationsare not autonomous;they existto servesomeexternalpurpose,usually manifestedina groupsuch as shareholdersina companyor trusteesof a charity. In particular,the strategic apex must not lose sight of this accountability.  Allmanagers have a duty of faithful serviceto the externalpurposeof the organisation and thisliesmostheavilyon the shouldersof those at the strategicapex.  Ethicsand moralityare about rightand wrongbehaviour.Westernthinkingabout ethics tends to be based on ideas about duty and consequences. Unfortunately,such thinking oftenfailsto indicatea singleclear courseof action.  Ethicalthinkingis also influencedby the conceptsof virtueand rights.  Ethicalconductby allmembersshouldbe a majorconcernformanagement.Insidethe organisation,a compliance based approach highlightsconformitywiththe law.  Anintegrity based approach suggestsa widerremit, incorporatingethicsinthe organisation'svalues and culture.  Organisationssometimesissuecodes of conductto employees.  Asan accountant, yourvaluesand attitudes flowthrough everythingyou do professionally.Theycontributeto the trust the widercommunityputs inthe professionand the perception it has of it.  TheInternational Federation of Accountants(IFAC)is an internationalbody representing allthe majoraccountancy bodiesacross the world.Itsmissionis to developthe high standards of professionalaccountants and enhance the qualityof servicesthey provide. G H 104 Businessand technology(FBT/BT) Page 119 of 327 q 41 mins 25 Ethical considerations 25.1 Managersare said to have a ........................................responsibility(orduty of faithful service)inrespect of the entitieswhosepurposesthey serve. Whichtermcorrectlycompletesthissentence?  Picklist: Financial Ethical Fiduciary 25.2 25.3 G (1mark) Whatis the name givento an approach to ethicaldecision-makingwhichconsidersthe 'right'decisionto be the one whichresultsinthe greatest good to the greatest numberof peopleina givensituation?   Utilitarianism Deontology  Virtueethics (1mark) Xplcis tryingto get a tradingpermit,forwhichit qualifies.Unfortunately,there is a backlogat the issuingoffice,and Xplchas been notifiedthat there willbe a delay inthe processingof its permit.Thedivisionalmanager offersa donationto the issuingoffice's staff welfarefund,ifthe officialconcernedwillexpeditethe paperwork. Whichof the followingstatements is true of thisaction?  Itis not unethical,because the moneyis offeredforpositivepurposes.  Itis not unethical,because Xplcis legallyentitledto the benefitit is claiming.  Itconstitutesbribery.  Itconstitutesgrease money. (2 marks) 25.4 Whichof the followingis an approach to ethicswhichcombinesa concernforthe lawwith an emphasison managerialresponsibility?     Compliancebased Integritybased Environmentalbased Economicbased (2 marks) Questions 105 Page 120 of 327 H q 25.5 Farrahworksinthe sales tax sectionof the accounts departmentof BCDCo. Whenthe financedirectoris on holiday,Farrahnoticesthat BCDCo has not been payingthe correct quarterlyamountsto the authorities.Farrahhad suspectedthisforsometimeand decides to contact the authoritiesto tellthemabout the fraud. Thisdisclosureis known as................................... Whattwowordscorrectlycompletethe sentence?  Picklist: Confidentialitybreach Corporateconscience Whistleblowing 25.6 Whichof the followingwouldraiseethicalissuesfora manufacturerof fast-moving consumergoods? (1) (2) (3) (4) (5)     G 25.7 (1mark) Thematerialsused inmanufactureof the goods Thequalityof the goods Howthe goodsare advertised Howmuchits raw materialssupplierspay theirstaff Howthe goodsare packaged (2)and (3)only (1),(2)and (3)only (2),(3)and (5)only (1),(2),(3),(4)and (5) (2 marks) Reliability,responsibility,........................................ , courtesyand respect are the personal qualitiesexpectedof an accountant. Whichof the followingwordscorrectlycompletethisstatement?  Picklist: Accountability Socialresponsibility Timeliness Ambition 106 (2 marks) Businessand technology(FBT/BT) Page 121 of 327 H G q 25.8 Youhave been asked to workon a majorinvestmentdecisionthat yourcompanywillbe making,and discoverthat yourbrother-in-lawisthe managingdirectorof a firmthat may benefitfromthe outcomeof the decision.Youhave no intentionof allowingthisto influence the adviceyou giveyourfirm,and you knowthat yourbrother-in-lawwillnot try to influenceyou inany way. Whatprofessionalqualitywouldmakeyou considerhandingthistask to a colleague,or otherwiseraisingquestionswithyoursuperiors?  Scepticism  Accountability  Independenceof mind  Independenceinappearance (2 marks) 25.9 25.10 Whichof the followingwouldNOTrepresentan ethicalobjectiveinrelationto employment practices?   Guarantee of minimumwages Proactivehealth, safety and welfarepromotion   Promotionof workforcediversity Employabilitytraining (2 marks) Of the three mainsourcesof rulesthat regulatethe behaviourof businesses,the minimum levelof acceptable behaviouris set by which?     Non-legalrulesand regulations Ethics H Thelaw Society (2 marks) 25.11 Thedirectors'deliberationsmustbe balanced by takingintoaccount everyonewhohas a legitimateinterestinthe companyand respectingtheirrightsand views. Thisstatement describeswhichconcept?  Fairness  Openness  Probity 25.12 Whichof the followingstatements is a definitionof probity?  Open and clear disclosureof allrelevantinformation  Tellingthe truth and not misleadingstakeholders  Acceptingthe blameor creditfordecisions  Answerableinsomeway forthe consequencesof its actions (1mark) (2 marks) Questions 107 Page 122 of 327 q 25.13 Holdersof publicofficeshouldnot place themselvesunderany financialor otherobligation to outsideindividualsor organisationsthat mightinfluencetheminthe performanceof theirofficialduties. Thisstatement refersto whichconcept?  Independence  Reputation  Integrity (1mark) 25.14 Whichof the followingis NOTpart of a corporatecode of ethics?    25.15 Professionalethics Organisationalculture Organisationalself-interest (1mark) Abneris the lead partner on the audit of DEFInc.TheclientoftengivesAbnercorporate hospitalityat majorsportingeventsand smallgifts,such as a bottleof spirits,on his birthday. Whichthreat does thisrepresent?  Self-interest    G Self-review Advocacy Intimidation (2 marks) 25.16 XYZcarriesout the audit of DeltaProductsInc.DeltaProductsIncis infinancialtrouble and XYZhas had to qualifythe audit reportforthe past twoyears. Themanagingdirector of Deltablamesthe qualifiedaudit reportsforher firm'scontinuingproblems.Sheis threateningto sue XYZforpoorworkifthey qualifythe audit reportforthisyear. Whatthreat does thisrepresent?  Familiarity  Intimidation  Self-interest  Self-review (2 marks) 25.17 Whichof the followingis NOTa conflictof interest?     108 AnACCAmemberis indirectcompetitionwitha clienton a contract AnACCAmemberis marriedto a directorof the client AnACCAmemberis an officerof the clientcompanybut does not deal withthe client'saffairs AnACCAmemberis part of a jointventurewitha competitorof the client (2 marks) Businessand technology(FBT/BT) Page 123 of 327 H G q 25.18 Youhave been asked to prepare managementaccounts whilea colleagueis on holiday. Yoursupervisortellsyou that the accounts shouldbe printedout and lefton each manager's desk. Youquerywhetherthe accounts shouldbe put inan envelopemarked'confidential'but you are toldnot to botherinorderto save costs. Whatproblemdoes thiscause you?  Confidentiality  Unprofessionalbehaviour  Objectivity  Integrity (2 marks) 25.19 Whichof the followingstatements reflectsa relativistviewof ethics?    25.20 Thereis an unchangingset of ethicalprinciplesthat apply inallsituations Thesubjectto allethicalsituationsis the self Theethicsappropriatefora givensituationwilldepend on the conditionsat the time (1mark) Whichof the followingstatements is a criticismof absolutism?  Itis based on a fundamentalcontradiction   Ittakes no account of changingnormsinsociety Itleads to a cultureof anythinggoes  Itpromotesthe pursuingof short-termselfishdesires (2 marks) 25.21 Adeontologicalapproach to an ethicaldecisionfocuseson whichof the following?    Thedesiredvirtuesof the decisiontaker Thedutiesof the decisiontaker Theconsequencesarisingfromthe decision (1mark) (Total = 34 marks) Questions 109 Page 124 of 327 H q 26 Section F MTQs 26.1 (a) 29 mins WhichTWOof the followingare criticismsof relativism?  (b) Ittakes no account of evolvingnorms  Itleads to a philosophyof anythinggoes  Itmakesshort-termdesiresequivalentto longer-terminterests  Itis based on a fundamentalcontradiction  Aconsensusmay not be possible 2 marks) Indicatewhetherthe followingstatements about socialresponsibilitytrue or false. True False Socialresponsibilityactionis likelyto have an adverseeffect on   shareholders'interestsinthe shortterm Anenvironmentalaudit involvesassessingthe opportunitiesand   threats to an organisation Onlygovernmentsare concernedwithsocialresponsibility Guaranteeingemployeesa minimum'livingwage' is an exampleof socialresponsibility     (2 marks) 26.2 (a) Indicatewhetherthe followingstatements about ethicstrue or false. True False G Theteleologicalviewof ethicsis based on duty   Briberycan sometimesbe legal   Virtueethicssuggests that managers shouldincorporatevalues such as fairnessand loyaltyintotheirdecision-making Anaccountant's ethicalbehaviourservesto protect the public interest     (2 marks) (b) WhichTWOof the followingare criticismsof absolutism?  Ittakes no account of evolvingnorms  Itleads to a philosophyof anythinggoes  Itmakesshort-termdesiresequivalentto longer-terminterests  Itis based on a fundamentalcontradiction  Whateversourceis used, humaninterpretationwilllead to differentviews (2 marks) 110 Businessand technology(FBT/BT) Page 125 of 327 H G q 26.3 (a) Thefollowing arequalities youcanseeinanaccountant Reliability Independence Courtesy Respect Scepticism Timeliness Accountability Social responsibility WhichFOURoftheseboxesshowpersonal qualities expected ofanaccountant? (2 marks) (b) WhichTWOofthefollowing arefundamental principles fromACCA'sCodeof Ethics?  Integrity  Leadership    26.4 (a) Objectivity Truthfulness (2 marks) Accountability YRTCoisa firmofexternal auditors whichhasCompany W,Company X, Company YandCompany Z among itsauditclients. H Company Wiscurrently beingsuedbyoneofitssuppliers. YRTCohasoffered legal services andwilldefend theminthislegalcase. Theauditpartner ofCompany Xhasbeena member oftheexternal auditteamfor thepast15yearsandhasgoodrelationships withthesenior management of Company X. Thefinancial controller ofCompany Yisthedaughter oftheauditmanager from YRTCo. Company Z doesnothaveanexperienced financial department andsoYRTCohelps toprepare thefinancial statements ofCompany Z inadvance oftheexternal audit. Thefollowing aretypesofconflicts ofinterest:  Familiarity threat  Advocacy threat  Self-review threat  Self-interest threat Matchthetypesofconflict ofinterest abovetothecompanies below. (1) Company W (2) Company X (3) Company Y (4) Company Z (2 marks) Questions111 Page 126 of 327 G q (b) Whichof the followingwouldgiveriseto a threat of intimidation?  Litigationagainst the externalauditorby an audit client   (c) 26.5 (a) Provisionof taxationservicesas wellas audit services Anaudit partner is on the board of a client Ethicsare a set of that guidebehaviour. Whichof the followingcorrectlyfillsthe blank?  Legalguidelines  Moralprinciples  Professionalregulations (1mark) (1mark) JKLCo is a smallfirmof externalauditorswitha smallnumberof clients.Almost20% of its revenuecomesfromone client.Theclientstillhas not settledthe invoicefrom the previousyear's audit inthe hope that thiswillstrengthentheirpositionin negotiatinga lowerpriceforthisyear's audit. WhichTWOof the followingconflictsof interestexistinthissituation?  Self-reviewthreat  Advocacythreat  Self-interestthreat  Familiaritythreat  (b) 2 marks) Intimidationthreat Indicatewhetherthe followingstatements true or false? WhendealingwithethicaldilemmasACCAstudents mustfollow ACCA'scode of conduct. Professionalethicsshouldnot be followedat the expenseof contractualobligations. Thereis a publicexpectationthat accountants willact ethically. Aprospectiveaudit firmquotinga significantlylowerfee for assurance workthan the currentauditorscharge does not raisea threat of a conflictof interest. H True False         (2 marks) 112 Businessand technology(FBT/BT) Page 127 of 327 q 26.6 (a) (b) Corporatecodes of ethicsare publishedby organisationsinorderto communicate valuesto stakeholders. Indicatewhyeach of the followingstakeholdersmightbe interestedinwhat an organisationdoes. Local Employees communities Customers Decisionsof thisstakeholdermay be    influencedby ethicalconsiderations Standards of behaviourexpectedof this    stakeholdershouldbe communicatedto them Thisstakeholdermay need reassurancethat    the organisationwillact as a 'good citizen' (3 marks) TheChairman'sreportof Fairmindstates that "Weare a competitivebusiness,yet weare fairand open. Obtaininginformationabout competitorsby deceptionis stronglycondemned.Makingdisparagingcommentsabout competitorsshouldbe avoided.' Whichof the followingsafeguards wouldbe mosteffectiveinensuringthat these standards are maintained?     Asystemof finesforemployeeswhoare inbreach of the code Effectiveeducationand trainingforallstaff Externalreviewof Fairmind'sethicspolicy Rewardingemployeeswhoreporton colleagues'ethicalbreaches (1mark) G H (Total = 24 marks) Questions 113 Page 128 of 327 q 27 46 mins Mixed Bank 1 27.1 Systemsare sometimesdescribedas eitheropen or closed. Whena systemis closedit is:    27.2 (1mark) Acompanyhas placed a jobadvertisementfora fulltimeemployeeand a part time employee.Thepart timeemployee'stermsare lessfavourablethan the full-timeemployee's terms.Whattype of discriminationis this?    27.3 Incapableof furthertechnicalenhancement Protectedfromunauthorisedaccess Isolatedfromits externalenvironment Directdiscrimination Indirectdiscrimination (1mark) Victimisation Whatis the mainfocusand roleof the accountingfunction?  Topay employeesalaries   Toprovideinformationto externalauditors  Torecordfinancialinformation Toestimatehowmuchto spend on production (2 marks) G H 27.4 Whichof the followingis a benefitof decentralisation?     27.5 Decisionsare made at one place inthe organisation Reductionsinbureaucracy Bettercrisismanagement Improvesthe motivationof juniormanagers (2 marks) Anarrowspan of controlwouldbe suitablewhere  Theteam is not dispersedacross a widearea  Theworkis of a routinenature  Thereis littlesimilaritybetweenteam members'work  Theteam is veryexperienced (2 marks) 114 Businessand technology(FBT/BT) Page 129 of 327 q 27.6 Whenanalysingthe currentsituationina business,a consultantwillreviewthe general environmentsurroundingit. Whichof the followingwouldnot be includedinthisanalysis?  Newlegislationcomingintoeffect insixmonths'time  Activitiesof overseascompetitors  Interestrates  Independenceof the non-executivedirectors 27.7 Howmightthe purchasingmanager workcloselywiththe accountingfunction?     27.8 (2 marks) Processingexpenseclaims Seekingpromptpayment fromcustomers Managingthe promptpayment of suppliers Recordingstaff salaries (2 marks) Manyorganisationsare describedas bureaucratic.Whenthe team, was firstcoined, bureaucracywas regarded as beinghighlyefficientand there are stillcases wherea bureaucraticapproach is appropriate.However,bureaucracyhas someundesirable features. Whichof the followingare undesirablefeatures of bureaucracy? (1) G 27.9 Itrelieson the expertiseof its members– not throughstandardisedskillsbut by the importanceof the mixof skills (2) Committeesand reportsslowdownthe decision-makingprocess (3) (4)  Innovationis difficult Over-prescriptiverulesproducea simplisticapproach to problems (1),and (3)only    (1),(3)and (4)only (2),(3)and (4)only (1)and (2i)only (2 marks) MrWarner,yourdepartmentmanager, is weighingup the benefitsand disadvantagesof off-the-shelfpackages that have been customisedso that they fitthe organisation's specificrequirements. Whichof the followingoptionsare disadvantagesof customisation? (1) Itmay delay deliveryof the software (2i) Theuser is dependenton the supplierformaintenanceof the package (3) Thecompanywillnot be able to buy 'add-ons' to the basic package (4) Itmay introducebugs that do not existinthe standard version  (1)and (2)only  (1),(2)and (3)only  (1)and (4)only  (2)and (3)only (2 marks) Questions 115 Page 130 of 327 H G q 27.10 Intheshortrun,firmswillcontinue tosupplycustomers provided thattheycover    Fixedcosts Marginal costs Variable costs (1mark) 27.11 Whichofthefollowing isNOTanadvantage ofa matrix structure?     Dualauthority Greater flexibility Employee motivation Improved communications (2 marks) 27.12 Whichofthefollowing parties hasthemainresponsibility forgoodcorporate governance?    Theboardofdirectors Theauditcommittee Thenon-executive directors (1mark) 27.13 Whichofthefollowing statements isNOTtrueinrespect oftherelationships between directors, shareholders andauditors?  Auditors aretheagentsofshareholders   Shareholders areaccountable toauditors Auditors report toshareholders onthefinancial statements prepared bydirectors Directors areaccountable toshareholders (2 marks)  27.14 Whichofthefollowing statements correctly describes theprincipal purpose oftheexternal auditofa company within theUK?    Toassistmanagement inthepreparation ofthecompany's periodic financial statements Toexamine andexpress anopinion onthecompany's periodic financial statements Toprevent anddetectfraudwithin thecompany (1mark) 27.15 Arecord showing whohasaccessed a computer system iscalled:    Anaudittrail Acomputer trail Apassword trail (1mark) 116 Business andtechnology (FBT/BT) Page 131 of 327 H G q 27.16 AlfSparksis a manager of a smallteam designingand buildinga newmanagement informationsystem.Thevariouslevelsof managementthat willbe usingthe systemwillall have differentinformationrequirementsbut the qualitiesof good informationare the same at each level.Heis describingthese qualitiesto histeam. Whichof the followingwouldbe includedinhisexplanation? (1) Comprehensive (2) Relevant (3) Accurate (4) Authoritative  (1),(2)and (3)only  (2),(3)and (4)only  (1)and (4)only  (3)and (4)only (2 marks) 27.17 Externalauditorsmay place relianceon internalauditors'work. Isthisstatement correct?  Externalauditorsneed to assess the workof internalaudit first   Internalauditorsare not independentand so cannot be reliedupon Yes,always (1mark) 27.18 Whichof the followingcosts, inregards to an informationsystem,are capital costs? (1) (2) (3) (4) Hardwarepurchase costs Routinesystemmaintenancecosts Softwarepurchase costs Installationcosts     (1),(2)and (3)only (2)and (4)only (2),(3)and (4)only (1),(3)and (4)only H (2 marks) 27.19 Whoappointsexternalauditors?    Chair Financedirector Shareholders (1mark) Questions 117 Page 132 of 327 q 27.20 Controlovercash receiptswillconcentrateon three mainareas. Receiptsmustbe ..........................promptly  Picklist: Prevented Banked Complete Therecordof receiptsmustbe ..........................  Picklist: Prevented Banked Complete Thelossof receiptsthroughtheft or accidentmustbe ..........................  Picklist: Prevented Banked Complete (2 marks) G H 27.21 Thereare three broad pre-requisitesor 'pre-conditions'that mustexistinorderto make fraud a possibility. Whatare they?  Deception,criminalityand opportunity    27.22 Dishonesty,criminalityand opportunity Dishonesty,motivationand opportunity Deception,motivationand opportunity (2 marks) Theidentificationwithina clientcompanyof financialproblems,a dominantchief executive,poorinternalcontrol,unusualtransactions,or a high-technologyenvironment, are all indicativeof:     Increasedscope forpotentialfraud Ahigherthan normalriskaudit Inadequaciesinthe systemsof reporting Thepresenceof goingconcernproblems 118 Businessand technology(FBT/BT) Page 133 of 327 (2 marks) G q 27.23 Dataandinformation comefromsources bothinside andoutside anorganisation. Whichofthefollowing represent dataorinformation captured fromwithin the organisation? (1) Information aboutpersonnel fromthepayroll system (2) (3) (4)     Market information onbuyinghabitsofpotential customers fromthemarketing manager Information ondecisions takenfromtheminutes ofa meeting Valueofsalesfromtheaccounting records (1),(2)and(3)only (2)and(4)only (2)and(3)only (1),(3)and(4)only (2 marks) (Total= 38marks) 28 48 mins Mixed Bank 2 28.1 Whichofthefollowing didHenri Fayolinclude inhisfivefunctions ofmanagement? (1) (2) (3) (4)     Motivating Co-ordinating Commanding Controlling H (1),(2)and3)only (2),(3)and(4)only (1)and(4)only (3)and(4)only (2 marks) 28.2 Whichofthestatements below describes contingency theory?    Organisational design willbedetermined bya number offactors allofwhichdepend ontheothers Companies mustplanforchanges totheirorganisation Companies should focusontheshort-term asthefuture isuncertain (1mark) 28.3 PeterDrucker grouped management activities oroperations intofivecategories. Whichofthefollowing isNOToneofthosecategories?  Setting objectives  Thejobofmeasurement  Planning andcontrol (1mark) Questions119 Page 134 of 327 q 28.4 Differenttypes of powermay be exercisedwithinan organisationany differentindividuals. Whichtype of poweris associated withformalauthority?  Resourcepower  Expertpower  Positionpower 28.5 RensisLikertidentifiesfourmanagementstyles.Whatare they?     28.6  28.7 Norming Performing Storming H (1mark) Inthe contextof humanresourceplanning,whichTWOof the followingdocumentsare the outputsof a processof jobanalysis? (1) (2) (3) (4)     120 Benevolentautocratic,participative,democratic,exploitativeautocratic Benevolentauthoritative,participative,exploitativeauthoritative,democratic Exploitativeautocratic,benevolentautocratic,participative,laissezfaire Benevolentautocratic,consultativeparticipative,exploitative,laissezfaire (2 marks) Acompanyhas establisheda projectteam to designa newinformationsystem.Theteam has had a fewmeetingsto discusshowthey are goingto tacklethe work,and whowould do what, but someearlyideas have been unsuccessful.Groupmembersare stillputting forwarda numberof veryinnovativeideas, but they oftendisagreestronglywitheach other. Thegroupmembersappear to be dividingintotwo'camps' each of whichhas an unofficial'leader'. Thesetwoindividualsagree about verylittleand appear to dislikeeach other. Accordingto Tuckman,whichstage indevelopmenthas the projectteam reached?   G (1mark) Humanresourceplan Job description Personspecification Performanceappraisal (1)and (2) (1)and (3) (2)and (4) (2)and (3) (2 marks) Businessand technology(FBT/BT) Page 135 of 327 G q 28.8 Belbindescribedthe mosteffectivecharacter mixina team. Thisinvolveseightnecessary roles,whichshouldideallybe balanced and spread ina team. Apersonwhois highlystrung,extrovertand passionateabout the task fitsintowhichof Belbin'sroles?  Plant  CompleterFinisher  Resourceinvestigator  (2 marks) Shaper 28.9 Whichof the followingteam memberrolesis NOTfromBelbin'slistof grouprules?     28.10 Shaper Plant Attacker Finisher (2 marks) Whichof the followingare positiveaspects of teamworking? (1) (2) (3) (4)     Control Workorganisation Knowledgegeneration Decisionmaking (1),(2)and (3) (1)and (2) H (1),(2)and (4) Allfour (2 marks) 28.11 Tuckmanidentifiedfourstages ingroupdevelopment,whichoccurina particularorder. Whatis the orderinwhichthe stages occur?     Forming,storming,norming,performing Forming,storming,performing,norming Storming,norming,forming,performing Storming,forming,performing,norming (2 marks) 28.12 'Thejustificationforempoweringworkers,or removinglevelsinhierarchiesthat restrict freedom,is that not onlywillthe jobbe done moreeffectivelybut the peoplewhodo the job willget moreout of it intermsof growth,challenge,responsibilityand self-fulfilment'. Thethinkingis inlinewithwhichmanagementwriter?  Herzberg  Fayol  Taylor  Weber (2 marks) Questions 121 Page 136 of 327 q 28.13 Brucehas been on a trainingcourseto helphimdevelophisnegotiationskillsand learn somenewtechniques. Hehas been practisingthree of these back inthe office– can you identifythem? (1) Lookfora widevarietyof possiblesolutions (2) Tryto developoptionsthat wouldresultinmutualgain (3) Create a trustingsupportiveatmosphereingroup (4) Definethe problemcarefully  (1),(2)and (3)  (2),(3)and (4)  (1),(2)and (4)  (1),(3)and (4) (2 marks) 28.14 Thereare many differentmethodsof communication,each withits ownfeatures and limitations.Can you identifythe three features/advantages of conversationas a communicationtechniquefromthe listbelow? (1) (2) (3) (4)     G Requireslittleor no planning Givesa real impressionof feelings Complexideas can be communicated Usuallyunstructuredso can discussa widerange of topics (1),(2)and (3) (2),(3)and (4) (1),(2)and (4) (1),(3)and (4) (2 marks) 28.15 Whichof the followingwouldHerzbergclass among'hygienefactors'? 122 (1) (2) (3) (4) Salary Job security Gainingrecognition Challengingwork     (2)and (4)only (1)only (1),(2),(3)and (4) (1)and (2)only (2 marks) Businessand technology(FBT/BT) Page 137 of 327 H G q 28.16 Vocabularyand styleshouldcontributeto the clarityof messageina presentation.Itis recommendedthat shortsimplesentencesare used and the presentershouldavoidcertain expressions. Whichof followinglistshouldbe avoided? (1) Acronyms (2) Jargon (3) Colloquialisms (4) Doublemeanings  (2)and (3)only  (2),(3)and (4)only  (1),(2)and (4)only  (3)and (4)only (2 marks) 28.17 Electronicmailhas so many features and advantages that it is easy to forgetthat there may be limitationsassociated withit. Can you identifythe disadvantagesof emailfromthe listbelow? (1) (2) (3) (4)     Peoplemay not checktheiremailregularly Compleximagesdo not transmitwell Requiressomecomputerliteracyto use effectively Lackof privacy– can be forwardedwithoutyourknowledge (1),(2)and (3)only (2),(3)and (4)only (1),(2)and (4)only (1),(3)and (4)only H (2 marks) 28.18 Fora formalmeeting,inwhichorderwouldyou expectthe followingitemsto appear on the agenda? 1 Subjectsfordiscussion  2 Picklist: 1 2 3 4 5 6 Minutesof previousmeeting  Picklist: 1 2 3 4 5 6 Questions 123 Page 138 of 327 q 3 Dateofnextmeeting  Picklist: 4 1 2 3 4 5 6 Anyotherbusiness  Picklist: 5 1 2 3 4 5 6 Apologies forabsence  Picklist: G 6 1 2 3 4 5 6 Matters arising H  Picklist: 1 2 3 4 5 6 (1mark) 124 Business andtechnology (FBT/BT) Page 139 of 327 q 28.19 A360o(ormulti-source)appraisalcollectsfeedbackon an individual'sperformancefrom sourcessuch as the person'simmediatesuperiorand also hisor her immediate subordinates.Identifythese other sourcesfromthe listbelow. (1) (2) (3) (4)     28.20 Peers Customers Self-appraisal Familyand friends (1),(2)and (3)only (2),(3)and (4)only (1),(2)and (4)only (1),(3)and (4)only (2 marks) Whattype of appraisaloccurswhenemployeesjudgemanagers?    Peer Traditional Upward (1mark) 28.21 Whichof the followingis NOTa generalaimof an appraisal system?  G 28.22  Identifypotential Dealwithgrievances   Rewardattainment Measureperformance Whichof the followingis the personleast likelyto be requestedto fillout feedbackforms foruse ina 360 degree appraisalof a sales account manager?    28.23 H (2 marks) Accountspayable clerk Creditsales clerk Directcustomer (1mark) Whichof the followingis NOTa characteristicof a learningorganisation?    Learningclimate Enablingaccounting Rewardflexibility (1mark) Questions 125 Page 140 of 327 q 28.24 Upwardappraisalis used by somebusinesses.Thisinvolvesstaff givingtheiropinionson the performanceof theirmanagers.Thereare problemswiththismethod,whichinclude three of the following. Can you identifythem? (1) Employeepointscoring (2) Fearof reprisal (3) Thechance of bias is increased (4) Lackof authority  (1),(2)and (3)only  (2),(3)and (4)only  (1),(2)and (4)only  (1),(3)and (4)only (2 marks) (Total = 40 marks) 48 mins 29 Mixed Bank 3 29.1 Whichof the followingis an acronymused to describethe keyelementsof an organisation'sexternalenvironment?    G 29.2 PERT PEST SWOT (1mark) HenryMintzbergcategorisedfivebasic componentsof an organisation. WhichTWOof the followingstatements describesthe workof the technostructureof an organisation?  Designingsystems    29.3 (2 marks) Whichof the followingis a correctdefinitionof the term'span of control'?     126 Organisingand controllingwork Standardisingwork Securinginputs Thenumberof employeesreportingto one manager Thenumberof managers to whomone employeereports Thenumberof levelsinthe hierarchy Thenumberof employeesat each levelof the organisation Businessand technology(FBT/BT) Page 141 of 327 (2 marks) H G q 29.4 Towhomis the internalauditoraccountable?    29.5 Thedirectorsof the company Theemployeesof the company Theshareholdersof the company (1mark) SPAMSOAP is a mnemonicforthe types of internalcontrolemployedby an organisation. WhichTWOof the followingare types of internalcontrolincludedinSPAMSOAP?  Output  Arithmetic  Preventative  (2 marks) Physical 29.6 WhichTWOof the followingare typicalresponsibilitiesof the financialaccountant ina large organisation?     29.7   (2 marks) Payroll H Blakeand Mouton Katzand Kahn Herseyand Blanchard Tannenbaumand Schmidt (2 marks) Whichof the followingstatements accuratelydescribesa multi-disciplinary team?     29.9 Projectappraisal Whowas responsiblefordevelopingthe 'SituationalLeadership'model?   29.8 Inventoryvaluation Salesinvoicing Allteam memberscollaborativelydecidehowto organisetheirwork Allteam membershave differentskillsand specialismswhichthey pool Allteam memberscan performany and allof the group'stasks Allteam membersare jointlyresponsibleforthe leadershipof the team (2 marks) WhichTWOof the followingare examplesof content theoriesof motivation?     Maslow'shierarchyof needs Vroom'sexpectancytheory Herzberg'stwofactor theory Adam'sequitytheory (2 marks) Questions 127 Page 142 of 327 G q 29.10 WhichTWOofthefollowing areexamples of'onthejob'training?     Formal training courses Mentoring bya colleague Selfstudycourses Secondments tootherdepartments (2 marks) 29.11 Ifa manager inthepurchasing department requests thehelpoftheHuman Resources Director inpreparing fora difficult appraisal, whatdirection isthecommunication flow?    Vertical Horizontal Diagonal (1mark) 29.12 Honey andMumford classified fourdifferent learning styles. Whichofthefollowing statements accurately describes thereflector?  Prefers tounderstand principles  Prefers tothinkthingsthrough first   Prefers totrythings'hands on' Prefers toseepractical examples (2 marks) 29.13 'Anorganisation isa socialarrangement whichpursues collective........................................, whichcontrols itsownperformance andwhichhasa boundary separating itfromits environment.' Whichofthefollowing words completes thissentence appropriately?    Ambitions Duties Goals (1mark) 29.14 WhichTWOofthefollowing areincluded inMintzberg's organisational components?     Strategic apex Technicians Specialists Support staff (2 marks) 29.15 Whichofthefollowing is/areexamples ofweakfinancial control procedures?     Suppliers notbeingpaidontime Debtors notpayingwithin creditlimits Excessive badordoubtful debts Alloftheabove 128 Business andtechnology (FBT/BT) Page 143 of 327 (2 marks) H G q 29.16 Ina typicalfinance function, budgets andbudgetary control would usually bethe responsibility ofwhichofthefollowing roles?    TheFinancial Controller TheManagement Accountant TheChiefExecutive (1mark) 29.17 Whichfunction inanorganisation isresponsible forensuring thatonlyproperly authorised purchases whicharenecessary forthebusiness aremade?    Dispatch Internal audit (1mark) Purchasing/procurement 29.18 Whatisthetermgiventoa method offraudintheaccounts receivable area,bywhichcash orcheque receipts arestolen, andthetheftconcealed bysetting subsequent receipts against theoutstanding debt?     Collaboration Topping andtailing Teeming andlading (2 marks) Understating sales 29.19 Whichofthefollowing arepurposes ofa receivables control account? H (1) Asalesledger control account provides a checkonthearithmetical accuracy ofthe personal ledger (2) (3) Asalesledger control account helpstoimprove separation ofduties Asalesledger control account ensures thattherearenoerrors inthepersonal ledger (4)     Control accounts deterfraud (1),(2)and(3)only (2),(3)and(4)only (1),(2)and(4)only (1),(3)and(4)only (2 marks) 29.20 A........................................ isa program whichdealswithoneparticular partofa computerised business accounting system. Whichofthefollowing terms correctly completes thisdefinition?  Picklist: Suite Module Spreadsheet (1mark) Questions129 Page 144 of 327 q 29.21 Powerarisingfroman individual'sformalpositioninthe organisationis called:     29.22 (2 marks) Whatis the mostimportantattribute of a 'group', whichdistinguishesit froma random crowdof people?     29.23 Coercivepower Legitimatepower Expertpower Negativepower Leadership Goals Function Identity (2 marks) Whichof Belbin'sninerolesdoes the followingdescriptionapply to? Single-minded,selfstarting,dedicated.   Chair Specialist  Co-ordinator Teamworker  (2 marks) G H 29.24 Whichof the followingis a category inMaslow'shierarchyof needs theory?    Selfdetermination Needforaffiliation Safetyneeds (1mark) (Total = 40 marks) 48 mins 30 Mixed Bank 4 30.1 WilliamOuchiidentifiedthree types of control. Whichof the followingis NOTone of those?     130 Bureaucraticcontrol Marketcontrol Output control Clan control (2 marks) Businessand technology(FBT/BT) Page 145 of 327 q 30.2 Fromthe listbelow,identifythe one that doesn't have the attributesof a group.     30.3 Internaldisagreementand criticism Passiveacceptance of workdecisions Competitionwithothergroups (1mark) Aleadermay be distinguishedfroma manager by lackof dependencyon:     30.5 (2 marks) Whichof the followingis mostclearlya signof an ineffectivegroup?    30.4 Thefinancedepartmentof an organisation Anorchestra Afootballteam Fivepop fans Positionpower Expertpower Personalpower Physicalpower (2 marks) Delegationis needed inorganisationsto enable a distributionof workinthe organisation. WhichTWOof the followingare reasonswhymanagers may be reluctantto delegate.  Doesn'ttrust staff to carry out delegated tasks G    30.6 Theorganisationis dynamicand turbulentwithconstant changes Isnewand doesn't knowhowcompetentstaff are (2 marks) Billhas been on a trainingcourseto learnnegotiationskills.WhichTHREE of the following are negotiationskills.      30.7 Wants to controlallactivitiesunderhisor her responsibility Lookfora widevarietyof possiblesolutions Definethe problemcarefully Evaluateprogresstowardsobjectives Monitorthe behaviourof others Tryto developobjectivesresultinginmutualgains (2 marks) Leadershipinvolvesactivitiesthat are generallypeople-centred. Whichof the followingis NOTa leadershipactivity?  Creatingthe culture  Inspiringand motivatingothers  Reconcilingindividualneeds withthe requirementsof the organisation  Allocatingscarce resources (2 marks) Questions 131 Page 146 of 327 H q 30.8 Whichof the followingdescribesan employeeduty, rather than an employerduty under Healthand Safetylegislation?    30.9 Tokeepallplant and machineryup to a necessarystandard Toensureallworkpracticesare safe Totake reasonablecare of themselves (1mark) Everyorganisationhas a boundarythat separates it fromits environment. Froman organisation'spointof view,whichTWOof the followingwouldbe part of the organisation'senvironment?  Shareholders  Customers   30.10 Salesteam Purchasingdepartment (2 marks) WhichTWOof the followingdisciplinaryactionsmay be used onlyifit is (theyare) providedforinthe employee'scontract of employment?   Suspensionwithoutpay   Demotion Suspensionwithpay Dismissal (2 marks) G H 30.11 Whichtype of cultureaccordingto Handy'sculturalmodelswouldbest fitwitha matrix structure?     30.12 Handy Schein Harrison Dealand Kennedy (2 marks) WhichTWOof the followingare connectedstakeholdersto an organisation?     132 (2 marks) WhichTWOof the followingsaid 'Cultureis the way wedo thingsaround here'.     30.13 Person Role Power Task Employees Suppliers Managers Customers (2 marks) Businessand technology(FBT/BT) Page 147 of 327 q 30.14 HenryMintzbergcategorisedfivebasic componentsof an organisation. Whichof the followingstatements describesthe workof the strategicapex of an organisation?  Ensuringthe organisationpursuesits objectivesand servesthe needs of its owners and stakeholders  Securinginputsand processingand distributingthemas outputs  Organising,planningand controllingworkand acting as an interface (1mark) 30.15 WhichTWOof the followingare typicalresponsibilitiesof the managementaccountant ina large organisation?     30.16 G Processingsales invoices Reconcilingcash balances withbank statements Planningand preparingbudgets Appraisalof capital investmentprojects (2 marks) Lackof controloverwhichof the followingactivitiescan lead to the fraudulentpracticeof teemingand lading?  Non-currentasset register  Budgetarysystem   Inventorymanagement Salesledgerand receipts (2 marks) 30.17 Whichof the followingstatements identifiesthree broad requisitesforfraud? 30.18  Collusion,opportunity,motivation   Dishonesty,opportunity,motivation Opportunity,collusion,dishonesty Whichtype of audit is concernedwiththe evaluationand testingof the internalcontrols withinan organisation?    30.19 (1mark) Systems Management Transactions (1mark) Towhichof the followingculturaltypes did CharlesHandygivethe name of the Greekgod Dionysus?     Power/clubculture Personculture Roleculture Taskculture (2 marks) Questions 133 Page 148 of 327 H q 30.20 Whichof the followingdescribesthe 'impoverished'styleof managementidentifiedby Blakeand Mouton'smanagerialgrid?    30.21 Highconcernforpeopleand a lowconcernforthe task Lowconcernforpeopleand a highconcernforthe task Lowconcernforpeopleand lowconcernforthe task (1mark) Accordingto Belbin,the successof a groupcan depend on the balance of individualskills and personalitytypes. Whichof the followingstatements are characteristicsof the 'shaper'?  Calm,selfconfidentand controlled– coordinatingand operatingthroughothers  Concernedwiththe relationshipswithinthe group,supportiveand tends to diffuse conflict  Highly-strung,outgoingand dynamicand committedto the task  30.22 Orderly,conscientious,anxiousand ensuresthat timetablesare met (2 marks) Whichof the followingstatements describesthe correctsequencebetweensenderand receiverwithinthe communicationcycle?  Encodedmessage,medium,decoded message  Medium,encodedmessage,decoded message  Decodedmessage,encodedmessage,medium (1mark) G H 30.23 Accordingto the Ashridgestudieson leadershipstyle,what is mostimportantto subordinatesabout the styleof theirleader?    30.24 Consultation Direction Consistency (1mark) WhichTWOof the followingmustbe ina jobdescription?     Reportinglines Salary Hoursof work Job content (2 marks) (Total = 40 marks) 134 Businessand technology(FBT/BT) Page 149 of 327 G q 31 48 mins Mixed Bank 5 31.1 WhichTWOof the followingare advantages of computerisedaccountingpackages over manualsystems?     31.2 31.3 31.4 31.5 Theymakeit easierto see wherea mistakehas been made Theycan be used by non-specialists Theyprovidemoreconsistentprocessingthan manualsystems Theyare lessexpensiveto implement (2 marks) Whichof the followingis normallysubjectto the mostdirectgovernmentregulation?  Employmentprotection   Corporatesocialresponsibility Corporategovernance (1mark) Fishand chipsare consideredcomplementaryproducts.Ifthe priceof fishrises,what will the impactbe indemand forchips?  Rises   Stays the same (1mark) Falls H ForwhichTWOof the followingdoes the externalauditorhave responsibility?  Evaluatingthe efficiencyof systemsand procedures   Reportingto shareholders Detectingfraud  Givingan opinionon financialstatements (2 marks) Amediumsizedmanufacturingfirmproducesa numberof reports,forexample,production and materialsreports,marketingreports,personnelreportsand financialreports. WhichTWOof the followingwouldyou expectto see ina productionand materialsreport?  Transportcosts  Wastage rates  Labourutilisationfigures  (2 marks) Salesanalyses Questions 135 Page 150 of 327 q 31.6 Whichof the followingis a feature of a structureddecision?     Thereis a formalprocessfordecision-making Thedecisionvariablesare verycomplex Theinformationneeded fordecision-makingis unpredictable Themanager's experienceand intuitionplay a large part inmakingthe decision (2 marks) 31.7 Whowas responsiblefordevelopingthe 'two-factortheory'of motivation?    31.8    Powerassociated witha particularroleor status Powerassociated withphysicalforceor punishment Powerassociated withcontroloverphysicalresources Powerassociated withindividualpersonalityand attitudes (2 marks) WhichTWOof the followingare parts of the jobof a supervisor?   G (1mark) Whichof the followingstatements describescoercivepower?  31.9 Herzberg Maslow Vroom   Managingteam performance H Co-ordinatingdepartmentalobjectives Developingstrategicplans Organisingthe workof others (2 marks) 31.10 Whichof the followingemployeeselectionmethodshas the highest'predictivevalidity': that is,whichis best at predictinga candidate's performanceinthe job?     136 Interviews Personalitytesting Assessmentcentres Worksampling (2 marks) Businessand technology(FBT/BT) Page 151 of 327 q 31.11 Theconceptof ………………… is based on the beliefthat the types of individualdifference whichare protectedby anti-discriminationlegislationare crude and irrelevantto successfulperformance,and that an organisationcan benefitfromembracingallkindsof difference. Whichwordscorrectlycompletethissentence?  Picklist: Equalopportunity Managingdiversity Diversification (1mark) 31.12 Kolbprovidesa usefuldescriptivemodelof adult learning. Whichof the followingis the correctsequenceof the fourstages of the learningcycle?  Activeexperimentation,observationand reflection,abstract conceptualisation, concreteexperience  Concreteexperience,abstract conceptualisation,activeexperimentation, observationand reflection  Abstractconceptualisation,observationand reflection,activeexperimentation, concreteexperience  Concreteexperience,observationand reflection,abstract conceptualisation,active experimentation (2 marks) G H 31.13 Whichof the followingfeatures of organisationalstructureis NOTassociated withflexibility and adaptability?   Horizontalstructure Shamrockorganisation  Scalarchain (1mark) 31.14 Whichof the followingis the roleof the secretary of a committee?     Guidingdiscussionincommitteemeetings Selectingmembersof the committee Takingand circulatingminutesof the meeting Determiningthe agenda of the meeting (2 marks) 31.15 Whichof Handy's'gods' is associated with'powerculture'?     Zeus Apollo Athena Dionysus (2 marks) Questions 137 Page 152 of 327 q 31.16 Whichof the followingfactors helpshape an organisation'sculture? (1) (2) (3) (4) (5)     Thepersonwhofoundedthe organisation Thefailuresand successesexperiencedby the organisation Recruitmentand selection Theindustrythe organisationis in Labourturnover (2)and (4)only (1),(2)and (4)only (2),(3)and (4)only (1),(2),(3),(4)and (5) (2 marks) 31.17 Inthe contextof the differentlevelsof objectivesthat an organisationmay pursue, environmentalprotectionregulationswouldrepresentwhichof the followingcategories?     Primaryeconomicobjective Non-economic,socialobjective Responsibility Boundary (2 marks) 31.18 Threeof the followingare recognisedadvantages of a framework-basedapproach to ethicalcodes.Whichis the exception? G  Encouragesproactivediscussionof issues   Encouragesconsistentapplicationof rules Suitscomplexsituationsand evolvingenvironments Encouragesprofessionaldevelopment  H (2 marks) 31.19 Thefollowing,withone exception,are 'buildingblocks'forteam building.Whichis the exception?    31.20 (1mark) Whichof the followingwouldbe identifiedas a problemwiththe roleof non-executive director?    138 Diversemixof personalities Membersdo not challengeor criticise Regularreviewsof performance Externalstakeholdersecurity Timeavailableto devoteto the role Objectiveviewpoint Businessand technology(FBT/BT) Page 153 of 327 (1mark) G q 31.21 Inthe contextof corporatesocialresponsibility,whichTWOof the followingmight 'sustainability'involve?     Usinglocalsuppliers Maintaininglong-termrelationshipswithsuppliers Minimising energy consumption Ethicalemploymentpractices (2 marks) 31.22 ………………………… is the study of the aggregated effectsof the decisionsof individual economicunits(suchas householdsor businesses). Whichwordcorrectlycompletesthissentence?  Picklist: Demographics Globalisation Macro-economics (1mark) 31.23 Governmentcan directlyaffect an organisationby influencing (1) (2) (3)  Demand Capacity expansion Competition   (1)and (3) (2)and (3)  (1),(2)and (3) (1)and (2) H (2 marks) 31.24 Inrelationto fraud prevention,what objectiveshouldexternalauditorshave indesigning and implementingtheiraudit procedures?     Areasonableprospectof detectingirregularstatements or records Theidentificationof everyinconsistencyor errorwithinthe records Toprovidea systematiccheckof everyrecordedtransaction Toverifypre-determinedsamplesof alltypes of records (2 marks) (Total = 40 marks) Questions 139 Page 154 of 327 q 46 mins 32 Mixed Bank 6 32.1 Whichof the followinggroupsare the ownersof a limitedcompany?    32.2 (1mark) Whichof the followingcorrectlydescribesthe meaningof Mintzberg'sterm: 'technostructure'?     32.3 Non-executivedirectors Stakeholders Shareholders Analystssuch as accountants and workplanners,whoseobjectiveis to effect standardisationinthe organisation Therange of technologyneeded foreffectiveorganisationalperformance Theorganisationof shopfloorworkersand theirsupervisorsina manufacturing environment Thecentralstrategy-settingcomponentof organisationstructure (2 marks) Zplcsourcesa range of complexcomponentsfromsupplierswhichare criticalto the qualityof Zplc'sfinalproduct.Anydisruptionto the supplyof these componentswillmean that Zplccannot maintainits servicelevelsto its owncustomers. Inthe purchasingof these components,whichTWOof the followingwillNOTbe a componentof Zplc'ssupplystrategy?  Long-termpartnershiprelationswithkeysuppliersof the components G    32.4 Asmallnumberof suppliersof the components Outsourcingproductionof the productto low-costcountries Consolidatingpurchasesof the componentsand sourcingfroma singlesupplierto (2 marks) reducesourcingcosts InRobertAnthony'shierarchy,whichof the followingis the termgivento the processof establishingmeans to corporateends, mobilisingresourcesand innovating?    140 H Strategicmanagement Tacticalmanagement Operationalmanagement (1mark) Businessand technology(FBT/BT) Page 155 of 327 q 32.5 ……………….. is the systemby whichorganisationsare directedand controlledby theirsenior officers. Whichtwowordscorrectlycompletethisdefinition?  Picklist: Corporategovernance Strategicmanagement Executivedirectorship Internalcontrols 32.6 Whichof the followingstatements is true of a 'progressivetax'.    32.7   32.8 Ittakes a higherproportionof a poorperson'ssalary than of a richperson's. Ittakes the same proportionof incomeintax fromalllevelsof income. (1mark) Ittakes a higherproportionof incomeintax as incomerises. Inemploymentprotectionlaw, whichof the followingwouldconstituteunfairdismissal?   G (2 marks) Dismissalbecause the employerhas ceased to carry on the business Dismissalbecause the employerhas relocatedthe place of work Dismissalbecause demand forthe type of workdone by the employee(s)is expected to decline Dismissalbecause the employeeis pregnant (2 marks) Variousgroupsof peoplemightbe interestedinfinancialinformationabout an organisation,forvariousreasons. Matchup each of the followinggroupswiththe primarynature of theirinterestinfinancial information. Groups Interest (i) Shareholders (1) Abilityto maintainand repay loans (ii) Financiers (2) Potentialsocialcontributionsand impacts (iii) Employees (3) Managementstewardship (iv) Public (4) Attainmentof performanceobjectives (2 marks) 32.9 Thewebsiteof a universitycontainsa dedicated siteforacademicresearchers,givingthem access to the university'sarchivedmaterial,ifthey registerand obtaina passwordto enter the site. Of whichtype of networkis thisan example?  Internet  Intranet  Extranet (1mark) Questions 141 Page 156 of 327 H G q 32.10 Whichofthefollowing isa feature ofanineffective jobadvertisement?     Itnarrows thepoolofpeople whomightgoontoapplyforthejob Itprovides allinformation necessary tomakeanapplication Itmaximises theattractiveness ofthejobandorganisation topotential applicants Itisrelevant andappropriate tothenature ofthejobandthedesired applicants (2 marks) 32.11 There arethreepre-requisites forfraud:motivation, opportunity anddishonesty. Match eachofthesewiththemostimmediate control strategy fromthefollowing list. Control strategies (1) Recruitment reference checking (2) Disciplinary codes (3) Internal checks andcontrols (i) Motivation (ii) Opportunity (iii) Dishonesty (2 marks) 32.12 Inwhichofthefollowing areasdoesa database system havesignificant advantages?     Datasecurity Dataprivacy Development cost H (2 marks) Datamanagement 32.13 The…………. Studies isthenamegiventoexperimental socialresearch initiated byElton Mayo,whichidentified theinfluence exercised bysocialneedsandinformal groups inthe workplace, andgaverisetothehuman relations school ofmanagement. Whichwordcorrectly completes thesentence?  Picklist: Hofstede Hawthorne Ashridge Mintzberg (2 marks) 32.14 Instrategic planning, whatisthepurpose ofenvironmental scanning?    Tomonitor PESTfactors Toappraise SWOTfactors Tomonitor competitive forces (1mark) 142 Business andtechnology (FBT/BT) Page 157 of 327 G q 32.15 Whatis the mainfocusof InternationalAccountingStandards (IASs)?     Financialcontrol Accountancytraining Financialreporting Corporategovernance (2 marks) 32.16 Alarge supermarketchainhas purchasedland fora newout-of-townshopping developmentinan area of recognisednatural beauty. Theorganisationis nowpreparing plans forinfrastructuredevelopment(roadaccess, parking,power)and construction. Levelof interest Low High High C D A B Power Low Intowhichquadrant of the abovepower/interestmatrixwouldthe organisationplace local nature appreciationgroups,and what strategy does thisindicate? Consultand involve  Keepinformed  Keepsatisfied   Minimaleffort (2 marks) 32.17 Whatis a fraud responseplan?    Astrategy forpreventingand controllingfraud Aframeworkof disciplinaryrulesand sanctionsto be appliedwhenfraud is discovered Astrategy forinvestigatingand dealingwiththe consequencesof suspectedor (1mark) identifiedfraud 32.18 Inwhichof the followingareas is economicgrowthmostclearlybeneficial,as an objective of macro-economicpolicy?    Employment Publicservices Environment (1mark) Questions 143 Page 158 of 327 H q 32.19 Accordingto WarrenBennis,whichTWOof the followingattributesdistinguishesa leader, as opposedto a manager?     32.20 Administersand maintains Focuseson people Innovates Focuseson systems (2 marks) ComfyDentiality,a large dental practice,is concernedwiththe securityof its patient records.Themanager amendsthe disciplinaryrulesof the practice,so that unauthorised disclosureof data by personnelcan be made groundsfordismissal. Whattype of approach to data securitydoes thisreflect?  Correction   Detection Threatavoidance  Deterrence (2 marks) 32.21 G H A B C Thediagramaboveis of an appraisalsystem.Matchthe followinglabelsto BoxesA,Band C. Labels: 1 2 3 32.22 (2 marks) Whatset of environmentalfactors is mostdirectlyinfluencedby birthand mortalityrates?     144 Assessmentinterview Followup action Criteriaforassessment Political Economic Social Technological (2 marks) Businessand technology(FBT/BT) Page 159 of 327 q 32.23 Inthe contextof rewardingteam performance,team-based rewardsand bonusesare more effectiveifindividualteam members'contributionsand workpatterns are largely ………………… Whichwordcorrectlycompletesthissentence?  Picklist: Independent Interdependent Isolated (1mark) (Total = 38 marks) 50 mins 33 Mixed Bank 7 33.1 Ina payrollsystem,whichof the followingactionswouldNOTrequireauthorisation,as a standard controlmeasure?   Engagementor dischargeof employees Changes inpay rates  Statutorydeductionsfrompay Overtimepayments  (2 marks) G H 33.2 Ata chocolatemanufacturingcompany, one of the productionmixershas recentlybeen made redundant.Fellowshop-floorstaff are outraged:he was 'the onlyone whoknew anythingabout chocolate'and they had reliedon hisjudgementforyears. Protestsare ignored.Aweeklater, cementisfoundina batch of crunchybars. Twoweekslater, staff refuseto workovertime.Themixeris finallyreinstated. WhichTWOtypes of powerare illustratedinthisscenarioby the mixerand the shop floor staff?  Positionpower  Expertpower  Personalpower  Negativepower (2 marks) Questions 145 Page 160 of 327 q 33.3 Ina particularworkteam, Jemimais acknowledgedto be the 'ideas' personwho'thinks outsidethe box'withcreativesolutionsto difficultproblems.However,she tends to lookat the big picture,not at the details.Frankspots the gaps inJemima'ssuggestions,and encouragesthe team to considerotheroptions. Matcheach character inthisscenariowiththe rolethat they occupyinBelbin'steam role model. Characters Roles (i) (ii) 33.4     33.6    Inorderto maintaincontrol,the organisationshouldoutsourceactivitiesinareas of its owncore competence. Outsourcingto externalcontractorsharnessesspecialistexpertise,but at the cost of losteconomiesof scale. Outsourcingcarriescommercialand reputationalrisks. (1mark) Contenttheory Processtheory H (1mark) Hierarchytheory Usingemail Introducingreportingby exception Holdingregularstaff meetings Speedreadingtrainingformanagers (2 marks) Whichof the followingis representedby Blakeand Mouton'smanagerialgrid?     146 (2 marks) Inthe contextof improvingorganisationalcommunication,whichof the followingwouldbe helpfulmeasuresinaddressingthe problemof informationoverloadon managers?  33.7 Monitor-Evaluator Teamworker Plant VictorVroom's'expectancytheory'is an exampleof whichtype of motivationaltheory?  G (1) (2) (3) Whichof the followingstatements about outsourcingis true?  33.5 Jemima Frank Thebalance ina manager's leadershipstylebetweenconcernforthe task and concernforpeopleand relationships Thesuccessof a manager's performance,forthe purposesof appraisal Amanager's positionon the continuumbetweenconcernfortask and concernfor peopleand relationships Amatrixorganisationstructure,combiningfunctionaland lineauthority (2 marks) Businessand technology(FBT/BT) Page 161 of 327 G q 33.8 Inthe contextof selectioninterviewing,whichTWOof the followingtypes of questionmight you use to pindowna candidate whoseemsreluctantor unableto givea definiteanswer?     33.9 Open Closed Leading Probing (2 marks) Inthe contextof motivation,workersmay have the attitude that workis not an end initself, but a means to otherends, throughearningfinancialrewards. Whattermis givento thisattitude?  TheoryY  Job enrichment  33.10 (1mark) Instrumentalorientation Inthe contextof performanceappraisal,what does the term'telland listen'referto?   Anapproach to appraisal interviewing Anapproach to upwardappraisal  Abarrierto effectiveappraisal (1mark) 33.11 Whichof the followingstatements about trainingand developmentis false?     H Agap betweencurrentperformanceand requiredperformanceis a learninggap whichrequirestraining. Trainingand developmentactivitiescan have measurablebenefitsfororganisations. Educationmay formpart of training,whichinturn may formpart of employee development. A'learningorganisation'is one whichfacilitatesthe learningof allits members. (2 marks) 33.12 Accordingto the hierarchyof needs (a motivationaltheoryput forwardby Maslow)which TWOof the followingrewardsmightyou pursueinorderto have youresteemneeds satisfied?     Opportunityto undertakefurtherprofessionaldevelopment Awardof a departmentalprizeforyourperformance Receivingpraiseon an achievementfromyourworkteam Beinginvitedto joincolleaguesforlunch (2 marks) Questions 147 Page 162 of 327 q 33.13 Ifa teamhasbeenfunctioning forsometime,itmaygrowcomplacent withits performance, andstarttodevote moreattention torelationship andpower issues within thegroup. Inthegroupdevelopment model, whichofthefollowing terms would beusedforthisstage oftheteam's development?  Forming  Norming  Dorming  Storming (2 marks) 33.14 Ina typicalrecruitment andselection process, inwhatorderwould thefollowing stepsbe carried out.Assign eacha number inthesequence, from1(first)to5 (last). (i) (ii) (iii) (iv) (v)     Preparing jobdescriptions Selection interviewing Reference checking Selection testing Preparing person specifications 1(i),2(ii),3(iii),4(iv),5(v) 1(ii),2(iv),3(i),4(iii),5(iv) 1(iii),2(i),3(v),4(ii),5(iv) 1(i),2(v),3(ii),4(iv),5(iii) (2 marks) G H 33.15 Oneofthedistinctions between coaching andmentoring isthata ……………. isnotusually theimmediate superior oftheperson beinghelped. Whichwordcorrectly completes thissentence?  Coach  Mentor (1mark) 33.16 Apopular approach toselfdevelopment isforemployees toreflect onworkincidents, and assesswhether andhowtheymightadjusttheirbehaviour togainmoresuccessful outcomes infuture. Onwhichschool oflearning theory isthisapproach based?  Behaviourist psychology  Cognitive psychology  Contingency theory  Learning styles 148 Business andtechnology (FBT/BT) Page 163 of 327 (2 marks) q 33.17 WhichTWOof the followingfactors establishthe independenceof an internalauditor?     Theauditor'smandatoryauthority Theauditor'sinvolvementinthe activitiesbeingappraised Theauditor'sownprofessionalism Theauditor'sfreedomfromaccountability (2 marks) 33.18 Amanager is comingup to retirementina year's time.Inwhichof the following circumstanceswouldthe organisationbe mostlikelyto considerexternalrecruitment, rather than internalpromotion,to fillthe position?    Theorganisationhas a policyof staff developmentand successionplanning Theorganisationis lookingto introducea cultureof innovationforthe firsttime Theorganisationhas a verystrongmanagerialculture,whichit wishesto preserve (1mark) 33.19 Inwhichof the followingareas is there an advantage to usingformaloff-the-jobtraining coursesas opposedto on-the-jobor experientiallearningmethods?   Levelof riskforacquiringnewskills Relevanceof learningto the job  Applicationof learningto the job  Continuityof workeffort (2 marks) G H 33.20 …………………… occurswhena personis penalisedforgivinginformationor takingactionis pursuitof a claimof discrimination. Whichwordor wordscorrectlycompletethisstatement?  Picklist: Directdiscrimination Indirectdiscrimination Victimisation (1mark) 33.21 Whichof the followingwouldbe considereda potentiallysensitiveor negativeelementof an effectiveequal opportunitiespolicy?     Flexibleworkingand career break programmes Monitoringnumbersand performanceof ethnicminoritystaff Diversejobinterviewpanels Counsellingand disciplinarypolicieson discrimination (2 marks) Questions 149 Page 164 of 327 q 33.22 Whichof the followingcheckswouldthe externalaudit functionbe responsiblefor?     33.23    G Ultimatevalue Changes injobbehaviour Traineereactions Traineelearning Impacton organisationalresults 1(i),2(ii),3(iii),4(iv),5(v) 1(iii),2(iv),3(ii),4(v),5(i) 1(ii),2(iii),3(iv),4(i),5(v) 1(iii),2(i),3(v),4(ii),5(iv) (2 marks) Inthe contextof data security,whichTWOof the followingare examplesof physical access controlsto protect computerequipmentor data storage media?  Card entry systems   Back-upcontrols Personalidentificationnumbers Logicalaccess systems  33.25 (2 marks) Theeffectivenessof trainingprogrammescan be evaluatedusinga five-levelmodelby Hamblin.Assignthe correctnumberfrom1to 5 to each of the followinglevels. (i) (ii) (iii) (iv) (v)  33.24 Separationof dutiesforindependentprovingof work Arithmeticcheckson the accuracy of data recordingand calculation Creatingand preservingrecordsthat confirmaccountingentries Consideringwhetherdirectorsact on internalaudit information H (2 marks) Anorganisation'semployeesare one of its connectedstakeholders.   True False (1mark) (Total = 42 marks) 150 Businessand technology(FBT/BT) Page 165 of 327 q Answers G H Page 166 of 327 q G H 152 Businessand technology(FBT/BT) Page 167 of 327 q 1 Business organisations and their stakeholders 1.1 Goals 1.2 Rationale:Collectivegoalsor aimsare a feature of organisations. Pitfalls:Watch out forcloselyrelated terminologylike'goals' and 'tactics'. Youmighthave thought'tactics' wouldfithere, but they are the lowerlevelplans of functions:they may not be shared by the organisationas a whole. Ways in:Ifyou didn'tknowthe definition,you couldhave got to the answerby rulingout the otheroptions.Stakeholdersdoesn't fit'pursues';profitsare not the objectiveof all organisations;and tactics are at a lowerlevelthan goals. Synergy Rationale:Synergyis the 2 +2 =5 factor, and is one of the keyreasonsforthe formation of teams and organisations. Pitfalls:Youneed to read allthe optionscarefully,especiallyifthey looksimilarand all 'sound' plausible. Ways in:Youshouldbe able to definethe other options,to confirmthat they do not fitthe definitiongiven. 1.3 Fororganisationsthat have limitedcompanystatus, ownershipand controlare legally separate. Rationale:Ina limitedcompany, the owners(shareholders)are separate fromthe managers of the concern(boardof directors). Pitfalls:Someoptionslookplausiblebecause of the wording.'Limited'doesn't mean 'only beingallowedto trade up to' – but looksas ifit might.Thesecondhalfof the statement about partnershipsis true – but thisdoesn't mean that the firsthalfis also true. Ways in:Youshouldhave been able to ruleout A(nocompany'sturnoveris limited),C (soletraders do have personalliabilityfordebts: they do not have 'limitedliability')and D (ordinarypartnershipsare differentfromlimitedcompanies). G 1.4 Apublicsectororganisation 1.5 Rationale:Suchan organisationis part of the publicsector. Thevoluntarysector comprisescharitiesand other organisationswhosemembersare volunteers.Privatesector comprisesnon-governmentalorganisations,such as limitedcompanies. Pitfalls:Watch out for'public'and 'private'sectorterms– and be able to distinguish clearlybetweenthem. (1),(2),(3)and (4) 1.6 Rationale:Allthese groupshave a legitimatestake inthe enterprise:the government,as a regulator;employees,as participantsinthe business;and environmentalpressuregroup and localresidents,because of potentialimpacts. Pitfalls:Don'tforgetexternalstakeholders! Stakeholderswhodo not have a contractualrelationshipwiththe organisation 1.7 Rationale:Secondarystakeholdersare stakeholderswhodo not have a contractual relationshipwiththe organisation.Primarystakeholdersare stakeholderswhodo have a contractualrelationshipwiththe organisation. Alocalauthority Measuressuch as valueformoneyor efficiencyare oftenused innot-for-profit organisationssuch as localauthorities. Answers 153 Page 168 of 327 A N S W E R S H q 1.8 Co-operative Rationale:Aco-operativeis a businesswhichis ownedby its workersor customers,who share the profits.Othersfeatures includeopen membership,democraticcontrol, distributionof surplusinproportionto purchasesand promotionof education. 2 2.1 2.2 2.3 The business environment PEST Rationale:PESTstands forPolitical,Economic,Socio-culturaland Technological. Pitfalls:SWOT(Strengths,Weaknesses,Opportunities,Threats)is a related exercise,as PESTdata is fed intothe O/Tpart of the businessappraisal. Ways in:Youcouldeliminateas many distractorsas you couldidentify:SMART (Specific, Measurable,Attainable,Relevant,Time-bounded)refersto objective-setting. Offeringfinancialincentivesto publicofficialsto use theirinfluenceon the organisation's behalf Rationale:Thiswouldbe interpretedas corruption.Theotheroptionsare usuallylegitimate methodsof influence.Althoughgivinglawmakersnon-executivedirectorshipsmay be questionableinsomeparts of the world,inotherslikethe UKit is perfectlylegitimate. Demographics Rationale:Thestatement definesdemographics.Ergonomicsis a study of the interaction of humansand theirenvironments(usedindesignof officeequipmentand furniture,for example).Psychographicsis the study of psychologicalfactors (usedinselectiontesting, forexample).Economicsisthe study of economies. G 2.4 Ways in:Youcouldeliminateas many distractorsas you coulddefineinotherways. Technological Rationale:Virtualorganisationis the collaborationof geographicallydispersedindividuals and teams, specificallyusingthe latest informationand communicationtechnology(ICT) enablers:the Internet,web-conferencingand so on. 2.5 Erasure 2.6 Rationale:Erasureis also knownas the right'to be forgotten'.Data subjectsmay request informationheldabout thembe destroyed. Ways in:Thinkabout what the othertermsmean. Rectificationmeans to change forerrors or misstatements,portabilitymeans that the data can be moved. Selectionforredundancyon the basis of age Rationale:Thisconstitutesunfairselectionforredundancy(onthe basis of recent age discriminationlegislation):redundancyis potentiallyfairgroundsfordismissalas longas the basis of selectionis fair. Misconductand incompetenceare potentiallyfairgrounds: there shouldbe a reasonableattempt at performanceor disciplinarymanagement (warnings,trainingetc). Youmay have hesitatedovermarriageto an employeeof a key competitor,but thisis an exampleof 'substantialreasons' that wouldbe consideredby a tribunal. Ways in:Youcouldnarrowthe optionsby consideringthat there mustbe some way for companiesto dismissincompetentor deliberatelyobstructiveemployees. 154 Businessand technology(FBT/BT) Page 169 of 327 H G q 2.7 (1),(2)and (3)only Rationale:Increasingdiversityhas an impacton HRpoliciesinregard to equal opportunity and preventionof discrimination.Fallingbirthrates creates an aging workforceand skill shortages.Allorganisationsneed to take account of environmentalregulationand consumerism.Anincreaseinsingle-memberhouseholdswillimpacton some organisations: notably, those whichmarketgoodsand servicesto thissegment(eg single-servepack sizes),but the questionssaid 'most' organisations. Pitfalls:Youneed to thinkthrougha range of compliance,marketingand skillingissues whenappraisingsocio-culturalfactors. 2.8 Governmentregulationof the industry 2.9 Rationale:Theotherforcesare bargainingpowerof suppliersand rivalryamongstcurrent competitorsinthe industry. Pitfalls:Thefiveforcesmodelis basic:you reallyneed to learnthe details… Marketing Rationale:Socio-economicgroupingsare oftenthe basis on whichmarketsare segmented, so that products/servicesand marketingmessagescan be targeted appropriately(to peoplewiththe rightlevelsof income,aspiration,educationand so on).Youmighthave paused overHumanResources,because socialclass includeseducationfactors,but the data cannot be used to predictskillavailability. 2.10 Procurement Rationale:Procurement,technologydevelopment,HRmanagementand infrastructureare supportactivities.Inboundand outboundlogistics,operations,marketing/salesand service are primaryactivities. 2.11 Automationand artificialintelligenceallowthe accountant to focustheirtimeon verifying low-leveltransactions. 2.12 Rationale:Automationand artificialintelligencesupportthe automaticand intelligent processingof transactionalinformationto freethe accountant to workon value-adding servicesrather than focussingon low-leveltransactions.Theotheroptionsare allcorrect statements concerningthe impactof technologyon the roleof accountants. Sheila 2.13 Steve,Sam,and Sunnyallhave supportrolesand the words'administration'and 'informationtechnology'shouldhave immediatelyindicateda supportroleforSteveand Sam.Sunny'sprocurementroleis not so clearcut but the responsibilitiesfordealingwith the suppliersare sufficientto concludethat Sunnyalso has a supportrole. Asearlyas possibleafter employment 2.14 Rationale:Afterthe firstfewweeksof employmentis incorrectbecause waitinga few weeksleavesthe employeeopen to risksinthose weeks.Theotheroptionsare incorrect because there is no certaintythat the jobwillbe offeredor accepted. Lowswitchingcosts inthe market Rationale:Lowswitchingcosts means that it willbe easy forcustomersto change from existingsuppliersto a newsupplier:thiswouldfacilitateentry to the market.Theother optionsshouldclearlypose difficultiesto a newentrant: not yet big enoughto benefitfrom economiesof scale (againstcompetitorswhoare); highstart-up costs;highdegree of recognitionof and loyaltyto existingbrands. Answers 155 Page 170 of 327 A N S W E R S H q 2.15 Delegating 2.16 Rationale:Outsourcing(contractingsomeof the firm'sactivitiesto externalproviders)and delayering(removinglevelsof the organisationhierarchy)are strategiesfordownsizing (reducingthe numberof staff permanentlyor directlyemployedby the firm).Delegatingis the processwherebya superiorgivesa subordinatepart of hisor her ownauthorityto makedecisions. Concernwithhealth and diet Rationale:Healthand safety legislationmay reflect a culturaltrend (increasing expectationof qualityof workinglife,say), but it is a complianceissue.Increasingage of the populationis a demographictrend. 2.17 Lifestyle Rationale:Lifestyleis generallyconsidereda reflectionof economicstatus and conditions, not a determinantof them.(Formarketsegmentationpurposes,forexample,lifestyle factors are oftenmeasuredintermsof attitudes, interestsand opinions,rather than purely economicfactors.) 2.18 False Rationale:Technologicaldevelopments,such as automationand artificialintelligence, mean that theroleoftheaccountantandauditorto recordandverifyday-to-day transactionshas becomelessimportantas the roleswitchesto morehigh-leveltasks such as reportwriting. 3 3.1 The macro-economic environment Exchangerates Rationale:Exchangerates are a target of monetarypolicy:governmentpolicyon the moneysupply,the monetarysysteminterestrates, exchangerates and the availabilityof credit.Fiscalpolicyis governmentpolicyon the three otheroptions. Pitfalls:Thiswholesyllabusarea is fullof finedistinctionsinterminology,whichlend themselvesto testingina MultipleChoiceand ObjectiveTestingformat. Ways in:Ifyou knewthat there was a distinctionbetweenfiscaland monetarypolicy,you mighthave identifiedexchangerates as the onlymonetaryissue. G 3.2 Thegovernmentis runninga budget surplus. 3.3 Rationale:Abudget surplusoccurswhena government'sincomeexceedsits expenditure: there is a negativePSNCRor PSDR.Whena government'sexpenditureexceedsits income, so that it mustborrowto makeup the difference,there is a positivePSNCRand wesay that the governmentis runninga budget deficit. Ways in:Ifyou recognisedthat a negativePSNCmeans no borrowing,you mighthave been able to start eliminatingsomeoptions… Indirect 3.4 Rationale:Thedefinitionclearlydistinguishesan indirecttax (eg sales tax)froma direct tax, whichis paid directby a personto the Revenueauthority(eg incometax, corporation tax, capital gains tax and inheritancetax).Progressiverefersto the proportionof income taken by a tax. Increasingtaxation Rationale:Increasingtaxationlowersdemand inthe economybecause peoplehave lessof theirownmoneyafter tax forconsumptionor saving/investment.Increasingpublic expenditureshouldincreasethe levelof consumerdemand.Decreasingtaxationhas the oppositeeffect.Loweringinterestrates shouldstimulateinvestment(by companies)and consumerexpenditure,evenifonlyafter a timelag. 156 Businessand technology(FBT/BT) Page 171 of 327 H G q 3.5 Areductioninthe rate of cost push inflation Rationale:Anincreaseinthe exchangerate makesa country'sexportsmoreexpensiveto overseasbuyers,and importscheaper:it thereforehas the oppositeof the firstthree effects.Thelowercost of imports,however,is likelyto reducethe rate of domesticinflation. 3.6 Pitfalls:Thepermutationsof increases/decreasesininterestrate can be confusing:ensure that the logicmakessense to you! Ways in:Youcouldgroupthe secondand thirdoptionstogether(increasedcost =reduce demand):sinceboth cannot be the answer,and there is onlyone answer,neitherof these optionscan be correct.Thisgets you quitea longway towardsthe solution…Soifyou don't knowan answer,don't panic:logiccan oftenhelp! Subsidiesforexporters Rationale:Subsidiesforexporterswillencouragedomesticexports,but willnot helpto protect domesticproducersagainst overseasproducers.Theotheroptionsare tariff(taxes and dutieson goodsenteringthe country)and non-tariffbarriersto trade. 3.7 Frictionalunemploymentwillbe shortterm:True Governmentscan encouragelabourmobilityifthey want to reduceunemployment:True Rationale:Frictionalunemploymentoccurswhenthere is difficultyinmatchingworkers quicklywithjobs.Thismeans that frictionalunemploymentis temporaryand shortterm.A governmentcan encouragelabourmobilityby offeringindividualsfinancialassistance with relocationexpensesand by improvingthe flowof informationon vacancies. 3.8 Interestrates, exchangerates Rationale:Governmentpolicyon taxation,publicspendingand publicborrowingrelatesto fiscalpolicy.Governmentpolicyon interestrates and exchangerates are part of the monetarypolicy. 3.9 3.10 Anorganisationwhichhas a large numberof long-termpayables Rationale:Debtslose'real' valuewithinflation:a companythat owesa lotof moneywould effectivelypay less(inreal terms)overtime.Theotherorganisationswouldsufferbecause: inflationwouldmakeexportsrelativelyexpensiveand importsrelativelycheap; business mightbe lostdue to pricerises;and the cost of implementingpricechanges wouldbe high. Encouragingeconomicgrowth,lowunemployment,achievementof a balance between exportsand imports Rationale:Thefourmainobjectivesof macroeconomicpolicyrelate to economicgrowth, stable (notzero)inflation,unemploymentand the balance of payments(balancebetween exportsand imports). 3.11 Recessioninthe buildingindustry 3.12 Rationale:Recessionis part of the businesscycle:demand foroutput and jobsfalls,and unemploymentrisesuntilrecoveryis wellunderway. Thefirstoptionisan exampleof frictionalunemployment;the secondoptionisseasonalunemployment;the thirdoptionis technologicalunemployment. Pitfalls:Itis easy to confusecyclicalwithseasonalunemployment,or frictional unemploymentthat occurson a seasonalbasis. Youneed to associate cyclical employmentfirmlywithbusiness cycles. Current. Rationale:Itis particularlytemptingto equate a trade surplusor deficitwitha 'profit'or 'loss'forthe country,but thisis not the case. Answers 157 Page 172 of 327 A N S W E R S H q 3.13 Northland 3.14 Rationale:Stagflationoccurswheneconomicgrowth(definedby the change innational incomeina period)is lowor negative,and inflationis high.Sothe relevantfiguresare percentage change inGDPand change inconsumerprices.Northlandand Eastlandboth experiencednegativegrowth,however,Northlandhad a highlevelof priceinflationas well. Potential. Rationale:Potentialgrowthis the rate at whichthe economywouldgrowifallresources wereutilised:it is thereforedeterminedby factors inthe capacity of the economy(supply side),such as increasesinthe amountof resourcesavailable,or inthe productivityor resources.Actualgrowthis determinedboth by growthinoutput (supplyside)and aggregate demand (demandside). 4 4.1 Micro-economic factors Allocatesresources Rationale:Ina freemarketeconomy,it is the interactionof supplyand demand through the pricemechanismthat determineswhat shouldbe producedand whoshouldget it. 4.2 Marginalcost curveabovethe average variablecost curve 4.3 Rationale:Thesupplycurvefora perfectlycompetitivefirmis its marginalcost curve abovethe average variablecost curve.Thefirmwillnot continueto produceifpriceis less than average variablecost. Nothing Rationale:Aminimumprice(floorprice)onlyleads to excesssupplyifit is set higher than the equilibriumprice. G 4.4 Afallinproductioncosts of the good 4.5 Rationale:Theotheroptionsrelate to movementsalong the supplycurve. Asurplusof the good Rationale:Theeffectof pricebeingabovethe equilibrium(marketclearing)priceis that supplywillextendand demand willcontract. 4.6 Ariseinthe priceof overseasholidays 4.7 Rationale:Ariseinthe priceof overseasholidayswilllead to a movementalongthe demand curverather than a shiftinthe demand curve. Afallinthe levelof householdincomesgenerally Rationale:Generally,ifincomesfall,demand willfall. 4.8 Thereare fourproducersexertingconsiderableinfluenceinthe market 4.9 Rationale:Thefirstoptionis one of the conditionsfora perfectmarket,the secondis a monopolyand the fourthis monopolisticcompetition. Carpet underlay 4.10 Rationale:Carpet underlayis a complementto carpet. Holidays Rationale:Anincreaseindemand forcars willlead to an increaseindemand forpetroland tyres. Itwillnot increasethe demand forholidaysalthoughpeoplemay use theircars to go on holiday. 158 Businessand technology(FBT/BT) Page 173 of 327 H G q 4.11 Allocative inefficiency among producers Rationale: Thisisa supply-side factor. 4.12 Afallinthedemand fortea Rationale: Coffeeandteaaresubstitute products. Thus,a fallinthepriceofcoffeewill result inhigher demand forcoffeeandlower demand foritssubstitute product, tea.The priceofteamighttherefore fall.Demand fordrinking cupsisprobably insufficiently related totheconsumption ofcoffeetomakethema complementary product tocoffee.Evenso, lower coffeepriceswould belikelytoraisethedemand fordrinking cupsrather than reduce it. 4.13 Agoodforwhichdemand willfallashousehold income rises Rationale: Theterm'inferior good'isa technical termineconomics. Anexample ofsucha goodmightbesmall'starter' homes. 4.14 Thedemand curveforflower vaseswillshifttotheleftandtheirpricewillgodown Rationale: Itisassumed thatcutflowers andflower vasesarecomplementary goods.The riseinpriceofcutflowers willhaveanadverse effectondemand forflower vases,andthe demand curveforflower vaseswillshifttotheleft.Givennochangeinsupplyconditions forvases,thenewequilibrium priceforvaseswillbelower. 4.15 Thedemand curveforseaferrytickets willshifttotheright,andtheirpricewillgoup.More ferrytickets willbesold. Rationale: Asseaferrytickets andhovercraft tickets aresubstitute goods,anincrease in thepriceofhovercraft tickets willcausea shifttotheright(increase indemand) forsea ferrytickets. Givennochangeinsupplyconditions, theconsequence willbeanincrease in thenumber ofseaferrytickets sold,ata higher pricethanbefore. 4.16 Item1only Rationale: Afallinthepriceofsterling would makeLondon hotels cheaper forforeign tourists. Afallinthepriceofaeroplane tickets would makeLondon cheaper tovisitfor foreign tourists. Events 2 and3 would leadtoa riseindemand forhotelrooms. Incontrast, a fallinthevalueoftheUSdollarwould maketheUKmoreexpensive tovisitforUStourists andtourists fromothercountries where theUSdollariswidely used,anddemand forhotel rooms inLondon would fall. 4.17 Oligopoly Rationale: Thisisanexample ofoligopoly. 4.18 Inthelonger term,anincrease innewbuilding work,theprovision ofmorerented accommodation Rationale: Whenrentcontrols areeased,theeffectissimilar toraising orremoving minimum pricesintherented housing market. Weshould expect higher rents,moresupply ofhousing, anda closing ofthegapbetween demand forrented housing andsupplyof rented accommodation. Thereverse ofthefirstoption should happen, andhomelessness should decrease. Givenwidespread homelessness, itisunlikely thattheeasingofrent controls willhaveanyeffectondemand forowner-occupied dwellings. 4.19 Alloftheabove Rationale: Alloftheoptions maycausethedemand curvefora resource toshift. 4.20 Saleswillrisesharply whenincomes ofhouseholds rise Rationale: Theincome elasticity ofdemand measures theresponsiveness ofdemand to changes inconsumers' incomes. An'inferior' goodhasa negative income elasticity: as incomes fall,moreisbought. Answers159 Page 174 of 327 A N S W E R S H G q 4.21 Answer:2 4.22 Rationale:Percentagechange inquantity=50%.Percentagechange inprice=25%. Theexcessbetweenwhat consumersare prepared to pay fora good or service,and the prevailingmarketprice 4.23 Rationale:Consumersurplusis the excessbetweenwhat consumersare prepared to pay fora good or serviceand the prevailingmarketpricethey have to pay to purchase it. Elasticdemand, elasticsupply 4.24 Rationale:Toincreasemarketshare requiresgreater quantitiesof the firm'sproductsto be both demandedand supplied.Tosellmore,a firmneeds to lowerprice.Forthisto be profitable,demand mustbe elastic.Toproducemore,supplymustalso be elastic. Amorethan proportionalincreaseinthe quantityof dry whitewinepurchased 4.25 Rationale:Assuminga normalgood, a decrease inpriceresultsina greater quantitybeing demanded.Giventhat demand is priceelastic,the increaseinquantitywillbe proportionallygreater than the pricefall. Ratioof marginalutilityto priceis equal foreach good Rationale:Imagineyou can buy a secondcar for$10,000or buy a bikefor$100and they both giveyou the same extra utility.Youwouldn'tchooseto buy the car as you'repaying muchmoreto achievethe same utilityas you couldget frombuyingthe bike.Ifyou get 10 timesmoreutilityforone thingcomparedto another you'd be prepared to pay 10times moreforit. 5 5.1 Section A MTQs (a) Ifincomeelasticityis positive,the commodityis calledan inferiorgood. False.Aninferiorgood wouldhave negativeincomeelasticity Iftwogoodsare complements,the crosselasticitywillbe negative. True Ifpriceelasticityis greater than 1,demand is said to be inelastic. False.Ifpriceelasticityis lessthan 1,demand is said to be inelastic (b) 5.2 (a) (b) Unrelatedproductswouldhave a crosselasticityof infinity. False.Unrelatedproductshas a crosselasticityof zero. Anincreaseinhouseholdincomes Anexpectedfutureriseinthe priceof the good Anincreaseinpopulation (1) Wrongful Wrongfuldismissalrelatesto the methodof dismissal (2) Neither Thisdismissalwouldnot be classifiedas unfairor wrongful (3) Unfair Thisdismissalis unfairto the employee (4) Unfair Thisdismissalis unfairto the employee Inthe eventof redundancy, an employeewithone year's continuousemploymentis entitledto compensation. False.Thereis no entitlementto compensationwithlessthan 2 years' continuous employment Redundancycan occurwherean employerceases to carry on businessina particularlocation.True 160 Businessand technology(FBT/BT) Page 175 of 327 H q 5.3 (a) (b) 5.4 (a) (b) 5.5 (a) G (b) 5.6 (a) (b) (1) Taxincentivesforinvestment Taxincentiveswillencourage investmentwhichwillincreaseoutput capacity (2) Forbidtakeovers (3) Equalopportunitieslegislation (4) Productsafety standards Forbiddingtakeoverwillmean more competitorsinan industryand encouragescompetition Equalopportunitieswillpositively influenceemployment Productsafety standards willensurea minimumsafety levelforconsumers (1) (2) (3) (4) (1) (2) (3) (4) Fiscalpolicy Fiscalpolicy Monetarypolicy Monetarypolicy Operations Outboundlogistics Marketingand sales Aftersales service Thereis a lackof substituteproductsavailableand the productsuppliedis highly differentiated. Ifthere are a lackof substitutesthen the customerhas lesschoiceof suppliersand similarlyifthe productis highlydifferentiated. (1) 12.5%/–5%=–2.5 (2) –2.5%/–5%=+0.5 (3) Sincethe crosselasticityof demand is positive,the productsare substitutes. Downwards.Aninferiorgood stillhas a downwardslopingdemand curve,but lessof the productis demandedwhenincomesrise. Theyare aimedat promotingsocial,politicalor environmentalchange, they often raisefundsthroughdonationsand they are measuredintermsof effectivenessand efficiency. Thedescription'NGO'generallyappliesto groupswhoseprimaryaimis not a commercialone, aimedat promotingsocial,politicalor environmentalchange. NGOsare not necessarilycharities,althoughthey tend to raisefundsthrough donations.Theyare measuredintermsof effectivenessand efficiency,rather than customersatisfactionor profittargets. VFM.NCOsare measuredon theireffectivenessand efficiencyinhowthey manage theirresources– ' valueformoney' Answers 161 Page 176 of 327 A N S W E R S H G q 6 Business organisation, structure and strategy 6.1 Anorganisation chartcanindicate functional authority butnotlineauthority within a business. Rationale: Lineauthority caneasilybeshown ontheorganisation chart. Pitfalls:Youmayhavehesitated ifyoudidn'tknowthedifference between functional authority (where anexpert department hasauthority overtheactivities ofother departments intheareasofitsexpertise egtheHRdepartment setting recruitment policy forthesalesandproduction departments) andlineauthority (direct authority flowing down thechainofcommand). However, youonlyneeded toknowthemeaning oflineauthority toseethatthestatement wasuntrue. Waysin:Youmayhavepaused toaskwhether anorganisation chartcanimprove internal communications, butitdoesinonekeyway:byhighlighting thelength andcomplexity of linesofcommunication between people whoneedtoco-ordinate theirwork. 6.2 Thenumber ofemployees directly responsible toa manager Rationale: Thisisthedefinition ofspanofcontrol: alltheothers aredistractors. 6.3 Pitfalls:Allthedistractors areplausible: notetheneedtothinkthemthrough carefully. The firstoption isclosetothecorrect definition – butifyouthinkaboutit,thenumber of subordinate employees includes allthosebelow themanager, whereas spanofcontrol is directreports only. Support base Rationale: Support baseisnotoneofMintzberg's components oforganisation structure: theothercorrect terms aremiddle lineandsupport staff. Pitfalls:Thebasicterminology ofwell-known models ismust-learn material! 6.4 Divisionalisation H Rationale: Whiletheremaybeelements offunctional andgeographical organisation, Y plc'ssituation suitsdivisionalisation: moreorlessautonomous product andregional businesses, withco-ordination fromheadoffice.'Diversification' and'acquisition' aregood pointers todivisionalisation. Pitfalls:Don'tgetsidetracked bythelinkbetween 'overseas markets' and'geographical'. 6.5 Unityofcommand 6.6 Rationale: Matrix organisation isbasedondualcommand: theclassical principle ofunity ofcommand is'oneperson, oneboss'. Managers inpositions ofauthority generally cannot bepartoftheinformal organisation. 6.7 Rationale: Thefirstoption A isa fact.Thesecond option istrue,because ofinformal 'short cuts'whichareoftendeveloped andshared, by-passing health andsafetyrulesand procedures. Thethirdoption istrue,because the'grapevine' encourages knowledge sharing andmulti-directional communication. Thefourth option isnottrue:managers can feedinformation intothegrapevine andbepartoftheirowninformal networks. Senior managers cantakea wider viewofproblems andconsequences Rationale: Acentralised organisation isoneinwhichauthority isconcentrated inone place.Ifalldecisions aremadeinthesameplacethenitwillbeeasier forthedecisionmakers toseethe'biggerpicture' andtherefore understand theconsequences oftheir decisions. Thefirsttwooptions areadvantages ofdecentralisation, where decisions are delegated. 162 Business andtechnology (FBT/BT) Page 177 of 327 G q 6.8 Statement (1)only 6.9 Rationale: Statement (2)isnottrue,because theinformal organisation hasitsown agenda. Statement (3)isnottrue,because a strong informal organisation withitsown agendacanundermine theformal organisation: createdamaging rumours, safety/quality shortcuts, distractions fromtaskgoalsetc. Boundaryless organisation Rationale: Thisdescribes a boundaryless organisation. Ahollow organisation splitspeople andactivities intocoreandnon-core. Inmodular organisations different elements or components oftheproduct orservice theorganisation produces areoutsourced to different suppliers. Ina jobless structure theemployee becomes nota job-holder buta seller ofskills. 6.10 Statements (1)and(2)only Rationale: Theshared service centre iscreated within theorganisation andisa partofit, although itsrelationship issimilar tothatofanexternal service provider. 7 Organisational culture and committees 7.1 Roleculture 7.2 Rationale: Theroleculture isa bureaucratic ormechanistic culture, asdescribed inthe scenario. Taskculture isproject-focused; existential culture isperson-focused; andpower culture isleader-focused. Pitfalls:Ifyoudidn'tknowHarrison's model well,youmighthaveconfused 'focusonthe task'(seeinthescenario) witha taskculture, orthestrong central leadership witha 'power' culture. Strongvalues aredangerous iftheyfilterout'uncomfortable' environmental information Rationale: Thisisa problem withstrong cultures (andultra-cohesive groups). Pitfalls:Theotherstatements areplausible: youneedtocomeupwithcounter-arguments toshowthattheyarenotalwaystrue.Bismostplausible because itmakes a limited claim thatvalues 'can'replace rules:thinkofhealth andsafetyorfinancial controls, however, to disprove theclaim. Waysin:Youcouldruleouttwoofthestatements because theyaredogmatic (sothatjust onecounter-example would makethemuntrue). 7.3 Category ofpeople. 7.4 Rationale: There aremanyspheres ofculture: nation, ethnic groupandsocialclassare onlythreeofthem. 'Culture' applies tocategories ofpeople including genders, social classes andorganisations. Acquisitive/giving Rationale: Thefourth dimension inHofstede's model ismasculinity-femininity. 7.5 Assumptions 7.6 Rationale: Assumptions arefoundational ideasthatarenolonger evenconsciously recognised orquestioned bytheculture, butwhich'programme' itswaysofthinking and behaving. Values andbeliefs arethenextlevelup:theyareconsciously heldconcepts whichgivemeaning tothenextlevelupagain– observable factors suchasrituals, artefacts andbehaviour. Schein Rationale: Thisisjusta caseoflearning whoisassociated withwhichtheory anddefinition. Answers163 Page 178 of 327 A N S W E R S H G q 7.7 Masculinity– femininity 7.8 Rationale:Makesure that you learnthe distinctionsbetweenthe culturaldimensions. (2)and (3)only 7.9 Rationale:R&Dtends to be concernedwithproductresearch(notmarketresearch),and many organisationshave internalR&Dfunctions. Pitfalls:Beaware of the differencebetweenproductand marketresearch. Ways in:Ifyou wereable to ruleout statement (1),you wereonlyleftwithtwooptionsto choosefrom– and you shouldbe able to ruleout statement (4)ifyou knowany organisationswithan internalR&Ddepartment,leavingyou withthe correctoption. Intangibility. 7.10 Rationale:Intangibilityrefersto the fact that there are no materialor physicalaspects to a service:physicalelementshelpto reducethiseffect,and makethe provisionconcretefor the customer.Inseparabilityand perishabilityreferto the fact that servicesare created and consumedat the same time:they cannot be stored– and pose challengesto demand forecastingand scheduling.Variabilityrefersto the fact that servicesare specificto the situationand cannot easilybe standardised. Ways in:Whatdo physicalelementsdo fora customerpurchasingeg a train rideor legal advice?Ifyou knewthe meaningof the term'intangible',the answerto thisquestionwould get you to the correctanswer. Sales Rationale: Asales orientationassumesthat customersmustbe persuaded to buy the productsthat the firmproduces.Aproductionorientationassumesthat customerwillbuy whateveris produced:the focusof the firmis on meetingdemand. Amarketingorientation seeksto determinethe needs, wants and valuesof customersand to producewhat customerswant to buy. Pitfalls:Don'tconfusesellingand marketing! 7.11 (1)and (3) Rationale:HRMis concernedwiththe mosteffectiveuse of humanresources.Itdeals with staffinglevels,motivation,employeerelationsand employeeservices.Itis the marketing functionwhichmanages an organisation'srelationshipwithits customers,not HRM.Note that increasingly,HRMis undertakenby linemanagers as wellor instead of HR departments. 7.12 Standingcommittee Rationale:Astandingcommitteeis formedfora particularpurposeon a permanentbasis. Joint committeesare formedto co-ordinatethe activitiesof twoor morecommittees:they need not be permanent.Taskforcesare specificallynot permanent:they fulfiltheir allocatedtask and then windup. Pitfalls:Theconfusionof related terminologyis oftenthe target of testing. 7.13 Josh Rationale:HRand linedepartmentsgenerallyprovidedetailsof salary/wage rates, time sheets etc – but the financedepartmentgenerallyadministerspayroll,so Josh is likelyto be responsible. 7.14 Both(1)and (2) Rationale:Time,expenseand compromisedecisionsare someof the disadvantagesof a committeeso Paulis correct.Thereare, however,many advantages to committeesas well. 164 Businessand technology(FBT/BT) Page 179 of 327 H G q 7.15 Lesley Rationale:Dianeand Joanne workat operationallevelas they are concernedwithroutine activities.Lesleyis at an intermediateleveland is managingresources.Sheis therefore part of tactical management.Traceyis concernedwithdirectionsettingforthe business and is thereforepart of strategicmanagement. 7.16 Lowmasculinity Rationale:Lowmasculinity(orfemininity)is about highregard forvaluessuch as focuson relationshipsand qualityof workinglife,and the acceptabilityof such valuesforboth men and women:MrQ's nurturingstylewouldscoreon thisdimension.Hisapproach does not reallysay anythingabout power-distance(command-and-controlv delegation-andinvolvement).Thereare elementsof uncertainty-avoidanceinhisattempt to minimisestaff insecurity– but thiswouldbe highUA,not lowUA. Pitfalls:Don'tconfusethe masculine/femininedimensionwithstraightforwardgender stereotypes! 7.17 Mutualdependency Rationale:Dependencyincreasesstakeholderpowerand creates risksand constraints.A buyerwouldnot necessarilywant a supplierto be dependenton its business(forethical reasons),any morethan it wouldwant to be dependenton a supplier(forbargainingand supplyriskreasons). Pitfalls:Youmay have hesitated overinformation-sharing,because of intellectualproperty and confidentialityissues– but it is necessaryforhigh-interest,high-power'keyplayers'. 7.18 Janet only Rationale:Internalstakeholdersincludeemployeesand managementand so Janet is the onlyinternalstakeholder.Customersand suppliers(likeMaryat P Co)are connected stakeholders.Pressuregroupssuch as DGroupare externalstakeholders. 7.19 Givinga rulingon matters indispute S Rationale:Allthe other optionsare dutiesof the Committeesecretary. 7.20 Committeesecretary Rationale:Youshouldhave been able to ruleout the chairof a committee.Anordinary committeememberwillreceivecommunications,not producethem. 7.21 Ascertainingwhetherspecificmatters fallwithinthe termsof referenceof the committee 7.22 Rationale:TheSecretarydoes not agree the minutes,and may indeedsometimesnot be a committeememberat all. Standingcommittees Rationale:Adhoc committeesare non-permanentcommittees,oftenformedfora particularpurpose.Theterms'managementcommittee'and 'executivecommittee'are generallyinterchangeable.Theyreferto the committeeof executivesthat willmeet regularlyto formulate,implementand reviewoperationalmatters. Ina large company, they usuallyincludethe twoor three executiveswhoserveas executivedirectorsas wellas otherseniormanagers whoare not executivedirectors.Standingcommitteesare a permanentfeature of the governanceof a companyand includethe audit committeeand the remunerationcommittee(largercompaniesalso have a nominationcommitteeand perhaps a riskcommittee).Standingcommitteesmeet regularly(thoughnot necessarily monthly). Answers 165 Page 180 of 327 A N S W E R H q 8 Corporate governance and social responsibility 8.1 (3)only 8.2 Rationale:Statement(1)is incorrect,because there is no such 'guarantee'; statement (2) because it is not necessarilyso, and statement (4)because otherorganisations(eg charities,governmentbodies)are oftenmoreconcernedwithsocialresponsibilitythan businesses. Ways in:Itis alwaysworthcheckingto see iflogichelps.Wordslike'guarantee' often signalan untruestatement, because they makesuch extremeclaims.Andifstatement (1)is thereforeincorrect,you'vehalvedyouroptions.Itshouldthen be obviousthat (4)is incorrect(ifyou thinkabout a hospital,say). Agencytheory 8.3 Rationale:Agencytheorysuggests that managers willlookafter the performanceof the companyifdoingso servestheirowninterests:hence performanceincentivesand rewards. Stewardshiptheoryviewsthe managers as stewardsof the assets of the firm.Stakeholder theoryargues that managers have a duty of care to a range of organisational shareholders. Ways in:Youcouldhave ruledout stakeholdertheoryas irrelevant,and then workedon the implicationsof stewardshipand agency. Maximisingshareholderwealth Rationale:Theobjectiveof corporategovernanceis overallperformance,enhanced by good supervisionand management,withinbest practiceguidelines.Businessis to be conductedina way that is both ethicaland effectivefromthe perspectiveof all stakeholders– not justshareholders. 8.4 Strategicimportance 8.5 Rationale:Corporategovernanceincludesthe selectionof seniorofficers(withinfluence overthe futuredirectionof the organisation),and relationshipsbetweenthe organisation and its keystakeholders.Itis thereforeregarded as beingof strategicimportance. Dominationof the board by a singleindividual 8.6 Rationale:Thisis a feature of poorcorporategovernancebecause it makesway forselfinteresteddecision-making.Theothersmay 'look'likenegatives,but are infact the oppositesof three otherfeatures of poorcorporategovernance:lackof independent scrutiny;lackof supervision;and an emphasison short-termprofitability(whichcan cause pressureto concealproblemsor manipulateaccounts). Ways in:Youcouldhave got to the answerwithlogic,witha soundgrasp of corporate governance– but it wouldbe worthlearningthe listof features of poorcorporate governance,so you can recognisetheminan examquestion. Theboard of directors G H Rationale:Theseare someof the rolesfulfilledby the board. Theaudit committeereviews financialstatements,audit procedures,internalcontrolsand riskmanagement.ThePublic OversightBoardmonitorsand enforceslegaland compliancestandards. Thenomination committeeoverseesthe processforboard appointments. Pitfalls:Youneed to be able to distinguishclearlybetweenallthe variousparticipantsin the corporategovernancesystem. Ways in:Strategy formulationshouldhave steered you towardsthe correctanswer. 166 Businessand technology(FBT/BT) Page 181 of 327 G q 8.7 (1),(2)and (4)only 8.8 Rationale:Professionalethicsconcernthe individualethicalsphere,not the widersphereof CorporateSocialResponsibilitywhichoperates at the levelof the firm.Allof the othersare CSRprinciples:humanrightsas a componentof ethicaltradingand investment;employee welfareas part of ethicalemployment;and supportforlocalsuppliersas an exampleof sustainability. Pitfalls:Thecombinationsweredesignedto test ifyourthinkingwas limitedto internal organisationalmatters or commercialmatters. Corporatesocialresponsibility 8.9 Rationale:Employmentprotectionis justone exampleof an area whichis subjectto law. Corporategovernanceis an area whichis subjectto codes of best practice(and lawin somecountries).CSRis thereforethe area subjectto least regulationand mostmanagerial discretion. Toprovideguidanceon the standards of the best practicethat companiesshouldadopt 8.10 Rationale:Codes of practiceare usuallyassociated witha principles-basedapproach (ratherthan a rules-basedapproach)and so the firsttwooptionsshouldhave been easily eliminated.Thewords'guidance'and 'shouldadopt' werethe keywordsto lead to the correctoption. Aremunerationcommitteemade up of independentnon-executivedirectors Rationale:Onlythisoptionfulfilsthe requirementforfullindependenceof the body that sets directors'remuneration(to avoiddirectors'awardingthemselvesunjustifiable rewards!).Anominationcommitteehas the separate task of overseeingboard appointments. 8.11 Toset out the directors'analysisof the business,inorderto provideinvestorswitha historicaland prospectiveviewthroughthe eyes of management. Rationale:Thisis the definitionused by the AccountingStandards Board.Thethirdoption isanother corporategovernancereportthat may be required.Thefirstoptionis justa distractor. 8.12 (1),(2)and (3) Rationale:4 is incorrectand can actuallybe problematicfornon-executivedirectors.Nonexecutivedirectorsoftenhave limitedtimeto devoteto the roleas they are likelyto have othertimeconsumingcommitments. 9 9.1 Section B MTQs (a) (i) Salesorientation (ii) Productorientation.Addingadditionalfeatures but withoutactually researchingwhat customerswant is productorientation,whichis a variantof productionorientation. (iii) Productionorientation (b) (iv) Marketingorientation Thisis knownas marketsegmentation. Answers 167 Page 182 of 327 A N S W E R S H q 9.2 (a) (b) 9.3 (a) (b) (1) Corporate (2) Business (i) Attitudesare patterns of collectivebehavioursuch as greetingstyles,business formalities,socialcourtesiesand ceremonies. Artefactsare concreteexpressionssuch as architectureand interiordesign, dress code and symbols. Businessstrategy is howan organisationapproaches a particularmarketarea. (3) Operational Thisrelatesto a functionaldecisionand thereforeis at the operationallevel. (4) Business Businessstrategy is howan organisationapproaches a particularmarketarea. Managersare able to take a widerview,proceduresand documentationcan be standardised.Theotherstatements are advantages of decentralisationor delegation. (i) Thiscompanyhas a highindividualismculture. (ii) Thiscompanyhas a highuncertaintyavoidanceculture. (iii) Thiscompanyhas a lowmasculinityculture. (iv) Thiscompanyhas a lowpowerdistanceculture. (ii) 9.4 (a) G (b) 9.5 9.6 Corporatestrategy isconcernedwithwhat types of business the organizationis in. (1) Supportstaff Supportstaff provideancillaryservices. (2) Operatingcore Productionis part of the operatingcore,takinginputsand convertingthemintooutputs. (3) Middleline Middlemanagers such as a productionmanager formthe middlelineof an organisation. (4) Strategicapex Theboard wouldformthe strategicapex of the organisation. Technostructure Machinebureaucraciesare characterisedby multiplelayersof management,formal (oftenrigid)proceduresand standardisedproductionprocesses,so the technostructureis veryimportant (a) Arrangingan overdraft Treasurydepartment Managingforeigncurrencyexposure Treasurydepartment Recordingfinancialtransactions Financialaccountingdepartment Cash budgeting Treasurydepartment Reportingto shareholders Financialaccountingdepartment Repayingloans Treasurydepartment Thetreasury departmentplans and controlsthe sourcesand uses of fundsby the organisation. (b) Moneymarketsare marketsfortradingshort-termfinancialinstruments. (a) (i) Todefinethe purposeof the company (ii) Todefinethe values by whichthe companywillperformits dailyduties (iii) Toidentifythe stakeholders relevantto the company (iv) Todevelopa strategy combiningthese factors (v) Toensureimplementationof thisstrategy Chairingmanagementcommitteemeetings.Chairingmanagementcommittee meetingsis part of the usualresponsibilitiesof the CEO. (b) 168 Businessand technology(FBT/BT) Page 183 of 327 H q 10 The role of accounting 10.1 Toprovidefinancialinformationto usersof such information Rationale:Thisis the mainor overallaimof accounting. 10.2 Charitiesand professionalbodiesdo not have to producefinancialstatements inthe same way as businesses. 10.3 Rationale:Non-commercialundertakingsstillprepare annual financialstatements,for accountabilityto theirtrustees,membersor fundingbodies. TheManagementAccountant 10.4 Rationale:TheManagementAccountantprovidesinformationformanagement:cost accounting,budgets and budgetary controland financialmanagementof projects.The FinancialControllerisresponsibleforroutineaccounting,accountingreports,cashiers' dutiesand cash control.ATreasurerwouldbe responsiblefortreasury management: raisingand investingfundsand cash flowcontrol. Timesheets 10.5 Rationale:Timesheets are used to calculatehoursworkedand overtime,inorderto calculategrosspay (beforedeductions).Thesysteminformationformanagement(payroll analysis),informationforemployees(pay slips)and methodsof payment (credittransfer forms),are alloutputs. Pitfalls:Itis worthsortingout the inputs,processingand outputsof any financialsystem. Toensurethat allcreditnotes receivedare recordedinthe generaland payables ledger Rationale:Allthe otheraimsrelate to the controlsystemrelatingto receivablesand sales. Pitfalls:Youhave to get straightinyourmindwhichtransactionsand controlsrelate to payables/purchasesand whichto receivables/sales. G 10.6 10.7 Atrue and fairviewof the statement of affairsof the companyas at the end of the financialyear Rationale:Thefirstoptionrefersto the statement of profitor loss,not the statement of financialposition.Thesecondoptionrefersto audit reports. Pitfalls:Ifyou wereina hurry, you mighthave selectedthe firstoptionimmediatelyyou saw the words'true and fair'.Avoidsuch mistakesby readingthroughall questionoptions carefully,keepingan open mind. Specialisedcapabilities Rationale:Anintegratedpackage is expectedto do everything,so it may have fewer facilitiesthanspecialisedmodules(especially as it alsorequiresmorecomputermemory).The otheroptionsareadvantagesofintegration: abilityto updatemultiplerecordsfromonedataentry; abilityto extractdatafromallrelevantsourcesto compilespecifiedreports;andlesslikelihood of discrepancies indifferentrecords. 10.8 Module. 10.9 Rationale:Asuiteis a set of severalmodules.Aspreadsheet is a type of program,and a formatfordisplayingand processingdata: it is oftenused to integratedata from accountingmodulesfordecision-supportand managementinformationsystems.A database is a collectionof data. Thereis muchstrongerprovisionfordata security Rationale:Thereis no scope fordata inmanualsystemsto be affected by cyber-attacks and they are not vulnerableto corruptionor lossof data throughuser error. Answers 169 Page 184 of 327 A N S W E R S H G q 10.10 Automaticcorrectionof alldata entered by the operatorintothe spreadsheet Rationale:Unfortunately:'garbage in,garbage out!'… 10.11 Nationallegislation Rationale:Mandatoryreportsto governmentand shareholdersare requiredundernational legislation.Codes of corporategovernanceare principles-basedand voluntaryinnature. Internationaland localAccountingStandards do affect the contentand presentationof accounts but it is nationallegislationwhichdictates the requirementsforpreparationand filingof accounts 10.12 1Acomputer-basedaccountingsystemwillalwaysrejectinaccuratefinancialinformation inputto the system'sdatabase Rationale:'Garbage in,garbage out'! 10.13 Theanalysisof those itemswhereperformancedifferssignificantlyfromstandard or budget Rationale:Exceptionreportingfocusesattentionon those itemswhereperformancediffers significantlyfromstandard or budget. Pitfalls:Theword'exceptional'was placed inother optionsas a distractor! 10.14 Thiscompany'scomputersystemdoes not receiveemailfromcustomersor suppliers Rationale:Back-upstorage, virusdetectionsoftwareand passwordprotectionare basic securityrequirementsof any computersystem,regardlessof whetherthey are connected to the Internet.Becausethissystemis not so connected,however,it cannot receiveemail. Pitfalls:Makesure you distinguishbetweenintranet(internalnetwork)and Internet(world widenetwork),and read questionscarefullyto see whichis beingdiscussed. 10.15 ExecutiveSupport Rationale:Thisis the definitionof an ExecutiveSupportSystem.Itis distinguishedfroma DSSby supportingdecision-makingat a higherand lessstructuredlevel.Expertsystems drawon a knowledgebase to solvewell-definedtechnicalproblems. Pitfalls:'Management','Expert'and 'Decision'wereplausibledistractors:makesure you can distinguishbetweenthe differenttypes of system,and howthey contributeto decision-makingand problemsolving. 10.16 Data is alwaysinnumericalformwhereasinformationis alwaysintext form. Rationale:Data is any kindof unprocessedinformation,and informationis any kindof processedinformation. 10.17 Database managementsystem Rationale:Thedatabase managementsystem(DBMS) is the softwarethat builds, manages and providesaccess to a database. Data storage iscarriedout inthe database itself.Thedatabase administratoris a person(nota part of the system)whocontrolsthe system.EPOSis a formof data collectionand input. 10.18 Lossor corruptionof data is almostalwaysnon-deliberate. Rationale:Data can be lostor corruptedas the resultof deliberateactionssuch as fraud, sabotage, commercialespionageor maliciousdamage – as wellas humanerror.Theother statements are true:newstaff pose a securityriskbecause of the riskof humanerror(if they are inexperiencedor untrained);it is impossibleto preventallthreats (importantto be realistic!);and smokedetectorsare an exampleof protectionfromphysicalrisks(inthis case, fire). Pitfalls:Don'tforgetphysicalsecuritymeasures:you may have discountedthe fourth optiontoo quickly.Data securityalso involvesprotectionagainst fire,flood,interruptionof powersourceand so on. 170 Businessand technology(FBT/BT) Page 185 of 327 H q 10.19 Productivity Rationale:Officeautomationsystems(OAS),withfunctionssuch as wordprocessing, digitalfiling,email,schedulersand spreadsheets,are primarilydesignedto streamline administrativetasks:documentmanagement,communication,data management. 10.20 Managersof the company Rationale:Managersneed mostinformation,at a significantlevelof detail,to enable them to makeplanningand controldecisions.Theyhave specialaccess to information,because they can arrange to obtainthe informationthey need throughthe accountingsystem. Shareholdersare entitledto certaininformation,focusedon particularareas of interest (mainlyprofits).Financialanalysts may onlyhave access to publicinformationand reports. 10.21 Theaudit committeeof the board of directors 10.22 Rationale:Inorderto controlthe risksof fraud and error,the internalaudit department shouldbe separate fromthe financedepartment. Informationand CommunicationTechnology(ICT)systemsare moreefficientthan manual systemsforany task an accountant may have to perform. 10.23 Rationale:Aquickphonecallmay be a moreefficientway of obtainingor giving informationthan email,forexample.Youmay have hesitated overthe thirdoptionbecause of often-stated warningsabout 'garbage in,garbage out'. Therisksof inputerrorare the same – but computerisedsystemsreducethe furtherriskof computationerrors. Purchasing/procurement 10.24 Rationale:Thepurchasingor procurementfunctionis responsibleforauthorising purchases(and suppliers)and approving.Theotherfunctionscontribute,however: production,by requisitioningonlyneeded items;goodsinwards,by checkingthat what was purchasedis what is infact received;and accounts, by seekingproperdocumentary evidenceand authorisationforpayment. Thecreditcontroldepartment G Rationale:Thisshouldbe obviousfromthe context(debtsrepresentgoodsbought on credit:hence, creditcontrol)– but makesure that you coulddefinethe rolesof allthe other options,ifyou needed to! 10.25 IFAC 10.26 Rationale:IFACis the InternationalFederationof Accountants.Itproducesan ethicalcode but it is not part of the regulatorysystem. IASB Rationale:InternationalFinancialReportingStandards are issuedby the IASB. 10.27 Nationallegislation Rationale:Of the choicesoffered,onlynationallegislationisentirelylegallybinding, thoughelementsof allof the distractorsmay be accepted and incorporatedinlegislation subsequentto the publicationof the standards and principles. Answers 171 Page 186 of 327 A N S W E R S H G q 11 Control, security and audit 11.1 Toeliminatethe possibilityof impactsfrompoorjudgementand humanerror Rationale:Theotheroptionswereidentifiedas aimsof internalcontrolsinthe Turnbull report.However,the reportalso states that evena soundsystemof internalcontrol reduces,but does not eliminate,the possibilitiesof poorlyjudgeddecisions,humanerror, deliberatecircumventionof controlsand unforeseeablecircumstances.Systemsonly providereasonable(notabsolute)assurance. Ways in:Ifyou had to guess, you couldprobablysee that the correctansweris an exaggerated claim.Lookout foroptionsthat say 'always'or 'never'or 'total', ina similar vein:these are muchmorelikelyto be untruethan true, inthe complexworldof business… 11.2 Non-discretionary. Rationale:Non-discretionarycontrolsare as described:as opposedto discretionary controlswhichare subjectto humanchoice.'Mandated'is a similaridea, but mandated controlsare requiredby lawand imposedby externalauthorities(as opposedto voluntary controls,chosenby the organisation).Detectcontrolsare controlsdesignedto detect errorsonce they have happened. Administrative controlsare to do withreporting responsibilities,communicationchannelsand other means of implementingpolicies. Pitfalls:Thereis so muchterminologyinthisarea: fertilegroundforexamquestions.Be able to use distinctionswithinclassifications(as in'discretionaryand non-discretionary',or 'prevent,detect, control')as wellas across classifications,as inthisquestion. 11.3 Organisation Rationale:Organisationinthiscontextmeans identifyingreportinglines,levelsof authority and responsibilityto ensurethat everyoneis aware of theircontrolresponsibilities.Thefull mnemonicstands for:Segregationof duties;Physical;Authorisationand approval; Management;Supervision;Organisation;Arithmeticaland accounting;and Personnel. 11.4 Systemsforauthorisingtransactionswithinspecifiedspendinglimits Rationale:Thisis an internalcontrol,rather than an internalcheck.Internalchecksare moreabout dividingwork(sothat the workof one personcan be independentlyprovedby that of another)and using'proofmeasures'to ensurethe accuracy of recordsand calculations. 11.5 Internalaudit is an independentappraisal activity Rationale:Internalaudit is independent, but is stillpart of the internalcontrolsystem:it is a controlwhichexaminesand evaluatesthe adequacy and efficacyof othercontrols. Internalauditorsshouldreportdirectto the audit committeeof the board of directors(in orderto preserveindependence).Itis external audit whichis forthe benefitof shareholders:internalaudit is a serviceto management. Ways in:Onceyou realisedthat the optionswerecirclingrounddifferentaspects of the definitionof internalaudit, and the differencebetweeninternaland externalaudit, you wouldbe better able to sort out whichstatement was givento you 'straight' – and which wereoppositesof the true points. 11.6 Weather Rationale:Thisshouldbe straightforwardifyou thinkthroughwhat the potentialthreats involve.Lightningstrikeor electricalstormsare a keycause of powersupplyfailuresand surgeswhichmay effectcomputerfunctions.Fireand accidentaldamage are also physical threats to data and equipment.Hackingis a non-physicalthreat involvingunauthorised access to data (possiblyresultingindata theft or destruction). 172 Businessand technology(FBT/BT) Page 187 of 327 H G q 11.7 Systemrecoveryprocedures Rationale:Systemrecoveryproceduresare set inplace foractivationinthe eventof breakdown,to get the systemup and runningagain: thisis a contingencycontrol,because it plans fora 'worstcase scenario'.Passwordaccess is an exampleof a security control: protectingdata fromunauthorisedmodification,disclosureor destructionof data. Audit trails(showingwhohas accessed a systemand what they have done). Pitfalls:Thereis a lotof vocabularyand procedureinthisarea: makesure that you could answerquestionson a varietyof differentdata securitycontrols. 11.8 Theindependenceof controlsfromthe methodof data processing Rationale:Itwouldbe a limitationifcontrolsdepended on the methodof data processing. Theothersare limitations,because: the costs of controlmustnot outweighthe benefits; there is alwayspotentialforboth humanerrorand deliberateoverrideof controlsby management;and controlsare designedto cope withroutinetransactions,not non-routine transactions. 11.9 Theprimaryresponsibilityof externalauditorsisto investigatefinancialirregularitiesand reportthemto shareholders Rationale:Theprimaryresponsibilityof the externalauditoris to reportto shareholderson whetherthe client'sfinancialstatements are accurate and freefrombias ('trueand fair'). Theotheroptionsare true. 11.10 Toidentifyerrorsand omissionsinfinancialrecords Rationale:Substantivetests 'substantiate' the figuresinthe accounts. Theyare used to discoverwhether figuresare corrector complete,not why they are incorrector incomplete, or howthe figures'got there'. Establishingwhetherinternalcontrolsare beingappliedas prescribedis the aimof compliancetests. 11.11 Correct Rationale:Correctcontrolsare designedto enable the organisationto minimisethe effect of errors:inthiscase, restoringdata fromthe back-upsifthe maindata store iscorrupted. Preventcontrolsare designedto preventerrorsfromhappeninginthe firstplace, and detect controlsare designedto detect errorsonce they have happened. 11.12 Audittrails. Rationale:Audittrailsenable systemadministratorsto maintainsecurity,check transactions(inorderto identifyerrorsand fraud),recoverlosttransactionsand monitor the use of networkresources.Passwordsare access controlsand archivesare long-term back-up storage: both are good systemcontrols. Pitfalls:Thereis lotsof terminologyinthisarea: get to gripswithallthe basic termsand procedures. 11.13 Operationalaudit Rationale:Asystemsaudit is based on the testingand evaluationof internalcontrols.A probity(ortransaction)audit checksaccount entriesto identifyerrorsor omissionswhich may indicatefraud. Asocialaudit measuresthe socialresponsibilityor socialimpactsof the business. Pitfalls:Thisis another area of distinctiveclustersof terminology:makesure you can identifyoperational,systemsand transactionsaudits – and the types of tests they use (compliancev substantive). 11.14 Noaudit manualsor workingpapers are availableforinspection Rationale:Thismay suggest that internalaudit workis not properlyplanned,reviewedor documented:a failureof due professionalcare. Theother optionsshowgood status, scope and technicalcompetence. Answers 173 Page 188 of 327 A N S W E R S H q 12 Identifying and preventing fraud 12.1 Teemingand lading 12.2 Rationale:Collusionis workingwithanother party (eg customersor suppliers)to commit fraud. Misrepresentationis stating that somethingisso, whenit is not, inorderto mislead (eg overstatingprofits). (1),(2),(3)and (4) 12.3 Rationale:Payslipscan be deliberatelymiscalculatedto pay extra amounts.Staff may colludewithcustomersto under-recordquantitiesof despatched goodson deliverynotes so the customerpays less:conversely,employeesmay colludewithsuppliersto pay invoicesforlargerquantitiesthan wereactuallydelivered.Option(4)may have made you hesitate:it seemssuch a positive,desirablething!However,profitsinexcessof target may be siphonedoff,withlessscrutinyonce targets have been met. Itresultsinthe intentionaloverstatementof profitsand net assets 12.4 Rationale:One formof fraud is the intentionalmisrepresentationof the financialposition of the business.Baddebt policymay be unenforceddeliberately,inorderto overstate profits. Pre-disposition 12.5 Rationale:Thisis an importantdistinctioninmakingsense of the three prerequisitesfor fraud:dishonesty(a willingnessto act dishonestly),motivation(an incentiveor reason to act dishonestly)and opportunity(an openingto act dishonestly). Increasedcompetition Rationale:Increasedcompetitionis a riskfactor (becauseit may put pressureon managers to manipulateresults)– but it is an external factor. Theothersare internal factors whichincreaseriskbecause they disruptsupervisionand controlor introduce unknownfactors. Pitfalls:Lookcarefullyat questionstemsforqualifierkeywordssuch as 'internal'and 'external'. G 12.6 Staff not takingtheirfullholidayentitlements Rationale:Thismay seemlikenormalbehaviourina 'workaholic'officeculture,but failure to take fullholidayentitlementmay signalan employeetryingto preventa temporary replacementfromuncoveringa fraud. Theotheroptionsare factors inreducing risk:lack of segregationenablesfraud to go undetected;lowstaff moraleisoftena motiveforfraud (inretaliationagainst the firm);and an autocraticmanagementstylemay prevent questioning. Pitfalls:Ensurethat you knowwhat 'segregationof duties'means:otherwise,it mightlook likea riskfactor (becauseit soundslikeallowingpeopleto workindependentlyand unsupervised,say). 12.7 Increaseinworkingcapital Rationale:Thereis a reductioninworkingcapital, whichmakesit moredifficultforthe companyto operate effectively,potentiallyresultingincorporatecollapse.Theother effectsshouldbe obvious(remember,weare talkingabout removalof fundsor assets and not overstatementof profitsand/or net assets). Reputationaldamage refersto lossof shareholderand marketconfidenceinthe organisation'smanagementwhenthe fraud emerges. 174 Businessand technology(FBT/BT) Page 189 of 327 H G q 12.8 Requiring signatures toconfirm receipt ofgoodsorservices Rationale: Thisshould beclearfromthecontext, because ofthecollusion withcustomers (ifyouremembered whatcollusion was).Physical security refers tokeeping assetsunder lockandkey:nottobedismissed asa fraudprevention measure! Sequential numbering works because itiseasytospotifdocuments aremissing. Authorisation policies increase checks andaccountabilities. 12.9 Theboardofdirectors. Rationale: Thedirectors areresponsible fortheconduct ofthebusiness, thedeterrence anddetection offraudulent (andotherdishonest) conduct, andthereliable reporting of financial information. Theresponsibility oftheexternal auditor isonlytoexpress anopinion onthefinancial statements, although auditprocedures should havea reasonable expectation ofdetecting misstatements arising fromfraud.Theauditcommittee reviews theorganisation's performance infraudprevention, butalsoreports totheboard. 12.10 Inability tosecure accesstodata Rationale: There areplentyofwaysofsecuring accesstodata,usingavailable software tools:password protection, encryption andsoon.(Ofcourse, thefirmhastousethem,but thatisa separate issue!) Hackers areunauthorised people breaking intothesystem. Lack ofmanagerial understanding creates loopholes incontrols, andtheabilitytoconceal fraud bytechnical staff.Integrated systems alsohelptoconceal fraud,byensuring that alterations torecords areconsistent: fewer discrepancies totrigger investigation. 12.11 Investors andsuppliers Rationale: Investors willbemaking decisions (andtakingrisks)oninaccurate information. Suppliers willextend creditwithout knowing thetruefinancial position ofthecompany. (Staffandcustomers willeventually beeffected ifshortfalls inworking capitalthreaten the business …) 12.12 Fraudawareness training andrecruitment controls Rationale: These aremeasures forfraudprevention andcontrol. Afraudresponse plan specifically dealswithinvestigating anddealing withtheconsequences ofidentified frauds. Thisincludes takingimmediate stepstosecure thesecurity ofrecords thatwillbe investigated andlaunching aninvestigation intothemethod andextent offraud. 12.13 Limitation control Rationale: Limitcontrols limitopportunity forfraud:another example islimiting accessto thecomputer network bymeans ofpasswords. Segregation ofduties means ensuring that functions whichtogether facilitate fraudareperformed bydifferent individuals: eg separating thecheque signing function fromtheauthorisation ofpayments. Appropriate documentation involves recording, authorising andtracking transactions through purchase requisitions, orders, invoices andsoon. 12.14 Performance-based rewards formanagers reduce theriskoffraud Rationale: Performance-based rewards increase pressures andmotivation formanagers to manipulate results. Waysin:Agoodapproach forthesesortsofquestion istoworksystematically through the options toeliminate thosewhichareclearlytrue.Thatway,evenifyouareleftwithan option youarenotsureabout(because performance-related payformanagers issucha popular strategy, say),itisthebestoption you've got. 12.15 Money laundering. Rationale: Thestatement isthedefinition ofmoney laundering. 12.16 Placement Rationale: Theorderisplacement, layering andintegration. Answers175 Page 190 of 327 A N S W E R S H G q 13 Financial technology (Fintech) 13.1 Bigdata Rationale: Acompany thatusesbigdataforcompetitive advantage streams vastvolumes ofdatafrommanyinternal andexternal sources, andapplies dataanalytics toobtain valuefromthedata. 13.2 Velocity Rationale: Velocity concerns thespeedofdataandistherefore connected totheabilityto stream largeamounts ofdataintoanorganisation's systems inrealtime.Ifvelocity was notquickenough, thedatawould besubject toa time-lag whichmightundermine its usefulness. 13.3 Riskmanagement Rationale: Dataanalytics onbigdatacanassistwiththeidentification, quantification and management ofbusiness risk.Itisnotusedinconnection withtheotheroptions. 13.4 Opendata Rationale: Opendataoriginates fromthepublicsector data(forexample transport, government financial andpublicservice data).Processed dataoriginates fromexisting databases ofbusiness andotherorganisations. Machine-generated dataoriginates from fixedandmobile sensors, aswellascomputer andwebsite logs. 13.5 Users ofcloudaccounting software arecompletely reliant ontheprovider ofthesoftware toensure theirdataissecure andtotakebackups ofit Rationale: Users ofcloudaccounting software arecompletely reliant ontheprovider ofthe software toensure theirdataissecure andtotakebackups ofit.Theotheroptions are disadvantages oftraditional accounting software. 13.6 Distributed ledger Rationale: Distributed ledger technology allows people whodonotknoweachotherto trusta shared record ofevents. 13.7 Downloading banktransactions intotheaccounting system Rationale: Automation allows certain routine procedures tobeundertaken without the inputofa human (suchastheautomatic download ofbanktransactions). Theother options areallareasofworkthatrequire human inputorartificial intelligence. 13.8 Posting transactions tonominal codes Rationale: Artificial intelligence allows a system tolearncertain basictasksandperform theminfuture (suchasidentifying transactions andposting themtoappropriate nominal codes). Theotheroptions areallareasofworkthatrequire human inputorsimple automation. 13.9 Verifytheownership ofassets Rationale: Distributed ledgers giveauditors reassurance abouttheownership ofassets. Theydonotreduce theneedforanauditopinion ortocheckformaterial misstatement. 176 Business andtechnology (FBT/BT) Page 191 of 327 H q 14 Section C MTQs 14.1 (a) 14.2 (1) Toassess the abilityof the companyto pay its debts Supplierswillwant to knowwhetherthe companyis able to pay its debts. (2) Toassess tax payable by the company Taxauthoritieswant to assess whethertax paid isadequate forthe levelof profits. (3) Assessinghoweffectively managementis running the company Shareholderswant to assess the effectivenessof managementinperforming its stewardshipfunction. (4) Toadviseclients Financialanalysts need informationto advise investorswhetherto investor not. (b) False (c) Charitiesand publicsectororganisationsalso need to prepare accounts. Atrue and fair (a) Trueand fairis usuallytaken to mean accurate and not misleading. Balancingof accountingentries Non-discretionary.Thiscontrolis builtinto the system. Authorisationof non-currentasset purchase Discretionary.Thiscontrolcan be bypassed so is discretionary. (b) Passwordaccess to the system Non-discretionary.Thiscontrolis builtinto the system. Reviewof the audit trail Discretionary.Thiscontrolcan be bypassed so is discretionary. Asystems (c) Operationalaudits can be concernedwithany sphereof a company'sactivitiesand a transactionsaudit aimsto detect fraud. False G A N S W E R Theexistenceof the controlsis not enough.Thecontrolsalso need to be applied properlyand honestlyinorderforthemto be effective. 14.3 14.4 (a) Processingis faster, Correctionscan be made quicker (b) (c) Informationis moreaccessibleina computerisedsystemand the riskof errorsis reducedrather than eradicated. Module Thisis the definitionof a module. False (a) Adatabase shouldbe evolveboth inthe shorttermand also the longterm. Doorlocks,Intruderalarms (b) (c) Thesecontrolsare designedto restrictphysicalaccess. Inputcontrol Theseare allexamplesof inputcontrols. Contingency Contingencycontrolshelpan organisationrecoverinthe eventof a disaster. Answers 177 Page 192 of 327 S H q 14.5 (a) (b) 14.6 (a) (b) (i) Failureto report Bynot reportingsuspicionsof fraud, Stellais committingan offence. (ii) Tippingoff Byinformingthe financialcontroller,James is tippingoffthe clientand may prejudicethe investigation. (i) Layering Layeringinvolvesthe transferof moniesfrombusinessto businessor place to place to concealthe originalsource. (ii) Placement Placementisthe initialdisposalof the proceedsof criminalactivityinto apparentlylegitimatebusinessactivityor property. Useof controltotals Internalchecksare checkson day to day transactions,wherethe workof one person is provedindependently,or is complementaryto the workof another. Acontroltotal is a total of any sort, used by comparingit withanother total that ought to be the same. Theotheroptionsinthe questionare features of the overallinternalcontrol system. Workrelatesto the financialstatements,and the financialrecordsthat underliethem Externalaudit Designedto add valueand improvean organisation'soperations Internalaudit Enablesan opinionto be expressedon the financialstatements Externalaudit Reportis to those charged withgovernance Internalaudit G Workrelatesto the operationsof the organisation Internalaudit Independentof the companyand its management Externalaudit 15 Leading and managing people 15.1 Positionpower 15.2 Rationale:Positionpoweris legitimateorganisationalauthority,by virtueof a positionin the organisationhierarchy:managers depend largelyon it fortheirinfluence.Leadersare oftenrequiredto exerciseinformal,interpersonalformsof influence,such as personpower (charisma,inspiration)and expertpower(valuedknowledge).Physicalpower(intimidation) shouldbe used by neithermanagers nor leaders! Pitfalls:the classificationsof powerare a richsourceof related terminology,and hence a potentialsourceboth of confusion– and of examquestions! FWTaylor Rationale:FrederickTayloris associated withscientificmanagement.Theother writersare associated withthe humanrelationsschool,focusingon the roleof 'higherorder'needs (suchas challengeand interestinthe work)inhumanmotivation. Ways in:Youcouldhalveyouroptionsby realisingthat Maslowand Herzbergbelongto the same school:thereforethe 'odd one out' mustbe one of the other two. 178 Businessand technology(FBT/BT) Page 193 of 327 H G q 15.3 Countryclub 15.4 Rationale:The'countryclub'is low-task,high-peoplefocusand 1.9on Blakeand Mouton's managerialgrid.ThisdescribesMonica.Impoverishedis 1.1(bothlow),task managementis 9.1(allabout the task),and dampenedpendulumis5.5 (swingingbetweenthe two extremes). (1),(2)and (3) 15.5 Rationale:Psychologicallydistant managers (PDMs)maintaindistancefromtheir subordinatesand they preferformalproceduresrather than informalones,forexample,a formalconsultationmethod. Ways in:Hopefullyyou wereable to ruleout the fourthstatement and thereforeoptionD. Psychologicallyclosemanagers are closerto theirsubordinates.Ifyou rememberedthat PDMspreferformalproceduresthen you may have been able to workout that statements 1,2 and 3 werecorrect. Authority Rationale:Theessenceof delegationis that the superiorgivesthe subordinatepart of his or her ownauthority.Poweris not conferredby the organisation,so it cannot be delegated:it mustbe possessed.Themostimportantthingto note is that responsibilityis not delegated:the superiormakesthe subordinateresponsibleto himforthe authorityhe has delegated, but he remainsresponsibleforit to hisownboss. Pitfalls:Itis easy to confusethese concepts,whichis whythey wouldmakean excellent examquestion. 15.6 Multi-skilled teamworking Rationale: Skillingwas an importantaspect of scientificmanagement– but multi-skilled team workingwasn't. Taylor'sapproach to jobdesignwas to break jobsdownintosingle, simpletasks whichweregivento an individualas a whole(specialised,repetitive)jobforan individual.Theotheroptionsare keytechniques. 15.7 Awarenessof the importanceof groupdynamicsand workerattitudes as an influenceon productivity 15.8 Rationale:Thesecondoptionis not a centralconcernof humanrelations:rather, thiscould apply to the scientificmanagementschool.Thethirdoptionis a contributionof the contingencyschool.Thefourthoptionhas not yet been providedby any schoolof managementor motivationtheory:apart fromanythingelse,businesssuccessdepends on factors otherthan the productivityof the workers. Democratic 15.9 Rationale:Democraticis a 'joins'style:decisionis moreor lessby voteor consensus. Consultativemeans that the leadertakes subordinateviewsintoaccount, but stillmakes the decision.Autocraticis basicallya 'tells'styleand persuasiveis a 'sells'style. Monitor Rationale:Themonitorroleinvolvesscanningthe environmentand gatheringinformation froma networkof contacts. Asspokesperson,the manager can then provideinformation on behalfof the departmentor organisationto interestedparties.Asdisseminator,(s)he can also spread relevantinformationto team members.Theroleof leadermeans hiring, firingand trainingstaff. Pitfalls:Theotheroptionsallinformationroles,so the distinctionbetweenthemis quite fine.However,questionshave been set at thislevelof detail,so such modelsare worth learning. Answers 179 Page 194 of 327 A N S W E R S H G q 15.10 Supervision. Rationale:Thisis the keydefinitionof the supervisoryrole:it is betweennon-managerial and managerial,acting as an informationfilterand overlap(sincesupervisorsboth do operationalworkand fulfilsomemanagerialfunctionsat a lowlevel).Middlelineand junior managementare higher,sincethey are already managerialpositions. 15.11 Itis mostpopularamongsubordinates Rationale:Aconsultativestyleis the mostpopularamongsubordinates,althougha 'sells' styleis perceivedto be mostused by leaders– and a 'tells'styleencouragesthe highest productivityinmany circumstances. 15.12 Authority Rationale:Responsibilityis the duty to performan action.Poweris the abilityto perform an action(and inparticular,to influenceothers).Influenceis a processby whicha person can director modifythe behaviourof another person. Pitfalls:Theseare finedistinctionsinmeaning– but they underpinthe idea of managementand leadershipand are an excellentsourceof potentialexamquestions. 15.13 Figurehead Rationale:Interpersonalrolesare based on the manager's formalauthority:they include the rolesof figurehead,leaderand liaison.Informationalrolesare based on the manager's positionininternaland externalinformationnetworks:they includemonitor,spokesperson and disseminator.Decisionalrolesrelate to the workof the manager's department: entrepreneur,disturbancehandler,resourceallocatorand negotiator. 15.14 Contingencytheories Rationale:Contingencytheoriesare based on the beliefthat there is no 'one best way' of leadingbut that effectiveleadersadapt theirbehaviourto changingvariables.Adair's modelsees the leadershipprocessina contextmade up of the task needs, individuals' needs and groupneeds. 15.15 Adair'sleadershipmodelfocuseson what leadersdo and not what they are: False TheAshridgeleadershipmodelproposesa democraticapproach to leadership:True Rationale:Thisis justtextbookknowledge.Youmustensurethat you understandthe main principlesassociated withthe managementtheoriesinthe study text. 15.16 Action-centredleadership Rationale:Thisis a descriptionof John Adair'saction-centredleadershipmodel. Contingencytheoryis moregeneral:indeed,Adair'smodelis withinthe contingencyschool of thought.Themanagerialgridis based on twodimensions:concernfortask and concern forpeople.Dispersedleadership(Heifetz)is the idea that individualsat allorganisational levelscan exerta 'leadershipinfluence'. 15.17 Organising Rationale:Planningis about determiningobjectivesand howto reach them.Controllingis measuringand adjustingactivitiesinlinewithplans. Ways in:evenifyou didn't recognisethe descriptionof organising,you couldprobably have eliminatedthe other options. 15.18 Motivating Rationale:Fayol'sfivefunctionsof managementare: planning,organising,commanding, co-ordinatingand controlling.Itis assumedthat subordinateswillcarry out a command whethermotivatedor not. 180 Businessand technology(FBT/BT) Page 195 of 327 H G q 15.19 Developing people Rationale: Drucker grouped theworkofthemanager intofivecategories, thefifthbeing developing people. Theotheroptions arefromMintzberg's managerial roletypes. 15.20 Bennis Rationale: Heifetz wrote ondispersed leadership, Fielder carried outresearch onthenotion ofleadership andBlakeandMouton published themanagerial grid. 15.21 Heifetz Rationale: Thisquestion isa testofwhether candidates canrecognise theessential features ofleadership theories andattribute themtotherelevant writer. Kotter's theory is concerned withtheleader's responsibilities incopingwithchanges, andfocuses on differences between 'leadership' and'management'. Adair's workrelates tothe effectiveness ofleaders inachieving a balance between achieving thetask,maintaining the teamanddeveloping individuals. Mintzberg considers therolesofleaders. ItisHeifetz who proposed thatleaders canemerge informally inhistheory ofdispersed leadership. 16 Recruitment and selection 16.1 Screening application forms Rationale: Screening means sorting through application forms received, inorderto separate outcandidates whichareclearlyineligible forthevacancy,immediately worth short-listing andsoon.Itisselection because itispartoftheprocess ofmeasuring candidates against requirements, andselecting thosewhoaremostsuitable. Recruitment istheprocess ofdefining requirements andreaching potential applicants. 16.2 Jobdescription Rationale: Thisisjobdescription rather thanjobanalysis, because a jobdescription isthe statement produced froma process ofjobanalysis. Thisisjobdescription rather than personnel specification, because itaddresses therequirements ofthejob,rather thanthe qualities oftheidealjobholder orperson. Jobadvertisement isjusta distractor. Pitfalls:Thedifference between jobdescription andpersonnel specification hascropped upfrequently inexams overtheyears.There ispotential forconfusion: remember thatone describes the'job',theotherthe'person' … 16.3 Motivation Rationale: 'Motivation' isa heading inanalternative method ofperson specification (the FivePointPattern ofPersonality, byJ Munro Fraser). Rodger's SevenPoints are:physical make-up, attainments (qualifications), general intelligence, special aptitudes, interests, disposition (temperament) andcircumstances. 16.4 Devolve recruitment andselection tolinemanagers Rationale: Thecurrent trendistodevolve recruitment andselection (among otherHRM activities) increasingly tolinemanagers, whohandle recruitment within theirown departments. 16.5 Testsaregenerally lessaccurate predictors ofsuccess thaninterviews Rationale: Alltheothercriticisms aboutthereliability ofselection testsarevalid– andyet testsarestillmorereliable thaninterviews atpredicting performance inthejob! Answers181 Page 196 of 327 A N S W E R S H q 16.6 Leading Rationale:Aleadingquestionpushesthe intervieweeto givea certainanswer.(Inthiscase, it is obviousthat the interviewerexpectsthe intervieweeto agree.)Anopen question requiresself-expression;a closedquestioninvitesa one wordeither/oranswer,and a problem-solvingquestionpresentscandidates witha situationand asks themto say how they woulddeal withit. Pitfalls:Thisis an easy aspect of interviewingtechniqueto set questionson:makesure you can identifyalltypes of questions. 16.7 Questionstend to be morevariedand morerandom Rationale:Thisis a disadvantagebecause there may not be a clear interviewstrategy, and candidates may have troubleswitchingfromone topicto another. Thefirstoptionis an advantage, because it reducesindividualbias, and savestimeinsharingassessments(eg comparedto a seriesof one-to-oneinterviews).Thesecondoptionis an advantage, because a singleinterviewermay not be able to spot candidate weaknessesintechnical areas. Thefourthoptionis an advantage, because personalrapport may lead to favourablebias on the part of an interviewer. 16.8 Atendencyforpeopleto makean initialjudgementbased on firstimpressions,and then lettingthiscolourtheirlater perceptions. Rationale:Theseare alldifferenttypes of bias and errorsof judgementininterviewing.The firstoptionis haloeffect.Thesecondoptionis contagiousbias. Thethirdoptionis stereotyping.Thefourthoptionis projection. Ways in:Stereotypingis probablythe mostrecognisableof the options,so you couldat least narrowyouroptionsby rulingthe thirdout option. 16.9 Psychometric Rationale:Proficiencytests focuson currentabilityto performtasks. 'Standardised'is a desirablequalityof any type of test, meaningthat it is applicableto a representative sampleof the populationbeingtested. 'Sensitive'is another desirablequalitymeaningthat the test can discriminatebetweendifferentcandidates. G 16.10 Aseriesof tests, interviewsand activitiesundergoneby a groupof candidates overseveral days Rationale:Assessmentcentresare groupassessments,usuallyused forhigher-level positions,because of the timeand costs involvedinexploringcandidates' personalitiesand skillsindepth. Pitfalls:Don'tfallforthe commontrap of thinkingthat an assessment'centre' is a place! 16.11 Atleast twoemployerreferencesare desirable Rationale:Twoemployerreferencesprovidenecessaryfactual informationand comparisonof views(to minimisebias).Theotheroptionsare untrue:referencesare highly subjectiveand/or deliberatelylimitedand personalreferencesare selectedto be supportive (youcan chooseyourfriendsina way you can't chooseyouremployers!). 16.12 Employeeflexibility Rationale:Job descriptionscan be narrowand restrictive,givingpeoplea limitedsense of what is their'job' and what isn't.Thiscan create demarcationlineswhichpreventpeople fromflexiblyswitchingtasks, or workingeffectivelyinmulti-skilledteams. Theotheroptions are allpotentialuses of jobdescriptions,because they clearlystate allthe elementsof a job:forcalculatingtheirvalueto the organisation(jobevaluation),identifyinggaps injob holders'ability(trainingneeds analysis)and preparingselectioncriteria(recruitment). 182 Businessand technology(FBT/BT) Page 197 of 327 H G q 16.13 Localnewspapers Rationale:Aprofessionaljournalwouldnot be read by the target audience.National newspaperswillbe too expensive,giventhat mostof the audiencewillnot be the firm's target group:lowlevelpositionsare morelikelyto attract localapplicants. Pitfalls:Ifasked about choiceof advertisementmedia,you need to thinkabout cost and audiencetargeting together. 16.14 Innovation Rationale:Successionplanningdevelopsmanagers inorderto ensuremanagerial continuityovertime– and internalpromotionis a keyway of groomingmanagers for higherpositions.Inductiontimewouldbe shorter,because an internalpromoteeis already familiarwiththe organisation'sculture,structures,systemsand personnel.Innovationis not necessarilysupportedby internalpromotion,because it does not bring'newblood'into the organisation. 16.15 Gettingas muchinformationas possibleabout the applicant Rationale:'Maximum'informationis not the pointof interviews:squeezingas many questionsas possibleintothe timeallowedcan restrictthe flowof communicationand put unnecessarypressureon the candidate, whilea lengthyopen-endedinterviewwillbe costly.Therelevance of the informationforselectionis moreimportant. 16.16 Theorganisationhas complexcultural,businessand technicalselectioncriteriaforits staff, but is consideringusinga consultancyforthe firsttime,because it requiresnewpeople urgentlyinorderto exploitan opportunity Rationale:Thekeyfactors here are the urgency, and the fact that the consultantsdo not knowthe organisation:there is not enoughtimeto givethe consultantsan adequate understandingof the complexrecruitmentneeds. Inthe firstoption,consultantswould bringa 'fresheye' and avoidbringingthe same oldtypes of peopleintothe organisation.In the secondoption,consultantswouldprovideexpertiseand resourcesto handlelarge-scale recruitment,whichthe organisationlacksin-house.Inthe thirdoption,the organisation can be confidentthat use of consultantswouldnot be resentedand resisted. Ways in:Ithelpsifyou have a checklistinyourhead of reasonsto outsourcerecruitment: 'newblood',resources/expertiseand internalsupportwouldcertainlybe on that list.'Lead timeto briefconsultantson the needs of the organisation'wouldbe on the listof reasons not to use consultants… 16.17 Competences Rationale:Attributesare simply'characteristics'of any kind.Skillsare learnedbehaviours, rather than capacities. 16.18 Toidentifya vacancy Rationale:Thisshouldhave been fairlystraightforward.Itwouldbe quitedifficultto writea jobdescriptionor a personspecificationifa vacancy had not firstbeen identified. Answers 183 Page 198 of 327 A N S W E R S H G q 17 Diversity and equal opportunities 17.1 (1),(2),(3)and(4) Rationale: Aswellascompliance withrelevant legislation, thesearethemainarguments forhaving anequalopportunities policy.ItisgoodHRpractice toattractandretain the bestpeople forthejob,regardless ofraceorgender. 17.2 Toprovide thatwomen havetherighttoequalpaytoworkofequalvaluetothatofmen Rationale: Thisdoesnotimplythatthewoman hastobeinthesamejob.Jobevaluation is recommended asa wayofestablishing relative values ofjobs,butisnotcompulsory. Equal Paydealsonlywithsexual discrimination – notraceorothergrounds. 17.3 Theyarebothfalse. Rationale: Positive discrimination refers toactions beingtakenwhichgivepreference toa protected person, regardless ofgenuine suitability andqualification forthejob.Statement 1isnotpositive discrimination asthestepsareonlytakentoencourage people toapply.It doesnotsaythattheywillnecessarily beaccepted. Diversity goesfurther thanequalopportunities. Thewaysinwhichpeople meaningfully differintheworkplaceinclude notonlyraceandethnicity, ageandgender but personality, preferred working style,individual needsandgoalsandsoon. 17.4 Harassment Rationale: Harassment istheuseofthreatening, intimidating, offensive orabusive language orbehaviour focused ontherace,religious belief,sexorsexual orientation of another person. Thissounds likevictimisation, butvictimisation isa separate formof discrimination, involving penalising someone because theyareinvolved ina claimof discrimination against anemployer. 17.5 Better understanding oftargetmarket segments Rationale: Abusiness canbetter understand (andmeet) theneedsofmarket segments ifit employs representatives ofthosesegments: thisisa business benefit, because itenhances customer loyalty,salesrevenue, profitability etc.Thefirstoption isa legal/moral benefit (andaddresses equalopportunities rather thandiversity). Thesecond option isa benefit to employees ina diverse organisation. Thefourth option isnottrueofdiversity, which requires significant management investment andless'standardised' HRsolutions. 17.6 Employers mustadjustworking arrangements orthephysical features ofpremises to remove anydisadvantage todisabled people Rationale: Thedutyistomake'reasonable' adjustments. Theotherstatements aretrue. 17.7 Setting agelimits orranges inanemployment advertisement Rationale: Nowthatagediscrimination legislation isinforce,thiswould bedirect discrimination (akintosaying'blue-eyed, English-speaking people onlyneedapply').The otheroptions maywellbeconstrued asindirect discrimination. 17.8 Theorganisation haslaiditselfopentoa claimofindirect sexual discrimination, butsucha claimwould notbesuccessful Rationale: Theorganisation haslaiditselfopentoa claimofindirect discrimination, because iftheselection decision hadbeenmadeonthebasisofa question askedofa woman butnotofmen,itmayhavebeenconstrued assuch.Theclaimwould notsucceed because theorganisation would beabletojustify theapparently discriminatory conditions onnon-discriminatory (job-relevant) grounds. Pitfalls:Youneedtogettogripswiththebasicsofhowthisworks, andrecognise examples whenyouseethem. 184 Business andtechnology (FBT/BT) Page 199 of 327 H G q 17.9 Managingdiversity Rationale:Equalopportunityis a narrowerconcept based on eradicatingdiscrimination based on the crude dimensionsof individualdifference.Theotheroptionis justa distractor. 17.10 Selectinga certainnumberof peoplefromethnicminoritiesforjobs,regardlessof jobrelevantselectioncriteria Rationale:Positivediscrimination(treatinga minoritygroup'unfairly'well)is not permitted, exceptinrelationto trainingprovision.'Quotas' are positivediscrimination,because selectiondecisionscannot be justifiedon non-discriminatorygrounds:'targets' are 'positive action' – because they lead organisationsto encourageunder-representedgroupsto apply forjobs,and makenon-discriminationa performancemeasureforselectors. 18 Individuals, groups and teams 18.1 Memberspassivelyaccept workdecisions Rationale:Membersof an effectivelyfunctioninggroupwilltake an activeinterestin decisionsaffectingtheirwork.Thefirstoptionis healthy, particularlyinavoidingproblems that occurwhengroupsseekconsensusat allcosts (eg 'group think').Thesecondoptionis healthy, as it unitesand stimulatesthe group.Thefourthoptioncan be a signthat the groupis supportingthe performanceof its members– not justthat they are focusingon theirownperformanceat the expenseof the group. Pitfalls:Ifyou weretryingto go by 'commonsense' instead of knowledge,you mightthink that intra-teamdisagreementand inter-teamcompetitionwerenegatives:not so. Thereare no 'trick'questions,but questionscan be designedto separate those whohave studied fromthose whoare guessing! 18.2 Encouragethe membersto modifytheirpersonalities 18.3 Rationale:Personalityis a relativelystable and distinctiveconcept:it is verydifficult(ifnot impossible)to change personality,and the attempt has radicaleffects!Theotheroptions are constructiveapproaches to handlingpersonalityclashesina team. Storming 18.4 Rationale:Thisis typicalof 'storming'behaviour.Formingwouldbe moretentative:just gettingto knowone another. Normingwouldbe furtheralonginthe processof settlinginto shared valuesand behaviours. Pitfalls:Don'tassumethat 'storming'is allabout conflict!Ifyou did this,you mighthave mistakenthisdescriptionfornorming,say. Ways in:Underlinesomekeywordsinthe micro-scenario:'debating', 'factions','disagree' … Attitudes Rationale:Thisis the definitionof attitudes. Personalitytraits are relativelystable, enduringqualitiesof an individual'spersonality(eg 'impulsiveness').Perceptionsare how people'see' things,accordingto howthe brainselectsand organisesinformation. Emotionalintelligenceis a conceptpopularisedby DanielGolemanto describeawareness of, and abilityto manage, one's ownemotionsand those of others.Noneof these concepts is explicitlymentionedinthe syllabus– but you are requiredto knowsomethingabout the 'characteristicsof individualbehaviour',so it is worthgettingto gripswithsomeof the basics. Ways in:Perceptionsare about thinking,emotionsare about feeling– and the question asked forsomethingthat combinesthinking,feelingand intention. Answers 185 Page 200 of 327 A N S W E R S H G q 18.5 Crisisdecision-making Rationale: Teams arenotthebestvehicle forcrisisdecision-making, because group decision-making takeslonger, anddecisions mayprotect theteamattheexpense ofthe right(possible tough) solution. Teams are,however, greatfordecision-making where the hearing ofdifferent viewpoints isbeneficial. Theyarealsogreatforideasgeneration (think ofgroupbrainstorming) andcoordination (teams areoftencross-functional). Youmight havehesitated overthefourth option, butitisimportant torealise thatdistance isnowno obstacle toteamworking (think ofvirtual teams, connected byITandcommunications links). Pitfalls:Don'tforget'virtual' teams inyourthinking. 18.6 Blocking Rationale: Blocking (ordifficulty stating) iswhere members putobstacles inthewayof proposals: thismaybea positive contribution incircumstances where theproposals are riskyorunrealistic – butitisprobably contributing totheproblem here.Bringing-in is encouraging thecontribution ofothers; summarising, drawing together passages of discussion; testing understanding, checking whether points havebeenunderstood. They aregenerally supportive behaviours, whichcouldbeusedtogettheteambackinto constructive discussion. 18.7 Members areasalikeaspossible Rationale: 'Compatibility' isnotthesameas'homogeneity': teams needdiversity, inorder tohavea mixandbalance ofcontribution androles.Theotheroptions correspond toteam identity, andshared objective: twoofthekeytoolsofteambuilding. 18.8 Completer – finisher Rationale: Thekeywords inthequestion were'keeneyefordetail', 'always meets deadlines' and'reluctant toinvolve others'. These phrases aretypicalcharacteristics ofa completer-finisher. 18.9 Identity Rationale: Thedefinition ofa groupis,basically, 'anycollection ofpeople whoperceive themselves tobea group'(Handy). Identity means thatthereareacknowledged boundaries toa group,whichdefine whois'in'andwhois'out','us'and'them'. Groups mayhavea defined purpose, butnotalways.Conformity canbeanattribute ofgroups or crowds. Pitfalls:Notethatthiswasn't a question aboutthedifference between a groupanda team – although thistoowould makea goodexamquestion… 18.10 Amixandbalance ofteamroles Rationale: Thisshould bestraightforward ifyouhaveunderstood theBelbin model. A healthy teamhasa mixandbalance ofroles.However, members canadoptmorethanone role,orswitch rolesasrequired: thereneednotbeninemembers withfixedroles.Belbin argues thatitistheprocessroles(howpeople behave, contribute andinteract withothers), rather thanthefunctional roles(technical skillsandoperational knowledge) thatimpact on teamfunctioning – although functional rolesarestillimportant forgetting thetaskdone! 18.11 Adjourning Rationale: Adjourning iswhere thegroupseesitselfashaving fulfilled itspurpose, and thereisa process ofdisconnecting fromthetaskandgroup– because therewillhavetobe a renegotiation ofaimsandrolesforthenewtask.Dorming iswhere a groupgrows complacent aboutperformance. Norming isa muchearlier stageinthecycle,where the groupreaches agreement aboutworkmethods, rolesandbehaviours. Pitfalls:Dorming andadjourning arealllatestagesofgroupdevelopment, andcanbe confused ifyouarenotclearaboutthem. Although 'forming, storming, norming and performing' isbetter known, theseadditional stagesarepartofTuckman's model. 186 Business andtechnology (FBT/BT) Page 201 of 327 H q 18.12 Encouragingmembersto expressdisagreements Rationale:Competitionwithothergroupsenhances solidarity,and competitionwithina groupdestroysit, so the firstand secondoptionare the oppositeof solidarity-enhancing. Thefourthoptionwouldlead to 'group think':inabilityto confrontproblems,lackof criticismof poordecisions,falseconsensus.Itmay create highsolidarity,but not healthy solidarity. 18.13 Multi-skilled team Rationale:Amulti-skilledteam is one whichbringstogetherversatileindividualswhocan performany of the group'stasks. Multi-disciplinary (ormulti-functional)teams bring togetherindividualswithdifferent skillsand specialisms,so that theirskillscan be pooled or exchanged.Self-managedteams are givendiscretionto plan theirowntask sharingand workmethods,withindefinedtask objectives:there is no suggestionthat thisis the case here. Avirtualteam is a geographicallydispersedteam, connectedby informationand communicationtechnology(ICT)links. 18.14 Shaper Rationale:TheShaperis the 'dynamo'of the team: one of the formsof leadershipin Belbin'smodel.ThePlantis the ideas personand creativeproblem-solver.TheCo-ordinator is the chairperson,clarifyinggoals,delegating,promotingdecision-making.The Implementeris the personwhoturns ideas intopracticalactions. Pitfalls:Thereare several'leader' rolesinBelbin'smodel:you need to distinguishbetween them.ThePlantis an ideas leader;Resourceinvestigatoran entrepreneur;Co-ordinatora task organiser;and the Shaperan interpersonalleader. 18.15 Shuttingout Rationale:Youmay have hesitated betweenthe thirdand fourthoptions.Howeverblocking is puttingobstaclesinthe way of a proposalwithoutofferingany alternatives;whereas shutting-outis interruptingor overridingothersand takingover. G 18.16 Performing Rationale:Theteam is executingits task and the team briefingis dealingwithprogressto date. 19 Motivating individuals and groups 19.1 Thework Rationale:Intrinsicrewardsare 'part of' the workitself:extrinsicrewardsare 'external'to the workitself. Pitfalls:Potentialconfusionbetweenintrinsicand extrinsic:a classicexamtest! 19.2 Needforaffiliation 19.3 Rationale:Affiliationis actuallya category inanother need modelby DavidMcClelland. Theotheroptionsare Maslow's(althoughfreedomof inquiryand expressionoverarchesthe hierarchyitself). (4)only Rationale:InHerzberg'stheory, onlytrainingisa 'motivatorfactor'. Theothersare all 'hygiene'factors:ifthey are inadequate, employeeswillbe dissatisfied,but evenifthey are got right,they willnot providelastingsatisfactionor motivation.Herzbergargued that satisfactioncomesonlyfromthe job. Pitfalls:Herzbergis oftenexamined,and students frequentlyget the basics of the theory wrong!Makesure you can sort the motivatorfactors fromthe hygienefactors. Answers 187 Page 202 of 327 A N S W E R S H G q 19.4 Goals Rationale: Goalsarethingspeople choose topursue: eachindividual willhavetheirown goals,whichmayvarywithtime,circumstances andotherfactors. Theideaofinnate (inborn,instinctive) needsisthattheyarebiological orpsychological imperatives, common to allpeople. (Thisiswhatmakes itpossible tohaveneedtheories withdiscussion ofonlya fewinnate needs.) Satisfaction ariseswhena goalisachieved. 19.5 Valence would bearound 0, expectancy high,motivation low Rationale: Willy'sexpectancy (expectation thatbyworking hardhewillbegiventheteam leadership) ishigh,butvalence (importance toWillyofbecoming a teamleader) isneutral, because hehasbothpositive andnegative feelings aboutit.SinceMotivation =E ×V,ifVis 0, motivation isalso0. Pitfalls:Makesureyougetvalence andexpectancy therightwayround, andthatyou recognise whyWilly'svalence is0. Waysin:Workthrough theequation, calculating yourownvalues forVandE … 19.6 Motivator factor Rationale: Herzberg usedtheotherthreeterms todescribe thesamesetoffactors: the onesthatmaintain morale butdonotpositively motivate (maintenance); prevent dissatisfaction butdonotpromote satisfaction, inthesamewaythathygiene prevents illhealth butdoesnotpromote well-being (hygiene); andthatrelate totheenvironment of workrather thantotheworkitself(environmental). Theopposite setoffactors is'motivator' factors intheworkitself,which– according toHerzberg – positively createsatisfaction and motivation tosuperior performance. Pitfalls:Anexamquestion mayrefertohygiene factors byanyoneofitsthreenames, soit isworth usingthisquestion tocheckthatyouknowthemall! 19.7 Autonomy Rationale: Autonomy isa degree offreedom ordiscretion inthejob:theremoval of restrictive controls. Waysin:Youmayhavespotted thatallthecoredimensions areallintrinsic tothejobitself: theyareallwhatHerzberg would call'motivator' factors. Youcouldtheneliminate someof theoptions thatareclearlyextrinsic tothejob,or'hygiene' factors … 19.8 Everyone isallowed toparticipate equally Rationale: Participation willonlyworkiftheindividual hastheabilityandinformation to participate effectively (theprinciple of'capacity'): otherwise, theywillfeelfrustrated and under pressure. Youmayhavehesitated overthefourth option, butthisisnecessary for people totakeparticipation seriously (theprinciple of'consistency'). 19.9 Theory X Rationale: Theory X isthemanagerial assumption thatmostpeople dislike workand responsibility andwillavoidthemifpossible theyhavetobecoerced andcontrolled towork adequately – hencethekindsofmanagement measures described. Theory Y isthe managerial assumption thatpeople canbemotivated toacceptchallenge and responsibility andcontribute willingly tothefirm– resulting ina quitedifferent management style! Pitfalls:Youreallydoneedtoknowwhichwayround X andYare!(Ifithelps,thinkofXas a 'cross'against workers' names …) 188 Business andtechnology (FBT/BT) Page 203 of 327 H G q 19.10 Immediacy ofreward following results Rationale: Theotheroptions areessential foranindividual toworkouthowmucheffortwill berequired, andwhether itwillbeworth itfortherewards expected (duetoconsistency) to beavailable. However, 'immediacy' isnotnecessarily required: people mayhavea high tolerance for'delayed gratification', andbewilling towaitforrewards aslongastheyhave a reasonable expectation thattheywilleventually accrue.(Asa student, forexample, you maybeworking sacrificially hardnow,inordertogainqualifications thatwillbenefit your career inseveral years'time.) 19.11 Itseffectonteammotivation Rationale: Teammembers mayworkforindividual rewards, rather thancontributing tothe group,especially sincethereisa problem offering rewards forlessmeasurable criteria such asteam-work. Thefirstoption isclearlya benefit. Thesecond option isa benefit ofPRP because itrelates rewards directly tobusiness objectives. Youmayhavehesitated overthe thirdoption butthisisa benefit because PRPisa wayofrewarding employees whenthere isnootherwaytodoso(egbecause theyhavereached thetopofthesalary/wage range theirposition iseligible for). 19.12 Itreplaces monetary rewards Rationale: Jobenrichment cannot offermanagement a cheapwayofmotivating employees: eventhosewhowantenriched jobswillexpected toberewarded withmore thanjobsatisfaction. Theotheroptions havebeenfoundinpractice tobebenefits ofjob enrichment. 19.13 Self-actualisation Rationale: According toMaslow, self-actualisation isthefinal'need'tobesatisfied. Itisthe fulfilment ofpersonal potential. Maslow claims thatthiscanrarelybesatisfied. Waysin:Itmightbeworth memorising thetriangular diagram andperhaps adding pictures tohelpyouremember. Pitfalls:Youmayhavehesitated overthefirstoption butthiswasjusta fictitious distracter. Esteem needsandphysiological needsarelower downthehierarchy. 19.14 Jobcontent Rationale: Jobevaluation focuses onjobcontent, tomeasure therelative valueofjobs, compared toeachother, nottheirworth inmoney terms. Actualpaylevels aresetwith reference totheotheroptions, among others. 19.15 Thestrength ofanindividual's preference fora givenoutcome Rationale: Thefirstoption isvalence (V).Thethirdoption refers to'expectancy' (E).The second option is'forceofmotivation (F):theproduct ofvalence andexpectancy. Hence the equation: F =V×E. 19.16 Jobenlargement Rationale: Eva'snewtasksareofthesameskilllevelandresponsibility asheroriginal task, soherjobhasbeenhorizontally enlarged rather thanvertically enlarged (which would be jobenrichment). Ifshehadgonefromjustpacking oneshift,tojuststamping onthenext shift(andsoon),thiswould havebeenjobrotation. Pitfalls:Anyarealikethiswhere students frequently confuse similar terminology isripefor testing. Read,thinkandcheckyouranswers carefully, toavoidcareless errors! 19.17 Micro-division oflabour Rationale: Micro-division oflabour (orjobsimplification) isbreaking downjobsintotheir smallest possible components, andhaving oneperson carryoutonecomponent. Division of labour isspecialisation, butnottothisextent. Jobenlargement implies greater taskvariety, andempowerment, greater tasksignificance andresponsibility. Answers189 Page 204 of 327 A N S W E R S H q 19.18 Integration Rationale:Thecorrectansweris impliedinthe scenario,inthat the manager is urgingteam membersto put theirfeelingsaside forthe benefitof the team. Inotherwords,Javed is seekinggreater integrationinrelationto theirgoalsand objectives. 20 Training and development 20.1 Theorist 20.2 Rationale:TheTheoristseeksto understandbasic principlesand to take an intellectual, 'hands off' approach priorto tryingthings.Pragmatistsare the opposite.Youmay have hesitated overthe firstoption,but Reflectorslearnby thinkingthingsthrough,rather than necessarilyby applyingtheoreticalconcepts. Pitfalls:Thisis an area ripeforexamquestions,because of the clarityof the style classifications.Makesure you can identifythe labelto go witha descriptionand viceversa. Ways in:Youcouldprobablyruleout Pragmatistquitequickly,because of Sara's dislikeof 'hands on' methods. Ascientificapproach to problem-solving,inorderto minimiseriskand error Rationale:Thescientificapproach to problem-solvingis a characteristicof learning organisation,but thisinvolvesexperimentationand learningby testingideas and making mistakes.Learningorganisationshave a hightoleranceforrisk,and regard errorsas learningopportunities. Ways in:Ifyou don't recognisethe conceptor model,don't giveup and guess:think throughthe optionsand howthey relate to each other. Aquestionphrased 'whichis not…?' suggeststhat you are lookingforthe 'odd one out'. Ifyou lookat the options,you should findthree that are compatiblewitheach other– leavingone that isn't. G 20.3 Trainingcan be an effectivesolutionto someperformanceproblems 20.4 Rationale:Thisis a positiveand realisticviewof the benefitsand limitationsof training:not all performanceproblemsare amenableto training,and may need othersorts of intervention(discipline,counselling,equipmentrepair, jobre-design,motivationand so on). Thefirstoptionwouldfailto involvetraineesand linemanagers, whoare keystakeholders intraining.Thesecondoptionwouldlimittrainingprovision,ignoringits significantbenefits. Thethirdoptionwouldfailto designtrainingprogrammesappropriatelyforspecific trainingneeds and learnerstylepreferences. Training 20.5 Rationale:Conditioningmay have soundedfamiliarifyou onlyread as far as 'modification of behaviour',but it involvesspecificrepetition-and-rewardtechniques.Educationis the gradual acquisitionof knowledge,by learningand instruction,oftenleadingto qualifications. Pitfalls:Thiskindof related terminologylendsitselfto examquestions.Training,education and developmentallinvolve'learning',but the learningexperiencesare of differenttypes, and withdifferentoverallaims. Experiential Rationale:Thelearningcycleis experientiallearningor 'learningby doing'.'Action learning'soundssimilar,but is actuallya specificlearningmethodby whichmanagers are broughttogetheras a problem-solvinggroupto discussreal workissues.Programmed learningis highlystructuredlearning,whichdoesn't apply here. Reflectionis a way of thinkingabout what you have learnt. 190 Businessand technology(FBT/BT) Page 205 of 327 H q 20.6 Enhancedemployabilityof staff members 20.7 Rationale:'Employability'refersto an individual'shavinga portfolioof skillsand experiencethat are valuableinthe labourmarket,thus enhancinghisor her mobility(and abilityto get a joboutsidethe presentemployer).Thisis a double-edgedswordforthe organisation:it is sociallyresponsibleand fostersemployeesatisfactionbut may also cause a skilldrainto otherorganisations.Youshouldbe able to see howtraining contributesto the otheroptions,and whythey are benefitsforthe organisation. Pitfalls:Lookout forqualifierkeywordslike'foran organisation'(that is,not 'forthe individual').Thinkcarefullythrough'whichis the exception?'questions,too. Logically,an optionmay be an exceptionformorethan one reason:inthiscase, because it isn'ta benefit(but a drawback)or because it isn'ta benefitto the organisation (but a benefitto the individual).Ina welldesignedquestion,you shouldget the same answereitherway! Methods(2),(3)and (4)only 20.8 Rationale:Dayreleaseis 'off-the-job',because the learningcomesfromthe employee's attendinga collegeor trainingcentre one day per week.Theothermethodsare all'on the job'. Pitfalls:Notethe varietyof 'on the job'methods:don't forgetto includejobrotation(which you mightotherwiseconnectwithjobdesignand Herzberg)and temporarypromotion (whichyou mightnot thinkof as training). Applicationof learnedskillsto the job 20.9 Rationale:On-the-jobapproaches support'transferof learning':skillsare learnedinthe actual contextinwhichthey willbe applied– so applicationis seamless.Thefirsttwo optionsare advantages of off-the-jobtraining:the learnersdon't have the distractionof otherworkduties,and errorswhilelearningare lesslikelyto have real consequences.You may have hesitated overthe thirdoption,but there is a riskthat by learningon the job, peoplewillpickup 'bad habits' and short-cuts– rather than best practice. Level3: jobbehaviour G 20.10 Rationale:Level1measureshowemployeesrated the training.Level2 measureshowmuch they learned:what they knowor can do that they didn't do before.However,fora manager concernedwithdepartmentalproductivity,the importantthingis whetherthe traineesapplied what they learnedeffectivelyto the job:Level3. Level5 is the impactof trainingon the wider'good' of the organisationand its stakeholders:thiskindof informationis usuallyonlyavailable(and worththe cost of gatheringand analysingit)at seniormanagementlevel. Personal Rationale:Managementrelatesspecificallyto managementeffectivenessand succession; career to planningopportunitiesfornewchallengesand learningthroughcareer moves (whetherverticalor lateral). 20.11 On-the-jobcoachingby hissupervisor Rationale:APragmatistlikesto learnin'hands-on' waysthat have a directlinkto real, practicalproblems– so on-the-jobpracticeis ideal.Thesecondoptionwouldsuitan Activist– a similarstyle,enjoyingpractical,active,participativelearning,but withoutthe need to see a work-related'payoff'. Thethirdoptionwouldsuita Reflector,sincea journal offersopportunityforlearningthroughreflection.Andthe fourthoptionwouldsuita Theorist,witha preferenceforstructuredintellectualstudy. Pitfalls:Thepairs of 'hands off' and 'hands on' stylesare quitesimilar:don't confusethem. Itmay helpto relate each styleto a differentstage of Kolb'slearningcycle,to makethem moredistinct.ThePragmatistfocuseson the job;the Reflectorreflectson what happened; the Theoristseeksto understandit;and the Activistplans to try somethingnew. Answers 191 Page 206 of 327 A N S W E R S H q 20.12 Increased employee satisfaction Rationale: Employee satisfaction would notberegarded asa quantifiable benefit – unless itcouldbecorrelated directly withfigures suchasreduced absenteeism andlabour turnover (although itwould bedifficult torelatethisspecifically totraining, asopposed to othereffects). Pitfalls:Watchoutforqualifier keywords inthequestion like'quantitative' or'qualitative' (benefits, characteristics). Always readquestions carefully! 20.13 1isthedefinition ofdevelopment and2 isthedefinition oftraining Rationale: Itisimportant toseparate development, training andeducation inyourmindfor thissyllabus. Development isthegrowth ofa person's potential. Training isa planned learning event. Education isknowledge thatisacquired gradually bylearning or instruction. 20.14 Asetofcompetence standards foryourjobordepartment Rationale: Aformal training needsanalysis involves systematic study(atthelevelofthe individual, jobordepartment) oftherequired levelofcompetence, thepresent/actual level ofcompetence andanygapbetween them. Theotheroptions areallwaysinwhich learning needsmay'emerge' inthecourse ofwork:thefirstoption, through monitoring developments inyourfield;thesecond option asa 'critical incident' andthefourth option ason-going performance feedback. 20.15 E-learning Rationale: Itisthenetworked aspectthatmakes e-learning different fromcomputer based training (CBT)(usingstand-alone computers). Blended learning involves learning usinga combination ofdifferent methods andtechnologies: thiswould bethecorrect option ifthe learning support wasavailable fromface-to-face tuition, say. Pitfalls:Learning technologies isfertile territory forexamquestions, because thereareso manyclosely-related methods andterms (coaching, mentoring etc). Waysin:Justaboutanything withan'e-'infrontofit,thesedays,isabouttheinternet – notstand-alone computers. G 20.16 (2),(4),(1),(3) Rationale: ThisisKolb'slearning cyclewhichisa 'learning bydoing'approach. Itputsthe learner inanactiveproblem-solving roleandencourages themtoformulate andcommit themselves totheirownlearning objectives. Waysin:Simplified, thislearning bydoingapproach involves: Act Analyse action Suggest principles ApplyprinciplesAct...andsoon 20.17 Toidentify present levelofcompetence Rationale: Thiscanthenbeusedtoplanfortheotheroptions. 21 Performance appraisal 21.1 Jobevaluation Rationale: Jobevaluation isa method ofmeasuring thevalueofa job,notthe performance oftheperson holding thejob.Theotheroptions arekeyapplications of performance appraisal. (Succession planning isa formofpromotion orpotential review, aimed atidentifying future managers.) Pitfalls:Thisisa common source ofconfusion (akintothedifference between job descriptions andperson specifications inrecruitment). 192 Business andtechnology (FBT/BT) Page 207 of 327 H G q 21.2 Guidedassessment Rationale: Overall assessment isnarrative comment without theguidance onhowthe terms should beapplied. Grading usesratingscales(definitions ofperformance oneach characteristic from1-5,say).Behavioural incident methods compare specific behaviours against typicalbehaviour ineachjob. 21.3 Theyshould beeasilyachievable Rationale: Achievable (which ispartoftheSMART objectives framework) isdifferent from 'easilyachievable': oneofthekeypoints ofperformance measures isthattheyshould be motivational, whichmeans thattheyshould beatleasta littlebitchallenging. 21.4 Tellandlisten Rationale: Thismanager tellsinthefirstpartandlistens inthesecond partoftheinterview, takingona dualroleascriticandcounsellor – andnotassuming thatallperformance problems arethefaultoftheemployee himself. Tellandsellwould bemoreone-sided ('selling' simply beinggaining acceptance oftheevaluation andimprovement plan). Problem-solving isevenmoreofa collaborative, proactive process, withthemanager inthe roleofcoach.Sellandlisten isnotanappropriate method. 21.5 360-degree feedback Rationale: 360-degree is,bydefinition, a 'rounded' viewofanindividual's performance fromtheappraisee, colleagues, superiors, subordinates andrelevant business contacts. Selfappraisal islikelytobebiasedbyself-perception; peerappraisal byteam relationships; andupward appraisal bysubordinates' fearofreprisals. 21.6 Performance management. Rationale: Thisisthedefinition ofperformance management. Itdiffers fromperformance appraisal initsemphasis oncollaboration, objective-setting andon-going management. 21.7 (1),(2),(3)and(4)only Rationale: These areallvalidcriteria. Thefifthcriteria would berelevance notresults. 21.8 Multi-source feedback Rationale: Multi-source feedback isanother termfor360-degree feedback orappraisal. Management byobjectives andperformance management arebothapproaches to collaborative objective-setting, on-going development andperiodic review. 21.9 There isanimplied linkbetween assessment andreward Rationale: Thisisa double edgedsword: a linkbetween assessment andreward may motivate employees totakeappraisal seriously, butcanalsomakeitthreatening ifthey fearthattheyhaven't donewell.Moreover, thereareotherfactors insetting rewards – and ifthereisn'ta realconnection between a positive appraisal anda meaningful reward, the 'implication' thatthereiswillonlyundermine theappraisal system. Theotheroptions are clearlypositive. 21.10 Appraisal isseenasanopportunity toraiseworkplace problems andissues Rationale: Theotheroptions wereidentified asbarriers toeffective appraisal byLockett: 'appraisal asunfinished business' (distracting fromfuture-focused improvement planning); 'appraisal asbureaucracy' (amereform-filling exercise); and'appraisal asanannual event' (where on-going performance management isrequired). Lockett alsoidentified 'appraisal asconfrontation' asa barrier, butthisisnotwhatisimplied bythecorrect answer, whichreflects a genuine, job-relevant, problem-solving approach. Answers193 Page 208 of 327 A N S W E R S H G q 21.11 Bonuses awarded Rationale: Although appraisals canbeusedtomeasure theextent towhichanemployee is deserving ofa bonus, itcannot beusedtomeasure theeffectiveness oftheappraisal scheme itself.Fundsmaynotbeavailable forbonuses butthisdoesnotmeanthatthe appraisal system isineffective. Appraisals mustbecarried outwithserious intent and managers mustbecommitted tothesystem. Thesystem should befairandreasonably objective. 21.12 Individual objectives arerelated totheobjectives ofthewhole organisation Rationale: Thisisanadvantage because itgivestheindividual a greater senseofmeaning andcontribution totheorganisation. Itisalsoanadvantage totheorganisation – asareall theotheroptions. Youmayhavehesitated overthefirstoption. Thiswould certainly bean advantage toappraisees identified forpromotion – butnoteveryone. 21.13 Results-oriented 22 Rationale: Thisinvolves setting specific targets andstandards ofperformance, and measuring performance against them. Behavioural incident focuses onjobbehaviours; ratingscalesarethesameasgrading; andguided assessment isnarrative comment on defined characteristics. Section D MTQs 22.1 (a) (b) (c) 22.2 (a) (b) 22.3 (a) (b) (i) (ii) (iii) (iv) Implementer Shaper Specialist Monitor-Evaluator These allrelate tothedescriptions ofBelbin's teamroles. Victimisation. Victimisation occurswhenanindividual ispenalised forgiving information ina discrimination claimagainst anemployer. True.Notethatthisisnotthesamethingaspositive discrimination. Afeeling ofachievement. Intrinsic reward Intrinsic rewards arisefromtheperformance ofthework Apromise ofadditional timeoffformeeting a target.Incentive Anincentive isa promise orofferofa reward Working conditions Extrinsic reward Extrinsic rewards areseparate fromthejobitselfanddependent onthedecisions ofothers Salary Extrinsic reward Extrinsic rewards areseparate fromthejobitselfanddependent onthedecisions ofothers Givinganemployee freedom todecide howthejobshould bedone,encouraging employee participation inplanning decisions ofsuperiors Transferring anemployee fromonejobtoanother isjobrotation. Increasing the number oftasksanemployee participates inisjobenlargement. Dividing a jobup intoa smallnumber ofsequential tasksisjobsimplification. (1) Theorists (2) Reflectors (3) Pragmatists (4) Activists These allrelate totheclassifications ofHoney andMumford. Computer-based training, college courses Theotheroptions areallonthejobtraining methods. 194 Business andtechnology (FBT/BT) Page 209 of 327 H q 22.4 (a) (b) 22.5 (a) (1) George Personal development canhelptofoster employee job satisfaction, commitment andloyalty. (2) Helen (1) Company W- Results-oriented scheme Thisscheme isbasedonthe results achieved bythesales staff. (2) Company X- Grading (3) Company Y- Guidedassessment Eachmanager isgradedontheir performance. Thisisa guided assessment method. Management development. Thismayinclude thedevelopment of management/leadership skillsormanagement education suchas anMBA. (3) Josh Professional development. Thisisanexample ofcontinuing professional development (CPD).CPDisbasedonthebeliefthat a professional qualification isthebasisfora career lifetime of development. (4) Leigh Careerdevelopment. Thetrendfordelayered organisations reduces opportunities forpromotion, soopportunities areplanned forsideways orlateral transfers. There should beclearobjectives, thereshould betimely feedback Fortraining tobeeffective thereshould betimely feedback andalsoclearobjectives forthetraining. Training doesnotneedtobeonoroffthejobtobeeffective, itcan beeither.Training doesnotneedtobeexpensive tobeuseful. (4) G (b) Company Z - Behavioural-incident methodThismethod concentrates on employee behaviour measured against typicalbehaviour ineach job. Problem-solving Thisisa problem solving approach. (c) 22.6 (a) 23 True.Thisisoneoftheobjectives ofperformance appraisal. Negative power Negative power istheuseofdisruptive behaviour tostopthingsfromhappening. (b) Individuals atalllevels canexerta leadership influence Heifetz: theory ofdispersed leadership There are'psychologically close'and'psychologically distant' managers Fiedler: contingency theory; people become leaders partlybecause oftheirown attributes andpartlybecause oftheirsituation Themanager 'doesthingsright'whiletheleader 'doestherightthing' Bennis: putforward specific differences between managers andleaders Personal effectiveness and communication 23.1 Diagonal Rationale: Thecommunication hereisbothupwards and'sideways'. 23.2 Personal development planning Rationale: Personal development planning issomething theindividual doesforhisorher ownimprovement andlearning, although a coach,mentor orcounsellor mayfacilitate this process. Theotheroptions arealltypesof'developmental relationships': a coachhelpsa trainee fora briefperiod toworkonjob-relevant skills;a mentor helpsa lessexperienced Answers195 Page 210 of 327 A N S W E R S H G q person overthelongtermtoworkonmoregeneral personal development issues; anda counsellor helpsanindividual toworkthrough emotional orsocialissues orproblems. Pitfalls:These aredistinct roles:makesureyoucanidentify themcorrectly. 23.3 Anassertive styleofcommunication Rationale: Anassertive styleofcommunication willhelpintimemanagement, because it enables youtosay'no'(appropriately) tointerruptions andunscheduled demands. 23.4 Thewheel Rationale: Thewheel hasa central figurewhoactsasa hubforallmessages between members. Thecircleinvolves a message goingfromoneperson toanother. The'Y'involves a message goingfromperson toperson upa chain,untilitreaches someone whoisin contact withmorethanoneperson. Andall-channel involves everyone sending messages toeveryone else. Waysin:Ifyoucanvisualise thesituation, ithelps:youcouldtheneliminate thecircleand all-channel, atleast. 23.5 Mobile communications Rationale: Amobile phone enables bothcolleagues andcustomers toreachyouwhenyou areoutoftheoffice.Italsoenables youtocalltheofficeegtocheckinventory availability ofitems, placeimmediate orders andsoon.(Ifyouhada laptop, thiswould beevenbetter: youcouldhavedirectconnection withofficesystems.) Thefirsttwooptions allinvolve linked computer systems, soarenotrelevant. 23.6 Security Rationale: Security isa keyvulnerability ofemail: thereisnoguarantee ofprivacy (anda riskofaccidentally sending themessage tothewrong person). Theotheroptions are significant strengths, however. Ifyouhesitated overthefourth option, thinkabouthow emailcanbeusedformemos/reports/letters, andhowmanyformats (visual, audio)canbe 'attached' toemailmessages. 23.7 Non-directive Rationale: Counselling isfacilitating others through theprocess ofdefining andexploring theirownissues andcoming upwiththeirownsolutions: thisisrelatively non-directive. Advising isa relatively directive role:offering information andrecommendations onthebest course ofactiontotake.Counselling isoftennotdirectly task-related: itisoftenabout helping employees toformulate learning goalsortocopewithwork(ornon-work) problems. 23.8 Accurate Rationale: Thegrapevine isa 'rumour mill':information isofteninaccurate and exaggerated. Communication is,however, fast,selective (inthatinformation isnot randomly passed ontoeveryone) andup-to-date (information isoftenmorecurrent thanin theformal system). 23.9 Exception reporting Rationale: Exception reporting mayimprove thequality ofupward communication (making itmoreselective), butitdoesnotencourage it:ifanything, itmaycreatea culture inwhich staffdon't'bother' theirsuperiors withinformation. Theotheroptions areallwaysof encouraging upward flowofinformation andideas– whichotherwise tendstoberarein organisations. 23.10 Sender, Codedmessage, Decoded message, Receiver, Feedback Rationale: Thesender encodes themessage andtransmits itthrough a medium tothe receiver whodecodes itintoinformation. Theanswer cannot beAsinceyouneedtohavea message tofeedback onbefore youprovide thefeedback. Waysin:Itmighthelpyoutopicture theradiosignaldiagram inyourmind. 196 Business andtechnology (FBT/BT) Page 211 of 327 H G q 23.11 Teammeetings Rationale: Notice boards areunsuitable forupward communication, andorganisation manuals andteambriefings arefordownward communication. Pitfalls:Youneeded tobeawareofthenature ofa teambriefing, whichisforinformation andinstructions tobegiven(downward) toa team. 23.12 Distortion Rationale: Noise istheothermaintypeofcommunication problem: interferences inthe environment inwhichcommunication takesplace,affecting theclarity,accuracy orarrival ofthemessage. Redundancy isa positive principle inthiscontext: youcanusemorethan oneformofcommunication, sothatifonemessage doesnotgetthrough (perhaps because ofnoiseordistortion), another may.Feedback isanessential partofthecommunication cycle:itistheresponse whichindicates tothesender whether themessage hasbeen correctly received. 23.13 Wheel Rationale: Thewheel wasthefastest andtheYwasthesecond fastedinLeavitt's experiment. Thechainwastheslowest. Thereason wasthefactthatmessages came through andweredistributed froma central source. 23.14 Developing theindividual byhelping tobuildonskillsandovercome weaknesses Rationale: Ifyougotthisanswer incorrect thenremember theimportance ofhaving a clear understanding ofthekeydefinitions within thesyllabus. Forexample, coaching isnotonewaysothesecond option couldimmediately beeliminated. Itisimportant tolookforkey words (clues)totherightanswer. 23.15 People paylessattention tonon-verbal cuesthantowhatisbeingsaid Rationale: Research shows thatpeople paymoreattention tonon-verbal cuesin interpreting whatsomeone means thantheydotothewords themselves. Theother statements aretrue. Pitfalls:Youmayhavewrongly selected thethirdoption ifyouassociated non-verbal communication toonarrowly as'bodylanguage': beawareofthefullrangeofnon-verbal signals thatcanbegivenorreceived. 23.16 Measurable Rationale: SMART is'Specific, Measurable, Attainable, Relevant andTime-bounded', although versions differ.Thefirstandthirdoptions arebothveryplausible – andalso qualities ofeffective goals– butyouwouldn't wanttoreplace 'measurable', whichis essential (otherwise, howwillyouknowwhenyou've reached yourgoal?). 23.17 Failedtomeetdeadlines Rationale: Youmayhaveconsidered failingtocommunicate, butyouarenotgivenenough information inthescenario toassume thatthisisthecase. 23.18 Setting upa competence framework Rationale: Acompetence framework setsoutwhatanemployee should beabletodoand oughttoknow. 23.19 Adispute focuses attention onindividual contributions Rationale: Focusing attention onanindividual's contribution maybeconstructive, ifit bringstheemployees involved torealise whateachcontributes. Answers197 Page 212 of 327 A N S W E R S H q 24 Section E MTQs 24.1 (a) (b) 24.2 (a) (b) Thetaskwillsatisfya keycustomer, Thetaskwilladdvaluetotheorganisation. These aretwooftheconditions ofanimportant task.Theotheristhatthepotential consequences offailure arelong-term, difficult toreverse, farreaching andcostly. Ameeting without a clearobjective willalwaysgivevaluetoeveryone attending for thetimetaken False Meetings without objectives canbea wasteoftimeforallthoseattending. Timemanagement canbeimproved bysetting asidetimes whenanindividual isnot contactable byothers. True Constant interruptions fromothers canprevent workbeingcompleted. Setting asidetimeforthesetaskswillimprove timemanagement. (1) Compromise Compromise involves bargaining, negotiating andconciliating. (2) Integration/Collaboration Integration/collaboration involves emphasis beingputonthetaskandindividual esteem beingsubordinate totheneedsofthegroup. (3) Dominance Dominance istheapplication ofpower or influence tosettle theconflict. (4) Denial Ignoring theissueisknown asdenial. Compromises result inallparties beingsatisfied False.Evenpositive compromises onlyresult inhalf-satisfied needs. Awin-win situation israre,butisthebestsolution toconflict resolution True.Win-win situations canresult inmutual respect andco-operation. Alose-lose situation isnotpossible False.Compromise comes intothecategory. G 24.3 (a) (b) Win-lose situations canresult indamaged relationships within theteam True.Ifoneteammember getswhattheywantattheexpense ofanother, relationships within theteammaybreakdown. Completed questionnaires formarket research Data:Thisisrawmaterial tobeprocessed. Company website page Information: Thishasbeenprocessed andthenpresented. Calculations showing whether aninvestment isprofitable Information: Thishasbeenprocessed andthenpresented. Anindividual employee's testscore Data:Thisisrawmaterial tobeprocessed. Variance reports fora department manager Information: Thishasbeenprocessed andthenpresented. Theaverage employee assessment gradefora company Information: Thishasbeenprocessed andthenpresented. Strategic information willhelpsenior managers withlong-term planning. 198 Business andtechnology (FBT/BT) Page 213 of 327 H q 24.4 (a) Timing Theemailhasbeensenttooclosetothedateofthemeeting, whenthe financial controller couldhavesentitmuchearlier. Themedium, clarity andrecipients oftheemailareallsuitable forthecommunication. (b) Information isnotdivulged randomly, itcanbypasssecretive management, itrelates tointernal politics Thegrapevine operates inside theplaceofwork,thegrapevine ismostactivewhen theformal communication network isactiveandinformal communication ismore current thanformal information. Slangisusedintaskinstructions, anemailsenttoallemployees usingITjargon 24.5 (a) (b) (c) 24.6 (a) Slangorjargoncouldcreatemisunderstanding iftherecipient ofthecommunication isunaware ofthemeaning. Directdiscrimination. Thisisthedefinition ofa grievance. Distortion. Thisisthedefinition ofdistortion. (1) (2) (3) (4) (5) (6) Establishing priorities withPeggy Delegation ofroutine tasks Identification ofinformation sources within thebusiness Sequencing ofinterviews withrelevant staff Collation ofinformation Report writing Oneofthemostimportant thingsisforSusantoestablish priorities withPeggy.This willenable hertodelegate someofherroutine worktoenable hertomakesometime fortheproject. (b) G 25 Helping Johntoprepare forhisupcoming appraisal Thisoption would appear toapplymoreclosely toa mentoring role Ethical considerations A N S W E R S 25.1 Fiduciary Rationale: 'Fiduciary' means 'oftrust'. Although thisisa terminology question, itaddresses theimportant pointthatallmanagers (andorganisations) areaccountable tosome external entityandpurpose. 25.2 Utilitarianism Rationale: Utilitarianism isbasedon'usefulness': thegreatest goodofthegreatest number. Deontology isanalternative approach basedonabsolute moral principles (or categorical imperatives): whatismorally 'right'ina situation. Virtue ethicsisa beliefin pursuing positive moral qualities, whichflowoutintobehaviour. 25.3 Itconstitutes greasemoney. Rationale: Greasemoney refers topayments forbenefits towhichthecompany islegally entitled – justto'oilthewheels'. Bribery ispayment forbenefits towhichthecompany is notlegallyentitled – to'bendtherules'! Ineither case,thisisunethical (andinsome situations, illegal) – regardless ofthelegitimacy oftheclaimorthepurposes towhichthe payment is(supposedly) put. Pitfalls:Knowthedifference between extortion, bribery, greasemoney, giftsand hospitality. 25.4 Integrity based Rationale: Theemphasis onmanagerial responsibility isa feature oftheintegrity orvaluesbasedapproach toethicsmanagement. Aconcern forthelawaloneisa compliance based approach. Thethirdandfourth options areexamples ofresponsibilities. Answers199 Page 214 of 327 H G q 25.5 Whistle blowing Rationale: Corporate conscience isirrelevant, andconfidentiality breach isincorrect, since whistle-blowing givessomeprotection toemployees frombeinginbreach ofconfidentiality. 25.6 (1),(2),(3),(4)and(5) Rationale: These areallpotential ethical issues. Materials usedimpacts onproduct safety andeco-friendliness (egforrecycling). Quality isa safetyandcustomer satisfaction issues. Advertising posesissues oftruthandnon-manipulation. Youmayhavehesitated over supplier labour practices, butthisisa keyareaofethical sourcing. Itcancausesignificant damage tocorporate reputations. Packaging raisesissues ofsafety/perishability, ecofriendliness andtruthful product labelling. 25.7 Timeliness Rationale: Accountability andsocialresponsibility areclassed asprofessional qualities, not personal qualities. Ambition isa personal quality – butisnotconsidered essential ina professional ethicscontext: itcanevenposeethical dilemmas … Pitfalls:Youneedtoreadthequestion stems carefully topickupfinedistinctions suchas 'personal' and'professional'. 25.8 Independence inappearance Rationale: Independence inappearance means avoiding situations thatcouldcausea reasonable observer toquestion yourobjectivity. Inthescenario, thisisa risk– while independence ofmind(freefromactualpartiality) isn't.Thepuredistractors wereplausible because ofthepossibility ofraising questions (scepticism) withyoursuperiors (accountability) – butirrelevant. 25.9 Employability training Rationale: Employability training helpsemployees togetotheremployment butitisnotan ethical objective. 25.10 Thelaw Rationale: Thesayingis:'thelawisa floor'.Bymeeting non-legal regulations (including the rulesofyourworkplace) youshould meeta higher standard ofbehaviour thanthelegal requirements. Ethicalbehaviour isa higher moral standard, basedonsociety's expectations andprinciples. 25.11 Fairness Rationale: Thisisa definition offairness. 25.12 Telling thetruthandnotmisleading stakeholders Rationale: Thefirstoption isa definition ofopenness, thethirdisresponsibility andthe fourth isaccountability. 25.13 Integrity Rationale: Thestatement isthedefinition ofintegrity madebytheUKNolan Committee on Standards inPublicLife. 25.14 Organisational self-interest Rationale: Organisational self-interest isa threat toindependence anda source ofconflict ofinterest. Theotheroptions aredifferent varieties ofethical systems. 25.15 Self-interest Rationale: Afirmora member ofanassurance teamshould notacceptgiftsorhospitality unless thevalueisclearlyinsignificant. Inthiscase,itislikelythatthecostofcorporate hospitality atmajor sporting events willbesignificant. 200 Business andtechnology (FBT/BT) Page 215 of 327 H q 25.16 Intimidation Rationale: Thisisa caseofintimidation. Youmayhavebeentempted topickself-interest butthethreat oflegalproceedings makes thisintimidation. 25.17 AnACCAmember isanofficer oftheclientcompany butdoesnotdealwiththeclient's affairs Rationale: ThefactthattheACCAmember doesnotdealwiththeclient's affairsisa safeguard against a conflict ofinterest. 25.18 Confidentiality Rationale: Theissueforyouisconfidentiality, astheaccounts arelikelytocontain sensitive information andshould definitely notbeleftlyingaround. Youmayhave wondered aboutunprofessional behaviour butthiswould applytoyoursupervisor rather thanyou. 25.19 Theethicsappropriate fora givensituation willdepend ontheconditions atthetime Rationale:Thefirstoption refers toabsolutism andthesecond refers toegoism. 25.20 Ittakesnoaccount ofchanging norms insociety Rationale:Thefirstandthirdoptions arecriticisms ofrelativism andthefourth option refers toegoism. 25.21 Theduties ofthedecision taker Rationale: Thevirtues ofa person arethosecharacteristics regarded bysociety as desirable, andmayresult inanobserver arriving attheconclusion thattheindividual will takegoodorbaddecisions. Aduty-based perspective considers whether a decision or actionwillbecompliant withtheperceived responsibilities ofa person ororganisation, whichinturnmayrelyonconsistency withthelaw,codesofpractice orgenerally accepted standards. Thisisthedeontological approach. Theconsequentialist approach considers rightandwrong fromtheviewpoint ofanactionordecision bringing aboutanendresult thatisrightorwrong. Thisiscalledtheteleological approach. G 26 Section F MTQs 26.1 (a) (b) Itleadstoa philosophy ofanything goes,itisbasedona fundamental contradiction. Itisargued thatrelativism leadstoa philosophy ofanything goesandthestatement thatallstatements arerelative isanabsolute (therefore non-relative) statement. Socialresponsibility actionislikelytohaveanadverse effectonshareholders' interests intheshortterm True.Socialresponsibility costsmoney andgoesagainst theideaofmaximising shareholder wealth. Anenvironmental auditinvolves assessing theopportunities andthreats toan organisation False.Anenvironmental auditmonitors thingssuchaslegalcompliance with environment regulations oremissions levels. Onlygovernments areconcerned withsocialresponsibility False.Ascanbeseeninmanyexamples, a number ofcompanies takesocially responsible actions. Guaranteeing employees a minimum 'livingwage'isanexample ofsocial responsibility True.Thisisanexample ofa company beingsocially responsible. Answers201 Page 216 of 327 A N S W E R S H q 26.2 (a) (b) 26.3 (a) Theteleological viewofethicsisbasedonduty False.Thisisthedeontological view.Teleology isbasedonconsequences. Bribery cansometimes belegal False.Bribery involves payment forservices thattheorganisation isnotlegally entitled to. Virtue ethicssuggests thatmanagers should incorporate values suchasfairness and loyaltyintotheirdecision-making True.Virtue ethicssuggest managers should incorporate suchvirtues intotheirdaily behaviour. Anaccountant's ethical behaviour serves toprotect thepublicinterest True.Thisisa keyreason whyaccountants should behave ethically. Ittakesnoaccount ofevolving norms, whatever source isused,human interpretation willleadtodifferent views. Absolutism takesnoaccount of'advances' inmorality andifhuman interpretation leadstodifferent viewstherecannot beuniversal agreement. Reliability, courtesy, respect, timeliness Thepersonal qualities thatanaccountant should demonstrate arereliability, responsibility, courtesy, respect andtimeliness. (b) 26.4 (a) Integrity, objectivity Thefundamental principles areintegrity, confidentiality, objectivity, professional behaviour andprofessional competence andduecare (1) Advocacy threat YRTCoisthreatening itsindependence bytakingthe client's position inthelegalcase. (2) G (3) Familiarity threat Sincetheauditpartner hasa long-term relationship withtheauditclient,thereisa familiarity threat. Self-interest threat Aself-interest threat exists ifthereareclosepersonal relationships between theclientandtheauditteam. (4) (b) (c) 26.5 (a) (b) Self-review threat Where theexternal auditor helpstoprepare the financial statements thereisa clearself-review threat. Litigation against theexternal auditor byanauditclient Litigation givesrisetoa threat ofintimidation. Theothers giverisetoself-interest threats. Moralprinciples Ethicsarea moral rather thanlegalorregulatory issue,although professional ethics areparticularly important. Self-interest threat, Intimidation threat Because itisimportant forJKLCotoretain thisclient,duetosignificance ofthe revenue, thereisa self-interest threat here.Theclientisalsolooking tointimidate the auditors overthefeenegotiations. Whendealing withethical dilemmas ACCAstudents mustfollow ACCA'scodeof conduct. True.ACCAstudents andmembers mustalwaysfollow ACCA'scodeofconduct. Professional ethicsshould notbefollowed attheexpense ofcontractual obligations. False.Professional ethicsshould befollowed evenifthisisattheexpense ofa contractual obligation. There isa publicexpectation thataccountants willactethically. True.Thepublicexpects allprofessionals toactinanethical manner. 202 Business andtechnology (FBT/BT) Page 217 of 327 H q 26.6 (a) Aprospective auditfirmquoting a significantly lower feeforassurance workthanthe current auditors chargedoesnotraisea threat ofa conflict ofinterest. False.Thisprocess isknown aslowballing andraisesa significant self-interest threat, particularly ifthefirmwanttooffermoreprofitable non-audit services aswell. Decisions ofthisstakeholder maybeinfluenced byethical considerations Customers: Forexample, customer purchases maybeinfluenced byethical considerations Standards ofbehaviour expected ofthisstakeholder should becommunicated to them Employees: Employees needtoknowwhatisexpected ofthem Thisstakeholder mayneedreassurance thattheorganisation willactasa 'good citizen' Localcommunities: Localcommunities mayneedreassurance thattheorganisation willactasa 'goodcitizen' (b) Effective education andtraining forallstaff Themosteffective waytoensure standards aremaintained istoinstilthestandards intothecompany culture. Stafftraining istheonlywaytoensure thatstandards are communicated, andthatstaffunderstand theimplications ofanyviolation. A N S W E R G S Answers203 Page 218 of 327 H G q 27 Mixed Bank 1 27.1 Isolated fromitsexternal environment. Rationale: Thedifference between anopenanda closedsystem isverybasic,and depends ontherelationship thesystem haswithitsenvironment. Asystem beingclosedto protect fromunauthorised accessmerely refers tothesystem's security arrangements. Incapability offurther technical enhancement refers toa stageinthesystem's lifecycle. 27.2 Indirect discrimination Rationale: Thisisindirect discrimination because mostparttimeemployees arewomen. If itweredirectdiscrimination thentheadvert would actually statethatwomen hadless favourable terms. 27.3 Torecord financial information. Rationale: Thisisitsbasic,original roleandisstillthebestwaytodescribe itspartinthe modern business organisation. 27.4 Improves themotivation ofjunior managers. Rationale: Whiletheotheroptions mayariseina decentralised organisation, theyarenot necessarily features thatarespecifically associated withdecentralisation. 27.5 There islittlesimilarity between teammembers' work. Rationale: Where thereislittlesimilarity inwork,subordinates willnotbeabletohelpeach other, andwillrelymoreheavily ontheirmanagers. Where theworkisroutine, ortheteamveryexperienced, teammembers willrequire less support soa wider spanmaybeappropriate. thewider thegeographical dispersion, the narrower thespan. 27.6 Independence ofthenon-executive directors. Rationale: Thiswillbeexamined intheinternal position auditofthecompany rather than theenvironmental analysis whichlooksatmatters external tothecompany. 27.7 Managing theprompt payment ofsuppliers. Rationale: Thepurchasing manager willbeconcerned withallaspects ofsupplier management (egdiscussing prices,discounts, delivery leadtimes, specifications, chasing latedeliveries, sanctioning payments). 27.8 (2),(3)and(4)only Rationale: Theotherstatement describes theadhocracy, whichiscomplex anddisorderly anddoesnotrelyonstandardisation toco-ordinate itsactivities. Italsorelies onthe expertise ofitsmembers, butnotthrough standardised skills. 27.9 (1)and(4)only Rationale: Customisation should notstopthecompany frombeingabletobuy'add-ons' tothebasicpackage. Infacttheyaresometimes usedtogivethepackage moreflexibility tosuitparticular needs. Dependence onthesupplier formaintenance isalsoa disadvantage ofready-made packages. 27.10 Variable costs Rationale: Intheshortrun,firmswillcontinue tosupplycustomers provided thatthey covervariable costs.Theywillincurfixedcostswhether theyproduce anyoutput ornot. Therefore provided revenues covervariable costsandtherefore makea contribution towards fixedcosts,itisbeneficial forthefirmtocontinue producing. 204 Business andtechnology (FBT/BT) Page 219 of 327 H G q 27.11 Dualauthority. Rationale: Dualauthority mayleadtoconflict between themanagers involved. Theadvantages ofsucha structure are: Greater flexibility  Improved communication  Motivating employees  27.12 Theboardofdirectors. Rationale: Aswithallcompany-specific matters itisthedirectors whoareprimarily responsible fortheimplementation ofprocedures, whichfollow bestpractice withregardto thecurrent corporate governance advice. 27.13 Shareholders areaccountable toauditors. Rationale: Alltheotherstatements aretrue.Bothdirectors andauditors areagentsofthe shareholders andtheirprimary duties relate tothem. 27.14 Toexamine andexpress anopinion onthecompany's periodic financial statements. Rationale: Thisisa Companies Actrequirement. Theotherresponses arespecific director responsibilities. 27.15 Anaudittrail Rationale: Anaudittrailshows whohasaccessed a system andtheoperations performed. 27.16 (2),(3)and(4)only Rationale: Itshould beaccurate– inthesenseofcorrect forthepurpose. Inaccurate information isoflittleuseforstrategic, tacticaloroperational purposes. Authoritative means thatthesource oftheinformation should bereliable. Itmustalsoberelevant tothe user's needs. Information thatisnotneeded fora decision should beomitted, nomatter how'interesting' itmightbe.Iftheinformation iscomprehensive, itmaybemorewide ranging thanitneedstobe.Itneedstobecomplete ieinclude everything thatisneeded. 27.17 External auditors needtoassesstheworkofinternal auditfirst. Rationale: Although someoftheprocedures thatinternal auditundertake areverysimilar tothoseundertaken bytheexternal auditors, thewhole basisandreasoning oftheirworkis fundamentally different. 27.18 (1),(3)and(4)only Rationale: Capitalcosts,whicharecapitalised andthendepreciated, include installation, hardware purchase andsoftware purchase costs.Routine system maintenance costsare revenue items whichareexpensed asincurred. 27.19 Shareholders. Rationale: Itisveryimportant thatexternal auditors areindependent ofthecompany's management. 27.20 Banked, complete, prevented. Rationale: Inanybusiness controls overcashreceipts arefundamental ifthecompany is tokeepa healthy cashposition. 27.21 Dishonesty, motivation andopportunity. Rationale: Ifoneormoreofthemcanbeeliminated, theriskoffraudisreduced. Answers205 Page 220 of 327 A N S W E R S H G q 27.22 Ahigher thannormal riskaudit. Rationale: Theinstances givenareallexamples ofinherent riskorcontrol risksand therefore theywould beindicative ofhigher riskaudit. Certain ofthefactors combined, suchasa poorinternal control environment coupled with a dominant chiefexecutive, mightraisetheauditors' suspicions offraud,butnot necessarily. However, theywould allincrease theoverall riskoftheaudit. 27.23 (1),(3)and(4)only 28 Rationale: Dataandinformation captured frominternal sources comefromtransaction systems, suchasthepayroll system andthesalesledger, oriscommunicated formally or informally, asina decision takenata meeting. Although thetypeofinformation iscirculated within theorganisation, itiscaptured from outside. Forexample, thesource ofthemarket information isthemarket itself,whichis clearlyexternal totheorganisation. Mixed Bank 2 28.1 (2),(3)and(4)only Rationale: Fayolwrote thattomanage istoforecast andplan,toorganise, tocommand, toco-ordinate andtocontrol. Commanding istheexercise ofcentralised authority and leadership. Co-ordinating involves harmonising theactivities ofallgroups towards the common objective. Controlling ismeasuring performance andaccounting fordeviations fromplans.Writers afterFayolsubstituted functions suchasmotivating andconsulting for commanding. 28.2 Organisational design willbedetermined bya number offactors allofwhichdependent on theothers. Rationale: These factors include elements suchasthecompany's objectives, the environment, thestaff,theculture, themanagement style,thetaskscarried out,the structure andthetechnology used. 28.3 Planning andcontrol. Rationale: Thefivecategories aresetting objectives, organising thework,motivation, the jobofmeasurement anddeveloping people. Planning andcontrol areincluded within setting objectives andmeasurement. Drucker gavemoreemphasis tothe'human resource' aspects ofmanagement thanwriters onclassical management theory suchasFayol. 28.4 Position power. Rationale: Position power orlegitimate power isconferred bytheauthority linked toa formal position within theorganisation structure. 28.5 Benevolent authoritative, participative, exploitative authoritative, democratic. Rationale: These areLikert's fourmanagement styles. 28.6 Storming. Rationale: Thisisthestorming stage,asidentified byTuckman. During thisstage,conflict canbequiteopen.Objectives andprocedures arechallenged andrisksaretaken. However, thereisa considerable amount ofenthusiasm within thegroupandnewideas emerge. Sotoodopolitical conflicts, asleadership ofthegroupbecomes anissue.This appears tobethesituation described inthequestion. 206 Business andtechnology (FBT/BT) Page 221 of 327 H G q 28.7 (2)and(3) Rationale: Jobanalysis involves finding outwhatarethetask,skillandknowledge requirements ofa job.Thisinformation isthenoutput intheformofa jobdescription (tasks, duties, objectives andstandards ofa job)anda person specification (reworking ofthejob description interms ofthekindofperson needed toperform thejob).A human resource planisa muchbroader statement ofthefuture skillrequirements oftheorganisation asa whole, andhowtheywillbemet(byrecruitment, training, retention andsoon).A performance appraisal analyses howa jobholder doesthejob– notthenature ofthejob itself. 28.8 Shaper. Rationale: AllofBelbin's rolesareimportant totheeffective functioning ofa team. Youshould familiarise yourself withallnineroles. Plant  Shaper  Resource investigator  Monitor evaluator  Company worker  Completer finisher  Teamworker  Chairman  Specialist  28.9 Attacker Rationale: Theshaper isa leader role,where theroleholder spurstheteamtoaction.The plantprovides thecreative thinking intheteam,whilethefinisher's actions aredirected to thecompletion ofthetask. Attacking isa typeofgroupbehaviour identified byRackham &Morgan. 28.10 Allfour. Rationale: Ateamisa number ofpeople withcomplementary skillswhoarecommitted toa common purpose forwhichtheyholdthemselves basically accountable. Thisisa control mechanism whichimproves workorganisation byusingknowledge froma broadrangeof perspectives toevaluate decision options. 28.11 Forming, storming, norming, performing. Rationale: Forming isthestagewhere theteamcomes together. Storming happens next; thegroupre-assesses itstargets and(hopefully) trustbetween groupmembers develops. Norming isa period ofsettling down,whenthegroupestablished norms andprocedures for doingtheirwork.Performing thenoccurs; theteamsetstoworktoexecute itstaskandthe difficulties ofdevelopment nolonger hinder it. 28.12 Herzberg. Rationale: Herzberg foundthatpeople's behaviour intheworkplace wasaffected bymore thantheirphysical andsocialneeds; thecontent oftheworkitselfhadaneffecton motivation andperformance. 28.13 (1),(2)and(4) Rationale: Bruce's course would havecovered manyapproaches toresolving problems. Thenegotiation techniques youshould haveidentified include tryingtodevelop options thatwould result inmutual gain;defining theproblems carefully andlooking fora wide variety ofpossible solutions. Evaluating progress towards objectives andcreating a trusting supportive atmosphere inthegroupwillenhance theproject team's performance butwould notbeconsidered negotiation techniques. Answers207 Page 222 of 327 A N S W E R S H G q 28.14 (1),(2)and(4). Rationale: Thefeature isanadvantage associated withothertypesofcommunication. Complex ideasthatrequire deeper consideration areprobably bestcommunicated in written form,orperhaps ina presentation. Holding a meeting isthemaincommunication technique forallowing multiple options tobeexpressed. However, aneffective chairperson isneeded ifallsidesaretobeheard. 28.15 (1)and(2)only Rationale: Hygiene factors areextrinsic orenvironmental factors (salaryandjobsecurity), whilemotivator factors aretodowiththesatisfactions ofthework:challenging workis clearinthiscategory – andrecognition couldbeineither. 28.16 (2),(3)and(4)only Rationale: Colloquialisms should onlybeusedininformal conversation andjargonshould beavoided, although itmaybeusedwhere itisanexcellent formofshorthand andunique totheparticular organisation, provided itremains comprehensible andisunderstood byall parties. Acronyms canbeusedfreelyaslongastheyareexplained. 28.17 (1),(3)and(4)only Rationale: Complex images canbeincluded asanattachment toanemailandthereisno limitation ontheirtransmission. 28.18 Thesequence is5,2,6,1,4,3. Rationale: Thesequence ofitems onanagendaisapologies forabsence, approving the minutes oftheprevious meeting, matters arising outoftheminutes, themainitems of business ontheagenda(subjects fordiscussion), anyotherbusiness (items notonthe agenda) andfinallydeciding thedateofthenextmeeting. 28.19 (1),(2)and(3)only Rationale: Peersorco-workers couldbemembers ofa teamorpeople receiving or providing services. Customers canbea useful source, especially forsalesstaff.Knowing whatcustomers think ofyouhelpstoimprove yourtechnique. Whenindividuals carryouttheirownself-evaluation, itisa major inputtotheappraisal process because theycanidentify theareasofcompetence thatarerelevant tothejob andtheirownrelative strengths. 28.20 Upward. Rationale: There isa current trendtowards thismoreprogressive appraisal system where subordinates appraise theirsuperiors. Potential problems withthismethod mayinclude: Fearofreprisal  Vindictiveness   Unwillingness ofsuperior torespond tofeedback 28.21 Dealwithgrievances. Rationale: Grievances should bedealtwithbya formal mechanism separate fromthe appraisal process. Ifa grievance arisesduring appraisal itshould bedealtwithusingthe normal grievance procedure. 28.22 Accounts payable clerk. Rationale: Itisunlikely thattheaccounts payable clerkwillbeasked.Theothers willall comeincontact withthesalesmanager andtherefore potentially couldbeaskedtoassist withcompleting theappraisal forms required by360degree feedback process. 208 Business andtechnology (FBT/BT) Page 223 of 327 H G q 28.23 Enabling accounting. Rationale: Enabling accounting isa madeuptermhere,andsounds likea rather dubious practice fora business. Accounting should bea well-controlled andregulated process. Theotheroptions areallcharacteristics ofa learning organisation. 28.24 (1),(2)and(4)only Rationale: Theadvantages ofupward appraisal arethatthesubordinates feelmore involved, managers receive objective feedback andcantherefore improve their performance. 29 Mixed Bank 3 29.1 PEST Rationale: PEST(Political, Economic, SocialandTechnological) aretheenvironmental factors thataffectanorganisation. Sometimes twomorefactors, ecological andlegalare added.PERTisa toolusedinproject management. SWOTisusedtoanalyse theinternal andexternal environment, sonotjusttheexternal environment. 29.2 Designing systems andstandardising work. 29.3 Thenumber ofemployees reporting toonemanager. Rationale: Thisisthedefinition ofspanofcontrol. 29.4 Thedirectors ofthecompany. Theroleoftheinternal auditor requires independence from otheremployees, therefore theyshould report tothedirectors. Somecompanies havean auditcommittee whichisa subcommittee oftheboardofdirectors, andtheinternal auditors report totheauditcommittee. Ifthereisnoauditcommittee thentheauditors should report directly totheboardofdirectors. 29.5 Arithmetic, physical. Rationale: SPAMSOAP stands for:Segregation ofduties, Physical, Authorisation and approval, Management, Supervision, Organisation, Arithmetical andaccounting and Personnel. 29.6 Salesinvoicing andpayroll. Rationale: Inventory valuation would beperformed bythemanagement accountant. Project appraisal would beperformed bythefinancial manager. 29.7 Hersey andBlanchard. 29.8 Allteammembers havedifferent skillsandspecialisms whichtheypool. 29.9 Maslow's hierarchy ofneedsandHerzberg's twofactortheory. 29.10 Mentoring bya colleague andsecondments tootherdepartments. Rationale: Theythesetypesoftraining takeplaceina workenvironment. 29.11 Diagonal Rationale: Themanager isina different function andalsobelow thedirector. 29.12 Prefers tothinkthingsthrough first. 29.13 Goals Rationale: Collective goalsoraimsarea feature oforganisations. 29.14 Strategic apex,support staff Rationale: Theothers aredistractors! Makesureyoudoknowthesetechnical terms as yourexamcouldinclude a similar question. Answers209 Page 224 of 327 A N S W E R S H G q 29.15 Alloftheabove Rationale: Alloftheseareexamples ofweaknesses infinancial controls. 29.16 TheManagement Accountant Rationale: TheManagement Accountant provides information formanagement: cost accounting, budgets andbudgetary control andfinancial management ofprojects. 29.17 Purchasing/procurement Rationale: Thepurchasing orprocurement function isresponsible forauthorising purchases (andsuppliers) andapproving. 29.18 Teeming andlading 29.19 (1),(2)and(4)only 29.20 Module Rationale: Asuiteisa setofseveral modules. Aspreadsheet isa typeofprogram, anda format fordisplaying andprocessing data:itisoftenusedtointegrate datafrom accounting modules fordecision-support andmanagement information systems. 29.21 Legitimate power Rationale: Thisisalsoknown as'position' power. 29.22 Identity Rationale: Thedefinition ofa groupis,basically, 'anycollection ofpeople whoperceive themselves tobea group'(Handy). Identity means thatthereareacknowledged boundaries toa group,whichdefine whois'in'andwhois'out','us'and'them'. 29.23 Specialist 29.24 Safetyneeds H Rationale: SafetyneedsisoneoftheneedsinMaslow's hierarchy. 30 Mixed Bank 4 30.1 Output control Rationale: Output control. Ouchiassumed thatoutput control waspartofmarket control, where itispossible topriceoutput ofa system effectively andwhere thereisexternal competition asa reference. 30.2 Fivepopfans Rationale: Fivepopfans.Theyarea random collection ofpeople. Theyhavenocommon purpose, orcommon leader andtheydonotseethemselves ashaving a common identity. 30.3 Passive acceptance ofworkdecisions Rationale: Passive acceptance ofworkdecisions. Members ofaneffectively functioning groupwilltakeanactiveinterest indecisions affecting theirwork,rather thanpassively accepting them. 30.4 Position power Rationale: Position power. Aleader issomeone whodoesnothavetorelyonposition power alone. 30.5 Doesn't truststafftocarryoutdelegated tasks,wantstocontrol allactivities under hisor herresponsibility Rationale: These suggest a lackoftrustbythemanager toward staff.Theotherreasons arelikelytoleadtoreduced delegation inthemselves. 210 Business andtechnology (FBT/BT) Page 225 of 327 G q 30.6 Lookfora widevariety ofpossible solutions, define theproblem carefully, trytodevelop objectives resulting inmutual gains. Rationale: Evaluating progress towards objectives willenhance teamperformance but would notbeconsidered a negotiation technique. Monitoring others isnotnegotiation. 30.7 Allocating scarceresources Rationale: Allocating scarceresources. Thiscouldbeconcerned withpeople asa resource butisnotpeople-centred. 30.8 Totakereasonable careofthemselves Rationale: Totakereasonable careofthemselves. Although thereisanemployer dutyof caretowards employees, thisdoesnotcoveremployee negligence orstupidity. 30.9 Shareholders, customers Rationale: These aregroups outside theorganisation's boundary, initsenvironment. The others arewithin theboundary andbelong totheorganisation system. 30.10 Suspension without pay,dismissal Rationale: Suspension without payordemotion. Dismissal isa course ofactionan employer cantakealthough notprovided forspecifically intheemployee's contract of employment. 30.11 Task Rationale: Thematrix structure requires a culture thatreactsquickly tochangeand focuses onparticular projects ortasksasdictated bytheneedsofthebusiness. Atask culture willsuitthisbestasitfocuses anachievement ofthetaskaboveallelse,andisvery flexible andreactive tochanges intheenvironment. 30.12 Handy,Schein Rationale: Thisquoteisvariously attributed toSchein andHandy.Anorganisation's culture isexclusive, shared andgivesitsparticipants a senseofcommunity. 30.13 Suppliers, customers Rationale: Theotheroptions areinternal stakeholders. 30.14 Ensuring theorganisation pursues itsobjectives andserves theneedsofitsowners and stakeholders Rationale: Thesecond option describes the'operating core'.Thethirdoption isthe'middle line'. 30.15 Planning andpreparing budgets, appraisal ofcapitalinvestment projects 30.16 Salesledger andreceipts Rationale: Teeming andladingisthetheftofcheque receipts. Setting subsequent receipts against theoutstanding debtconceals thetheft. 30.17 Dishonesty, opportunity, motivation Rationale: Allthreeareessential: dishonesty, opportunity andmotivation. 30.18 Systems 30.19 Person culture 30.20 Lowconcern forpeople andlowconcern forthetask Rationale: Thisoption istheworst ofbothworlds. 30.21 Highly-strung, outgoing anddynamic andcommitted tothetask Rationale: Theshaper thrives onpressure. Answers211 Page 226 of 327 A N S W E R S H G q 30.22 Encoded message, medium, decoded message 30.23 Consistency Rationale: Consistency wasfoundtobemoreimportant tosubordinates thanany particular style. 30.24 Reporting lines,jobcontent. Salaryandhours ofworkwillbeintheemployment contract. 31 Mixed Bank 5 31.1 Theycanbeusedbynon-specialists, theyprovide moreconsistent processing thanmanual systems. Rationale: Theycanbeusedbynon-specialists, theyprovide moreconsistent processing thanmanual systems. Infactitmaybemoredifficult toseewhere a mistake hasbeen made. 31.2 Employment protection Rationale: Theotherareasaredealtwithbya combination ofbestpractice, codesand somelegislation. 31.3 Falls Rationale: Because chipsarea complementary product tofish,a riseinthepriceoffish willleadtoa fallinthedemand forchips. 31.4 Reporting toshareholders, givinganopinion onfinancial statements. Rationale: Theotheroptions aretheresponsibility oftheinternal auditor, andultimately of management. 31.5 Wastage rates,labour utilisation figures. 31.6 There isa formal process fordecision-making 31.7 Herzberg 31.8 Power associated withphysical forceorpunishment Rationale: Coercion means compelling someone todosomething. 31.9 Managing teamperformance, organising theworkofothers Rationale: Theotheroptions willgenerally becarried outbyhigher levels ofmanagement. 31.10 Worksampling Rationale: Worksampling (viaportfolios ofworkortrialperiods, say)havethehighest reliability (followed closely bycognitive selection tests).Personality testing andassessment centres (groupselection exercises) areslightly lessreliable. Interviews, ironically, havea verylowpredictive power – ataboutthesamelevelasreference checking. 31.11 Managing diversity Rationale: Equalopportunity isa narrower concept, basedonsecuring non-discrimination onthebasisofthose'crude' dimensions ofindividual difference (sex,age,disability andso on).Diversification isfromanorganisational strategy involving widening itsrangeof products/markets. 31.12 Concrete experience, observation andreflection, abstract conceptualisation, active experimentation Rationale: Thismayalsobeworded as:haveanexperience, review theexperience, conclude fromtheexperience andplanthenextsteps. 212 Business andtechnology (FBT/BT) Page 227 of 327 H G q 31.13 Scalarchain Rationale: Thescalarchainisthedownward flowofdelegated authority inanorganisation andtheneedforreports toflowback'up':itisoftena source ofslowcommunication and rigidity (eginbureaucracies). Horizontal structure allows theflowofinformation and decisions acrossfunctional (vertical) boundaries: itisa keyapproach toflexibility. The 'Shamrock' isa formofnumerical flexibility, where a firmhasa corestaffanda various peripheral 'leaves' whichitcandrawonasthedemand forlabour fluctuates. 31.14 Taking andcirculating minutes ofthemeeting Rationale: Minute-taking isoneoftherolesofthesecretary, whoessentially provides administrative support tothecommittee. Thefirstoption istheroleofthechair,whilethe second andfourth options maybeimposed onthecommittee bytheauthorities towhichit reports. 31.15 Zeus Rationale: Apollo isassociated withroleculture; Athena withtaskculture; Dionysus with person culture. 31.16 (1),(2),(3),(4)and(5) Rationale: Thefounder influences culture through founding values; history/experience through creating expectations andstories; recruitment andselection bychoosing people whowill'fit'(orchange) theculture; industry byhaving itsownculture; andlabour turnover byallowing people whodon't'fitin'to'getout'. 31.17 Boundary Rationale: Boundaries aretherulesthatrestrict management's freedom ofaction:they include legislation, regulation andcontractual agreements. Responsibilities areobligations whicha company voluntarily undertakes. Theprimary economic objective relates to optimal resource-conversion (egprofitability). Non-economic, socialobjectives modify management behaviour inlinewithstakeholder expectations. 31.18 Encourages consistent application ofrules Rationale: Aframework approach setsoutprinciples andguidelines, rather thandetailed rulestocovereveryspecific situation. Thisleadstolistedadvantages – butnotto consistent application, sincethereisa highdegree ofdiscretion inapplying guidelines to different cases. 31.19 Members donotchallenge orcriticise Rationale: Failure tochallenge orcriticise isnota positive thing,inthiscontext, buta symptom ofpoorcommunications: the'building block'would bedeveloping a climate in whichpeople canspeaktheirminds, constructively. Theotheroptions describe positive building blocks intheareasofmembership, review andcontrol andobjectives. (The terminology of'building blocks' and'blockages' isdrawn froma model byWoodcock, butit isnotessential toknowthis.) 31.20 Timeavailable todevote totherole Rationale: Thisisa major problem fornon-executive directors, because theyarelikelyto haveothercommitments. Youshould havehadtothinkthrough theotheroptions, however. Someoftheadvantages ofnon-executive directors arethattheyoffera comfort factorfor thirdparties suchasinvestors andsuppliers; theyhavea wider perspective and(hopefully) novested interest; andtheyhavea combination ofknowledge/expertise anddetachment. 31.21 Usinglocalsuppliers, minimising energy consumption Rationale: Usinglocalsuppliers ispartofthegovernment's sustainability strategy, asit develops andpreserves localbusiness, employment andcommunities. Minimising energy consumption conserves resources. Theothertwooptions arenotdirectly related to sustainability goals. Answers213 Page 228 of 327 A N S W E R S H G q 31.22 Macro-economics. Rationale: Macro-economics looksata complete national economy oreconomic system: factors suchaseconomic activity andgrowth, inflation, unemployment andthebalance of payments. Theotheroptions arepuredistractors, drawn fromotherdisciplines. 31.23 (1),(2)and(3) Rationale: These arethreeofthewaysthatgovernment candirectly affecttheeconomic structure, according toPorter. Demand isaffected asthegovernment isa major customer. Governments canaffectcapacityexpansion, forexample, byusingtaxation policies to encourage investment inequipment. Government canintroduce regulations andcontrols within anindustry whichmayaffectgrowth andprofits andmaytherefore affect competition. 31.24 Areasonable prospect ofdetecting irregular statements orrecords Rationale: Itisimportant forstudents toberealistic aboutwhattheexternal auditing function canachieve. (Inotherwords, common senseshould helptoanswer thistypeof question.) 32 Mixed Bank 6 32.1 Shareholders Rationale: Theshareholders aretheowners, astheyprovide thecapitalforthebusiness. 32.2 Analysts suchasaccountants andworkplanners, whose objective istoeffect standardisation intheorganisation Rationale: Thisisthedefinition ofthe'technostructure' inMintzberg's components of structure. Ddefines the'strategic apex'component ofthemodel. 32.3 Outsourcing production oftheproduct tolow-cost countries, consolidating purchases of thecomponents andsourcing froma singlesupplier toreduce sourcing costs Rationale: Secure continuity ofsupplyandquality areZ'spriorities. Long-term partnership helpssecure both,whilehaving a smallnumber ofsuppliers avoids theriskofsupplier failure. 32.4 Tactical management Rationale: Thisisthedefinition oftacticalmanagement, carried outbymiddle management. Strategic management isata higher levelofestablishing corporate direction andpolicy:carried outbysenior management. Operational management isata lower level ofimplementing thetacticalplans:carried outbysupervisors andoperatives. 32.5 Corporate governance. Rationale: Strategic management isa process whichmayormaynotbecarried outina givenorganisation. Executive directorship andinternal controls areelements ofcorporate governance. 32.6 Ittakesa higher proportion ofincome intaxasincome rises. Rationale: Thisisthedefinition ofa progressive tax(suchasincome taxingeneral). The firstoption isa 'regressive' tax(suchasroadtax)whichisthesameforallpeople. The second option isa 'proportional tax'(suchasSchedule E income taxwithin a limited range ofincome). 32.7 Dismissal because theemployee ispregnant Rationale: Thefirstthreearecircumstances defined asredundancy. Dismissal onthe grounds ofpregnancy isautomatically considered tobeunfair dismissal. 214 Business andtechnology (FBT/BT) Page 229 of 327 H G q 32.8 (i)3,(ii)1,(iii)4,(iv)2 Rationale: Thisshould bestraightforward ifyouworkthrough theoptions. 32.9 Extranet Rationale: Researchers mayconnect tothisnetwork viatheinternet (world wideweb),and theuniversity mayhaveanintranet foritsownlecturers andstudents. Anextranet, however, isanintranet thatisaccessible toauthorised 'outsiders', usinga validusername andpassword. 32.10 Itmaximises theattractiveness ofthejobandorganisation topotential applicants Rationale: Jobadvertisements mustbepositive, buttheyshould alsobehonest, inorderto manage applicants' (andfuture employees') expectations. Thesecond andfourth options should beobvious. Youmayhavehesitated overthefirstoption, butadvertisements should encourage unsuitable applicants torulethemselves outbefore applying (andwasting the organisation's time). 32.11 1(iii),2(i),3(ii). Rationale: Motivation istheincentive tobehave dishonestly: onepartofthisequation isthe risks,andwhether theyareworth therewards – sostrong disciplinary penalties forfraud area disincentive. Opportunity ishaving anopening forfraud:internal checks andcontrols (suchassegregation ofduties andauthorisations) limitthoseopenings. Dishonesty isa pre-disposition ortendency tobehave unethically: itneedstobespotted early– ideally before a person joinstheorganisation! 32.12 Datamanagement Rationale: Thedatabase concept encourages management toregarddataasan organisational resource, whichneedstobeproperly managed. However, thereare problems ofdatasecurity andprivacy, duetothepotential forunauthorised accessand sharing. Iftheorganisation develops itsownsystem fromscratch, initial development costs willbehigh. 32.13 Hawthorne Rationale: Hawthorne studies. These werecarried outattheHawthorne PlantofWestern Electric. TheAshridge studies area studyinleadership styles(tells,sells,consults, joins). Hofstede's model describes dimensions ofdifference innational cultures. 32.14 Tomonitor PESTfactors Rationale: Political, Economic, Socio-cultural andTechnological (PEST)factors arethe external factors whichmayimpact ontheorganisation. SWOT(strengths, weaknesses, opportunities andthreats) incorporate datafromtheenvironmental scan,byanalysing PESTfactors thatpresent opportunities andthreats: however, thenamegiventothis process iscorporate appraisal. Thethirdoption would becalledcompetitive intelligence. 32.15 Financial reporting Rationale: IASsarestandards forfinancial reporting: thepreparation offinancial statements andaccounts. Theyareusedasbasesandbenchmarks forcompanies and national standard-setting systems. 32.16 Keepinformed Rationale: Localnature appreciation groups would havehighinterest (duetopotential environmental impacts) butrelatively lowpower: because oftheirhighinterest, though, theymightbeabletobandtogether orlobbytoincrease theirpower. Soa 'keepinformed' strategy isappropriate tosegment B. Answers215 Page 230 of 327 A N S W E R S H G q 32.17 Astrategy forinvestigating anddealing withtheconsequences ofsuspected oridentified fraud Rationale: Fraudresponse relates specifically toinvestigation anddamage minimisation (notprevention), including: actions thatwillbetakentoprotect thesecurity ofrecords that willberequired foridentification; protection ofvulnerable assets; investigation procedures; andcrisismanagement. Implementing thisplanwould betheresponsibility ofa fraud officer. 32.18 Publicservices Rationale: Agrowing economy ismoreeasilyabletoprovide welfare services without creating a heavytaxburden onthecommunity. Growth haspotential adverse effects for employment, where somesections ofthepopulation areunable toadapttodemands for newskills. Italsohaspotential adverse effects fortheenvironment, interms ofresource usage,pollution, emissions etc. 32.19 Focuses onpeople, innovates Rationale: Theotheroptions aremanagerial attributes. 32.20 Deterrence Rationale: Deterrence isanapproach whichseekstominimise threats duetodeliberate action,bycreating penalties to'putpeople off'attempting theaction.Correction isan approach toensure thatvulnerabilities aredealtwithwhenfound. Detection isan approach toidentifying vulnerabilities andattacks (egkeeping a logofpatient records accessed orremoved). Threat avoidance means eliminating a threat (egbychanging the system sonounauthorised accessispossible). 32.21 A3,B1,C2. Rationale: Thisshould bestraightforward ifyouthinksystematically through theprocess. 32.22 Social H Rationale: InthePESTmodel, socialfactors include demographics: thestudyofpopulation structures andcharacteristics. Birthandmortality ratesaffectpopulation numbers, distribution (iftheyareunequal indifferent areas)andagestructure (lower birthand mortality ratescreates anageingpopulation). 32.23 Interdependent Rationale: Interdependence ofteammembers isimportant, because no-one feelsthey couldearnhigher rewards ontheirown:everyone's contribution isnecessary, andeveryone 'pullstheirweight'. 216 Business andtechnology (FBT/BT) Page 231 of 327 G q 33 Mixed Bank 7 33.1 Statutory deductions frompay Rationale: Non-statutory deductions (suchaspension contributions) should beauthorised, toprevent money being'siphoned' offvianon-existent deductions. However, statutory deductions arenon-discretionary: theycannot notbeauthorised! 33.2 Expert power, negative power. Rationale: Theproduction mixer hasexpert power, because hehasknowledge thatis recognised andvalued bytherestofthestaff.Theshop-floor staffexercise negative power: thepower todisrupt operations. Neither haveposition power (organisational authority), nor(asfarasweknow) personal power, orcharisma. 33.3 Jemima3,Frank1 Rationale: InBelbin's model, thePlantistheideasperson; theMonitor-Evaluator the discerning critic;andtheTeamworker thediplomatic relationship-builder. 33.4 Outsourcing carries commercial andreputational risks. Rationale: There areseveral risksassociated withoutsourcing: beinglocked intoan unsatisfactory relationship; losingin-house assetsandknowledge; sharing confidential information; and'reputational' risk(ifthesupplier givespoorservice, orisfoundtobe unethical initspractices, say).Theotherstatements areuntrue: anorganisation should not outsource its'corecompetences' (areasofunique andnon-replicable competitive advantage); outsourcing oftencreates economies ofscale(taking advantage ofthelarger dedicated resources ofthecontractor); andoutsourcing stillincurs significant costs, including internal costsofmanaging therelationship. 33.5 Process theory Rationale: Process theories explore theprocess bywhichindividuals cometovalue,select andexplore goals:inotherwords, howpeople become motivated. Content theories (including Maslow's hierarchy ofneedsandHerzberg's two-factor theory) explore the needsthatmotivate people toactincertain ways:inotherwords, whatmotivates people. 33.6 Introducing reporting byexception Rationale: Reporting byexception means onlyreporting tomanagers whenthereisa deviation fromplan.Thefirstandthirdoptions would increase information flow.Thefourth option would notaddress theproblem: information overload isaboutexcessive complexity aswellasvolume! 33.7 Thebalance ina manager's leadership stylebetween concern forthetaskandconcern for people andrelationships Rationale: Thisisstraightforward, ifyourecallthemanagerial grid.Itdoesnotrepresent a continuum because itassumes thatthetwothings arecompatible: theycanbothbehigh orlowatthesametime.Thegridcanbeusedinappraisal, tofocusattention onthe manager's approach, butdoesnotindicate 'success' oreffectiveness. 33.8 Closed,probing Rationale: Closedquestions pinthecandidate downtoeither/or options. Probing questions pushforananswer where a candidate isbeingvague.Openquestions wouldn't workhere,because theygivethecandidate spacetoanswer inanyway(s)hewishes. You mayhavehesitated overleading questions, butthesewould encourage thecandidate to givea particular reply,suggested bytheinterviewer – nottopindownwhatthe candidate meant. Answers217 Page 232 of 327 A N S W E R S H G q 33.9 Instrumental orientation Rationale: Aninstrumental orientation accounts forwhysomepeople takejobsoffering highmonetary rewards rather thanintrinsic interest orjobsatisfaction (uptoa certain point). Jobenrichment isa formofjobdesign whichmoreorlessassumes theopposite: thatpeople seekintrinsic satisfactions inworkitself.Theory Y isirrelevant, relating to McGregor's Theory X andTheory Y. 33.10 Anapproach toappraisal interviewing Rationale: 'Tellandlisten' isoneofMaier's threeapproaches toappraisal interviewing: 'tell andsell'and'problem-solving' aretheothertwoapproaches. 33.11 Agapbetween current performance andrequired performance isa learning gapwhich requires training. Rationale: Agapbetween current 'competence' andrequired 'competence' maybe amenable tolearning ortraining. Agapbetween current 'performance' andrequired 'performance', however, maybecaused byotherproblems todowithsupervision, systems, resources, motivation andotherfactors. Theotheroptions aretrue. 33.12 Award ofa departmental prizeforyourperformance, receiving praiseonanachievement fromyourworkteam Rationale: Esteem needsareforrecognition andrespect fromothers. Theotheroptions relate toself-actualisation andsocialneed. 33.13 Dorming Rationale: Thisisthedefinition ofdorming. Forming isa 'getting toknoweachother' stage; norming thedevelopment ofagreed waysofbehaving; andstorming a stageofconflict andtesting. 33.14 1(1),2(5),3(2),4(4),5(3) H Rationale: Thisshould bestraightforward, ifyouworkthrough theoptions carefully. A person specification isprepared froma jobdescription. Testing follows interviewing, asa morerigorous formofselection. Reference checking comes last,asitonlyapplies to candidates whoarepotentially goingtobeoffered a job. 33.15 Mentor Rationale: Acoachisoftenthetrainee's immediate superior: indeed, coaching isaccepted asa styleofmanagement/leadership. Amentor isnotusually theimmediate superior of theprotégé, sothattherecanbeopen,confidential discussion ofworkandnon-work issues. 33.16 Cognitive psychology Rationale: Cognitive psychology argues thatthehuman mindusesfeedback information ontheresults ofpastbehaviour tomakerational decisions aboutwhether tomaintain successful behaviours ormodify unsuccessful behaviours, according totheoutcomes we want.Behaviourist psychology focuses ontherelationship between stimuli andresponses: weare'conditioned' torespond inwaysthatarerepeatedly positively reinforced (rewarded) andtoavoidbehaviours thatarerepeatedly negatively reinforced (punished). Thethirdoption isnota learning theory, andthefourth isa particular learning model (by Honey &Mumford) notrelevant here. 218 Business andtechnology (FBT/BT) Page 233 of 327 G q 33.17 Theauditor's mandatory authority, theauditor's ownprofessionalism Rationale: Thethirdelement intheauditor's independence istheresponsibility structure – whichdoesnotmeanfreedom fromaccountability. Theinternal auditor isaccountable to thehighest executive levelintheorganisation (preferably theauditcommittee oftheboard ofdirectors). Theauditor's involvement intheactivities beingappraised istheopposite of independence: internal auditors should notinstall newprocedures orsystems, orengagein activities, whichtheywilllaterhavetoappraise – asthismight(ormightbeseento) compromise theirindependence. 33.18 Theorganisation islooking tointroduce a culture ofinnovation forthefirsttime Rationale: Cultural changeisa goodreason toseek'newblood'inmanagement, rather thanpromote people whoareusedtothinking infamiliar ways.Thefirstandthirdoptions argueforinternal promotion asa matter ofpolicyandstaffretention andasa wayof preserving culture. 33.19 Levelofriskforacquiring newskills Rationale: Off-the-job training allows people tomakemistakes inlearning, without the costsandconsequences ofmaking thesamemistakes onthejob.However, formal courses maynotalwaysbedirectly relevant tothecircumstances ofthejobandworkplace, andit maynotbeeasyto'transfer learning' fromtheclassroom tothejob,forvarious reasons. Meanwhile, formal courses takepeople awayfromwork.Youcouldthinkoftheother options asadvantages ofon-the-job training. 33.20 Victimisation Rationale: Remember thatdirectdiscrimination islessfavourable treatment ofa protected group.Indirect discrimination iswhenrequirements cannot bejustified onnondiscriminatory grounds. 33.21 Monitoring numbers andperformance ofethnic minority staff Rationale: Thisislikelytobea sensitive issue.Howdoyouidentify jobapplicants' ethnic origins without potentially causing offence orsuspicion? Howdoyouapplyparticular performance monitoring toethnic minority staffwithout seeming todiscriminate? Allthe otheroptions aremuchmorestraightforward! 33.22 Considering whether directors actoninternal auditinformation Rationale: Thefirstthreeoptions areinternal checks toaninternal control system. External auditors willneedtocheckthatdirectors andmanagement actonanyinternal audit recommendations. 33.23 1(iii),2(iv),3(ii),4(v),5(i) Rationale: Thelowest levelishowtrainees feelaboutthetraining: thisisaninexact measure ofresults. Level2 istrainee learning, measuring whatthetrainees havelearned (whattheyknoworcandoattheendofthecourse, compared topre-training tests):the likelyfocusoftrainers. Level3 ischanges injobbehaviour, whichmeasures whether learning hasbeenappliedsuccessfully tothejob:thelikelyfocusofdepartmental managers. Level4 iswhether thesechanges result inmeasurable performance gainsfor theorganisation: thelikelyfocusofsenior management's cost-benefit analysis oftraining. Level5 (which manyorganisations never reach)isevaluating impacts on'wider' goalssuch asgreater socialresponsibility. Answers219 Page 234 of 327 A N S W E R S H q 33.24 Cardentrysystems, personal identification numbers Rationale: Physical accesscontrols arebasically 'lockandkey'systems – basicthough thatmaysound! CardentryandPINsystems arewaysofidentifying yourself (byswipe cardandkeypad entryrespectively) inordertogainauthorised entrytoanareaorstorage device. Logicalaccesssystems arenon-physical accesscontrols, involving passwordprotected accesstodatainthesystem. Back-ups arenotaccesscontrols atall:theyare integrity and/orcontingency controls. 33.25 False Rationale: Connected stakeholders include shareholders, customers, suppliers and financiers. Don'tconfuse thiswithinternal stakeholders whichinclude employees and management. G H 220 Business andtechnology (FBT/BT) Page 235 of 327 q Mock exams G H Page 236 of 327 q G H 222 Business andtechnology (FBT/BT) Page 237 of 327 G q Foundations in Accountancy/ACCA Business and Technology (FBT/BT) Mock Specimen Examination 1 Exam H Questions Timeallowed 2 hours Thisexamis dividedintotwo sections: SectionA – ALL 46 questionsare compulsoryand MUSTbe attempted SectionB – ALL SIX questionsare compulsoryand MUSTbe attempted DO NOT OPEN UNTIL YOU ARE READY TO START UNDER EXAMINATION CONDITIONS 223 Page 238 of 327 q G H 224 Business andtechnology (FBT/BT) Page 239 of 327 q SECTION A ALL 46 questions are compulsory and MUST be attempted 1 Themajor purpose oftheInternational Accounting Standards Board(IASB)istoensure consistency in . Whichtwowords complete thesentence above?  Financial control  Corporate reporting  External auditing (1mark) 2 Theleadership stylethatleastacknowledges thecontribution thatsubordinates haveto makeis. Whichwordcorrectly completes thesentence above?  Authoritarian  Autocratic  Assertive 3 G Inrelation tothemanagement ofconflict, whichofthefollowing approaches willmaximise theprospect ofconsensus?  Acceptance  Negotiation  Avoidance  4 (1mark) Assertiveness (2 marks) Darragh hasbeenappointed tothemanagement teamofa professional football club.His roleincludes coaching, mentoring andcounselling youngplayers whohavejustsigned contracts withtheclubforthefirsttime. Willthefollowing activities berelated tohisroleascoach,mentor orcounsellor? Coaching MentoringCounselling Identifying eachplayer's keyskillsandencouraging themtodevelop newskills    Helping theplayers toanticipate opponents' reactions    Advising theplayers onaddressing personal issues, suchasmanaging theirfinances    Helping theyoungplayers tosettle induring theirfirst week    (2 marks) MockExamination 1:Questions225 Page 240 of 327 H q 5 Inordertoensure thatthepolicies ofanorganisation areconsistent withthepublic interest, onwhichofthefollowing should thedirectors ofa company focus?  Thelong-term welfare oftheshareholders   6 G 226 (2 marks) Marginal unemployment H Topersuade potential consumers toconvert latentdemand intoexpenditure (2 marks) Toidentify suitable outlets forgoodsandservices supplied WhichTWOofthefollowing aretheconsequences ofa listedcompany failingtofileits accounts?     9 Frictional unemployment Whichofthefollowing isthemainfunction ofmarketing?  Tomaximise salesvolume  Toidentify andanticipate customer needs   8 (1mark) Thecollective well-being ofstakeholders Martin isanexperienced andfullytrained shipbuilder, basedina western European city. Duetosignificant economic changeinsupplyanddemand conditions forshipbuilding in Martin's owncountry, theshipyard heworked forhasclosedandhewasmaderedundant. There wasnootherlocaldemand forhisskillswithin hisownregion andhewould haveto movetoanother country toobtain a similar employment, andcouldonlyfindsimilar work locallythrough undertaking atleasta year'sretraining ina related engineering field. Whichofthefollowing describes thetypeofunemployment thatMartin hasbeenaffected by?  Structural unemployment  Cyclicalunemployment   7 Compliance withlegalrequirements andcodesofgovernance Investigation ofitsfinancial affairsbya government department oragency Imposition ofa finebythegovernment's company registration body Refusal oftheexternal auditor tosignthefinancial accounts Suspension ofdealings insecurities bythestockexchange (2 marks) Theoverall average ageofa population ina country isdirectly dependent ontwo demographic factors: Birthrateanddeathrate. Assuming equalratesofchange, willeachofthefollowing leadtoanoverall ageingofthe population? Yes No Increasing deathrate   Decreasing birthrate  Business andtechnology (FBT/BT) Page 241 of 327  (2 marks) q 10 Gilsisconducting anappraisal interview withhisassistant Jill.Heinitially feedsbacktoJill areasofstrengths andweaknesses ofperformance buttheninvites Jilltotalkaboutthe job,heraspirations, expectations andproblems. Headopts a non-judgemental approach andofferssuggestions andguidance. Thisisanexample ofwhichapproach toperformance appraisal?  Tellandsellapproach  Tellandlisten approach  Problem solving approach  (2 marks) 360degree approach 11 Whatistheprimary responsibility oftheexternal auditor?  Toverifyallthefinancial transactions andsupporting documentation oftheclient  Toensure thattheclient's financial statements arereasonably accurate andfree frombias  Toreport allfinancial irregularities totheshareholders oftheclient  Toensure thatalltheclient's financial statements areprepared andsubmitted tothe (2 marks) relevant authorities ontime 12 WhichTWOofthefollowing areexamples oftacticalinformation?  Annual forecasts ofrevenues andcostsfora department   G 13 Product development plansforthenext2 – 3 years Targets agreed bykeymanagers attheirperformance appraisal interviews (1mark) Wasim istheCustomer Services Manager ina largeleisure park.Theforthcoming weekend isgoingtobethebusiest oftheyear,asitisa publicholiday. Wasim hastocopewith several absentees, leaving himshort-staffed inpublicareasofthepark.Hismanager has toldhimthatheexpects himtocatchupwithsomeadministrative reports thatweredue lastweek.Wasim alsohastoarrange forsixnewstafftobetrained, whowillbearriving imminently. Inordertomanage hisworkload mosteffectively, whatshould Wasim do?  Prioritise thetasksinrelation tothemostimportant business outcomes  Dealwiththereports thatthemanager insists beprepared  Trainthenewrecruits  (2 marks) Carryoutsomeoftheworkthattheabsentees would normally do MockExamination 1:Questions227 Page 242 of 327 H q 14 Inordertodischarge theirduties ethically, finance directors mustensure thatthe information published bytheirorganisations provides a complete andprecise viewofthe position ofthebusiness, without concealing negative aspects thatmaydistort thereader's perception ofitsposition. Thisdutydescribes whichofthefollowing ethical principles?  Probity  Honesty  Independence  (2 marks) Objectivity 15 Whichofthefollowing isa purpose oftheInternational Federation ofAccountants?  Agreement oflegallybinding financial reporting standards acrossallmember accountancy organisations  Prevention ofinternational financial crimes, suchasmoney laundering andinsider dealing  Promotion ofethical standards inallmember organisations  Development ofuniversally applicable detailed rulestodeterinappropriate behaviours (2 marks) 16 Thefollowing government policies canbeusedtoexpand orslowdownthelevelof economic activity. Areeachofthefollowing consistent witha government's policyobjective toexpand the levelofeconomic activity? G Yes No Anincrease intaxation   Anincrease inpublicexpenditure   (2 marks) 17 Neillworks astheprocurement manager ofJL Company, a largeservices company. Information provided byNeillismostrelevant towhichofthefollowing elements ofthe marketing mix?  Physical evidence  Distribution (orplace)  Price  228 (2 marks) Processes Business andtechnology (FBT/BT) Page 243 of 327 H G q 18 Inrelation toemployee selection, whichtypeoftesting assesses thedepthofknowledge of a candidate andthecandidate's abilitytoapplythatknowledge?  Intelligence testing   19 Competence testing (1mark) Psychometric testing Malachi hasbeenaskedbyhismanager toanalyse thefinancial accounts ofABC Company, whichisbidding fora contract offered byMalachi's company inthenear future. Thetwofinancial statements whichhewillbeusingashissources arethestatement offinancial position andthestatement ofprofitorloss. Fromwhichfinancial statements willMalachi obtain thefollowing information? Statement offinancial position Statement ofprofitor loss Theequityofthecompany   Operating costsasa percentage of turnover   Long-term borrowings   Liquidity   (2 marks) 20 Linhownsa busyrestaurant. Shehashadcomplaints fromregular customers aboutdiners failingtocontrol theirnoisyandunruly children, whichisspoiling theirdiningexperiences. Whichofthefollowing courses ofactionwould beregarded asa pluralist solution tothis problem?  Setting asidea separate section oftherestaurant forfamilies withchildren  Notaccepting bookings fromfamilies withchildren  Advising customers thattherestaurant isa familyrestaurant before theybook  Taking noaction,assuming thatthosewhocomplain willalwaysbea minority (2 marks) 21 Whichofthefollowing isdataprotection legislation primarily designed toprotect?  Allprivate individuals andcorporate entities onwhom onlyregulated dataisheld  Allprivate individuals onwhom onlyregulated dataisheld  22 Allprivate individuals onwhom anydataisheld (1mark) Whichofthefollowing isanexample ofthesystem usedbya company torecord salesand purchases?  Atransaction processing system  Amanagement information system  Anofficeautomation system  (2 marks) Adecision support system MockExamination 1:Questions229 Page 244 of 327 H G q 23 WhichTWOofthefollowing areexamples ofconnected stakeholders?  Manager  Customer  Executive Director  Supplier (2 marks) 24 Inaneconomic environment ofhighpriceinflation, thosewhoowemoney willgainand thosewhoareowedmoney willlose. Isthisstatement trueorfalse?  True  (1mark) False 25 Roleplayingexercises usingvideorecording andplayback would bemosteffective for whichtypeoftraining?  Development ofselling skills 26   Regulation andcompliance Dissemination oftechnical knowledge  Introduction ofnewprocesses orprocedures Renata hasattended a leadership development course inwhichsheexperienced a selfanalysis exercise usingtheBlakeandMouton managerial grid.Thecourse leader informed herthattheresults suggested thatRenata demonstrated a 9·1leadership style. WhichTWOconclusions maybedrawn inrelation toRenata's leadership style?     27 230 Shemaximises theinvolvement ofherteam Shedemonstrates littleconcern forpeople intheteam Shebalances theneedsoftheteamwiththeneedtocomplete thetask Sheishighlyfocused onachieving theobjectives oftheteam (2 marks) Theimplementation ofa budgetary control system ina largeorganisation would bethe responsibility oftheinternal auditor. Isthisstatement trueorfalse?  True  28 (2 marks) (1mark) False WhichTWOofthefollowing arerolesofanexternal auditor?  Confirming thatthefinancial accounts present a trueandfairview  Confirming thatthereareappropriate policies forpreventing anddetecting fraud  Confirming thatthefinancial accounts havebeenprepared inaccordance withlegal requirements (1mark) Business andtechnology (FBT/BT) Page 245 of 327 H q 29 Professional accountants mustdemonstrate integrity atalltimes. Whichofthefollowing describes themeaning ofintegrity?  Applying consistently highmoral values  Maintaining a neutral andunbiased viewonallbusiness decisions  Provide timely andaccurate information freefromerrors (1mark) 30 WhichTWOofthefollowing arecharacteristics ofa publiclimited company butnota cooperative?  Maximising theexcess ofincome overexpenditure nota primary objective  Members canvoteaccording tothenumber ofshares owned  Shares canbebought andsoldthrough personal transactions ofthemembers  Allmembers areinvited toattend theannual general meeting andparticipate in (2 marks) decisions atthemeeting 31 Acompany hasadvertised forstaffwhomustbeatleast1·88metres tallandhavebeenin continuous full-time employment foratleastfiveyears. Whichofthefollowing isthelegaltermforthispractice?  Directdiscrimination  Indirect discrimination  Victimisation  G (2 marks) Implied discrimination 32 Whichofthefollowing statements iscorrect inrelation tomonetary rewards inaccordance withHerzberg's two-factor theory?  Payincreases area powerful long-term motivator  Inadequate monetary rewards area powerful dissatisfier  Monetary rewards aremoreimportant thannon-monetary rewards  (2 marks) Paycannever beusedasa motivator 33 Ina higher education teaching organisation anacademic facultyisorganised intocourses anddepartments, where teaching staffreport bothtocourse programme managers andto subject specialists, depending onwhichcourse theyteachandupontheirparticular subject specialism. According toCharles Handy's fourcultural stereotypes, whichofthefollowing describes theabovetypeoforganisational structure?  Role  Task  Power  (2 marks) Person MockExamination 1:Questions231 Page 246 of 327 H G q 34 35 36 Whichpattern ofcommunication isthequickest waytosenda message?  Thecircle  Thechain  TheY  Thewheel Kellyisdiscussing a business problem withPawelonthetelephone. Whowillbeinvolved in'encoding' thecommunication thattakesplace?  Kelly  Pawel  KellyandPawel 232 Newlawsmaking itmoredifficult todismiss employees unfairly Newlawsonhigher compensation foremployer breaches ofemployment contracts (2 marks) H Whatistheresponsibility ofa PublicOversight Board?  Theestablishment ofdetailed rulesoninternal auditprocedures  Thecommissioning offinancial reporting standards   38 (1mark) Whichofthefollowing typesofnewlegislation would provide greater employment opportunities inlargecompanies?  Newlawsonhealth andsafety  Newlawstoprevent discrimination intheworkplace   37 (2 marks) Thecreation oflegislation relating toaccounting standards Themonitoring andenforcement oflegalandcompliance standards (2 marks) Adrian isthemanager ofa callcentre. Consultants haveadvised himthatbyreorganising histeams tocomplete highlyspecific tasksthecallcentre willbeabletoincrease the throughput ofworksignificantly, aswellasincreasing thenumber ofsalescallsmadeto thepublic. Thereorganisation proposals areunpopular withmanyworkers, whofeelthat theirjobswillbecome tedious andrepetitive. Theproposal toreorganise theworkofthecallcentre utilises principles putforward by whichschool ofmanagement thought?  Theadministrative school  Theempirical school  (1mark) Thescientific school Business andtechnology (FBT/BT) Page 247 of 327 G q 39 Theaggregate levelofdemand intheeconomy ismadeupofgovernment expenditure, __________, __________ andnetgainsfrominternational trade. WhichTWOofthefollowing correctly complete thesentence above?     40 41 (2 marks) and . (1mark) Whichofthefollowing isanadvantage ofdecentralisation?  Riskreduction inrelation tooperational decision-making Moreaccountability atlower levels Consistency ofdecision-making acrosstheorganisation (1mark) FKTCompany isconsidering theintroduction ofa codeofethicsfollowing media criticism ofitsselling practices. Whichofthefollowing isthemostimportant whendeciding onthecontent oftheproposed codeofethics?  Theminimum acceptable standards ofbehaviour andconduct ofemployees    43 Taxation Investment Consumption Inthecontext ofmarketing, the'fourPs'aeprice,promotion, WhichTWOwords correctly complete theabovesentence?  Product  Positioning  Place   42 Savings Thelegalrequirements affecting thesalesofcoreproducts andservices Themainissues ofconcern tocustomers whohavemadecomplaints Thegenerally accepted standards byothercompanies operating inthesamesector (2 marks) Ahmed ispreparing hispersonal development plan.Heisparticularly concerned abouthow others seehim. Inordertoanalyse thisaspectofhispersonal development planfurther, Ahmed should consider whichTWOofthefollowing?  Strengths  Opportunities  (1mark) Weaknesses MockExamination 1:Questions233 Page 248 of 327 H q 44 Jackieleadsanestablished teamofsixworkers. Inthelastmonth, twohavelefttopursue alternative jobsandonehascommenced maternity leave.Three newstaffmembers have joined Jackie'steam. WhichofTuckman's groupstageswillnowoccur?  Norming  Forming  Performing  Storming 45 46 (2 marks) Inthecontext offraud,'teeming andlading'islikelytooccurinwhichareaofoperation?  Sales   Quality control Advertising andpromotion  Despatch (2 marks) Whichofthefollowing statements istrueinrelation totheaverage revenue function ofa business ina perfect market?  Itisdiagonal  Itishorizontal  (1mark) Itisvertical G H 234 Business andtechnology (FBT/BT) Page 249 of 327 q SECTION B ALL SIX questions are compulsory and MUST be attempted 1 Herearefourshortreferences tothefunction ofmanagement: A There areessentially fivefunctions ofmanagement thatapplytoanyorganisation B Individual andgroupbehaviour atworkisa major factorinproductivity. C Management isthedevelopment ofa truescience ofwork. D Themanager ofa business hasonebasicfunction – economic performance. Required: (a) Selectthecorrect reference foreachwriter. PeterDrucker  EltonMayo  HenryMintzberg  F WTaylor  Picklist: G (b) Reference A Reference B Reference C Reference D Noneofthereferences (2 marks) Fromthelistbelow identify TWOofHenri Fayol'sfunctions ofmanagement.   Planning    Managing Monitoring Motivating Organising (2 marks) (Total= 4 marks) MockExamination 1:Questions235 Page 250 of 327 H G q 2 (a) XYZcompany installed a computer system tohandle itsmainaccounting functions including accounts receivable, accounts payable andpayroll. Management havea number ofconcerns aboutaccesstothesystem andareconsidering a number of controls toovercome theseconcerns. Iseachofthefollowing a general control oranapplication control? General Control (b) Application Control Locking thecomputer roomtoprevent accesstononemployees.   Limiting accesstothepayroll system bymaking it password protected.   Taking backup ofdatafileseachevening andholding backup copiesoff-premises.   Providing basicITtraining totheentire stafftoprevent errors inusingthesystem.   (2 marks) Thecompany hasconsiderable cashcollections ona regular basis.Thecashier receives thecash,records itandthenbanksitattheendofeachday.Sincea single person isresponsible foraccesstocash,thefinancial director isconcerned that fraudanderrormayoccurincashhandling andrecording. Heproposes useof appropriate internal controls toprevent anysucherrors ormisappropriations. Thefollowing sentences describe internal controls whichcouldbeusedtoprevent fraudanderrors. Selectthecorrect internal control tocomplete eachsentence.  Fraudanderrors inhandling cashcanbeprevented through sincenooneindividual couldrecord andprocess a complete transaction. Evenifsucha measure wereintroduced, thepossibility exists thatstaffcouldact together toperpetrate fraudandbypassthiscontrol.  asitwould Thiscanbeprevented through ensure awareness of theheavysanctions tobeimposed incasesofdishonesty. Picklist: Segregation ofduties Internal audit Authorisation limits Induction andtraining (2 marks) (Total= 4 marks) 236 Business andtechnology (FBT/BT) Page 251 of 327 H G q 3 There area number ofwaysofdeveloping staffona one-to-one basiswithin organisations. Eachhasitsownstrengths andweaknesses andisappropriate indifferent worksituations. Examples oftypesofdevelopment include coaching, mentoring, counselling and appraising. Foreachtypeofdevelopment below, whichworksituation ismostappropriate? Coaching MentoringCounsellingAppraising (a) Aninterview tohelpanother person toidentify andwork through a problem.     Alongtermrelationship inwhich a moreexperienced person encourages anindividual's personal andcareer development.     Anapproach whereby a trainee isputunder theguidance ofan experienced employee who shows thetrainee howto perform tasks.     Aninterview, theaimofwhichis toreview performance and identify training and development needs.     (2 marks) (b) Anorganisation usesmentoring asa formofone-to-one personal development. WhichTWOofthefollowing arebenefits ofthisapproach?  Determine remuneration Decide promotions       Careerandpersonal development Resolve a grievance Demonstrating howtoperform Usingexperienced stafffortraining Providing a rolemodel foranemployee (2 marks) (Total= 4 marks) MockExamination 1:Questions237 Page 252 of 327 H q 4 Sport-4-Kidz isa charitable organisation thatoperates a sports centre ina largecity. Thelandonwhichtheplayingfieldsandfacilities arelocated isheldonbehalfofthe charity byDonna andDietmar, thetwotrustees. Donna andDietmar simply holdtheland onbehalfofSport-4-Kidz andplaynoroleinrunning thecharity. Theyarerarely contacted bythemanagement ofthecharity. However, theyaretheonlypeople whoare abletoenterintocontracts inrelation tothelandanditsuse. Sport-4-Kidz ismanaged andoperated bya management committee. Thecommittee has decided ona major expansion offacilities bybuilding a newsports hall.Thecommittee has thepower tolegallybindthecharity inallmatters otherthantheland.Theirdecisions are overseen bythegovernment charityregulator, whichgenerally sanctions thecharity's decisions except inrelation tofinancial reporting. Themanagement committee isnegotiating withfourbuilding companies. Theproposed expansion ofthefacilities hasangered thelocalresidents, manyofwhom are concerned aboutheavybuilding sitetrafficandthedanger posedtotheirchildren. Many believe thatthedesign ofthenewsports hallisuglyandinsensitive. Three well-respected localpoliticians serveontheresidents' committee. (a) G (b) Foreachofthefollowing, indicate whether theyareinternal, connected orexternal stakeholders. Internal External Connected Donna andDietmar    Localresidents    Members ofthemanagement committee    Thefourbuilding companies    (2 marks) Complete thefollowing tableaboutSport-4-Kidz stakeholders, withreference to Mendelow's grid. Stakeholder Stakeholder category Communication strategy Building companies   Localresidents   Picklist: Picklist: Lowpower, Lowinterest Keptinformed Lowpower, Highinterest Keptsatisfied Highpower, Lowinterest Treated askeyplayer Highpower, Highinterest (2 marks) (Total= 4 marks) 238 Business andtechnology (FBT/BT) Page 253 of 327 H q 5 (a) SelectFOURwords whicharefundamental principles ofethical behaviour fromthe IFAC(IESBA) andACCAcodesofethics. Integrity Honesty Trustworthiness Expertise Professional behaviour Confidentiality Respectfulness Objectivity (2 marks) (b) SelectFOURfactors inthelistbelow, whichdistinguish a profession froman occupation.      G    6 Actinginthepublicinterest Highlyskilled Ethicalcodesofconduct Governance byassociation H Highlyvalued services Training requirement Process ofcertification Qualification byexamination (2 marks) (Total= 4 marks) Company Aisanaccountancy professional bodywhichhasa tallstructure anda high levelofcentralisation. Thespanofcontrol isverynarrow. Subordinates haveminimal latitude forself-determination ortoinfluence decision-making andmainly concentrate on carrying outhighlyprescribed anddefined roles. Company Bisa financial services company whichgivesa wideranging roletoitstraders andpromotes cultural values suchasassertiveness, riskappetite, andencourages a high degree ofcompetition between employees. Theemployees areusually youngand unmarried andworkandsocialise together forlonghours ata frantic pace. Company C isa research anddevelopment company where thebusiness isdivisionalised byproduct. Staffworkveryflexibly andoftenneedtocommunicate laterally toachieve objectives through adhocprojects andcollaboration. There arenoformal rulesabout reporting structures, oraboutsetstarting orfinishing times. Staffarerewarded onthe basisofcreativity andinnovation. Company Disa familycompany whichishighlycontrolled bytheowners andtheCEOis themainshareholder. There isa verylowstaffturnover, butemployees areexpected tobe veryloyaltothecompany andareoftenrequired toworklonghours andcarryouttasks outside theirnormal rangeofduties. Relationships between employees andmanagers are MockExamination 1:Questions239 Page 254 of 327 q veryinformal andclose,andtherightsofemployees andtheiroverall interests arestrongly defended bytheowners whenchallenged. Foreachofthefourcompanies above,selectthecultural dimension concerned andthe levelatwhichthecompany isdemonstrating thiscultural dimension. Dimension Level Company A   Company B   Company C   Company D   Picklist: Picklist: Power distance Uncertainty avoidance Individualism Masculinity High Low G (4 marks) H 240 Business andtechnology (FBT/BT) Page 255 of 327 G q Answers Mock to Exam 1 DONOTTURNTHISPAGEUNTIL YOUHAVE COMPLETED THEMOCKEXAM Page 256 of 327 H q G H 242 Business andtechnology (FBT/BT) Page 257 of 327 G q SECTION A 1 2 3 4 Corporate reporting TheIASBseekstopromote consistency incorporate reporting bycreating internationally accepted financial reporting standards. Autocratic Thisistheleastparticipative ofthestylesintheAshridge model. Negotiation Negotiation givesthebestopportunity forthetwosidesina conflict toconverge their positions. Theotheroptions either involve backing down,forcing a position, potentially increasing conflict, orleaving theissueunresolved. Helping theyoungplayers tosettleinduring theirfirstweek– Mentoring Identifying eachplayer's keyskillsandencouraging themtodevelop newskills– Coaching Advising theplayers onaddressing personal issues, suchasmanaging theirfinances – Counselling Helping theplayers toanticipate opponents' reactions – Coaching 5 Mentors usually helpstaffonbroader workrelated development, including orientation and induction. Coaches workondeveloping specific skillsofthejobitself,whilecounsellors workwithpeople ona personal level,perhaps iftheyarehaving non-work related or emotional problems. Thecollective well-being ofstakeholders Byconsidering thecollective well-being ofallstakeholders anorganisation willmake decisions thatareinthepublicinterest. 6 Structural unemployment 7 Because oftheparticular circumstances ofthescenario where someone ismaderedundant fromanindustry indecline where skillscannot beeasilytransferred, where re-training mighttakea longtimeorwhere workisnotavailable intheshorttermwithin a reasonable geographic proximity, thisisclassed asstructural unemployment. Toidentifyandanticipate customer needs 8 9 10 Thebasicprinciple thatunderlies marketing isthatitisa management process that identifies andanticipates customer needs. Theotherdistracters inthequestion referto specific activities undertaken bya salesorpromotion function. Imposition ofa finebythegovernment's company registration body Suspension ofdealingsinsecurities bythestockexchange Thenormal sanctions insucha caseisthatfinesareimposed oncompanies bythe registration bodyofthecompany and,where listed,thecompany maybedelisted bythe stockexchange authorities. Although theoption wasn’tincluded, sanctions against responsible directors mayalsobeimposed. Decreasing birthrate– Yes Increasing deathrate– No Theageingpopulation trendiscaused bya decreasing birthrateanda decreasing mortality rate. Tellandlistenapproach The‘tellandlisten’approach encourages inputfromtheindividual, promoting participation intheprocess bytheappraisee. MockExamination 1:Answers243 Page 258 of 327 A N S W E R S H q 11 12 13 14 15 G 16 17 18 19 Toensure thattheclient'sfinancialstatements arereasonably accurateandfreefrom bias Theexternal auditor hastoensure thatthefinancial statements oftheorganisation truly reflect theactivities ofthebusiness intherelevant accounting period. Thisassessment should beindependent andtherefore freefromsubjectivity onthepartofthemanagement oftheclientorganisation. Annualforecasts ofrevenues andcostsfora department andtargetsagreedbykey managers attheirperformance appraisal interviews Tactical information ismedium terminnature andsodoesnotinclude thelongterm product development plans,butdoesinclude annual forecasts andtargets from performance appraisals. Prioritise thetasksinrelation tothemostimportant business outcomes Anemployee witha rangeoftasksorobjectives toachieve andpressures toachieve them tosetdeadlines, should alwaysprioritise tasksinaccordance tobusiness importance. Deciding onothercriteria suchaspressure applied bycolleagues, whether someone is absent ornotorsimply because a taskisurgent maydamage wider business objectives. Objectivity Aprofessional accountant actinginaccordance withthefundamental ethical principles is demonstrating objectivity whentheygivea complete andprecise view,whichby implication means thatnegative aspects should notbeconcealed orpositive aspects accentuated. Promotion ofethicalstandards inallmember organisations IFAChasnolegalpowers against businesses, nordoesitsetfinancial reporting standards. Itisanaccounting association member bodywhichpromotes educational andethical standards ofbehaviour amongst itsmember bodies, through a codeofethicsand behaviour, butdoesnotprescribe detailed rulesonthis. Anincrease intaxation – No Anincrease inpublicexpenditure – Yes Increasing taxation leaves individuals withlessdisposable income forexpenditure within theeconomy thereby slowing economic activity. Thesameeffectiscaused bya reduction ingovernment expenditure. Therefore economic activity canbestimulated byreducing taxation andincreasing government expenditure. Price Information onpurchase costsoffinished goodsorrawmaterials isimportant in establishing thepriceofa product. Interms ofthemarketing mix,thisinformation ismost relevant tothepriceelement aspricesshould besetatleasttocovercostandgivean acceptable levelofprofit. Competence testing Competence testing ismostappropriate whentesting a specific skill. Theequityofthecompany – Statement offinancialposition Operating costsasa percentage ofturnover – Statement ofprofitorloss Long-term borrowings – Statement offinancialposition Liquidity – Statement offinancialposition These answers correctly matchtheinformation required totheparticular financial statement inwhichtheyaretobefound. 244 Business andtechnology (FBT/BT) Page 259 of 327 H q 20 21 22 23 24 25 G 26 27 28 29 Settingasidea separate sectionoftherestaurant forfamilies withchildren Thepluralist solution istocaterfortheneedsofmorethanonestakeholder groupwithout seriously compromising theinterests ofanyindividual group.Therefore setting asidea special areaforfamilies withchildren whilehaving anadultsonlysection would achieve this.Theotheroptions involve adversely affecting therightsofoneorothergroupof stakeholders insomeway. Allprivateindividuals onwhomonlyregulated dataisheld Dataprotection legislation applies onlytoregulated dataandisdesigned toprotect the interests ofprivate individuals only. Atransaction processing system Atransaction processing system records a company's transactions, suchasitssalesand purchases. Anofficeautomation system automates certain business processes. Amanagement information system processes information heldbya business tohelp support management decisions. Adecision-support system would analyse information. Customer Supplier Customers andsuppliers dealclosely ona transactional basiswiththeorganisation, but theyarenotinternal stakeholders likemanagers andexecutive directors. True Ina period ofhighpriceinflation thevalueofmoney isreduced overtime,sothosewho owemoney arebetter offandthosewhoareowedmoney loseout. Development ofsellingskills Roleplayingexercises aremosteffectively usedforskillsdevelopment, including sales training. Othercommon business applications include effective selection interviewing and performance appraisal interviewing. Shedemonstrates littleconcern forotherpeopleintheteam Sheishighlyfocusedonachieving theobjectives oftheteam TheBlakeandMouton managerial gridenables leadership stylestobecategorised ona ninepointscalewithreference toconcern forproduction andconcern forpeople. Renata is therefore highlyconcerned withthetaskandmuchlessinterested inherteamas individuals. False Internal auditors areresponsible formonitoring theeffectiveness ofsystems, not implementing them. Confirming thatthefinancialaccounts present a trueandfairview Confirming thataccounts havebeenprepared inaccordance withlegalrequirements External auditors areresponsible forensuring thatthefinancial statements showa true andfairviewandthattheycomply withlegalrequirements. Directors areresponsible for ensuring thatsystems areinplacetoprevent anddetectfraud. Applying consistently highmoralvalues Integrity isoftendescribed asbeinghonest andapplying morality todecisions. Accuracy relates toprofessional competence andbeingneutral doesnotindicate morality. MockExamination 1:Answers245 Page 260 of 327 A N S W E R S H G q 30 33 Members canvoteaccording tothenumber ofsharesowned Sharescanbeboughtandsoldthrough personal transactions ofthemembers Onlyshareholders havevoting power related tothenumber ofshares thattheyown. Members ofa co-operative organisation canvotebutwillonlyhaveonevote.Cooperatives maybeowned bymembers, butownership stakes cannot beexchanged between members unless themembers belong tolimited companies. Indirect discrimination Todiscriminate against someone onthegrounds ofcharacteristics whichare predominately associated withtheirsex,gender, nationality orreligion isillegal.Aswomen aregenerally shorter thanmen,torestrict admission onthebasisofheight, indirectly discriminates against women. Theotheroptions areeither directdiscrimination, orother illegalandundesirable employment practices. Inadequate monetary rewards area powerful dissatisfier According toHerzberg, money isa hygiene factor(ordissatisfier). Although itisa powerful short-term motivator, itisquestionable whether eachindividual increase inmonetary reward willhavea major long-term effect.According toHerzberg, ‘Areward oncegiven becomes a right’. Task 34 Thetaskculture isappropriate where organisations canaccommodate theflexibility required toadjustmanagement andteamstructures toaddress thetasksthatmustbe fulfilled. Thisisverycommon inlargeconsultancy firms. Thewheel 35 Thewheel facilitates transmission ofthemessage directly toallreceivers andtherefore transmits mostquickly. KellyandPawel 36 Ina two-way communication link,bothparties needtoencode messages andbothhaveto decode theminorderforthecommunication tobeunderstood. Newlawstoprevent discrimination intheworkplace 31 32 37 38 Equalopportunity policies widen opportunity andenlarge thepotential poolofemployees torecruit from.Theotheroptions either indirectly ordirectly reduce thepotential forstaff turnover andtherefore limitthenumber ofjobvacancies available atanypointintime. Themonitoring andenforcement oflegalandcompliance standards Theprimary aimofa publicoversight boardistoeliminate orminimise anyactualor potential breaches oflegislative requirements andtoensure compliance withregulations applicable toorganisations within theirterms ofreference. Thescientific school Maximising efficiency inproduction (asinthescenario) isa feature ofscientific management.. 39 Investment andconsumption Thecomponents ofeffective demand intheeconomy areconsumer spending, investment byenterprises, central andlocalgovernment expenditure andthenetgainsfrom international trade. 40 Product Place ThefourPsarePrice,Promotion, Product andPlace. 246 Business andtechnology (FBT/BT) Page 261 of 327 H q 41 Moreaccountability atlowerlevels Decentralisation involves having greater authority andpower atlower levels ofthe organisation andaccountability goeswiththispower. 42 43 44 45 46 Theminimum acceptable standards ofbehaviour andconductofemployees Compliance withlegalrequirements maynoteliminate unethical behaviour. Theissues of concern tothosewhocomplain maynotbefullyrepresentative ofissues ofconcern to customers ingeneral. Othercompanies inthesector maynotbeconcerned aboutethical behaviour. Strengths, Weaknesses UsingSWOTanalysis, thestrengths andweaknesses aretherelevant points astheseare internal totheindividual andthesearethefactors thatwould influence theopinions of others. Forming Asnewmembers havejustjoined thegroup,essentially thegroupisreforming whichisthe startofa newgroupdevelopment process. Theotheroptions arealllaterstagesingroup development asidentified byTuckman. Sales Teeming andladinginvolves thetheftofcashandisa typeoffraudthatiscarried outby manipulating transactions. There would bemostpotential forthisfraudwithin thesales department where cashmaybereceived andremitted. Itishorizontal Thedemand curveina perfect market ishorizontal, because theycansellasmuchasthey wantattheprevailing market priceandnothing atallata higher price. G A N S W E R S MockExamination 1:Answers247 Page 262 of 327 H q SECTION B 1 (a) PeterDrucker Reference D EltonMayoReference B HenryMintzberg Noneofthereferences F WTaylorReference C (b) 2 (a) Drucker emphasised theeconomic objective ofmanagers inbusiness Mayoinvestigated individual andgroupbehaviour atwork,asa factorin productivity. Mintzberg described managerial roles,arguing thatmanagement isa disjointed, non-systematic activity. Taylorpioneered thescientific management movement andsought themostefficient methods. Planning Organising Fayolclassified fivefunctions ofmanagement: Planning, Organising, Commanding, Co-ordinating andControlling. Locking thecomputer roomtoprevent accesstonon-employees - Generalcontrol Limiting accesstothepayroll system bymaking itpassword protected - General control Taking backup ofdatafileseachevening andholding backup copiesoff-premises Generalcontrol Providing basicITtraining toentire stafftoprevent errors inusingthesystem Application control G General controls relate totheenvironment inwhichtheapplication isoperated. (b) Application controls arecontrols thatprevent, detectandcorrect errors. Fraudanderrors inhandling cashcanbeprevented through segregation ofduties sincenooneindividual canrecord andprocess a complete transaction. Segregation ofduties Evenifsucha measure wereintroduced, thepossibility exists thatstaffcouldact together toperpetrate fraudandbypassthiscontrol. Thiscanbeprevented through induction andtraining asitwould ensure awareness oftheheavysanctions tobe imposed incasesofdishonesty. Induction andtraining 3 (a) Segregation ofduties would prevent oneindividual recording andprocessing a complete transaction. Awareness andtraining would makestaffawareofsanctions incasesofdishonesty. Aninterview tohelpanother person toidentify andworkthrough a problem Counselling Alongtermrelationship inwhicha moreexperienced person encourages an individual's personal andcareer development - Mentoring Anapproach whereby a trainee isputunder theguidance ofanexperienced employee whoshows thetrainee howtoperform tasks- Coaching Aninterview, theaimofwhichistoreview performance andidentify training and development needs- Appraising 248 Business andtechnology (FBT/BT) Page 263 of 327 H q (b) 4 (a) Coaching involves a trainee beingputunder theguidance ofanexperienced employee. Mentoring isa long-term relationship where a moreexperienced person encourages career andpersonal development. Counselling isaninterpersonal interview tohelpanindividual identify andwork through a problem. Appraisals arepartofperformance management andcanbeusedtoestablish areas forimprovement andtraining anddevelopment needs. Careerandpersonal development Providing a rolemodelforanemployee Mentoring isa long-term relationship where a moreexperienced person encourages career andpersonal development andcanalsobea rolemodel. Donna andDietmar – Connected Members ofthemanagement committee – Internal Thefourbuilding companies – Connected Localresidents – External Donna andDietmar areconnected stakeholders astheyaretrustees ofthecharity. Themanagement committee areinternal tothecharity astheycanlegallybindthe charity. Thebuilding companies areinnegotiation withthemanagement committee and therefore areconnected stakeholders. (b) G Localresidents willalwaysbeexternal stakeholders. Stakeholder Stakeholder category Communication strategy Building companies Localresidents Keptinformed Treated askeyplayer Lowpower,Highinterest Highpower,Highinterest Residents havehighinterest duetotheanticipated effects ofthedevelopment, but duetotheinvolvement ofthelocalpoliticians theyalsohavehighpower. 5 (a) Stakeholders withhighpower andhighinterest should betreated askeyplayers. Thebuilding companies havehighinterest inthedecision toawardthebuilding contract. Stakeholders withlowpower andhighinterest should bekeptinformed. Integrity Professional behaviour Confidentiality Objectivity (b) Thefundamental principles areIntegrity, Confidentiality, Objectivity, Professional behaviour andProfessional competence andduecare. Actinginthepublicinterest Ethicalcodesofconduct Processofcertification Governance byassociation These qualities distinguish a profession fromanoccupation. MockExamination 1:Answers249 Page 264 of 327 A N S W E R S H q 6 Company A Dimension Powerdistance Masculinity Level High High Company B Company C Uncertainty avoidance Low Company D Individualism Low Highpower distance cultures acceptgreater centralisation, a top-down chainof command andclosersupervision. Highmasculinity cultures clearlydifferentiate gender roles.Masculine values of assertiveness, competition, decisiveness andmaterial success aredominant. Lowuncertainty avoidance cultures respect flexibility andcreativity. Theyhaveless taskstructure andwritten rules.There ismoretolerance ofrisk,dissent, conflict and deviation fromnorms. Lowindividualism cultures emphasise interdependence, reciprocal obligation and socialacceptability. Theorganisation isseenasa family. G H 250 Business andtechnology (FBT/BT) Page 265 of 327 q Foundations in Accountancy/ACCA Business and Technology (FBT/BT) Mock Examination 2 Questions 2 hours Timeallowed G H Thisexamis dividedintotwo sections: SectionA – ALL 46 questionsare compulsoryand MUSTbe attempted SectionB – ALL SIX questionsare compulsoryand MUSTbe attempted Please notethatitisnotpossible topredict question topicsinanexamination ofthisnature. We havebasedthecontent ofthisMockExamonourlongexperience oftheACCAexams. Wedonot claimtohaveanyendorsement ofthequestion typesortopicsfromeither theexaminer orthe ACCAandwedonotguarantee thateither thespecific questions orthegeneral areasthatare featured herewillnecessarily beincluded intheexams, inpartorinwhole. Wedonotacceptanyliability orresponsibility toanyperson whotakes,ordoesnottake,any actionbased(either inwhole orinpartandeither directly orindirectly) uponanystatement or omission madeinthisbook.Weencourage students tostudyalltopicsintheACCAsyllabus and thisMockExamisintended asanaidtorevision only. DO NOT OPEN UNTIL YOU ARE READY TO START UNDER EXAMINATION CONDITIONS 251 Page 266 of 327 q G H 252 Business andtechnology (FBT/BT) Page 267 of 327 q SECTION A ALL 46 questions are compulsory and MUST be attempted 1 (1) Private companies canraisesharecapitalbyadvertising tothegeneral public. (2) Private companies canraisesharecapitalfromventure capitalists Arethesestatements trueorfalse?  Statement 1istrueandstatement 2 isfalse  Statement 1isfalseandstatement 2 istrue  Bothstatements aretrue  Bothstatements arefalse (2 marks) 2 Nysslit Lerner plc,anorganisation ofsome400employees, hasanaverage spanofcontrol ofthree, throughout itsstructure. Fromthis,whichofthefollowing inferences mightone make?  Theworkissystematic androutine   3 (1mark) Theorganisation isflat Whichofthefollowing ispartoftheresearch anddevelopment function ofa business?   G Thelevelofcomplexity intheworkishigh  Theanalysis ofsurvey dataonconsumer behaviour, produced under contract byan independent market research company Creating newproducts andimproving existing ones Contracting independent advertising agencies topromote theproducts beingsold (1mark) bythecompany 4 Whichofthefollowing members ofthefinance function would beresponsible fordeciding howmuchcreditshould begiventocustomers?  Thefinancial manager  Thefinancial accountant  (1mark) Themanagement accountant 5 MrsGreylikesswimming andplayingbadminton aspartofherexercise routine. Shehasa budget ofupto$25tospendeachweekongetting fit.Eachtriptotheswimming pool costs$3,andeachbadminton session costs$4. Hermarginal utility schedule isgivenbelow: Numberof Marginalutilityof Marginalutilityof trips swimming badminton 1 90 100 2 80 90 3 4 70 60 80 70 5 50 60 MockExamination 2:Questions253 Page 268 of 327 H q Whichcombination ofactivities givesMrsGreythehighest utility?  Picklist: Swimming trips 1 3 4 2 6 Badminton sessions 5 4 3 4 (2 marks) Youhavereceived a letter fromanestate agent,requesting financial information aboutone ofyourclients, whoisapplying torenta property. Theinformation isneeded assoonas possible, byfaxore-mail,ortheclientwillloseapproval. Whichofthefollowing ethical principles, identified intheACCAcodeofethics, israisedby thedecision ofwhether, whenandhowtorespond tothisrequest?  Objectivity 7 G   Technical competence Confidentiality  Professional behaviour (2 marks) Alarge,well-established construction company organises itselfona project basis,using temporary matrix andproject teamstructures. H Whatcultural typeismostlikelytofitthisorganisation?  Roleculture  Power culture  Taskculture (1mark) 8 Whichofthefollowing options setsouttherequired procedures forallofthevarious functions ofa business?  Anaccounting manual  Afunction policy  Amanagement information manual  (2 marks) Apolicymanual 9 Whichofthefollowing isa purpose ofa jobevaluation?  Identifying individuals’ training anddevelopment needs  Evaluating theorganisation’s recruitment andselection procedures  Improving upward communication  Demonstrating compliance withequalpaylegislation 254 Business andtechnology (FBT/BT) Page 269 of 327 (2 marks) q 10 Whichofthefollowing isanexternal stakeholder?  Professional body  Customer  Bankoftheorganisation (1mark) 11 Helen, Jack,SueandJoeworkinthefinance department ofYCowhichhasseparate financial accounting andmanagement accounting functions. Helen works oninventory valuation, budgetary control andvariance analysis. Jackdealswithsalesinvoicing and debtcollection. Suedealswithquarterly salestaxreturns andcorporation taxandJoe carries outriskassessments andassists inproject planning. Whichmember ofthe department would report tothemanagement accountant?  Helen  Jack  Sue  Joe (2 marks) 12 Homer andMargeworkforsimilar companies butatMarge's company a mechanistic system ofmanagement exists, incontrast totheorganic approach atHomer’s firm.They arediscussing someofthecharacteristics ofeachsystem, whichareoutlined below. WhichTWOwould Margerecognise fromherworkplace?  Managers areresponsible forco-ordinating tasks G 13   Insistence onloyaltytotheorganisation Jobdescription arelessprecise, itisharder to'passthebuck'.  Flexibility injobroles (2 marks) Individuals mayconform withthenorms andcustoms ofa groupwithout realcommitment. Whichofthefollowing terms describes suchbehaviour?  Compliance  Counter-conformity  Internalisation  Identification 14 H (2 marks) Whichofthefollowing isa negative contribution oftheauditcommittee, ina corporate governance framework?  Alackofindependence inreviewing theproposed approach oftheexternal auditors  Actingasa barrier between themain(executive) boardandtheexternal auditors  Notallowing a forum toraiseissues ofconcern (1mark) MockExamination 2:Questions255 Page 270 of 327 q 15 Whichofthefollowing isa feature ofineffective delegation bya manager?  Specifying performance levels andtheresults expected ofthesubordinate  Obtaining thesubordinate’s agreement withthetaskandexpected results  Ensuring thatallthesubordinate’s decisions areconfirmed orauthorised bythe superior  Ensuring thatthesubordinate reports theresults oftheirdecisions tothesuperior (2 marks) 16 Inthecontext offraud,whichofthefollowing statements isFALSE?  Deliberate manipulation ofdepreciation figures isdifficult because ofitscashflow effects.  Fraudulently understating expenses willinflate thereported profitfigure.  Selling goodstofriends (witha promise ofbuyingthembackata laterdate)is potentially fraudulent.  Employees within oroutside thepayroll department canperpetrate payroll fraud. (2 marks) 17 Ifyouarea teamleader, seeking toevaluate theeffectiveness ofyourteam,whichofthe following criteria should youuse? G (1) (2) Criteria: Contribution toorganisational objectives Fulfilment ofgrouptaskobjectives (3) Satisfaction ofthedevelopment needsofmembers  Criterion (2)only   Criteria (1)and(2)only Criteria (2)and(3)only Criteria (1),(2)and(3)  18 H (2 marks) Inthecontext ofmotivation theory, whatareDouglas McGregor’s Theory X andTheory Y?  Extreme typesofmanagers  Extreme setsofassumptions thatmanagers mayhaveaboutworkers  (1mark) Extreme typesofemployees 256 Business andtechnology (FBT/BT) Page 271 of 327 q 19 Inthecontext ofinterpersonal skillsforcounselling, ……………………… istheskillofseeing an issuefromtheotherperson’s pointofviewandreflecting yourunderstanding backtothe otherperson. Whichofthefollowing terms correctly completes thissentence?  Picklist: Rapport-building Empathy Active listening 20 Whichoneofthefollowing isNOTanoffence relating tomoney laundering?  Concealing theproceeds ofcriminal activity    21 (1mark) Tipping off Dealing inpriceaffected securities Failingtoreport suspicion ofmoney laundering (2 marks) Anna,Barry,Charles, DilipandElaineallworkinthesamedepartment andforma communication network within thedepartment. Whenthereisinformation tobecommunicated, Charles isgiventhisinformation. Hethen communicates thistoBarry,DilipandElaine. Barrywillthencommunicate thisinformation toAnna. Whichofthefollowing patterns ofgroupcommunication isbeingusedhere? G     22 H Wheel Chain Circle Y (2 marks) Lockett suggested a number ofbarriers toeffective performance appraisal, including ‘appraisal asunfinished business’. Whatismeant bythisphrase?  Appraisal interviews aresubject tointerruption orleftincomplete  Themanager isembarrassed bytheneedtogivefeedback andsetchallenging targets, andleaves theinterview withunresolved issues.  Appraisal isusedasa wrapping upoftheunresolved performance issues ofthepast year,rather thanfocusing onfuture improvement andproblem-solving  Appraisal isseenasa sortofshow-down, inwhichunresolved conflicts canbe brought intotheopen (2 marks) MockExamination 2:Questions257 Page 272 of 327 G q 23 Inthecontext ofworkplanning, a ………………….. isanundertaking thathasa defined beginning andendandiscarried outtomeetestablished goalswithin cost,schedule and quality objectives. Whichwordorphrase correctly completes thisdefinition?  Picklist: Contingency plan Project Strategy 24 (1mark) Themanagement ofRSTCorecently helda meeting regarding itsfinancial results forthe lastyear.Ithasbeensuggested inthemedia thatRSTComakes excessive profits. Inorder tocombat thisthemanagement havedecided todeliberately understate itsfinancial performance forthelastyear. Whichofthefollowing isa potential consequence ofRST,fraudulently understating its results?  Excessive distribution ofprofits toshareholders    Restricted accesstoloanfinance Unrealistic expectations inthefinancial markets Potential shortfalls inworking capital (2 marks) 25 Thepriceelasticity ofdemand (PED)ofgoodAisnegative, itsincome elasticity ofdemand (IED)ispositive anditscrosselasticity ofdemand (XED)withrespect togoodXisnegative. Whatisthenature ofgoodA?  Agoodbought forpurposes ofostentation, complementary toX  Aninferior good,substitute forX  Anormal good,complementary toX (1mark) 26 Inthecontext ofTuckman’s model ofteamdevelopment, whichofthefollowing sequences ofstagesiscorrect?  Picklist: Norming Storming Forming Performing  Picklist: Norming Storming Forming Performing  Picklist: Norming Storming Forming Performing 258 Business andtechnology (FBT/BT) Page 273 of 327  Picklist: Norming Storming Forming Performing (2 marks) H q 27 Intheregulatory system surrounding financial accounting, whichbodyhasasa key objective thedevelopment ofa singlesetofenforceable globalaccounting standards?  TheAccounting Standards Board   TheInternational Accounting Standards Board (1mark) TheEuropean Union 28 WhichTWOofthefollowing aretypicalofinformal groups within anorganisation?  Membership isvoluntary  Tasksareassigned bymanagement  Communication isopenandinformal  (2 marks) Members areheldaccountable tomanagement fortheirtasks 29 Somemeetings achieve verylittlebecause ofhindrances. Sallyislearning aboutthese problems andhowshecanavoidtheminherroleaschairperson atthenextproject team meeting. Following conversations withotherpeople inthebusiness shehascomeupwith foursuggestions formaking meetings moreeffective. WhichTWOoftheabovearewaysofavoiding participants beingunclear aboutthe purpose ofthemeeting?  Name theperson responsible forcompleting eachactionpoint,andassigna completion date  Agreegoalsinadvance  Include allactions required andtheassigned datesintheminutes G  30 (2 marks) WhichTWOofthefollowing should bethepurposes ofanappraisal interview?     31 Prepare a focused agendaandensure people sticktoit Todiscuss employee performance Todiscipline anemployee Toagreeanemployee’s salaryreview Toidentify anemployee’s development needs (2 marks) Ifa government increased itsexpenditure andreduced levels oftaxation, theeffectwould beto(i)………….. demand intheeconomy andto(ii)…………… thesizeofthePublicSectorNet CashRequirement. Whichwords correctly complete thisstatement?  (i) Picklist: Stimulate Reduce Raise MockExamination 2:Questions259 Page 274 of 327 H q  (ii) Picklist: Stimulate Reduce Raise (2 marks) 32 Whichofthefollowing statements isanexample oflateral communication?  Communication between middle managers andtheirfirstlinesupervisors  Communication between headsofdepartment, whoreport tothesamedivisional manager  Communication between supervisors andtheirteammembers (1mark) 33 Whileouttolunch,yourunintoa clientatthesandwich bar.Inconversation, shetellsyou thatsheexpects toinherit froma recently deceased uncle,andasksyouhowshewillbe affected byinheritance tax,capitalgainstaxandothermatters – whichyouhavenotdealt with,indetail,forsomeyears. Whichofthefollowing principles oftheACCACodeofEthicsisraised bythisscenario?  Professional competence andduecare  Integrity  Professional behaviour  G 34 Confidentiality (2 marks) …………………….. learning isa method inwhichmanagers arebrought together asa problemsolving grouptodiscuss a realworkissue,anda facilitator helpsthemtoidentify howtheir interpersonal andproblem-solving skillsareaffecting theprocess. Whatwordcorrectly completes thisdefinition?  Picklist: Experiential Action Off-the-job Behavioural (2 marks) 260 Business andtechnology (FBT/BT) Page 275 of 327 H q 35 There area number ofdifferent viewsonethicswithin thefinance department ofTUVCo. Tinabelieves thatactions should bejudged bytheiroutcomes orconsequences. Chrisstatesthatthereisanunchanging setofethical principles thatalwaysapplies. Willbelieves thatrightandwrong areculturally determined WhichviewofethicsisgivenbyWill?  Ethicalrelativism  Cognitivism  Teleological  (2 marks) Deontological 36 Business …………….. area setofmoral principles toguidebehaviour inbusiness contexts. Whichofthefollowing words correctly completes thesentence?  Picklist: Objectives Controls Ethics 37 G WhichTWOofthefollowing arebestshown usinga barchart?  Thenature ofactivities within anactionplan  Asequence ofactivities within a project   38 (1mark) H Thetimerequired fordifferent activities Quantitative relationships between activities (2 marks) Emma, John,Pratish andRekhaallworkforWCo.Emma ensures thatgoodsareonly purchased whentheyarerequired. Johnensures thatgoodsthatarepurchased from authorised suppliers. Pratish paysthesuppliers’ invoices andRekhaevaluates thefinancial stability ofpotential suppliers. Three ofthemembers ofQCoworkinthepurchasing department andoneworks intheaccounting department. Whichmember works inthe accounting department?  Emma  John  Pratish  (2 marks) Rekha MockExamination 2:Questions261 Page 276 of 327 q 39 Whenanorganisation carries outanenvironmental scan,itanalyses whichofthe following?  Strengths, weaknesses, opportunities andthreats    40 41 G Strategic options andchoice Inbound andoutbound logistics WhichpartofSWOTanalysis considers external environmental factors?  Strengths andweaknesses  Strengths andthreats  Opportunities andthreats  Opportunities andweaknesses (2 marks) (2 marks) TheIFACcodeisadministered bywhichbody?  ACCA  IESBA  42 Political, economic, socialandtechnological factors FATF (1mark) Inthecontext ofinternal control systems whichofthefollowing would beincluded inthe ‘control procedures’?  Strategies fordealing withsignificant identified risks  Cleardefinition ofauthority, responsibility andaccountability  Detailed policies andprocedures foradministrative andaccounting control  Senior management commitment tocompetence andintegrity (2 marks) 43 Whichofthefollowing islikelytoposetheleastnumber ofproblems foreffective time management?  Personal workpatterns  Meetings  Thetelephone (1mark) 44 Whichofthefollowing methods ofcybersecurity ensures thatthelatestsoftware updates areinstalled onthesystem whenavailable?  Virusprotection  Patchmanagement  Firewalls  Accesscontrol (2 marks) 262 Business andtechnology (FBT/BT) Page 277 of 327 H q 45 JulieandNickarebothonthesamesalaryandgradeatPCo.Julieisthefinance director andNickistheoperations director. Anewproject teamhasbeencreated toconsider an alternative officelocation forPCo.JulieandNickarepartofthisteam.WhenJulieand Nickcommunicate witheachother, whattypeofcommunication isthis?  Downward  Diagonal  Lateral (1mark) 46 Thefollowing qualities aresomeofthoseexpected ofanaccountant, butwhichisa professional quality asopposed toa personal quality?  Reliability  Respect  Timeliness  Scepticism (2 marks) G H MockExamination 2:Questions263 Page 278 of 327 q SECTION B ALL SIX questions are compulsory and MUST be attempted 1 (a) Mintzberg defined threecategories ofmanagerial roleasinterpersonal, informational anddecisional. Foreachofthefollowing managerial rolesselectthecorrect category fromthe abovelist Negotiator  Spokesperson  Disseminator  Figurehead Liaison handler Disturbance Picklist: Interpersonal Informational Decisional (b) G (3 marks) Arethefollowing statements aboutsupervisors trueorfalse? Supervisors spendalltheirtimeonmanagerial aspects ofthe job Asupervisor isa filterbetween managerial andnonmanagerial staff Picklist: True False   (1mark) (Total= 4 marks) 2 (a) Frank,Gloria,Helen andIanarediscussing howtheyshould structure theirnewly formed company. Frankwantsa structure whichwould allowthenewlyrecruited employees tobemore flexible. Gloriawould prefer a structure where decisions canbemadeata locallevelrather thancentrally. Helen wantsa structure thatwillfacilitate therecruitment oftechnical specialists for thebusiness. Ian‘spreference isfora structure thatdoesnothavebureaucratic obstacles thatare present inotherstructures. 264 Business andtechnology (FBT/BT) Page 279 of 327 H G q Whichorganisational structure would bepreferred byeachofthefollowing? Frank  Gloria  Helen  Ian  Picklist: Functional Geographic Matrix (b) WhichTWOofthefollowing arefeatures ofa boundaryless structure?   Theemployee isa seller ofskills Barriers areremoved between theorganisation anditssuppliers   Theorganisation onlyexists electronically Thefocusisonthecustomer Elimination ofbureaucracy  3 (a) (2 marks) (2 marks) (Total= 4 marks) TheBoardofDirectors ofBCDCodiscussed corporate governance concepts. Thefinance director wantstoprovide financial projections toshareholders which wereusedasthebasisfordeciding toproceed witha major overseas investment. Themarketing director hasdecided nottoauthorise a proposed advertising campaign whichshebelieves ismisleading, despite theotherdirectors pushing for thecampaign togoahead. TheHRdirector, whowasresponsible forintroducing anunsuccessful training programme acrosstheentire business, accepts thatheshould taketheblame for thisissue. Thechiefexecutive hasdecided nottoproceed witha proposed takeover ofa competitor, thatwould nothaveincreased thevalueofBCDCo,butwould have giventhedirectors higher status. Foreachoftheabovescenarios, selectthecorporate governance concept being applied by: Thefinance director  Themarketing director  TheHRdirector  Thechiefexecutive  Picklist: Responsibility Transparency Judgement Integrity (2 marks) MockExamination 2:Questions265 Page 280 of 327 H q (b) Whichofthefollowing describes theminimum levelofcompliance anorganisation musthave?  There isnominimum level   (c) Legalobligations only (1mark) Legalobligations andnon-legal regulations Managers havea dutyoffaithful service toanorganisation. Thisisknown astheir ………………….. Whichphrase correctly fillsintheblank?  Picklist: Financial responsibility Fiduciary responsibility Ethicalposition 4 (a) (1mark) (Total= 4 marks) Thefollowing areallareasoflegalissues thatcanaffectanorganisation. Foreach legalissue,selecttheappropriate areaoflawrelated toit: Directors’ duties  Minimum wage  Theft  G H Wastedisposal (b)  Picklist: Employment law Company law Criminal law (2 marks) Environmental law Areeachofthefollowing statements concerning theimpact oftechnology onthe roleofaccountants andauditors trueorfalse? Cloudaccounting reduces theamount ofteamwork accountants areinvolved in  Artificial intelligence freestheaccountant toworkon value-adding services.  analytics helpstheauditor reduce business risks Distributed ledger technology reduces theneedfor auditors toauditalltransactions Picklist: True False Data  (2 marks) (Total= 4 marks) 266 Business andtechnology (FBT/BT) Page 281 of 327 q 5 (a) Thefollowing arequalities thatmightbefoundinaccounting information SelectFOURfromthelistthataccounting information should haveifitistobe useful.  Reliability  Irrelevance  Electronic  Completeness  Objectivity  Unformatted  Incomparability  Timeliness (2 marks) (b) Matchthefollowing finance taskstotheresponsible person. Statutory accounts  Jobcosting  Taxation  Picklist: Management accountant Financial accountant (2 marks) (Total= 4 marks) G H 6 (a) FGHCohasa culture ofinformality inmostofitscommunications atlower levels, butcommunications withandamongst members oftheboardaretypically formal. Ineachofthefollowing circumstances selecttheappropriate method of communication: Communicating thefindings ofanexternal review into investment possibilities totheboard  Formal document requiring directors’ signatures tobesent tocompany lawyers  Ameeting between salesmanagers basedin geographically distant locations  Letting employees knowabouta staffmeeting tobeheldin onemonth’s time  Picklist: Postalservice E-mail Report Videoconference (2 marks) MockExamination 2:Questions267 Page 282 of 327 q (b) WhichTWOofthefollowing areeffects onanorganisation ofitsemployees being ineffective?  Staffturnover willincrease    Deadlines willbemissed Problems arenotdealtwithastheyarise Customer satisfaction willincrease G (2 marks) (Total= 4 marks) H 268 Business andtechnology (FBT/BT) Page 283 of 327 G q Answers Mock to Exam 2 DONOTTURNTHISPAGEUNTIL YOUHAVE COMPLETED THEMOCKEXAM Page 284 of 327 H q G H 270 Business andtechnology (FBT/BT) Page 285 of 327 G q SECTION A 1 2 3 Statement 1isfalseandstatement 2 istrue Rationale: Thekeydifference between private andpubliccompanies isthatonlypublic companies canadvertise theirshares tothegeneral public. Bothprivate andpublic companies canraisesharecapitalfromventure capitalists. Pitfalls:Youhadtogetyour‘private and‘public’companies therightwayround. Thelevelofcomplexity intheworkishigh Rationale: Theorganisation hasa narrow spanofcontrol: thiswould typically bethecase iftheworkiscomplex, asitrequires closersupervision. Pitfalls:Remember: narrow spantypically means tallorganisation; widespantypically means flatorganisation. Waysin:Workthrough eachoption. Systematic/routine workwould notneedsucha narrow spanofcontrol. Witha control spanofthree ina fairlylargeorganisation, theorganisation mustbetall… Creatingnewproducts andimproving existing ones Rationale: Theotheroptions would bepartofthemarketing function. 4 Thefinancialmanager Rationale: Thefinancial manager, among otherresponsibilities, willdecide howmuch creditshould begiventocustomers. Pitfalls:Themanagement accountant presents accounting information tosupport management. Thefinancial accountant reports theresults andfinancial position ofa business. 5 4 swimming tripsand3 badminton sessions Rationale: Utility isgreatest atthepointwhere: Marginalutility ofswimmingMarginalutility ofbadminton = Priceofswimming trip Priceofbadminton session = 6 7 8 60 80 = =20 3 4 =4 swimming tripsand3 badminton sessions Note:4 swimming tripsand3 badminton sessions costa totalof$24andsoarewithin the $25budget. MrsGrey’soverall totalutility isrestricted byherbudget, sothetotalcostof anycombination shemightwishtochoose mustbelessthan$25. Confidentiality Rationale: Confidentiality istheimmediate ethical issue.Youneedtheclient’s authority to disclose theinformation: youmayalsoneedtoconfirm theidentity oftheperson making therequest, andtakestepstoprotect theconfidentiality oftheinformation ifyousendit(ie notusingfaxore-mail). Theotherethical principles donotapplyhere. Taskculture Rationale: Ataskculture suitsproject management structures, withtheirfocuson deliverables (project completion) rather thanprocesses. Roleculture suitsbureaucratic cultures andpower culture suitssimple/entrepreneurial structures. Pitfalls:Justbecause theorganisation islargeandwell-established, don’timmediately jumptotheconclusion thatitisa bureaucracy (roleculture)! Apolicymanual Rationale: Everyemployee willbeexpected tohavereadtheareasrelevant totheir functions andthepolicymanual should alwaysbereadily available foreasyreference. MockExamination 2:Answers271 Page 286 of 327 A N S W E R S H G q 9 10 11 12 Demonstrating compliance withequalpaylegislation Rationale: Equalpaylegislation requires thatwomen bepaidequalpaytomenforwork ‘of equalvalue’(totheorganisation): thisisestablished byjobevaluation. Theothers arepotential purposes ofaperformance appraisal. Equalpayisabout thevalueofthejob,notthevalueof thejobholder. Ifyouhesitated overevaluating theorganisation’s recruitment andselection procedures, think ofperformance appraisal asawayofmonitoring whether people reallydo aswellinthejobastheselection system predicted theywould when theywerehired! Professional body Rationale: External stakeholder groups – thegovernment, localauthorities, pressure groups, thecommunity atlarge,professional bodies – arelikelytohavequitediverse objectives. Helen Rationale: TheFinancial Accountant isresponsible foractivities suchaspayroll, receivables andpayables ledger, creditcontrol, financial accounts andtaxation. Jackand Suewould report tothefinancial accountant. TheTreasurer (ifthereisone)would be responsible forproject (investment) appraisal, andhisorherpriority would befunds management. Joewould report tothetreasurer. Pitfalls:These areessential distinctions: anycombination ofthetasksandtitlescouldbe tested. Managers areresponsible forco-ordinating tasks Insistence onloyaltytotheorganisation 13 Rationale: Thecorrect answers are:Managers areresponsible forco-ordinating tasks; insistence onloyaltytotheorganisation. Incontrast, Homer would recognise theother features astypicalofanorganic system ofmanagement. Compliance 14 Rationale: Compliance isbehaving insucha wayastoconform, regardless ofunderlying commitment orattitude: itapplies toorganisations aswellasindividuals! Counterconformity isrejection ofgroupnorms. Internalisation is‘inner’acceptance andownership ofthenorms. Identification isa separate idea:itisoneoftheprocesses through which norms arereinforced ina group. Actingasa barrierbetween themain(executive) boardandtheexternal auditors 15 16 Rationale: Thismaysound likean‘independence’ benefit, butthekeywordis‘barrier’: the mainboardneedstotakeresponsibility forthefinancial statements andbeopento question byauditors. Ensuring thatallthesubordinate’s decisions areconfirmed orauthorised bythe superior Rationale: There isa finedistinction between making thesubordinate accountable and interfering. Ifthesuperior doesn’t trustthesubordinate tomakedecisions, theyshouldn’t havedelegated atall.Theotheroptions should clearlybeeffective practice. Deliberate manipulation ofdepreciation figuresisdifficultbecauseofitscashflow effects. Rationale: Depreciation isanexpense thatdoesn’t haveanycashfloweffect,sothe figures areeasilytampered with:egunderstating depreciation togivea healthier netbook value.Fraudulently understating expenses willinflate thereported profitfigureisclearly true.Selling goodstofriends (witha promise ofbuyingthembackata laterdate)is potentially fraudulent istruebecause thiscanbeusedtocreatefictitious salesvalues or manipulate yearendresults. Employees within oroutside thepayroll department can perpetrate payroll fraudistruebecause, forexample, anyemployee canfalsifytimesheets, andpayroll staffcanchannel payments tobogusstaffaccounts. 272 Business andtechnology (FBT/BT) Page 287 of 327 H q 17 18 19 Criteria(1),(2)and(3) Rationale: Thecriteria forteameffectiveness arebothfulfilment oftaskobjectives (which should contribute toorganisational objectives) andmember satisfaction, where that contributes totheabilityofthegrouptofulfilitstask(eginthedevelopment ofmembers’ skillsandabilities). Extreme setsofassumptions thatmanagers mayhaveaboutworkers Rationale: Theory X andYareonlymanagerial assumptions – whichtheninfluence the kindsofmotivational approaches andleadership stylesthemanager willadopt.Theydo notdescribe actualtypesofpeople (managers oremployees). Pitfalls:Youareoftenaskedtoshowcritical awareness andunderstanding oftheories, so itisworth getting thisdistinction clear. Empathy Rationale: Theclosest distractor isactivelistening, asreflecting understanding isoneof thewaysa listener canbe‘active’.(Other waysinclude questioning, summarising, showing attentive bodylanguage, givingfeedback andsoon.)Rapport-building istheskillof making another person feelateasewithyou,andwilling tocommunicate withyou. 20 Dealinginpriceaffectedsecurities 21 Rationale: Thiscouldbeinsider dealing, iftheperson dealing wasaninsider andwasusing inside information. Y 22 G 23 24 25 26 Rationale: Thisisanexample oftheYnetwork. Drawing outwhatisgoingonmayhelp here. Appraisal isusedasa wrapping upoftheunresolved performance issuesofthepast year,ratherthanfocusingonfutureimprovement andproblem-solving Rationale: ThisiswhatLockett meant bythephrase. Appraisal interviews aresubject to interruption orleftincomplete isa simple distractor. Theotheroptions describe other barriers: ‘Appraisal aschat’and‘Appraisal asconfrontation’. Project Rationale: Aproject isdistinguished fromroutine workbecause ofthesecharacteristics. A contingency planisa planforwhatshould bedoneifchanges orproblems occur.A strategy isa long-term planrelating tothedirection ofthefirmorbusiness unit. Restricted accesstoloanfinance Rationale: Finance maybehardtocomebybecause thefinancial health ofthefirm (ability tomaintain andpayoffloans)isunderstated. Theotheroptions areimpacts of fraudulently over-stating results. Pitfalls:Ensure thatyoureadthequestion carefully andaddress understated, not overstated, results. Waysin:Thisshould havebeenclearifyouworked through eachoftheoptions. Onceyou identified thatsomeofthedistractors wereoverstatement impacts, youwould havea good ideawhattolookfor. Anormal good,complementary toX Rationale: Goodsofostentation havepositive PED.Inferior goodshavenegative IED. Substitutes havepositive XED. Forming, storming, norming, performing Rationale: Forming isthetentative ‘getting toknoweachother’stage;storming, the conflict thatresults aspeople begintoassert themselves; norming, the‘settling down’ stage,asroles,behaviours andworking methods areagreed; andperforming, ‘getting downtowork’. MockExamination 2:Answers273 Page 288 of 327 A N S W E R S H G q 27 28 Pitfalls:Thiscanbeconfusing: makesureyougettheterminology right,because itissolid territory forexamquestions. TheInternational Accounting Standards Board Rationale: TheIASBhasthisasa keyobjective. TheASBusedtoissueFinancial Reporting Standards intheUK,a rolenowperformed bytheFRC.TheEUisinterested in harmonisation ofstandards, butdoesnothaveglobaljurisdiction. Waysin:Youshould havebeentipped offtotheinternational element bytheword ‘global’.Combine thatwith‘accounting standards’ andyoucouldtakeaneducated guess atthecorrect answer, ifyouhadto. Membership isvoluntary; Communication isopenandinformal. Rationale: Anorganisation canbedescribed asa collection ofgroups bothformal and informal. Pitfalls:Itisimportant nottounderestimate theimportance ofgroups within an organisation. EltonMayofirstestablished thispointthrough theHawthorne Experiments. Itisalsoimportant toremember thattherearealliances andpower structures thatexist within anorganisation, otherthanthosedocumented inanorganisational chart. 29 Agreegoalsinadvanceandprepare a focusedagendaandensure peoplesticktoit. 30 Rationale: Ensuring meeting goalsareagreed before themeeting andproducing an agendabasedaround achieving theagreed goalsshould ensure attendees arefullyaware ofthemeeting purpose. Todiscussemployee performance; Toidentifyanemployee’s development needs. Rationale: There aredrawbacks tolinking appraisal tosalaryreview, notleastthatthere maynotbeenough money toreward theemployee fortheirperformance. 31 32 33 34 Stimulate, Raise Rationale: Demand would beraisedbecause firmsandhouseholds would havemore money (aftertax)forconsumption orsaving/investment. Theincreased expenditure would notbecovered byrevenue fromtaxation, sothechangewould befinanced bya higher PSNCR(borrowing mount). Pitfalls:Youhavetobeabletothinkthrough allthepermutations offiscalandmonetary policies andtheirimpacts ontheeconomy and(where relevant) business decision-making. Communication between headsofdepartment, whoreporttothesamedivisional manager Rationale: Lateral communication isbetween thoseofequalrank. Professional competence andduecare Rationale: Theprinciple ofduecareisthat,havingaccepted anassignment, youhavean obligation tocarryitouttothebestofyourability,intheclient’s bestinterests, andwithin reasonable timescales, withproper regardforthestandards expected ofyouasa professional. Inthisscenario, anyanswer yougiveonthespotwould riskbeingincomplete, inaccurate orout-of-date, withpotentially serious consequences, iftheclientrelies and actsonyourreply.Integrity ishonesty, fairdealing andtruthfulness; professional behaviour isupholding thereputation ofyourprofession; andconfidentiality isnotusingor disclosing information giventoyoubyemployers orclients inthecourse ofyourwork. (None oftheseissues applies directly here.) Action Rationale: Experiential learning is‘learning bydoing’,usually involving self-managed learning byreflection, planning andadjustment. Action learning isclassed ason-the-job learning, because itinvolves realworkproblems andgroups. Behavioural andoff-the-job arejustdistractors. 274 Business andtechnology (FBT/BT) Page 289 of 327 H q 35 36 Ethicalrelativism Rationale: Thisdescribes Will’sviewofethics. Ethics 38 Rationale: Ethicsare‘moralprinciples’: theotheroptions setbehavioural guidelines ofa different sort. Thetimerequired fordifferent activities, Quantitative relationships between activities. Rationale: Barchartsshowdatanotsequences. Theydonotexplain thenature ofan activity. Pratish Rationale: Payingsuppliers' invoices would bea function oftheaccounts department, oncethepurchasing department hasauthorised theinvoices forpayment. Youmayhave hesitated overRekha, butevaluating potential suppliers isa keyelement insupplier appraisal andselection, nota finance matter. (However, insomecompanies thefinance department would dothesupplier appraisal because oftheirtechnical skillsorknowledge butthisisnotthenorm.) 39 Political,economic, socialandtechnological factors 40 Rationale: These aretheexternal factors whichimpact thebusiness. Opportunities andthreats 41 Rationale: Strengths andweaknesses areinternal. IESBA 37 Rationale: TheIFACcodeisnowadministered bytheIESBA.TheACCAcodeofethicsis basedontheIFACcode.FATF(Financial Action TaskForce)promotes policies tocombat money laundering. G 42 43 44 45 46 Detailed policiesandprocedures foradministrative andaccounting control Rationale: Theotheroptions relate tothe‘control environment’ whichembraces theoverall organisational andcultural context ofcontrol. Theywerehighlighted asaspects ofa strong control environment intheTurnbull report. Personal workpatterns Rationale: Youcantakeadvantage ofpersonal workpatterns, whichinclude times ofhigh energy andfocusaswellaslow.Theotheroptions allexpose youtothedemands ofother people, whichmaybeharder tomanage. Patchmanagement Rationale: Patchmanagement isa cybersecurity solution intheformofa system procedure. Theorganisation ensures thatthelatestsoftware updates areinstalled onthe system whenavailable. Lateral Rationale: Lateral (orhorizontal) communication flowsbetween people ofthesamerank, inthesamesection ordepartment orindifferent sections ordepartments. Waysin:Hopefully youwould havebeenabletodisregard downward because itsuggests communication fromsuperior tosubordinate. Scepticism Rationale: Theprofessional qualities are:independence, accountability, scepticism and socialresponsibility. MockExamination 2:Answers275 Page 290 of 327 A N S W E R S H q SECTION B 1 (a) Negotiator: Negotiation oftenoccursbefore a decision istaken– decisional. Spokesperson: Themanager provides information onbehalfoftheorganisation to interested parties – informational. Disseminator: Managers disseminate relevant information tosubordinates – informational. Figurehead: Achiefexecutive spends timerepresenting thecompany at conferences, dinners etc– interpersonal. Liaison:Somemanagers spenda significant amount oftimemeeting peersrather thantheirsubordinates – interpersonal. Disturbance handler: Amanager hastomakedecisions whentherehasbeena deviation fromtheplan– decisional. 2 (b) False. True. (a) Frank:Matrix. Amatrix structure encourages flexibility ofpeople Gloria:Geographic. Localdecision-making isa feature ofgeographic departmentation Helen:Functional. Functional departmentation means thatfunctional specialists canberecruited Ian:Matrix. Amatrix structure removes bureaucratic obstacles common withtallerorganisation structures Barriers areremoved between theorganisation anditssuppliers, Elimination of bureaucracy. (b) G 3 (a) (b) (c) 4 (a) Asupervisor spends timedoingtechnical oroperational work. Asupervisor isnota filterbetween managerial andnon-managerial staff. Theemployee isa seller ofskillsisa feature ofa jobless structure. Theorganisation onlyexists electronically isa feature ofvirtual organisations. Thefocusisonthe customer isa feature ofoutput-focused structure. Thefinancedirector: Transparency. Openandcleardisclosure describes transparency Themarketing director: Integrity. Inworking lifeintegrity means adhering toprinciples ofprofessionalism TheHRdirector: Responsibility. Thisdemonstrates responsibility Thechiefexecutive: Judgement. Judgement means making decisions that enhance theprosperity ofthe organisation Legalobligations only. Fulfilling legalobligations istheminimum standard ofbehaviour required byan organisation. Fiduciaryresponsibility. Managers havea fiduciary interest toactinthebestinterest oftheorganisation, not ofthemselves. Minimum wage:Employment law. Minimum wagecomes under employment law. Directors' duties:Companylaw. Directors’ duties aresetoutincompany law. Criminal law:Criminallaw. Theftisa criminal lawmatter. Wastedisposal: Environmental law. Wastedisposal isanenvironmental law matter. 276 Business andtechnology (FBT/BT) Page 291 of 327 H q (b) 5 (a) (b) 6 (a) False. Cloudaccounting allows accountants toworkmorecollaboratively together andwiththeirclients. True. Artificial intelligence supports theintelligent processing oftransactional information tofreetheaccountant toworkonvalue-adding services. False. Dataanalytics allowpredictive analytics toassisttheauditor intargeting keybusiness riskstoimprove theirauditwork.Itdoesnothelpreduce business riskitself. True. Distributed ledger technology allows assetownership tobeeasilyverified, reducing theneedforauditors toauditalltransactions. Reliability, Completeness, Objectivity, Timeliness. Accounting information should beRelevant, Comprehensible, Reliable, Complete, Objective, Timely andComparable Statutory accounts: Financialaccountant Job costing:Management accountant Taxation: Financialaccountant Financial accountants areinvolved inpreparing information forusersoutside the organisation, suchasstatutory accounts andtax.Management accountants prepare information foruseinside anorganisation suchasjobcosting. Areport isusually a comprehensive written record, oftenused Report. forcommunicating findings totheboard. Postalservice. Asa physical signature isrequired, thisneedstobesentby postalservice. Videoconference. Avideoconference allows geographically distant people to havea visualmeeting. E-mail. E-mailallows allstaffmembers tobecontacted withone communication. G (b) Deadlines willbemissed, Problems arenotdealtwithastheyarise. Staffturnover isnotaffected byineffectiveness andcustomers aremorelikelytobe dissatisfied. MockExamination 2:Answers277 Page 292 of 327 A N S W E R S H q G H 278 Business andtechnology (FBT/BT) Page 293 of 327 q Foundations in Accountancy/ACCA Business and Technology (FBT/BT) Mock Examination 3 Questions 2 hours Timeallowed G H Thisexamis dividedintotwo sections: SectionA – ALL 46 questionsare compulsoryand MUSTbe attempted SectionB – ALL SIX questionsare compulsoryand MUSTbe attempted DO NOT OPEN UNTIL YOU ARE READY TO START UNDER EXAMINATION CONDITIONS 279 Page 294 of 327 q G H 280 Business andtechnology (FBT/BT) Page 295 of 327 q SECTION A ALL 46 questions are compulsory and MUST be attempted 1 2 Whichofthefollowing isanother nameforanentrepreneurial structure?  Matrix structure  Complex structure  Flatstructure  Simple structure (2 marks) Stephanie isthetypistforRon,Martin andJosephine. Josephine isthedepartment head andsetsStephanie's workpriorities. Josephine isina meeting andMartin needsa letter tobetypedurgently. Martin orders Stephanie to'typehisworknow!'.Stephanie refuses, sayingthatJosephine hastoldherto typea report fromRon,asthisisneeded fora BoardMeeting. WhenJosephine returns fromhermeeting Martin complains andthesituation degenerates toa shouting matchbetween RonandMartin. Josephine reviews theworktobedoneand tellsStephanie totypeRon'sreport first,thentheminutes ofthemeeting Josephine hasjust attended, andthenMartin's letter. Sheexplains toMartin that,although hisletter isimportant, itonlyneedstocatchthat evening's post.Ron'sreport isneeded fora Boardmeeting intwohours' timeandtheBoard willalsoneedtoseetheminutes ofhermeeting. Allparties feelhappywiththeresult. Howwould youdescribe Josephine's response totheconflict? Whichwordcorrectly completes thesentence above?  Denial  Suppression G   H Compromise (2 marks) Dominance 3 There arethreebroadpre-requisites or'pre-conditions' thatmustexistinordertomake frauda possibility.  Dishonesty, criminality andopportunity.  Deception, motivation andopportunity.  Dishonesty, motivation andopportunity. (1mark) 4 Arethefollowing statements trueorfalse? True False Employees whonotice fraudormalpractice ina workplace are obliged toreveal theirknowledge toexternal authorities immediately.   Thetermgiventoanemployee whoreveals fraudormalpractice occurring ina workplace iswhistle-blower   (2 marks) MockExamination 3:Questions281 Page 296 of 327 q 5 6 Whatelements constitute thepurchasing mix?  Quantity, quality, product, price.  Quantity, quality, discount, delivery.  Quantity, quality, price,delivery. Whichthreeofthefollowing aretheprofessional qualities expected ofanaccountant?  Moderation  Socialresponsibility  Authority  Independence  7 G 8 Scepticism (2 marks) Whichthreeofthefollowing personal relationships arelikelytoconstitute a threat to objectivity ortheappearance ofobjectivity?  Theauditpartner ismarried tothefinance director ofanauditclient.  Ajunior member oftheauditteamplaysfootball witha marketing assistant ofa company audited byanother officeofthefirm.  Asenior member oftheauditteamisina relationship withthefinancial controller of anauditclient.  Thefinancial controller ofa company resigned fromthecompany threemonths ago, isnowworking forthecompany's auditors andisworking ontheauditofthe company shepreviously worked for.  Theauditpartner attends theannual dinner ofthecompany. (2 marks) Agroupofpeople whoarenotinthesamegeographical location, butworktogether using information andcommunication technology (ICT)tosharedata,allocate workandhold meetings iscalleda ____________ team. Whichofthefollowing words mostappropriately fillsthegap?  Multi-skilled  Virtual  Multi-disciplinary 9 (1mark) (1mark) Whichofthefollowing factors would leadtostability ofpricelevels fora product?  Supplydecisions arebasedonthepricesofanearlier timeperiod.  Demand isbasedonthepricesofthepresent timeperiod.  Theproduct haslowpriceelasticities ofdemand andsupply.  Output isaffected bynon-controllable factors suchasclimate. (2 marks) 282 Business andtechnology (FBT/BT) Page 297 of 327 H q 10 11 Whichofthefollowing isanexternal stakeholder?  Supplier  Professional body  Bank  Customer (2 marks) Whichofthefollowing aretargets ofmacroeconomic policy? Yes No Highlevels ofinflation   Economic growth   Zerounemployment   Balance ofpayments equilibrium   (2 marks) 12 Whatisthenameofthefaultinthecommunication process thatleadstothelossofthe meaning ofthemessage intranslation fromintention tolanguage orfromlanguage to understanding?   G 13 Noise  Redundancy Distortion  Physical noise,technical noiseandpsychological noise. H Accounting Standards (andcompany law)prescribe thata company should produce _______ tobepresented tothe_______. Whichtwowords complete thissentence?  Accounts, shareholders  Reports, stakeholders  Accounts, stakeholders 14 (2 marks) (1mark) Ifa task-force teamrequired tolookintoa particular short-term problem weresetupasa committee, whattypeofcommittee would itbe?  Anadhoccommittee  Anexecutive committee  Astanding committee  Ajointcommittee (2 marks) MockExamination 3:Questions283 Page 298 of 327 q 15 Whatisa co-operative?  Abusiness thatworks closely withanother.  Acompany where ownership isseparate fromcontrol.  Abusiness owned byitsworkers orcustomers. (1mark) 16 Theaimofcoaching isto______ people byproviding challenging _______ and_______ in tackling them. Whichwords mostaccurately complete thissentence?  Develop; objectives; guidance.  Promote; opportunities; guidance.  Develop; tasks;guidance. (1mark) 17 Whatisa 'valueactivity'?  Themeans bywhicha firmincreases theworth ofitsproducts.    18 G Theprocesses forwhicha firmcanchargethemostmoney. Actions thatpromote ethical standards ofbehaviour. Those worktasksthatrequire largenumbers ofstaff. Whatarethemainphases ofthebusiness cycle?  Recession, depression, recovery, boom.  Boom, bust,boom, bust.  Recession, depression, stagnation, recovery. (2 marks) H (1mark) 19 Whichtwoofthefollowing arethenames giventothetwocommonly-adopted approaches tothemanagement ofethicsinorganisations?  System-based  Integrity based  Inspection-based  Auditbased  Compliance based (2 marks) 20 Whichoneofthefollowing statements correctly defines corporate governance?  Procedures andprocesses according towhichanorganisation isdirected and controlled.  Asystem thatallows forcorrective actionandpenalizing mismanagement.  Thesystem thatensures director accountability toshareholders andstakeholders. (1mark) 284 Business andtechnology (FBT/BT) Page 299 of 327 q 21 WillyHackett hasa problem withpersonal timemanagement. Hetakesonlotsofhis manager's workandtriestofititinwithhisown.Thesheersizeoftheworkload sometimes panicshim.Heispopular withhisstaff,though, because healwaysfindstimetotalkto themandlisten totheirproblems - whichinclude boredom atwork.Sometimes Willy'just doesn't knowwhere thedayhasgone'. Whichofthefollowing couldWillybenefit from?  Delegation only  Assertiveness andgoalplanning  Delegation, assertiveness andgoalplanning  (2 marks) Delegation, assertiveness, communication andgoalplanning 22 Chan,WillandFelipeareemployed byanauditfirmandconduct theauditofFriendly FacesCo.Felipeisinchargeoftheaudit. Friendly FacesCoactsasagentsforchildren wanting toworkintelevision. Friendly Faces haveoffered Felipe's daughter a partina popular children's television programme. Inreturn, theywantFelipetosignoffthisyear'sauditreport without mentioning theserious concerns hehasoverthesolvency ofFriendly FacesCo.Felipeaccepts theirofferand signsanunqualified auditreport. Chanhasfoundoutaboutthearrangement. Friendly FacesCohavealsooffered hersona partinthesameprogramme. Whatactionwould yourecommend Chantakes?  Accepttheofferbutreport Felipetotheheadoftheauditfirmanonymously toavoid conflict.  Refuse theofferandreport Felipetotheheadoftheauditfirm.  Accepttheofferandkeepquiet. G  (2 marks) Donothing inordertoavoidconflict. 23 Julieisa valuable member ofherteam.Sheiscreative andimaginative andsolves difficult problems, although shesometimes ignores details. WhichoneofBelbin's teamrolesdoesJuliefulfil?  Specialist  Completerfinisher  Teamworker  Plant (2 marks) 24 Anaccounting package automatically downloads banktransactions fromthebank's system, savingthebookkeeper timeentering thetransactions manually. Whatisthisfeature oftheaccounting package anexample of?  Artificial intelligence  Distributed ledger technology  Cloudcomputing  Automation (2 marks) MockExamination 3:Questions285 Page 300 of 327 H q 25 Whichparties contribute toa 360degree appraisal? Yes No Linemanagement   Colleagues   Theappraisee   Customers   (2 marks) 26 27 G Whenanalysing thecurrent situation ina business, a consultant willreview thegeneral environment surrounding it.   Interest rates  Newlegislation coming intoeffectin6 months' time Highlevels ofstaffturnover (1mark) Assuming bestcorporate governance practice isapplied, whoshould beresponsible for setting directors’ remuneration?  Thechiefexecutive   Theauditcommittee  Independent non-executive directors Shareholders (2 marks) 28 Whichofthefollowing isanoffence related toMoney Laundering?  Disguising, converting, transferring orremoving criminal property.  Failure ofanengineering company toobtain satisfactory evidence ofidentity where a transaction isfora smallamount.  (1mark) Purchasing stolen goods. 29 WhichTWOofthefollowing arepartoftheroleoffinancial accounting?.  Recording transactions in'books ofprime entry'  Preparing budgets andotherfinancial plans  Preparing financial statements fortheuseofexternal shareholders  Preparing variance reports 286 Business andtechnology (FBT/BT) Page 301 of 327 (2 marks) H q 30 Velma plcisa largecarmanufacturer thathastoregularly source thousands of component partsforinputintoitsrangeofvehicles. Theaimofa jointproject between the Finance Director andtheITDirector istoreduce thebargaining power ofkeysuppliers and getthebestpricefortheinputs tothebusiness. Several options interms oftheuseofIT havebeensuggested. WhichTWOofthefollowing willreduce thebargaining power ofsuppliers?  Anextranet linktoallowkeysuppliers accesstofuture production schedules for Velma plc  Adatabase ofallsuppliers usedbythebusiness todate,withcapability toblanket emailinvitation totender requests.  Accesstoanonline marketplace setupasa jointventure inconjunction withother largevehicle manufacturers.  Outsourcing themanufacture ofwhole systems (egthebraking system) toselected suppliers andsharing technical datawiththechosen suppliers. (2 marks) 31 Whichofthefollowing statements istrue? (1) (2) (3) G 32   Statement 1only Statements 1and3   Statements 2 and3 Statement 3 only H (2 marks) Whichofthefollowing groups should lookforsignsofpettyfraudaswellaschecking work thatstaffhavecompleted?     33 Aninformal organisation exists within everyformal organisation. Theobjectives oftheinformal organisation arethesameasthoseoftheformal organisation. Astrong, close-knit informal organisation isdesirable within theformal organisation thispractice? External auditors BoardofDirectors Operational managers Auditcommittee (2 marks) Whattypeofculture didHandysuggest suitsa simple andsmallorganisation runbyan entrepreneurial owner orfounder?  Role  Task  Power (1mark) MockExamination 3:Questions287 Page 302 of 327 q 34 Arethefollowing statements trueorfalse? True 35 False Drucker argued thatdeveloping people isa management function.   Drucker argued thatthemanager ofa business hasone basicfunction - economic performance   (2 mark) MaxandTonyruna successful parceldelivery service. BychanceMaxdiscovers thatTony hasbeenissuing a largenumber ofinvoices fordeliveries thathavenotbeenmade. WhenMaxinvestigates further, hediscovers thattheseinvoices havebeenpaid,butthe fundsreceived bythedelivery firmhavesubsequently beenusedtopaya company called ABC. Maxdiscovers ABCisowned byTony'swife.Thepayments toABCweremadetopay invoices issued totheparceldelivery company foraccounting services provided byABC. These services havenever actually beencarried out.Maxissuspicious andreports Tonyto thepolice. Eventually Tonyisarrested formoney laundering. Whatphaseinthemoney laundering process hasMax'sfirmbeeninvolved in?  Placement  Layering  Integration  Failure todisclose (2 marks) G H 36 XYZLtdhasa jobvacancyinoneofitsdepartments. SonyaBykemate, thehuman resources manager, knows thattherearepeople inthecompany whocoulddothejobif theywerepromoted toit.There isalsoa reasonable poolofsuitably skilled individuals available inthelocalarea,whoareeasilyreached through theemployment agencyused bythefirm. Whichoneofthefollowing isa justification forrecruiting externally rather thaninternally?  Reduction ofrisk  Motivation oftheexisting workforce  Timeneeded forinduction  (2 marks) Innovation andadaptability 37 Arethefollowing statements relating toemployment protection legislation trueorfalse? True False Wrongful dismissal relates tothemethod ofdismissal   Unfair dismissal isdismissal thathasbreached thecontract of employment   288 Business andtechnology (FBT/BT) Page 303 of 327 (2 marks) q 38 39 40 Aleader maybedistinguished froma manager bylackofdependency on:  Personal power  Position power  Physical power Whichofthefollowing isnotanobjective ofpersonal development?  Providing justification fora promotion.  Improving performance inanexisting job.  Careerdevelopment.  Acquiring transferable skillsandcompetences. (1mark) (2 marks) Danisa veryvaluable member ofstaffandsohismanager, Lee,wantstomakesurethat heremains motivated andhappyinhisjob.Leeknows thatDanhasa highdesire for success ineverything thathedoes.Leetherefore wantstogiveDanappropriate workto fulfilthisdesire. Whichofthefollowing features would NOThelptokeepDanmotivated?     Adegree ofpersonal responsibility Goalsthatmaynotbeachievable Realistic levels ofrisk-taking (2 marks) Anelement ofclearfeedback G H 41 Thecountry ofSportland hasrecently hada downturn initseconomy andisfacinga recession. Manybusinesses aremaking largenumbers ofstaffredundant, although all businesses areexpected torecover inthelongterm. Whattypeofunemployment isthis?  Frictional   42 Structural Cyclical (1mark) Whichofthefollowing ismostclearlya signofanineffective group?  Internal disagreement andcriticism  Competition withothergroups  Passive acceptance ofworkdecisions.  Achievement ofindividual targets (2 marks) MockExamination 3:Questions289 Page 304 of 327 q 43 Whatdoesthetermdiversity mean?  Abusiness invests inmanydifferent activities inordertoreduce risks  Thebusiness doesnotdiscriminate against anygroups basedongender orethnic background  Thecomposition oftheworkforce reflects thepopulation asa whole  (2 marks) Apolicyoffasttracking individuals fromminority groups 44 Whichofthefollowing isNOTa validadvantages ofhaving accounting standards?  Theydiscourage confusing variations inthemethods usedtoprepare accounts  Theyenforce conformity because companies arenever allowed todepart froma standard.  Theyarelessrigidthanenforcing conformity bylegislation.  Theyprovide a focalpointfordebate anddiscussions aboutaccounting practice. (2 marks) 45 Michael isconducting hisappraisal interviews. Hisphilosophy issimple. Hetellsthe subordinate inquestion howhehasbeenassessed - goodandbad- andthengiveshimor hera chancetoputquestions, suggest improvement targets, explaining shortcomings, identifying problems. Thisapproach isknown asthe:  'tellandsell'method. G 46  'tellandlisten' method.   'problem-solving' approach peerratingmethod. H (2 marks) Whichtypeofcontrol aimstointercept databeingtransmitted intoa system fromoutside viatheinternet?  Accesscontrols  Firewall  (1mark) Dataverification controls 290 Business andtechnology (FBT/BT) Page 305 of 327 q SECTION B ALL SIX questions are compulsory and MUST be attempted 1 Hereisinformation abouttofourcompanies: Company Wconsists mostly ofproject teams andtaskforces. Thecompany hasnoclear leader andperformance ofthecompany isjudged byresults. Company Xisa well-established company witha formal structure. Employees arenot particularly ambitious anddonotoverstep theboundaries oftheirauthority. Company Yisa company thatexists toservetheindividuals thatmakeupthecompany. Company Z isa smallcompany runbyanentrepreneur whomakes allofthemajor business decisions. There arefewformal rulesacrossthecompany. Required: (a) Whattypeofculture isdemonstrated byeachcompany usingHarrison andHany's cultural stereotypes? G (b) Company W  Company X  Company Y  Company Z  Picklist: Roleculture Taskculture Power culture Person culture Acommittee includes thefollowing roles: Chair Secretary 2 marks) Foreachofthefollowing roles,statewhether itisthedutyoftheChairorthe secretary Chair Secretary Giveruling ondisputed points   Taking notesduring a meeting   Communicating decisions takenina meeting   Fixingthedateofa meeting   (2 marks) (Total= 4 marks) MockExamination 3:Questions291 Page 306 of 327 H q 2 (a) Eachofthefollowing individuals works forCarberry Co. Julietakesstationery fromtheofficestationery cupboard home sothatshecan makenotesfora workmeeting. Kenhasborrowed money fromtheofficecharity collection withtheintention of repaying itassoonaspossible. Michael isstruggling tomeethisdeadline fora report fortheChiefExecutive, sohe asksoneofhiscolleagues toassisthim. Nadiahasadjusted thethree-year cashflowforecasts forthecompany toincrease thechances ofobtaining a bankloan. Statewhether eachindividual's behaviour isethicalorunethical. Ethical (b) G Unethical Julie   Ken   Nadia   Michael   (2 marks) There aredifferent viewsabouthowmuchexternal pressures canmodify business objectives. Theviewthatobjectives emerge fromthediffering viewsofshareholders, managers, employees, customers, suppliers andthepublic,buttheyarenotallselected or controlled bymanagement isknown asthe_________________________. Whichphrasecorrectly fillstheblankabove?    Stakeholder viewofcompany objective Framework ofrules Consensus theory (2 marks) (Total= 4 marks) 3 Statewhether thefollowing statements aboutinternal auditaretrueorfalse True False (a) Allorganisations needtohaveaninternal auditdepartment.   Theinternal auditor should beindependent   Theinternal auditor should report totheFinance Director.   Theinternal auditor mayperform a socialaudit.   Theinternal auditor mayreview compliance withlawsand regulations   Internal auditwillassesstheriskmanagement andcontrol culture ofanorganisation.   292 Business andtechnology (FBT/BT) Page 307 of 327 (2 marks) H q (b) Dothefollowing statements relate to Internal audit  External audit  Both internal andexternal audit  Workrelates totheoperations ofthe organisation  Objective ofworkistoexpress an opinion onthefinancial statements  Picklist: Internal audit External audit Bothinternal andexternal audit 4 (2 marks) (Total= 4 marks) Luis,Charlotte, RoyandJessicaallworkforQWECo (a) Foreachperson, selecttheappropriate development toolforthesituation: G Luishasjustcompleted hisfirstthree-month period with QWECoandiskeentogetfeedback onhisperformance levelandareasfordevelopment.  Charlotte isnewtoherdepartment andneedsan experienced employee toshowherhowtoperform the tasksthatshewillbeexpected todo.  Royhasjustjoined thecompany, buthasambitions to become a manager atQWECoandwantstoknowhow hecanreachthisgoalinthelongrun.  Jessicahasjustbeentoldshewillneedtorelocate in ordertocontinue working inthemarketing department of QWE.Sheisconcerned aboutseveral issues arising from thisrelocation andwantstoworkthrough theseissues.  H Picklist: Coaching Counselling Appraisal Mentoring (b) (2 marks) WhichTWOofthefollowing arebenefits toanorganisation ofusingcounselling?  Identifies future managers  Demonstrates commitment toemployees  Establishes learning targets  Determines payincreases  Reduces labour turnover  Provides a rolemodel foremployees 2 marks) (Total= 4 marks) MockExamination 3:Questions293 Page 308 of 327 q 5 (a) Foreachofthefollowing teams, identify thecorrect stagefromTuckman's model. TeamWhasbeenperforming wellforsometime.Itisnow concentrating onself-maintenance andtheinitial taskthatthe teamwasformed forisbeginning togetoverlooked.  TeamXisfulfilling itsobjectives, unhindered bydifficulties of growth anddevelopment.  TeamYconsists ofmembers tryingtoimpress theirown personality. There iswariness fromeachteammember about introducing newideasandtheobjectives oftheteamare currently unclear.  TeamZ isbeginning toseeagreements aboutindividual requirements andexpectations. Procedures areevolving which should bringinmethodical working fortheteam.  Picklist Forming Norming Performing Dorming (b) WhichTWOofthefollowing stepswould helptocreatea teamidentity?  Dealing withconflict within theteamopenly  Creating a separate space,either physical orvirtual, fortheteam  Creating a teamuniform   G 6 (2 marks) Encouraging interpersonal relationships within theteam Encouraging competition withothergroups H (2 marks) (Total= 4 marks) Highgate isa private limited company whichisrunbythethreefounders whoareJohn, Oliver andJemma.Thefamilymembers alsoown80%oftheshares andassuchcontrol thecompany aswellasrunning it. Theother20%ofthecompany isheldbyprivate investors whodon'thaveanysayinthe day-to-day running ofthebusiness. Highgate doesnothavemanycustomers andisheavily reliant ononemaincustomer (Archway) fora significant percentage ofitsrevenue. Foreachofthefollowing, indicate whether theyareinternal, connected orexternal stakeholders. Stakeholder type John,Oliver andJemma  The20%shareholders  Archway  Picklist Internal stakeholder External stakeholder Connected stakeholder (2 marks) 294 Business andtechnology (FBT/BT) Page 309 of 327 q (b) WhichTWOofthefollowing areadvantages ofa publicsector organisation overa limited company?  Fairness     Accountability Efficiency Political interference Norestriction onsize (2 marks) (Total= 4 marks) G H MockExamination 3:Questions295 Page 310 of 327 q G H 296 Business andtechnology (FBT/BT) Page 311 of 327 G q Answers Mock to Exam 3 DONOTTURNTHISPAGEUNTIL YOUHAVE COMPLETED THEMOCKEXAM Page 312 of 327 H q G H 298 Business andtechnology (FBT/BT) Page 313 of 327 q SECTION A 1 2 3 Thecorrect answer isSimple structure. Rationale: Mintzberg described thisstructure, where thestrategic apexexerts a 'pull'to centralise. Pitfalls:Youhadtogetyour‘private and‘public’companies therightwayround. Thecorrect answer is:Suppression Rationale: Josephine hassmoothed overtheproblem topreserve working relationships, whichisa suppression response. Josephine hasresponded tothesituation andsodenial isnotthecorrect answer. Youmay havehesitated overcompromise butJosephine hasimposed a solution, shehasnot bargained ornegotiated, sothiscannot bethecorrect solution. Againyoumayhavefelt tempted bydominance, butthiswould leadtolingering resentment andthescenario states thatallparties feelhappywiththeresult andsothiscannot bethecorrect answer either. Thecorrect answer is:Dishonesty, motivation andopportunity. Rationale: Ifoneormoreofthemcanbeeliminated, theriskoffraudisreduced. 4 True Employees whonotice fraudormalpractice ina workplace areobliged toreveal theirknowledge to external authorities immediately.  Thetermgiventoanemployee whoreveals fraudor malpractice occurring ina workplace iswhistle-blower G 5 6 7 False  Rationale: Employees arenotobliged toreveal theirsuspicions toexternal authorities. Theymayriskbreaching important codesofethicssuchasconfidentiality. Alternatively theymayfeelthatinforming a senior member ofstaffwould beadequate Thecorrect answer is:Quantity, quality, price,delivery. Rationale: Someoftheoptions include theword'product', whichispartofthemarketing mix.Purchasing makes a major contribution tocostandquality management inany business. Thecorrectansweris: Independence;   Scepticism;  Socialresponsibility. Rationale: Moderation andauthority, whilst admirable inmanycontexts - arenota professional qualities specifically identified asexpected ofanaccountant. Thecorrect answers are:  Theauditpartner ismarried tothefinance director ofanauditclient;  Asenior member oftheauditteamisina relationship withthefinancial controller of anauditclient; Thefinancial controller ofa company resigned fromthecompany threemonths ago,  isnowworking forthecompany's auditors andisworking ontheauditofthe company shepreviously worked for. Rationale: TheACCA'sCodeofEthicsandConduct setsoutthatobjectivity isthreatened ormayappear tobethreatened asa consequence ofa familyorotherclosepersonal or business relationship. Thethreat isgreater iftheindividuals concerned areinsenior positions attheclientortheauditfirm.Thethreat islesswhere theindividuals concerned arenotdirectly involved intheauditorthefinancial function. Amember should not personally takepartintheconduct oftheauditofa company ifheorshehasbeenan MockExamination 3:Answers299 Page 314 of 327 A N S W E R S H q officer oremployee ofthecompany during theprevious twoyears.Normal social relationships between auditpartners andtheirclients (suchasattending theannual dinner) donotnecessarily constitute a threat toobjectivity. 8 9 10 Thecorrect answer is:Virtual. Rationale: Virtual teams andorganisations arebecoming morecommon asthepotential of ICTisexploited. Youshould beawareoftheextent towhichdistance isnolonger a barrier toteamworking (ortostaffselection, oroutsourcing oftasks). Multi-disciplinary teams bringtogether individuals fromdifferent functions, topooltheir skills,experience andknowledge: a virtual teammaybemulti-disciplinary, buta multidisciplinary teamneednotbevirtual. Thesameapplies tomulti-skilled teams (which bringtogether individuals, eachofwhom canswitch flexibly between tasks)andproject teams (formed tocomplete a particular project). Thecorrect answer is:Demand isbasedontheprices ofthepresent timeperiod. Rationale: Priceinstability canbecaused byproblems onthesupply sidesuchashighprices inaprevious period. Non-controllable factors influencing supply means there isanuncertain levelofsupply which willcausepricefluctuations. Lowpriceelasticity ofdemand andsupply create priceinstability assmall changes inthelevelofdemand orsupply leadtosignificant pricechanges. Professional body Rationale: External stakeholder groups – thegovernment, localauthorities, pressure groups, thecommunity atlarge,professional bodies – arelikelytohavequitediverse objectives. 11 G Yes Highlevels ofinflation No  Economic growth  Zerounemployment  Balance ofpayments equilibrium  Rationale: Macro-economic policyobjectives relate tomanaging economic growth, inflation, unemployment andthebalance ofpayments. 12 13 Themacroeconomic policyistoachieve fullemployment, meaning unemployment islow (notzero)andinvoluntary unemployment isshort-term. Low,stableinflation isa macroeconomic policytarget. Thecorrectansweris:Distortion. Rationale: Noise istheothermaintypeofcommunication problem. Noise usually takestheformofdistractions andinterferences intheenvironment inwhich communication takesplace,affecting theclarity,accuracy orevenarrival ofthemessage. Redundancy isa useful principle toapplytocommunication. Ifyouusemorethanone channel ofcommunication, evenifthemessage failstogetthrough ononemeans, itmay stillarrive onanother. Feedback istheresponse thatindicates tothesender thathismessage has(orhasnot) beenreceived, properly interpreted andunderstood. Thecorrect answer is:Accounts; shareholders. Rationale: There areusually detailed regulations onwhattheaccounts mustcontain and thisenables shareholders toassesshowwellthedirectors (ormanagement board)haverun thecompany. 300 Business andtechnology (FBT/BT) Page 315 of 327 H q 14 15 16 17 18 19 G 20 21 22 Thecorrectansweris:Anadhoccommittee. Rationale: Anadhoccommittee isa fact-finding orspecial committee whichachieves its specified purpose, reports andthendisbands - likea task-force team. Anexecutive committee haspowers togovern oradminister. Astanding committee isformed fora particular purpose, butona permanent basis,with routine business toperform atregular meetings. Ajointcommittee isnot- asitmaysound - simply aninterdisciplinary team:itisa body formed toco-ordinate theactivities oftwoormorecommittees. Thecorrectansweris:Abusiness ownedbyitsworkers orcustomers. Rationale: Inmanylargecommercial organisations, ownership isseparate fromcontrol, buttheyarenotcooperatives. Abusiness thatworks closely withanother isnota cooperative. Thecorrectansweris:Develop; tasks;guidance. Rationale: Coaching isanapproach whereby a trainee isputunder theguidance ofan experienced employee whoshows thetrainee howtoperform tasks. Thecorrectansweris:Themeansbywhicha firmincreases theworthofitsproducts. Activities incurcosts,and,incombination withotheractivities, provide a product orservice whichearnsrevenue. Thecorrectansweris:Recession, depression, recovery, boom Rationale: Business cyclesortradecyclesarethecontinual sequence ofrapidgrowth in national income, followed bya slowdown ingrowth andthena fallinnational income. Thetwocorrectanswers are: Compliance-based;  Integrity-based.  Rationale: Acompliance-based approach isprimarily designed toensure thatthe company actswithin theletter ofthelawandthatviolations areprevented, detected and punished. Thecorrectansweris: Procedures andprocesses according towhichanorganisation isdirected and  controlled. Rationale: Alltheotheroptions areaspects ofcorporate governance, butnota complete definition. ThecorrectanswerisDelegation, assertiveness, communication andgoalplanning Rationale: Willyneedstodelegate because heisoverloaded, andhissubordinates are bored. Heneedsassertiveness tosay'no',where appropriate, tohissubordinates andeven tohisboss.Healsoneedstopractise goal-planning tobreakdownhisworkload andto prioritise andschedule histasks. Youmayhavepaused at(3),withthethought thatWilly'scommunication skillsand inclinations are,ifanything, toogood.However, theyarenot:hewastes timeon communication. Learning toreadfaster,towritemoreconcise reports andtosortout essential fromnon-essential communications alsocomeintothisarea. Thecorrectansweris:RefusetheofferandreportFelipetotheheadoftheauditfirm. Accepting theofferandkeeping quietisdishonest. Accepting theofferandthenreporting Felipeanonymously shows a lackofintegrity. Doingnothing inordertoavoidconflict may beunderstandable butshows a lackofprofessional behaviour. MockExamination 3:Answers301 Page 316 of 327 A N S W E R S H q 23 Thecorrectansweris:Plant. Othercharacteristics oftheplantinclude beingunorthodox andbecoming toopreoccupied tocommunicate effectively. 24 Thecorrectanswerisautomation Automation iswhere systems perform repetitive androutine tasks.Booking bank transactions automatically isanexample ofthis. Artificial intelligence implies thatthesystem learns fromdataandistherefore abletoassist a human operator makebusiness decisions. Distributed ledger technology, alsoreferred toasblockchain, iswhere several organisations orindividuals shareanagreed record ofevents. Inthiscase,therecord of events isonlythebanksrecord - therearenootherparties thathavetherighttoupdate therecords. Cloudcomputing refers tocomputer software orhardware resources thatareaccessed via theinternet. Theaccounting package mightwellbea cloudbasedsystem, butthatisnot mentioned inthequestion. 25 Yes Linemanagement  Colleagues  Theappraisee  Customers  No Rationale: The360degree appraisal isa technique thatinvolves feedback beingobtained fromvarious different sources whocomeintocontact withtheappraisee. G 26 Thisensures a muchmorethorough andcomprehensive assessment thanwould bepossible witha straightforward linemanagement appraisal. Thecorrectansweris:Highlevelsofstaffturnover 27 Thiswillbeexamined intheinternal position auditofthecompany rather thanthe environmental analysis whichlooksatmatters external tothecompany. Thecorrectansweris:Independent non-executive directors. 28 29 Independent non-executive directors should formtheremuneration committee whoshould setdirectors’ remuneration. Thecorrectansweris:Disguising, converting, transferring orremoving criminal property. Purchasing stolen goodsisnotanoffence linked tomoney laundering. Failure ofanengineering company toobtain satisfactory evidence ofidentity where a transaction isfora smallamount isnotanoffence linked tomoney laundering. Membership isvoluntary; Communication isopenandinformal. Thetwocorrectanswerare: Recording transactions in'books ofprime entry'  Preparing financial statements fortheuseofexternal shareholders  Rationale: Financial accounting isconcerned withpreparing financial statements for external shareholders. Itstartswiththerecording ontransactions inthebooks ofprime entry,includes categorising thosetransactions appropriately, andonthebasisofthis, preparing financial statements. Budgets andvariance reports areusedbyinternal management andaretherefore partof theroleofthemanagement accountant. 302 Business andtechnology (FBT/BT) Page 317 of 327 H q 30 Thetwocorrectanswerare:  Adatabase ofallsuppliers usedbythebusiness todatewithcapability toemail invitation totender requests; Accesstoanonline marketplace setupasa jointventure inconjunction withother largevehicle manufacturers. Bothoftheseoptions should meanthatVelma plchasaccesstoa largenumber of suppliers whowillthenhavetocompete onprice&terms towineachcontract. Todiscussemployee performance; Toidentifyanemployee’s development needs. Rationale: There aredrawbacks tolinking appraisal tosalaryreview, notleastthatthere maynotbeenough money toreward theemployee fortheirperformance. Thecorrectansweris:Statement 1only.  31 Notethatformal andinformal organisations areNOTmutually exclusive. Theinformal organisation isthenetwork ofinformal inter-personal andinter-group relationships that exists within everyorganisation. Thisislikelytohaveitsownpriorities andevenobjectives, though theymaynotbeeasily apparent orconsistent overtimeandacrossthebreadth oftheinformal organisation. These objectives andpriorities mayormaynotbethesameasthoseoftheformal organisation. Statement 3 requires somethought: a strong, close-knit informal organisation canimprove morale andcommunication within theformal organisation, butcanalsodivert energy and loyaltyfromit.Also,iftheobjectives oftheinformal organisation arenotaligned withthose oftheformal, thereisdanger ofserious conflict. Stimulate, Raise 32 Thecorrectansweris:Operational managers. 33 Operational managers should bealertforsignsofpettyfraud,aswellaschecking thework staffhavedoneandalsobeingawareofwhatstaffaredoing. Thecorrectansweris:Power Rationale: Thepower culture isbasedaround personalities, flexibility andinformality; this ismostappropriate tosimple organisations. G 34 True Drucker argued thatdeveloping people isa management function.  Drucker argued thatthemanager ofa business has onebasicfunction - economic performance  False Drucker emphasised theeconomic objectives ofmanagers inbusiness buthealsogrouped theworkofmanagers intofivecategories including: 35 Setting objectives  Organising thework  Motivating employees  Measurement  Developing people  Thecorrect answer is:Layering. Max'sfirmhasbeeninvolved inthetransfer ofmonies frombusiness tobusiness toconceal theoriginal source. MockExamination 3:Answers303 Page 318 of 327 A N S W E R S H q 36 Thecorrect answer is:Innovation andadaptability. Thegreatadvantage ofexternal recruitment isinbringing 'newblood'anda fresh viewpoint topotentially 'stale'situations : therefore innovation andadaptability isthe correct answer. Straightforward enough, onceyou've worked outtherelevance andimplications ofthefour options. There arepressures topromote fromwithin, fromthefamiliarity ofthepromotee: reduction ofrisk- heisa 'known quantity' totheorganisation, unlike theexternal recruit, withwhom itwillberisking possible disappointment orincompatibility. Promotion of insiders isalsovisible proofoftheorganisation's willingness todevelop itsemployees' careers, whichcanenhance motivation andavoidsomeresentments. Promotees willnot havetobeinstructed, coached, 'broken-in' andotherwise 'socialised' intothemethods, norms, politics, culture andpersonal relationships oftheorganisation totheextent thatan outsider will. 37 True Wrongful dismissal relates tothemethod ofdismissal Unfair dismissal isdismissal thathasbreached the contract ofemployment False   39 Dismissal thathasbreached thecontract ofemployment iswrongful dismissal notunfair dismissal. Thecorrectansweris:Position power. Theonlyvaluable definitions ofleadership, asdistinguished frommanagement, stress its capacitytosecure fromothers morethanmerecompliance withtherequirements imposed byorganisational authority. Aleader istherefore someone whodoesnothavetodepend on position power alone. Thecorrect answer is:Providing justification fora promotion. 40 Personal development implies a widerangeofactivities. Apersonal development planisa cleardevelopmental actionplanforanindividual whichincorporates a widesetof developmental opportunities, including formal training. Thecorrect answer is:Goalsthatmaynotbeachievable. 38 G 41 42 Goalsthatpresent a hugechallenge willnotachieve themanager's wishtokeepDan motivated: theyaremorelikelytooppress andworryhim.Dan'smanager should givehim moderately difficult tasksandgoalsthatpresent a challenge andanopportunity to display ability. Thecorrect answer is:Cyclical. Thisiscyclicalunemployment. During decline andrecession years,thedemand foroutput andjobsfalls,andunemployment risestoa highlevel. Whentheeconomy picksupagain,demand forjobspicksupagainaswell.Thisiswhyitis cyclicalunemployment.. Thecorrect answer is:Passive acceptance ofworkdecisions. Members ofaneffectively functioning groupwilltakeanactiveinterest indecisions affecting theirwork,rather thanpassively accepting them. Internal disagreement andcriticism canconstitute healthy communication within thegroup inthattheywillencourage compromise andagreement, rather thanhaving decisions and opinions forceduponthegroupmembers Competition withother groups brings thegroupcloser together asthemembers work towards a common goalincompeting withother groups perceived asa threat oranenemy. 304 Business andtechnology (FBT/BT) Page 319 of 327 H G q 43 44 45 Thecorrect answer isThecomposition oftheworkforce reflects thepopulation asa whole. Abusiness invests inmanydifferent activities inordertoreduce risksisanexample of diversification. Nondiscrimination islikelytobepartofdiversity, butdiversity goesfurther thannondiscrimination. Apolicyoffasttracking individuals fromminority backgrounds mayhelptoachieve a more diverse mixonemployees - however, theorganisation couldbeaccused of"positive discrimination". Itisnottruethatcompanies cannever depart froma standard. Inrarecases,itmaybe necessary todepart froma standard inordertoshowa trueandfairview. Thecorrect answer is:'tellandlisten' method Three typesofapproach toappraisal interviews areidentified byMaier. Michael's approach is'tellandlisten' method. It'sa fairlyparticipative approach, withtheassessor takingonthedualroleofcriticandcounsellor, anddoesnotassume thatthesolekeyto performance improvement isintheemployee himself: 'Problem-solving' approach isa stepfurther inthisdirection, where theassessor abandons theroleofcriticaltogether. Discussion iscentred notontheassessment butonthe employee's workproblems, whichareworked through together withthe assessor/counsellor. 'Tellandsell'method isthemoreone-sided approach. Themanager tellsthesubordinate howhe'sbeenassessed, andthentriesto'sell'(gainacceptance of)theevaluation andthe improvement plan. Peerratingiswhere anindividual isassessed andcounselled bycolleagues ofthesame levelintheorganisation hierarchy, rather thanbyhissuperiors, notthecasehere. 46 Thecorrect answer isfirewall. Thisisa system thatmonitors incoming andoutgoing network traffic.a network. A N S W E R S MockExamination 3:Answers305 Page 320 of 327 H q SECTION B 1 (a) Company W Taskculture Company X Roleculture Company Y Person culture Company Z Power culture (b) Chair Giveruling ondisputed points 2  Taking notesduring a meeting  Communicating decisions takenina meeting  Fixingthedateofa meeting  (a) Ethical Julie (b) Unethical  Ken  Nadia  Michael G Secretary  Thecorrectanswerisconsensus theory. H Withthestakeholder view,management doesselectorcontrol alltheobjectives 3 (a) True False Allorganisations needtohaveaninternal auditdepartment. Theinternal auditor should beindependent   Theinternal auditor should report totheFinance Director.  Theinternal auditor mayperform a socialaudit.  Theinternal auditor mayreview compliance withlawsand regulations  Internal auditwillassesstheriskmanagement andcontrol culture ofanorganisation.  (b) Workrelates totheoperations ofthe Internal audit organisation Objective ofworkistoexpress an audit opinion onthefinancial statements External 306 Business andtechnology (FBT/BT) Page 321 of 327 q 4 (a) Luishasjustcompleted hisfirstthree-month period withQWECo andiskeentogetfeedback onhisperformance levelandareas fordevelopment. Appraisal Charlotte isnewtoherdepartment andneedsanexperienced employee toshowherhowtoperform thetasksthatshewillbe expected todo. Coaching Royhasjustjoined thecompany, buthasambitions tobecome a manager atQWECoandwantstoknowhowhecanreachthis goalinthelongrun. Mentoring Jessicahasjustbeentoldshewillneedtorelocate inorderto continue working inthemarketing department ofQWE.Sheis concerned aboutseveral issues arising fromthisrelocation and wantstoworkthrough theseissues. Counselling Justification: Luiswantsfeedback anddevelopment points, whicharepartofanappraisal  process.  (b) G Charlotte willbenefit fromcoaching where anexperienced employee will guideherthrough thetasks. Royislooking fora long-term mentoring programme.  Theaimofcounselling istohelpa person workthrough a problem.  Thecorrect answers are: Demonstrates commitment toemployees.  Reduces labour turnover andabsenteeism.  Counselling mostly shows careforemployees, whichcanreduce labour turnover and absenteeism. 5 (a) TeamWhasbeenperforming wellforsometime.Itisnow concentrating onself-maintenance andtheinitial taskthattheteam wasformed forisbeginning togetoverlooked. Dorming TeamXisfulfilling itsobjectives, unhindered bydifficulties ofgrowth Performing anddevelopment. (b) TeamYconsists ofmembers tryingtoimpress theirownpersonality. There iswariness fromeachteammember aboutintroducing new ideasandtheobjectives oftheteamarecurrently unclear. Forming TeamZ isbeginning toseeagreements aboutindividual requirements andexpectations. Procedures areevolving which should bringinmethodical working fortheteam. Norming Thecorrect answers are: Creating a separate space,either physical orvirtual, fortheteam  Creating a teamuniform  Theotheroptions would allhelptocreateteamsolidarity. MockExamination 3:Answers307 Page 322 of 327 A N S W E R S H q 6 (a) (b) Stakeholder type John,Oliver andJemma Internal stakeholders The20%shareholders Connected stakeholders Archway Connected stakeholders Explanation  John,Oliver andJemima: Shareholders whoarealsomanagement are internal stakeholders.  The20%shareholders: Shareholders whohavenosayinrunning thecompany areconnected stakeholders.  Archway: Customers areconnected stakeholders. Thecorrect answers are: Fairness  Efficiency  Accountability andPolitical interference aredisadvantages ofpublicsector organisations. Norestriction onsizeisanadvantage ofa limited company. G H 308 Business andtechnology (FBT/BT) Page 323 of 327 q G H Notes Page 324 of 327 q G H Notes Page 325 of 327 G q ReviewForm Name: Address: Date: HowhaveyouusedthisPractice& Revision Kit? (Tickoneboxonly) Onitsown(bookonly) Ona BPPin-centre course Ona BPPonline course Ona course withanother college Other Duringthepastsixmonths doyourecall seeing/receiving anyofthefollowing? (Tickasmanyboxesasarerelevant) Ouradvertisement inACCAStudent Accountant Ouradvertisement inTeachAccounting Otheradvertisement Ourbrochure witha letter through the post ACCAE-Gainemail BPPemail Ourwebsite www.bpp.com Whydidyoudecidetopurchase this Practice&Revision Kit? (Tickonebox only) Haveusedcomplementary Interactive Text HaveusedBPPTextsinthepast Which(ifany)aspectsofouradvertising doyoufinduseful? (Tickasmanyboxesasarerelevant) Pricesandpublication datesofnew editions Information onPractice &Revision Kit content Recommendation byfriend/colleague Recommendation bya lecturer at college Sawadvertising Other Facilitytoorderbooks Noneoftheabove Haveyouusedthecompanion Interactive Textforthissubject? Yes No Yourratings, comments andsuggestions would beappreciated onthefollowing areas Veryuseful Useful Notuseful Introductory section (HowtousethisPractice & Revision Kit) 'DoYouKnow' checklists 'DidYouKnow' checklists Possible pitfalls Questions Answers Mockexams Structure &presentation Icons Excellent Good Adequate Poor Overall opinion ofthisKit Doyouintendtocontinue usingBPPproducts? Yes No Pleasenoteanyfurther comments andsuggestions/errors onthereverse ofthispage. Theauthorofthiseditioncanbeemailed at:learningmedia@bpp.com Page 326 of 327 H q REVIEWFORM(continued) Please noteanyfurther comments andsuggestions/errors below G H Page 327 of 327

Bpp Exam kit

Related documents

Add this document to collection(s)

Add this document to saved

Suggest us how to improve StudyLib